The Company “Dundee Precious Metals Chelopech” EAD has refused to sign a contract with the Ministry of Energy for search and exploration of metal minerals in the area of “St. Nikola”, located on 155 sq. km of the territory of five municipalities from Stara Zagora and Plovdiv region – Stara Zagora, Kazanlak, Pavel Banya, Bratya Daskalovi and Breznik. The Company has informed the Minister Temenuzhka Petkova of its intention by letter dated June 17, 2020. This was reported for “Pro Veritas” by the press center of the ministry department.
The Canadian company has been investing in Bulgaria for years. It mines gold, silver and copper ore in the mine near Chelopech, and since 2019 gold in the new mine “Ada Tepe” near Krumovgrad.
But why is the company now giving up geological research, given that if she had discovered
deposit of precious metals,
she would receive a long-term concession for their extraction? And big profits, correspondingly.
In a letter to the Regional Governor of Stara Zagora and to the mayors of the four municipalities in the region, as well as in a press release to the media – both dated June 17, 2020, the company describes the steps taken under the procedure, according to the requirements of the Bulgarian legislation. An application for opening of the procedure was submitted to the Ministry of Energy on May 14, 2018, and the draft decision was approved by the Council of Ministers on October 2, 2019. And only two months later, at one of its last meetings before the Christmas holidays, the government voted to issue Permit No524/13.12.2019 for search and exploration for a period of three years in favor of the Canadian company. After it was not appealed within 14 days of its publication in the State Gazette, the investor was released from any legal obstacles to proceed with the development of a comprehensive project. However, the final contract with the Ministry of Energy could only become a reality after a positive opinion from the Ministry of Environment and Water. But until March 4 this year, there was no comprehensive working project from Dundee Precious for the research in the locality of “St. Nicholas”. This was stated by the ministry in response to an inquiry by the chairman of the Municipal Council in Pavel Banya Milena Paunova.
Without this procedure,
”the company doesn’t have rights and duties
for research and exploration in the area of “St. Nicholas“, the investor explains in his letter to the local authorities and ensures that the activities related to them have a limited impact on the environment and are carried out with non-invasive methods that do not hide risks of environment pollution.
The press release, which the company sends to the media, also emphasizes the fact that “the disseminated information on the subject has created tension among the population and has led to the manipulation of public opinion.” However, the text does not mention whether representatives of sectors affected by possible future gold mining have reacted against the stated investment intentions. These sectors are the rose production and perfume industry, balneotherapy and tourism, viticulture, fruit growing and other sectors of the economy, typical for the region of Srednogorie.
The question
”why“ the Canadian company refuses
to sign a contract with the Ministry of Energy for research and exploration in the area of these 155 sq. km continues to stand, as it does not receive a response from the information disseminated so far.
There is another question that awaits an answer: How did the state and local authorities in the five municipalities protect the interests of businesses and citizens?
By the end of June, on behalf of local authorities, declarations were submitted to the Ministry of Energy from the municipal councils in Pavel Banya and Brezovo. They demanded that the permit issued to “Dundee Precious Metals Chelopech“ and its validity be terminated. This was announced by the Press Center of the Ministry in response to an inquiry from “Pro Veritas”.
At the beginning of this year, within the parliamentary control, Georgi Andreev from BSP and the Stara Zagora MPs from GERB Boris Karchev and Radostin Tanev asked questions on that topic to Minister Temenuzhka Petkova. In her answers to them from March 20 this year, the following is recorded:
“The area of the declared territories is coordinated with positive opinions by the competent ministers under Art. 26, par. 1, it. 1 of the Mineral Resources Act, corresponding to the protection of the national security and the defense of the country, for protected by law territories and cultural values“.
According to the Minister, the procedure under Art. 26 of the Mineral Resources Act (MRA)
does not require prior coordination with local authorities,
serving the territory on which the research and exploration for the discovery of deposits will be carried out. We asked lawyer Alexander Kodzhabashev, who has extensive experience in cases related to environmental protection, whether Temenuzhka Petkova interprets correctly the provision of the law in question. He commented for “Pro Veritas” that the practice of the Supreme Administrative Court (SAC) is contradictory, referring to decisions from two court cases.
In Decision No 3305/10.03.2014 under Adm. Case No 300/2014, a 5-member panel of the SAC with Judge Rapporteur Iliana Doycheva points out that the requirement of Art. 26, par. 1, it. 2 of MRA for coordination shall refer to research and exploration or to exploration of mineral resources under Art. 2, par. 1, it 5 or it. 6 of the MRA, and these are construction and rock– facing materials, but not metal minerals. In another Decision No 16490/11.12.2013 of the SAC under Adm. Case No 1352/2013, V department, with rapporteur the chairwoman Marina Mihaylova decrees that before opening of a procedure for search and discovery of mineral resources, coordination with the mayors is required, on the territory of whose municipalities the area for search and exploration is located. Therefore, it is in the public interest to know
whether the Minister of Energy selectively applies the provision
of Art. 26 of MRA and in which cases the minister informs the Local Authorities and in which she does not.
On June 17 this year, the mayors of Stara Zagora, Kazanlak, Pavel Banya, Bratya Daskalovi and Chirpan (the municipality is not among those affected), together with the Regional Governor of Stara Zagora region signed a joint declaration to the Council of Ministers and the Ministries of Energy and of Environment and Water, in which they insist the permit issued to the Canadian company “Dundee Precious Metals Chelopech” to be cancelled. During the press conference that followed the meeting, a letter came from the Canadian company, in which they informed the local authorities that the company is giving up its investment intention. The letter was read to the journalists present, and then to the citizens who gathered in front of the District Administration building to state their position against the intentions to explore and extract gold in the region.
It wasn’t just that coincidence that was strange.
It turned out that the declaration signed by the mayors of the five municipalities and that has gathered the spontaneous applause of the people,
has not been sent to the recipients.
This was confirmed to “Pro Veritas” also by the press service of the Ministry of Energy. Thus, only the positions of the Municipal Councils in Pavel Banya and Brezovo, stated before the responsible institutions in special Declarations, remain legitimate in practice.
Our investigation also proved that the Permit of the Ministry of Energy, issued in favor of “Dundee Precious”, was published in the State Gazette on January 21 this year, and the mayors of the five municipalities were informed about it by letter sent to them six days earlier. According to Zhivko Todorov, the mayor of Stara Zagora, he and his colleagues from the other three municipalities in the district received the letter in question only after the publication of the Permit in the State Gazette.
It turns out that this is not true.
But even if it was, the legal deadline for appealing the Permit of the Council of Ministers is 14 days after its promulgation. And it follows from the contradictory practice of the Supreme Administrative Court that mayors could at least try to appeal it, if they were willing to protect the public interest. But not only did they not do so, they did not even inform citizens and businesses about the Canadian company’s intentions.
It is true that the publication of the decisions of the Council of Ministers in the State Gazette assumes that the public is informed about them, although this newspaper is intended primarily for legal advisers and for institutional use. The question is why after the mayor of Stara Zagora (and probably his other colleagues) pays every year to central and regional media
hundreds of thousands of levs for the so-called “Information Services”,
in this case he has decided that it is sufficient to hang the Permit in question on an information board at the entrance of the municipality?
Thanks to the efforts of individual municipal councilors, civil activists and business representatives from the region, a few days ago in Stara Zagora a National Civil Initiative “Bulgaria for Sredna Sarnena Gora” was established, chaired by Hristo Enkov – Mayor of the Plovdiv’s Municipality Brezovo. The manifest adopted at the constituent assembly states:
“The decision of the Government to allow research, exploration and potential industrial extraction of gold and other minerals in the heart of the Rose Valley, next to the yards of the houses in the spa resort Pavel Banya, along the catchment area of the largest dam in the country – Koprinka and in the area of the mineral springs of Pavel Banya, Ovoshtnik, Yagoda and Stara Zagora Mineral Baths, is of great concern. The implementation of such a project is in sharp contradiction with the strategies for development of the affected municipalities and with the pre-election programs of the parties that have gained the trust of the citizens.
Representatives of the citizens’ initiative insist for revocation of the Permit issued by the Minister of Energy, for
moratorium on search, exploration and extraction of gold
and other metallic minerals in Sarnena Sredna Gora, as well as for a change in the legislation, providing for mandatory public discussion in each settlement, subject to research and exploration of metal minerals, before issuing a permit for research and/or exploration, as well as a ban to carry out research activities in areas at risk of radiation pollution. Here it is good to specify that the territory designated for research borders the largest military range in the country – the one in the village of Zmeyovo.
The members of the citizens’ initiative have sent an Application for access to public information to the Ministry of Energy with a request the official refusal of “Dundee Precious” from its investment intention to be given to them, as well as the decision of the ministry revoking the search and exploration permit in the region.
So far, the Ministry of Energy has not allowed access to any document from the entire file with the Canadian company, requested also by another applicant under the Law on Access to Public Information (LAPI).
The subject of this investigation does not address economic benefits and harms of opening a new mine in the Srednogorie region. But we cannot fail to point out the fact that for the promised 300 jobs, there is a high probability that many more will be lost in hotels and spas, in rose production, beekeeping, agriculture and other sectors that will be negatively affected by mining activities. Not to mention
the risks of environment pollution.
Probably the comparison of our region with that of Klondike – a river in Canada, in whose area at the end of the 19th century began the so-called “Gold Rush” excites the imagination of naive and adventurous people, but the truth about the consequences of gold mining is quite different.
Obviously, the public has the will to defend its demands (argued with expertise), even if it has to use legally permitted forms of civil pressure and protests.
And what are the reasons that led to the withdrawal of the Canadian company
from the search of new deposits of metals in Bulgaria, at this stage, in the absence of sufficient information, we can only assume.
One of the possible reasons is that “Dundee Precious Metals Chelopech” EAD has well assessed what image and financial damages the company would suffer from a strong civil resistance against its investment intentions to discover, explore and develop new gold deposits in the country.
Not to be overlooked is another reason related to the parliamentary elections in the early spring of next year. The government is in a difficult situation and will have to conduct its election campaign in a position of siege. Therefore, they may have found arguments to convince the Canadian company that it would be good to withdraw at such a time,
to prevent civil protests,
which will reduce the electoral support for GERB, which is already melting from different scandals.
But whatever the reasons for this result are, the more important question is whether the declared intention of the Canadian company has legal weight, which will ensure that the resumption of exploration and possible gold mining in the future will be impossible.
