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Mining Industry. Supreme court allocated the lucrative deposit back to
Canadian Rozmin.
Charges hanging over soapstone mining
Rožňava. Slovak Republic Supreme Court got involved in the fight for the right to
exploit one of the most attractive soapstone deposits in Europe. The Supreme Court
decided that the allocation of mining zone by the Regional Mining Bureau in Spišská
Nová Ves two years ago was illegal. The mining rights were unlawfully removed from
Canadian company Rozmin and the deposit was allocated to another investor.
Rozmin filed a petition which was first rejected by District Court in Košice, but the
Supreme Court accepted the petition. So far both investors invested almost three
hundred million crowns in the project and they both claim rights to the deposit. Now it
is the turn of the Mining Bureau to bring things to order. How, they don’t know yet.
Rusko allegedly in the background
However, the incorrect decision of the state authority that allegedly resulted from
political pressure of then current minister of commerce Pavol Rusko and people from
ANO may result in claims amounting to hundreds of millions crowns. In spite of the
fact that not even a ton of soapstone has been exploited from the mine, the fight has
been going on for years. Some experts think that this conflict had a significant effect
on the last amendment to the Mining Act. " We have received the verdict last week
and we are analyzing it. It is too early to say what will happen now,” said Antoniín
Baffi, chairman of the Regional Mining Bureau in Spišská Nová Ves. He was in the
position at the time when the disputed resolution was passed and he always
maintained that he proceeded according o the law.
Millions at stake
According to the decision of the Mining Bureau – although cancelled by the Supreme
Court – the mining space now belongs to VSK Eurotalc Košice. The investors in the
background are the Austrian businessman of Polish descent Jacek Engel and
Austrian Friedrich Schmid, owner of Schmid Industrieholding, known for
production of construction materials. Company Skanska has been working on more
than 4 km long tunnel to access the soapstone for two years now. They already spent
about 160 million crowns and according to the contract the tunnel should be finished
in February of the next year. Currently about one half is complete.
" We are not in the mining space of the deposit, we have license for mining activities
and so I don’t see a reason to suspend the works,” maintains Peter Čorej, the
technical manager of the project. He thinks that the decision of the court shall have
no effect on the mining rights of the company with respect to soapstone deposit. In
his opinion the mining bureau should only change the legal act assigning the mining
space.
" Our interpretation of the court´s decision is that the mining space was not taken
away from our company and the successor companies: Economy Agency RV, VSK
Mining and VSK Eurotalc , to which the rights were gradually transferred, never
became lawful holders and have no legal right for mining of soapstone in this location,” objects Ondrej Rozložník, the executive of Rozmin, owned by Belmount
Resources from Vancouver. In his opinion the Mining Bureau will have to include
Rozmin in the proceeding and the company will make use of its rights. If no
acceptable solution is found the shareholders will want compensation for lost profit,
since according to the plans the soapstone was already supposed to be mined.” We
have notified all competent authorities, including the Ministry of Commerce, but
nobody was listening, “ he added.
Dubious tender
HN several times pointed out the dubious background of the case and the
controversial decision by the mining administration.
Rozmin lost it license in 2004 – allegedly as a result of violation of the three year
deadline to start mining. After last – reportedly purposeful – amendment of the law
the period was extended to five years, but – as demonstrated by the situation in
Gemerská Poloma, in case of deep and inaccessible deposits, even this may not be
enough. The Mining administration announced the removal of mining rights to the
company which already invested more than 100,000,000 crowns in a simple letter.
Rozmin was rejected form the administrative proceeding and had no chance for
defense. Subsequently the administration announced a tender for mining space.
The tender was won by an accounting firm Economy Agency RV, which extended its
line of business to include mining activities just one month before the tender, leaving
behind large European soapstone players. However it was clear that they will need
investors to launch the project worth millions. Thus the mining rights found their way
to companies Economy Agency, VSK Mining until they finally arrived in a company
with foreign capital VSK Eurotalc, which may loose them following the last resolution
of the court.
"The disputes shall put the mining off for several years,” thinks Rozložník. After
completion of the access tunnel, VSK Eurotalc was considering the construction of a
processing plant and trial mining in 2010. In four years the production capacity
should reach its maximum of 100,000 tons of soapstone per year, creating about 100
jobs. According to the geologists the deposit contains several million tons of
soapstone, with exceptionally high purity. There is a great demand for quality
soapstone especially from pharmaceutical, cosmetic and paper industry, especially in
the European market and the value of the deposit is growing. One ton of the top
quality material can be sole at more than 12,000 crowns. The most valuable part of
the deposit contains about 1,6 million tons, another 28 millions are still awaiting
exploration.
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