for
2004 - 2010
1. Analysis
of the mining industry evolution and its present condition
1.1 Introduction
Before 1989, the mining industry development
strategy provided for the full supply with mineral resources of the Romanian
economy in order to reduce import.
The result of this policy was an overdeveloped
mining sector compared to the solid mineral resources potential of
The economic conditions after 1989 have
required the state support of the mining sector through a huge budgetary
effort.
Between 1990 and 2002, the state expenditure to
sustain the mining sector was of USD 5,249.5 million (see table 1):
·
subsidies: USD 2,769.6
million
·
capital
allocations: USD
1,428.7 million
·
budgetary
allocations: USD 75.0 million
Table
1
|
Specification |
Amount (USD million) |
|
Subsidies |
3,403.6 |
|
Social allocations |
247.0 |
|
investment |
1,598.9 |
|
Total |
5,249.5 |
Another USD 1,270.2 million representing
operating loss for the period should be added to the above-mentioned amounts.
The total state effort
including the budget expenditure to cover operating loss for 1990-2002 amounts
to USD 6,519.7 million.
The restructuring actions undertaken in this
period of time have resulted in several new problems, such as:
·
sharp
decrease of the economic level in mining regions affected by the sector
restructuring;
·
worsening
of social problems in these regions;
·
poverty
worsening;
·
unsatisfactory
economic and financial performance of the mining companies and societies.
1.2 Review of solid
mineral deposits mineable with the state support
Geological deposits in
various stages that can be mined using present mining technologies and with the
state support are shown in table 2:
|
Substance |
Deposit |
Level
of the state involvement |
|
|
unit |
quantity |
||
|
o
lignite |
million tones |
2800 |
reduced ; subsidies
for underground operations, social allocations and, partially, investment |
|
o
hard coal |
million tones |
900 |
high ; mining
subsidies, social allocations and investment |
|
o
gold and silver ore |
million tones |
40 |
very high ; mining
subsidies, social allocations and investment and deferred payment of debts to
power suppliers |
|
o
polymetallic ore |
million tones |
90 |
|
|
o
copper |
million tones |
900 |
|
|
o
salt |
million tones |
4000 |
no state involvement |
Compared to similar
deposits worldwide regarding quality, technologies used and productivity (5 to
12 times higher), the mining conditions and the characteristics of
1.3
Structure of the solid mineral substances mining sector
There are 12 companies
and societies operating in this sector:
·
coal : 2 national
companies : the National Lignite
Company Oltenia (CNLO) and the National Hard Coal Company
Petrosani (CNH
)
1 national society: the National
Coal Society Ploiesti (SNC)
1 commercial society :
S.C. Banat Anina
·
metallic
deposits : 2 national
companies : MINVEST S.A. Deva and REMIN
4 commercial societies: MOLDOMIN S.A. Moldova
Noua, CUPRUMIN S.A. Abrud, Baita S.A. Stei and S.C. Bucovina Min Vatra Dornei
·
uranium : 1 national
company : the National Uranium Company
·
salt : 1 national
society, the National Salt Society Bucharest
Presently, the mining activity involves 120
mines and open pits and there are 23 operating processing plants (see table 3):
|
Specification |
Total |
Out
of which : |
|||
|
Hard
coal |
Lignite |
Minerals |
Salt |
||
|
Mines |
77 |
12 |
23 |
36 |
6 |
|
Open pits |
43 |
- |
38 |
3 |
2 |
|
Processing plants |
23 |
2 |
- |
14 |
7 |
1.4.
Infrastructure
and technological level
Main characteristics :
·
reduced
ethnological level, determined by :
§
highly
worn out mining equipment (mechanized installations for coal mining, drilling
equipment, mineral convey equipment, compressed air and water drainage
equipment, ventilation installations, processing plant equipment,
automatization, control and monitoring equipment);
§
absence of
performant equipment for preparation and opening works execution;
§
high work
safety risk;
·
delays in
the execution of investment works to start new capacities, especially in the
copper mining sector, with consequences on the mines production capacity;
·
abandoned
buildings within the mines precincts resulted from decreased activity and
reduced staff which required less room;
·
degraded roads and
accesses to main precincts.
The lignite sector represents an exception and it’s characterized by:
·
increased
technological level of open pits determined by:
§
the
rehabilitation of technological
lines ;
§
better
monitoring and management of open pits equipment and of power consumption;
§
internal
waste tips were introduced in all the lignite open pits;
·
improvement
of open pits infrastructure determined by :
§
easy and
safe access to all equipment and works;
§
providing
safe and good communication means;
§
precincts with
buildings in good condition, with well maintained roads and platforms.
1.5 Evolution of domestic mining products demand between 1997 - 2002
The following main
factors influenced the output and the consumption:
·
variation
of the hard coal and lignite demand,, the domestic market requiring since 1997
a reduced coke coal quantity of maximum 3.5 million tones/year with a maximum
caloric power of 3,800 kcal/kg, as well as the fluctuation of lignite power
plants demand;
·
gradually
diminishing of the state support for complex and copper deposits mining;
·
stopping
by the National Bank of the gold acquisition from domestic market starting from
year 2000;
·
reduced salt demand:
on domestic market caused by the chemical industry restructuring, as well as on
foreign market, because of the international context.
The dynamics of the mining output between 1990 – 2002 is shown in table 4.
|
Product |
unit |
1990 |
1996 |
1997 |
2000 |
2001 |
2002 |
|
Net hard coal |
mil. tone |
3.9 |
5.3 |
4.3 |
3 |
3.5 |
3.7 |
|
Lignite |
mil. tone |
33.7 |
36.5 |
29.1 |
26 |
29.7 |
29.3 |
|
Copper in concentrate |
th.
tone |
32.0 |
24.5 |
23.6 |
16.1 |
19.1 |
21.7 |
|
Zinc in concentrates |
th. tone |
3.6 |
31.3 |
29.4 |
26.3 |
28.6 |
29.7 |
|
Lead in concentrates |
th. tone |
25.1 |
18.8 |
17.1 |
16.2 |
17.1 |
18.5 |
|
Salt |
th.
tone |
4.2 |
2.6 |
2.6 |
2.3 |
2.2 |
2.7 |
The entire mining
output obtained by 1996 has been taken over by domestic companies.
Following the GO no. 190/2000 re-published in
2004 regulating the precious metals activity and the Minister of Industry and
Resources order no. 391/2003, the export of subsidized non-ferrous concentrates
and precious metals has been approved. Table 5 shows the output destination
starting 1999.
|
Year |
Unit |
Total
metal in concentrates |
Out
of which : |
||||
|
for
domestic market |
for
export |
||||||
|
non-ferrous
|
gold |
non-ferrous |
golden
mud |
pyrite |
|||
|
1999 |
tones |
61,100 |
23,300 |
2.43 |
37,800 |
0.3 |
0.17 |
|
2000 |
tones |
58,500 |
19,900 |
2.42 |
38,600 |
0.18 |
- |
|
2001 |
tones |
64,800 |
24,900 |
1.04 |
39,900 |
1.51 |
0.05 |
|
2002 |
tones |
58,564 |
18,865 |
0.41 |
39,699 |
1.56 |
0.02 |
Since 2001, the National Bank of
Between
1997 – 2002 the domestic coal demand varied according to table 6:
|
Product |
Unit |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
|
Energetic hard coal |
million
tones |
4.3 |
3.2 |
2.7 |
3.3 |
3.6 |
3.0 |
|
Lignite and brown coal |
million
tones |
28.9 |
22.9 |
20.0 |
26.0 |
29.8 |
27.4 |
The salt market was influenced by the increase
of foreign demand and the evolutions within the industry (see table 7).
|
Product |
Unit |
|
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
|
Salt in rocks |
th.
tone |
domestic |
455 |
436 |
402 |
384 |
339 |
321 |
|
export |
556 |
408 |
470 |
450 |
340 |
366 |
||
|
Salt in solution |
th.
tone |
domestic |
1555 |
1325 |
1281 |
1442 |
1516 |
1529 |
1.6.
Legislative
framework
The mining activity is
controlled by the Romanian Constitution and the Mining Law no. 85/2003. The new
Mining Law no. 85/2003 brings changes of the old mining law, by providing an
improved framework to carry on the restructuring process and facilitating the
private sector development.
1.7.
Institutional framework
The institutional
framework was established and organized based on specific regulations, being
represented by the following bodies:
·
The
Ministry Of Economy and Commerce (MEC), a public institution which develops the Government policy in the mining
area, also provides the management of the public property in the mineral
resources area;
·
The
National Agency for the Development and Implementation of the Mining Regions
Reconstruction Programs (NAD),
responsible with promotion of social mitigation measures and actions;
·
The
Office for Industry Privatization, within the MEC, responsible with privatization of companies under the
MEC;
·
The
National Agency for Mineral Resources (NAMR), the competent body managing on behalf of the state the
mineral resources of the country.
1.8
Real and budgeted revenues and expenses
Total revenues for 1990 – 2002 didn’t
meet the levels provisioned within the Government approved budgets.
This situation was caused by reduced
selling revenues (the coal delivery price was not correlated with the inflation
rate) and by the general decrease of metal prices.
Total expenses for year 2002 and the
previous years are higher than provisioned in the mining companies/societies
budgets, except for CNLO, SNS Bucharest, CNU
Bucharest.
1.9 Loss summary
During previous years, as well as in the
current year, the mining companies/societies have constantly registered operating
loss over the subsidy level.
Total loss has been
influenced by exceptional expenses representing penalties for debts to the
state budget, local budgets, health insurance budget and special funds and is
amounting to lei 3,570.3 billion only for year 2002.
Thus, all mining
companies have registered loss for the overall activity, while only CNLO, CNH and
SNC have constantly registered profit from operating activity.
Measures undertaken during 2002
resulted in a decrease by 20-25% of operating loss plus subsidies and social
allocations, compared to the same period one yea earlier (see table 8).
Table 8
|
Loss |
unit |
2000 |
2001 |
2002 |
|
Total loss, out of
which : |
million
lei |
9,754,244 |
11,230,613 |
12,320,244 |
|
Operating
loss |
million
lei |
1,392,590 |
5,782,314 |
6,065,524 |
1.10
Mining companies/societies liabilities at 31.12.2002
The mining companies have liabilities in amount
of lei 41,505,986 million, out of which lei 18,294,373 million represent debts
and lei 23,211,613 million penalties. Out of total liabilities, 88.96%
represent liabilities to the state budget, local
budgets, social insurance budget and special funds and 11.04% represent debts
to suppliers.
Out
of total liabilities to suppliers of lei 4,583,675 million, 69.88% represent
debts to power suppliers.
Debts to power suppliers represent a major
strategy issue that requires a political decision to be solved.
1.11 Investment
Regarding the investment management, the following aspects should be
pointed out:
·
investment
provisioned in the revenues and expenses budgets provided about 35% of the
amount needed by CNH Petrosani and the
mineral companies;
·
own financed
investment covered 10% of needs, except for CNLO where it covered more than 80%
;
·
the distribution of
investment resources was poorly managed.
The mining companies/societies have stayed within the limits of the
total budgeted salary fund (see table 9).
Table 9
|
Specification |
Unit |
2000 |
2001 |
2002 |
|
Personnel expenditures |
lei million |
5,411,677 |
7,996,075 |
10,947,733 |
|
Salaries fund |
lei million |
4,162,829 |
6,730,504 |
8,392,298 |
|
Net salaries |
lei million |
2,497,784 |
4,666,304 |
5,794,929 |
1.12 Productivity of work
The productivity of work in the mining industry increased between 1997 – 2002, as shown in table 10.
Table
10
|
Specification |
Unit |
Year |
|||||
|
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
||
|
Work productivity |
USD th./worker year |
4.84 |
6.69 |
5.50 |
6.61 |
7.14 |
8.12 |
1.13 The mining
companies/societies staff
The age structure of the mining companies/societies personnel at
31.12.2002 is shown in table 11.
Table 11
|
Specification |
Unit |
Total |
Out
of which : |
|||
|
less
than 25 |
26
- 35 |
36
- 45 |
over
45 |
|||
|
Lignite |
no. |
24,000 |
1,202 |
9,190 |
10,237 |
3,371 |
|
Hard coal |
no. |
18,405 |
732 |
7,351 |
7,528 |
2,794 |
|
Minerals |
no. |
23,730 |
532 |
7,955 |
12,169 |
3,074 |
|
Salt |
no. |
2,697 |
79 |
927 |
919 |
772 |
|
Total |
no. |
68,832 |
2,545 |
25,423 |
30,853 |
10,013 |
The personnel structure on gender
and type of work is shown in table 12.
Table
12
|
Specification |
Unit |
Total
personnel |
Total
personnel |
Out
of total personnel |
|||
|
men |
women |
Management & administrative |
workers |
||||
|
Total |
Out
of which, miners |
||||||
|
Lignite |
no. |
24,000 |
20,850 |
3,150 |
3,316 |
20,682 |
6,559 |
|
Hard coal |
no. |
18,405 |
15,546 |
2,859 |
1,802 |
16,603 |
7,508 |
|
Minerals |
no. |
23,730 |
20,065 |
3,665 |
2,327 |
21,403 |
10,394 |
|
Salt |
no. |
2,697 |
2,220 |
477 |
449 |
2,250 |
499 |
|
Total |
no. |
68,832 |
58,681 |
10,151 |
7,894 |
60,938 |
24,960 |
The following conclusion can be drawn from the above data:
·
a relatively
young medium age of 38 which involves a
reduced number of employees to retire in the following 3 years;
·
the most of
employees are between 35 – 45 years old, as there are only few newcomers.
·
a relatively high
number of women which, considering the specific of work, involves that, many of
them have special working conditions.
Table 13 shows the education level of employees within the mining
companies/societies.
Table 13
|
Company/Society |
Basic
education |
Average
education |
University |
|||
|
No. |
% |
No. |
% |
No. |
% |
|
|
S.C.
|
663 |
70.2 |
235 |
25.9 |
46 |
4.9 |
|
S.C.
MOLDOMIN S.A. |
1398 |
68.5 |
532 |
26.1 |
111 |
5.4 |
|
CNLO
Tg. Jiu |
10733 |
57.9 |
5900 |
31.8 |
1918 |
10.3 |
|
REMIN
Baia Mare* |
4827 |
50.1 |
3924 |
40.7 |
887 |
9.2 |
|
SNC
|
2428 |
40.5 |
3145 |
52.4 |
425 |
7.1 |
|
MINVEST
Deva** |
3330 |
35.0 |
5769 |
58.9 |
595 |
6.1 |
|
CNH
Petrosani |
5376 |
31.7 |
10126 |
59.7 |
1523 |
9.0 |
* Bucovina Min Society is included within REMIN
Company
** Baita Society and Cuprumin Society are included
within MINVEST Company
A high percentage of personnel with
basic education can be observed, with a maximum at Banat Anina S.A. and a
minimum at CNH Petrosani.
This situation shows that a priority
of the mining companies/societies should be the personnel training with the
objective to inform the employees regarding: (i) the chances of keeping their
present jobs; (ii) possibilities to find new jobs; (iii) professions required
on the labor market.
2. Main
objectives of the mining sector strategy
In response to the
economic situation, the Government has established the following major strategy
objectives:
2.1 Approach of the
mining industry on commercial basis
·
best use
of mining products under free market conditions, to compete with any
other internal or external providers;
·
reconsideration
of mining perimeters, in order
to focus activity on most productive areas;
·
mining
output at competitive costs;
·
optimization
of staff number and remuneration
based on efficiency indicators;
·
modernization and
rehabilitation of viable mines or with
revival potential by transfer of mining licenses to private
operators.
2.2 Decrease of the Government direct involvement
and search for private sector investments
·
restructuring
of production capacities and improvement
of technological performances, cease of activity and closure of non-viable
mines;
·
gradual
phasing out of subsidies to
their full exclusion until 2007 for the ores and lignite sector;
·
provision
of subsidies for the hard coal sector, observing the Council of Europe
Directive no. 1407/07.23.2002;
·
phasing
out the subsidies for social protection of personnel employed in the mining industry until 2007;
·
privatization
of viable mines and of those
with revival potential to become viable in order to ensure the financing
sources needed for their development and modernization;
·
development
of the state-private partnership ;
·
promotion of a market
and efficiency oriented management.
2.3 Undertake of mining
activities in compliance with mining protection criteria
·
inventory
of the environment degradations
produced by the mining activity before granting the mining license and the
Government assuming its responsibilities in this sense until the license is
granted;
·
evaluation
of the potential environment impact produced by the mining activity in order to
establish the obligations for the state mining companies/societies and for the
private license holders;
·
preparation
of the environment protection manual for the mining industry, in order to
ensure the framework capable to promote an environment management at
European standards;
·
preparation
and promotion of the mine closure manual for privately owned mines in
order to secure environmentally and socially responsible closure by private
license holders;
·
improvement
and extension of institutional and regulating framework to ensure monitoring of fulfillment of
responsibilities by private license holders, related to environment and
society.
2.4 Mitigation of social
problems caused by closure of non-viable mines and revitalization of economy in
the affected mining regions
·
promotion
of individual and collective dialogue for informing the employees about the
present and future state of the mine;
·
consultation
with the affected staff on the most adequate social protection forms to be
adopted;
·
promotion
of training forms for the personnel in order to increase its chances on the
labor market;
·
implementation
of community works programs, aiming at temporary employment for the redundant
people;
·
social
protection of people laid off with minimal chance to find new jobs;
·
reuse of locations
and assets become available, following mines closure.
2.5
Strategy priorities
The social situation created in the mining
regions by the massive layoffs between 1997-1999 on one hand, and the absence
of complementary sectors to offer people an alternative, on the other hand,
require a careful management.
The economic and
financial situation of the state-owned mining companies/societies has been
continually going down and registering loss over the subsidy level, deferred
payments to power suppliers, debts to the state budget, social insurance budget,
local budgets and special funds.
The defective economic
and financial management has led to: (i) unsafe work and health
conditions ; (ii) improper control of output at stope level ; (iii)
inefficient mining procedures, leading to low productivity ; (iv)
redundant personnel and inefficient use of employees ; (v) weal motivation
of employees ; (vi) resistance to change ; (vii) management lacking
vision.
Actions presented in
detail in the strategy are structured on short, medium and long term and have been
established depending on their priority and based on the following factors:
·
necessity
of restructuring the production, economic and financial capacities of the
company ;
·
elimination
of financial loss and phasing out of subsidies;
·
potential
for rapid creation of new jobs;
·
possibilities
to attract funds to finance actions ;
·
existent
local capacity for efficient implementation ;
·
speed of
implementation.
2.6
Conditions of the strategy implementation process
There is a fundamental
interrelation among the national
strategy for mining sector, the
energetic strategy and the strategy for regional development of affected mining
areas:
·
the
electrical power produced in power plants using coal will represent between
2003-2020 about 33-35% from the total of power produced in Romania, a fact
generally caused by the need to maintain a source of primary energy carriers at
Government’s disposal, by the policy for modernization of coal thermal points
promoted by the MEC;
·
the state
budget financial resources ever limited for supporting non-profitable mining
activities;
·
about 155
settlements in the mining areas are dependent in a proportion more than 50% on
the incomes from the mining activity from their geographical area;
·
directly
affects the social and material situation of 68,000 persons employed in the
mining activity, as well as indirectly, impacting on over 300,000 persons from
related sectors;
·
bad influence on the
social situation of over 50,000 young people in the affected mining areas,
following detrimental influence produced on the economies of the respective
regions.
Joint implementation of the programs prepared
for mining sector reform, approach of mining industry on commercial basis,
privatization of viable mines and of mines with revival potential, economic and
social reconstruction of affected mining regions and social protection of
affected staff are conditioned by ensuring an adequate regulating framework,
financing sources and the institution responsible with the implementation of
the strategy.
The development and promotion by the end of
2004 of a regulation to provide the necessary framework for the adjustment of
the mining sector activity to fit the market economy and to establish the
rights and liabilities of mining communities represents one of the priorities
of the implementation process.
3.
Policies, instruments and
resources required to achieve the main objectives of the mining sector strategy
To accomplish this mission, several policies have to be adopted allowing
the Government intervention by legislative and regulatory measures and by funds
allocation in order to finance all actions required for the implementation of
these measures.
3.1.
Policies regarding the revision of institutional structures and capacities in
the mining sector
The economic performances of the Romanian
mining sector show that the mining companies activity in the field of brown
coal, hard coal and non-ferrous minerals is uneconomic, so the existing
capacities should be reconsidered in order to cease activities, close non-viable
mines and support mines with revival potential.
Measure 1 : Reducing
gradually the state’s role by eliminating its involvement in non-mining,
exploration and mining activities
Reducing the state’s role in the mining industry involves the gradual
replacement of its administration and financing attributions with the
regulation, control and tax and royalty collector attributions, by:
·
elimination
by 2006 of the state budget financing of geological explorations works, the
exploration risk being taken over by the exploration license holders;
·
the state
financing only “The National Geological Research Program” (prospecting
work) to provide basic geological
information;
·
selection
of the most unprofitable mines and ceasing the funds allocation for investment
and preparation works;
·
promotion
of all documentation required to obtain the closure approval and of the “personnel social protection”;
·
offering
for privatization of cooper open pits an of the best underground mines;
·
offering for
privatization of mines to be closed, if they have rehabilitation potential.
Measure 2 : Revision
and improvement of the legal framework
The promotion of the National Mining
Industry Strategy, as well as its implementation requires several legal and
organizational measures, as follows:
·
mining
industry adjustment to fit the market economy, the rights and liabilities of
the mining communities
·
approval
of methodologies for the mining societies financial restructuring, labor
retrenchment and privatization of mining companies organized as commercial
societies;
·
approval
of restructuring programs for each mining company/society developed on the
basis of regulations regarding the mining industry adjustment to fit the market
economy, the rights and liabilities of the mining communities;
·
appointment
of the Inter-ministry Committee members established by the Government Decision
for the strategy approval;
·
establishment
of the institutional framework to enable the strategy implementation;
·
management
of the mining waste, according to the Position Document of Romania in view of
the EU integration, Chapter 22 – Environment Protection;
·
ratification of a
new Loan Agreement for the restructuring program implementation.
Measure 3: Strengthening of the
administrative capacity of public institutions involved in the monitoring of
the strategy, policies and actions for sector restructuring
The public institutions presently involved in the administration and
monitoring of the mining activities do not have yet enough experience in order
to solve all present and future mining industry problems and have only limited
experience with the private sector which, as underlined in the strategy,
should become the most important factor in the rehabilitation and modernization
of the mining industry.
In this sense, the following are required:
·
reconsideration
of the existing personnel;
·
providing
a qualified personnel familiar with the mining sector issues;
·
training
of personnel employed in these institutions, according to procedures imposed by
the future integration of
·
institutionalization
of an information and communication system with other public institutions
involved in the reform process;
·
financing
and optimization of the required equipment and logistic procurement;
3.2
Policies for
eliminating the financial loss in the mining sector
The results of the Romanian mining industry activity show the following:
·
the
activity of the state-owned mining companies/societies in the hard coal, brown
coal and mineral sector is inefficient, as the state is forced to allocate
important financial resources for subsidizing the mining operations, investment
works and social expenditures;
·
the state-owned
mining companies/societies are registering high operating loss up to twice the
amount allocate door subsidies.
These realities urge the Government to take appropriate measures for
diminishing the losses and the subsidies until complete elimination.
Measure 1 : Restructuring the
production capacities and improving the technological performance
The Government will begin to restructure the production capacities on
the basis of the following premises:
·
elimination
of subsidies for the mineral and brown coal sectors starting from 2007;
·
the directive no.
1407/2002 of the European Commission allows the member states to subsidize the
mining of the energetic hard coal until 2010.
·
reassessment
of the hard coal subsidy norm, using kcal as the new unit of measurement instead of tone;
·
gradually
phasing out operating loss and subsidies by technical and technological
rehabilitation of mines within CNH;
·
reassessment
of the gold subsidy norm, using
capitalized metal instead of metal in concentrate;
·
reconsidering
the mining perimeters in order to focus activity in the most productive areas
and directing starting from 2003 of investment solely to area with
rehabilitation and/or privatization potential;
·
correlation
of the negotiated energy hard coal price with the imported hard coal (65
USD/tone), adjusted with the quality report (heating power of the imported coal
6000 kcal/kg, heating power of the Valea Jiului hard coal 3800 kcal/kg.);
·
dispersion on a
certain period of time of the social effort determined by the production
capacity restructuring, to make it easier for the affected personnel.
In order to improve the technological performances:
·
subsidies
will be re-directed from mines under closure to operating mines, enabling
payment of debts including debts to power suppliers;
·
the volume
of budgetary allocations for operations, investment and social will be
maintained at a constant level between 2004 – 2006 (the updated level of 2003
allocations);
·
the shareholder will
be responsible for the development and approval of reform programs to ensure an
efficient use of budgetary financial resources, thus preparing the
privatization of the mining companies/societies.
·
allocation
of financial resources should be done only on the basis of reform programs
developed for each beneficiary unit;
·
implementation
of measures provisioned in the reform programs and privatization action plans,
as approved;
·
incentives
in order to encourage the establishment of joint ventures and public-private
partnerships for the non-ferrous minerals open pits, as means to reduce production costs and sustain with
investments their development based on approved programs;
·
development of a
reform program for the uranium mining sector correlated with the objectives of
the “Nuclear Energy Program” and the foreign market constraints regarding the
price and additional expenditures for nuclear fuel procurement. In accordance with
this program the capacities which will remain in function and the costs
necessary for modernization, as well as the financial sources, will be
established;
·
establishment
of commercial societies with a sole shareholder – the mining company/society
for the execution of underground investment, preparation, maintenance,
equipment disposal, coal maneuver and transportation, administrative
activities, water discharging);
·
association of the
commercial societies established for servicing works which main shareholder is
the mining company with specialized private societies in order to rapidly
attract in the area financial resources from the private sector.
Measure 2: Closure
of uneconomic mines
The mine closure process included so far only
mines which activity was ceased in 1997 and 1998, following the massive layoffs
those years.
Within this strategy, the mine closures and
environmental rehabilitation will be a priority, starting immediately after
activity cease of mines included in the program.
The experience so far has proved that the care and maintenance works
carried on since the closure decision was approved by the Government and until
the contractors entered the site generated expenditures of about 600 billion
lei, while for the actual closure the expenditures were of about 800 billion
lei.
There will be enforced regulations for ensuring
the proper bodies for executing some closure works since the care and
maintenance stage, thus reducing the costs for the entire process.
The planning and execution of the closure works will be carried on with
respect to respecting the following rules:
·
community
involvement in the closure process, by information and collective and
individual consultation actions regarding all aspects involved ;
·
employment
of local labor, usually from among laid off or to be laid off workers ;
·
rehabilitated
and cleaned fields, buildings and utilities will be made available for
communities, as support for starting new business;
·
stimulation
of other economic activities in the area;
·
using the experience
resulted from the “Pilot-project for mines closure and social mitigation”
financed by the World Bank.
Measure 3 : Financial
restructuring of the mining companies/societies
The financial situation of the mining companies
demands the following restructuring measures:
·
separation
of the non-profitable mines from the mining company/society and their
establishment as commercial societies carrying on the historical debts;
·
the
juridical liquidation of the mining companies organized as commercial societies,
for which the closure decision has been approved;
·
yearly
compensation of 2003 – 2006 loss registered by operating mines, in the mining
company annual budget preparation stage;
·
controlling
the salaries increase and other personnel benefits for mines where revenues do
not cover expenditures;
·
promoting the
regulations for capitalizing the stockpiles difficult to sell.
Measure 4 : Use
of available assets (buildings, mine workings, utilities, field) for the
affected regions reconstruction
Assets belonging to the mines for which the
closure decision has been approved by the Government will be used with priority
for the creation of new businesses which will support the economic
reconstruction of affected regions and will provide new work places for the laid
off persons.
The experience so far proves that some assets
from closed mines, like Lonea Pilier, Magureni Tufeni, Rodna, Cuzap, Burloaia,
Bodos, Racos, Petrila Sud, Campu lui Neag have been capitalized by sale to
entrepreneurs who have developed various businesses.
Through the “Pilot-project for Mine Closure
and Social Mitigation” financial resources are ensured to organize 12
buildings in closed mines precincts which will be converted into workspaces and
be made available to investors for a period of 24 months.
The implementation of the reform programs for the mining
companies/societies will result in spare room within the closed mines precincts
that requires:
·
an
inventory of assets that may have other use than for mining activities;
·
consulting
employees regarding their interest to capitalize available assets;
·
consulting
the community regarding its interest to capitalize available assets;
·
organizing
17 industrial parks in the precincts of the mines that became available after
closure in the areas Motru, Berbesti, Dragotesti, Vulcan, Lupeni, Livezeni,
Anina, Borsa, Suior, Brad, Ghelesi, Filipestii de Padure, Balan, Zlatna, Baia
de Aries si Moldova Noua, for which the financing will be ensured by a
private-public partnership.
·
making additional
room available for local authorities to establishes communitary enterprises.
3.3 Policies regarding
environment rehabilitation and safety
Although there is a regulatory
framework addressed to specialized bodies, state-owned mining companies and
license holders, they still lack the abilities to properly monitor and execute
environment rehabilitation works.
Measure 1 : Mining
activity using international accepted environment safety standards
“The Environment management manual for the
mining sector” offers
guidelines to approach environment issues related to the mining industry on the
basis of international experience.
According to the manual, the
environmentally safe mining requires:
·
acknowledgement
of the environment management as a priority and the establishment and implementation
of an “environment management system”;
·
assuming
responsibilities to the highest level toward environment issues;
·
adopting
the best ways to minimize environmental degradation;
·
a risk
analysis and a risk management in design and mining;
·
providing
finance to improve the on going works in the mining sector;
·
eliminating
procedures and regulations that make difficult commercial activities and
initiatives.
Measure : Rehabilitation of
the environment damaged by the mining activity
·
inventorying
before issuing the mining licenses the environment damages produced by the
state-owned mining companies as a direct result of the mining activity, as well
as the impact on the neighboring areas, communities, infrastructure and
landscape;
·
providing
the necessary financial resources and establishing financing priorities;
·
defining the
monitoring framework required to environmental rehabilitation.
At mines to be closed, environmental
rehabilitation will be included within the closure documentation.
The Ministry of Environment and Waters through
the local Environmental Agencies is responsible for monitoring and enforcing
the environment protection measures.
3.4
Policies regarding the social protection of people affected by the
restructuring process
Taking into account the
extent of the reform program described in the strategy affecting both personnel
of mines to be closed and employees of mines that will remain active, the
strategy should provide social protection policies that will be applied
specifically for each mine in part, considering that:
·
for the
mines undertaking rehabilitation and restructuring, these measures will be
included in the plan for reform;
·
for the mines to be
closed, these measures will be part of the social protection program.
Following the Strategy approval, local
councils in the mining areas will initiate with the NAD support the development
of a study on the social and economic situation of each important mining
region.
The Ministry of Labor, Social Solidarity and
Family, the National Agency for Labor and the mining companies shall be
responsible for the implementation of the social measures.
Measure 1 : Promotion of individual and collective dialogue
for the information of employees with regard to the current and future
situation of the company
Within the individual and collective dialogue for information of the
employees, the mining operators shall undertake the following:
·
appointment
of a competent person in charge with planning, programming, organization of the
labor retrenchment process;
·
consultation
with the employees on the proposed “reform plan”, including forms of
privatization to be most appropriate to their interest;
·
consultation
with the employee on the personnel restructuring criteria to be applied
targeting to rational restructuring and not to voluntary redundancy;
·
notification
through mass-media and displaying in public places the mine closure decision
that will contain:
§
the public
announcement of the mine closure;
§
the
dispersal of mining assets, including the buildings;
§
the
notification on the personnel restructuring program;
·
informing
the employees regarding the mine economic and financial condition, including:
§
liabilities;
§
debts and
credits;
§
budgeted
and effective revenues;
§
budgeted and effective expenses;
§
personnel
expenses;
§
wages
expenses based on the collective labor contract;
§
ratio
between operating revenues and expenses;
§
market;
·
informing
the employees regarding the reform program, specifying the mine prospective and
personnel changes by:
§
meetings
at activity group level;
§
displaying
information panels;
§
disseminating
public information brochures;
·
consulting
and informing the employees of mines to be closed or restructured regarding:
§
legal
provisions regarding unemployment and chances to be re-employed;
§
distribution
of redundant mining labor on existing openings in the region and ways to find
new jobs;
§
redeployment
of labor within the company or to other companies and training;
§
personnel
information regarding active measures to fight unemployment;
§
privatization
opportunity options and best employees interest methods;
§
development
chances of the settlement/area;
§
possible
jobs for community development;
§
possibilities
of using available room within precincts of closed mines;
§
environmental
damages affecting the development of other economic activities;
·
making employees
familiar with the labor market requirements.
Measure 2 : Professional
training for the staff employed in the mining industry to increase chances on
the labor market
The state-owned mining company shall require the organization by the
Local Agency of Labor of various forms of professional training, based on
individual and collective consultation:
·
organization
together with the Regional Employment and Training Agency of professional training courses within a larger
program, up to two years, on:
§
professions
required on the labor market;
§
liberal
professions;
§
ways find
new jobs;
§
self-employment;
§
support
for business plan preparation;
§
professions required
on both domestic and foreign market for people up to 30 years old.
Measure 3: Social protection of miners laid
off
Social protection measures are needed for the redundant personnel in the
mining activity, aiming at ensuring subsistence resources for a given time, so
that they may be able to find new jobs and to adapt to new life conditions.
The adoption of such measures is brought about by the following: (i)
the activity in any mining basin can’t be stopped under these conditions
earlier than 2-3 years; (ii) between the restructuring decision of a mining basin
and the total cease of activity, a reduced number of staff can still be
employed; (iii) the mining life of certain mines is shorter than the time
needed by a part of the staff employed until it reaches the retirement age.
The following measures will be adopted:
·
a “monthly
additional income” for 2 years starting from activity cease in the state-owned
mining company/society subject to restructuring, in which time the former
employee will be given support to resume work in another company, become
self-employed or retire if retirement conditions are met;
·
personnel
redistribution among the mines within the same company, with the individual’s
agreement regarding the new work, following the steps below:
§
change the
transportation routes for personnel and/or providing accommodation in the
nearby of the new place of work;
§
identification
of jobs for women;
§
take over
of execution works by the mine personnel, currently performed by companies
outside the mine;
§
identification
of other jobs available to redistribution;
§
training
of personnel to start the new jobs;
·
support
for laid off people living in the country side to provide their access to:
§
agricultural
inventory;
§
agricultural
land;
§
cattle;
§
household
or household reconstruction in resident locality or other place;
§
training specific to
the new jobs.
·
premiums
for job changing;
·
severance payments
provided when no other measure of social protection can be applied.
The implementation of these measures requires
the approval of specific regulations regarding the mining industry adjustment
to market conditions.
Measure 4 : Support of a community works program, having as
objective temporary employment of redundant persons in order to keep them
active and facilitate access to the labor market
The implementation of reform programs requires the active and interested
participation of affected employees, as well as of other factors affected by
the process.
The Strategy aims at:
·
keeping
active the redundant staff;
·
ensuring fulfillment
of city obligations in the mining areas,
as stipulated in law no. 351/2001.
The following actions will be taken:
·
identification,
together with local authorities, of community works that may provide jobs for
the redundant staff;
·
amendment of the
mines closure and social mitigation project with a component for financing
community works.
Measure 5 : Stimulating
employers to hire people laid off from the mining activity, with a view
to their redeployment, training and keeping active, in order to maintain the
abilities to find a job
The following actions will be taken:
·
identification
of potential employers, willing to take over the redundant people from the
mining activity;
·
consultation
of potential employers on the conditions and level of premiums to be provided
to them in order to employ a number as large as possible of laid off people;
·
consultation
of the persons to be laid off on the conditions they would accept in new jobs;
·
organization
of meetings with the participation of miners to be laid off and potential
employers;
·
support to
employers in ensuring training;
·
needed changes of
specific regulation in this field.
Measure 6: Social protection of laid off people with
minimal chances in finding jobs, due to age, low education or physical
status
The increased number of employees over 40 and with low education makes
difficult for a large part of them to find a jobs, as
they do not represent interest for employers.
As inferring from the employment analysis, as result of years working in
mining, a great number of employees are suffering from specific diseases,
making very difficult for them to respond to employers and the labor market
requirements.
Therefore, the social protection of people in
this category is necessary and the following actions will be taken:
·
identification
of persons in this category before mine closure and/or during the “monthly
additional income” period, after implementation of measures stipulated
previously;
·
financial
support for 2 years amounting to a certain percentage of the salary for former
miners unable to find new jobs, provided that they work for community
·
establishment of the
institutional framework to ensure the organization, management and coordination of these persons, in order to
fulfill the obligations referring to work for the community.
Measure 7: Social protection of the laid off people’s
families, in order to prevent their social exclusion and specifically the
exclusion of children from education
The following actions will be taken, with the support of the Mining
Communities Social Development Scheme :
·
periodical
identification of laid off workers families;
·
cooperation
with specialized institutions to identify programs these people may benefit
from;
·
promotion of a
social development scheme including this type of projects.
Measure 8: Establishing viable alternatives for youth generation to provide conditions
for their development
·
identification
of existing youth programs and make them
known to interested people;
·
adapting
the high school curricula to include subjects on information and communication;
·
support to
children from poor families to allow them continue their studies after
graduation of the 8 compulsory grades;
·
consultant
services to speed up the implementation of youth programs;
·
focus of responsible
institutions activity on helping young people in the mining regions.
The National Authority for Youth is helding
responsibility for the implementation of youth education and training programs
able to provide them other employment opportunities than the mining sector.
3.5 Policies regarding
economic reconstruction of the mining regions affected by restructuring
The mines closure process results on one hand in the decrease of local
population income with impact on the local economy, and on the other hand in
the decrease of local budgets revenues.
Once Strategy approved, the Inter-ministry Committee and Local
Councils in Jiului Valley, Moldova Noua, Anina – Oravita, Brad, Zlatna – Baia
de Aries, Baia Mare, Baia Borsa and Balan with the County Councils support will
prepare the social and economic development strategies of the mining areas
identified as the most affected.
The Ministry of Administration and Internal Affairs is responsible to
ensure connection with local authorities.
For the implementation of economic reconstruction policies, more
measures and activities have been identified as further set forth.
Measure 1: Changing localities containing assets of closed
mines in areas favorable to private sector
The following actions will be taken:
·
set up of
the community consortium (a civil society body including representatives of
relevant local public and private organizations such as city halls, local
councils, health, education and cultural organizations, local labor agencies,
environmental agencies, labor unions, employers’ associations, regional development
agencies, NGO-s and donors) and
preparation of the local action plan establishing priorities according to the Strategy
measures;
·
identification
of localities with assets that belonged to closed mines that may support the
development of private sector;
·
facilitating
the re-arrangements as business centers of some buildings, providing required
utilities (electricity, water, gas, etc where possible) to be offered to
private investors;
·
ensuring
the management of existing workspace centers and of some services (accounting,
phones, e-mail) for the businesses incubated;
·
identification
of programs for business development and of those for local development;
·
ensuring
assistance for entrepreneurs in preparation of business plans, market analysis,
business management, staff employment, documentation for credits and projects
to attract development funds, such as MARR, SAPARD, etc;
·
support of
local authorities in preparation of projects in order to access funds for the
rehabilitation and modernization of infrastructure, such as: the project
financed by the World Bank for rural development, social cohesion program, etc;
·
establishment
at the precincts of closed mines (where possible) of industrial parks for
attracting investors by offering facilities allowed by law;
·
support of
small businesses development by expanding access to micro-credit funds for the
respective regions where it has shown to work;
·
support
for the local communities as independent or in partnership with the state/and
or mining companies in order to establish or to organize community enterprises,
that may best use local resources by provision of these available spaces;
·
free
transfer to local councils (GO no. 632/1999) of all locations, sites, facility
network belonging to mines but had common facilities with them;
·
promotion
of positive image of the mining areas :
§
provision
of information to assist people in any matter related to the activity in the
area or existing possibilities;
§
publicity
for all initiatives within the development program;
§
identification
and promotion of opportunities for new entrepreneurs and for existent
commercial companies;
§
promotion of the
region in the country.
Measure 2: Reuse of sites, assets and lands made available
after mines closure for the development of alternative economic activities in
the area
The following measures will be taken:
·
inventory
of the sites, buildings, lands become available following mines closure and
transmitting the resulted information to the Chamber of Commerce, make the
information public on the NAD and the MEC sites, as well as by public
information campaigns at local and central level;
·
transfer
to all physical and legal persons who show interest for these locations, with
compliance of GD 632/1999;
·
establishment
of partnerships local authorities-private investors, for developing economic
activities with transfer of available sites;
·
removal of
wastes away from assets and lands to be made available to those interested in
developing economic activities;
·
ensuring
facilities (power supply, running water,
sewerage ) additional to these assets;
·
promotion
of community economic activities in order to provide jobs for most
disadvantaged categories of people by provision of buildings and lands that
belonged to former mines
Measure 3 : Ensuring the community and local consensus to
approach the mines closure and environmental rehabilitation process as a
recovery of assets and lands to attract investments, by community involvement
and support.
The following actions will be taken:
·
promotion
of a transparent restructuring process for information of the community and for
their involvement in the process as interested factors, capable to develop
proposals and activities contributing to economic reconstruction of the area,
by:
§
the mining
operator will take actions from its own initiative, bearing the costs and
assuming the obligation to:
o
assist the
local councils in areas affected by mine closure to establish and organize
“community councils” together with secretarial work;
o
initiate
and organize communities consultancy and information campaigns, in the
responsibility of the “director for community”(according to the Minister of
Industry and Resources Order no. 273/2001), prior to mine closure decision by:
ŕ
collective
consultation:
(i)
organization
of meetings with community members on subjects such as consequences of mine
closure;
(ii)
active
participation to community consortia actions;
(iii)
developing
surveys regarding the labor market, abilities and professions available to
former miners, etc;
(iv)
involvement
of interested entities in the preparation of specific mine closure processes
(social and environmental responsible);
ŕ
individual
consultation of community members:
(i)
disseminating
information regarding the restructuring process using brochures, panels,
meetings with individuals, groups and mass media;
(ii)
organization of
“open doors” days to inform on the restructuring progress.
·
in order
to be representative, the “community consortia” should include representatives
of entities such as the city hall, the local council, the health departments, the
police, the church, the education departments, the regional agencies for
occupational training, the environment authorities, trade unions, employers’
associations, the NAD, the MEC, NGO’s in the field of economic reconstruction
and environment rehabilitation, donors, as well as other relevant entities the
local counselors may consider relevant;
·
the priority task of
the local consortium consist of the development of the « Local Action
Plan » that will include proposals and actions agreed with the community,
helping at community social and economic development .
Measure 4 : Improving
the living conditions by solving the housing problem and rehabilitating
utilities
The following actions are envisaged:
·
initiatives
directed especially toward the laid off miners and their families, as well as
the other poor social categories;
·
a
development fund (the Mining Communities Social Development Scheme) for the
local community to offer resources with the help of which specific actions will
be achieved;
·
specific
initiatives for improving the housing fund, using people living in those houses
for modernization and rehabilitation;
·
involvement of
ministries and other decentralized bodies for improving the social assistance
conditions.
The entire support package will be applied
during the strategy implementation, but will be mainly applied to people who
cannot be relocated. The needed resources and consulting will be accessible in
all the main locations and as close as possible from local community.
Measure 5 : Improvement of environment and infrastructure
by public works programs
The following actions will be taken:
·
identification
and start of all environmental programs;
·
identification
of infrastructure needs (roads, water supply, sewerage, electrical power, gas,
telecommunications);
·
establishment of
financing level that the Government will provide during the strategy
implementation and appeal to potential donors for ensuring co-financing.
Measure 6 : Capitalization of local resources from
agriculture, woods, tourist and fishing
The following actions will be taken:
·
consultancy
services – training for farmers focused on new technologies for cattle breeding
and bio-products (natural and ecological products);
·
support of
establishing associations for cattle-breeding and fishing;
·
support
for entrepreneurs in wood and fruits processing;
·
establishment of a
research-assistance center for agriculture specific to mountain areas.
Measure 7 : Ensuring the economic environment and
infrastructure that may facilitate financing for development of new businesses
and reconstruction of infrastructure
The following actions will be taken:
·
investments
in business incubators (a modular location with integrated support services);
·
a
sustained campaign to promote the region and attract new businesses and
investments;
·
support for a new
economic sector, with focus on tourism and development of existent sectors,
such as constructions and agriculture.
Measure 8 : Promotion of a positive image of the region to
attract investments and investors
The following actions will be taken:
·
support
services precisely located for providing information and counseling on any
topic from housing improvement to development of professional skills;
·
on the job
business support;
·
advertisement
of all initiatives within the strategy and information of residents on
available opportunities;
·
identification
and promotion of opportunities for new entrepreneurs and existent commercial
companies;
·
promotion of regions
in and outside the country.
Measure 9 : Re-launch of the viable mines activity and
fluidization of economic activities in the mining regions
The following actions will be taken:
·
strategic
initiatives that should be permanently applied:
§
identification
of new cost diminishing measures ;
§
measures
to allow prices as close as possible as to the metal stock exchange prices;
§
establishment
of an internal and external monitoring mechanism for the mine and the company
financial and technical performance;
§
canceling
of historical debts to the state budget, local budgets and special funds
budgets;
·
strategic
initiatives for the first year of the implementation process;
·
closure of
non-viable mines consumer of resources that may be directed to improve the
performance of better mines;
·
technical
and economic audit for identification of investment needed for modernization
and rehabilitation of active mines in order to attract private investors or
private - state partnerships;
·
doubling
the work productivity during the next three years in case of active mines in
order to increase the interest in their privatization;
The strategy implementation measures and
actions have been structured on three stages:
·
immediate
actions for year 2004 ;
·
medium
term actions for 2004 – 2006 ;
·
long term
actions toward 2010, for sustainable development.
3.6
Immediate actions and measures
Starting from the strategic objectives and taking into account the
relative low pace of the reform in the mining industry, determined by the delay
of creating a business environment within the mining regions able to stimulate
the private investment, the immediate actions will focus on the strong
financial mobilization of the state budget, local budgets special funds and
financial institution resources.
The main actions for 2004 are detailed in the implementation program of “The
Mining Industry Strategy for 2004 – 2010” in annex 1.
3.7
Medium term (2005 – 2006) measures and actions
The medium term actions and measures
are mainly directed to the further restructuring of the production capacities
and financial restructuring to allow a profitable activity of the mining
companies/societies within the budgetary limits and to provide a proper social
protection of people who will leave the sector.
The medium term actions
and measures for 2005 – 2006 are presented in annex 2.
3.8
Long term actions and measures
Regions affected by the sector restructuring
will remain for a period of time (2005 – 2006) highly dependent on the mining
activity, both because of direct and indirect employment and because the
resources required by the mining activity.
It is thus necessary to
continue the sector restructuring in order to reduce the burden over the budget
and to attract private capital able to take over the labor force that will
become available.
Actions provisioned to achieve this purpose:
·
restructuring
and changing the mining sector in a modern economic sector by selecting and
closing uneconomic mines and focusing the capital resources on the improvement
of the economic mines;
·
environmental
rehabilitation and land assessment in order to identify and capitalize new land
surfaces;
·
building
of European roads passing through areas;
·
developing
tourism as an alternative to the traditional mining activity, in locations with
tourist potential;
·
professional
training of youth with respect to the labor market needs;
·
promoting the
technological development, the technology transfer as an option for the mining
activity.
·
fighting chronic
unemployment by involving in community activities people with minimal chances
on the labor market because of age, sex, professional abilities, etc.
·
making
available fields in the Hunedoara county or nearby counties for the low/no
income families with;
·
social assistance in
order or prevent social marginalization.
4.
Conclusions
4.1
Expected results
·
New
commercial basis for the mining industry.
·
Elimination
of subsidies and social allocation for the mineral and lignite sectors starting
with 2007, assuming outputs as showed in annex 4 and annex 5 as result of the
Strategy implementation.
·
Control
over the hard coal sector subsidies with respect to Directive no. 1407/2002 of
the European Union.
·
Focusing
the state budget allocations on the best performing mines in the mineral sector
aiming at their privatization.
·
Privatization
of the lignite open-pits in the form of commercial societies or as aggregate
including heating plants.
·
Ensuring
the social protection for approximately 48.000 persons representing mining
workers laid off in 2002-2003, as well as for those to be further laid off
between 2004-2010 and considering that:
§
15.000 will
receive “monthly additional income”
§
9.000 will
retire
§
21.000
will be employed in new established jobs
§
15.000
will enter chronic unemployment and will be granted severance payments
§
3.000 will
become self-employed.
·
Promoting
a transparent closure process, informing communities and involving them in the
process.
·
Establishment
on medium term of approximately 31.500 jobs, out of which 17.000 for a limited
period of time (2-3 years) on infrastructure works.
·
Developing
an attractive business environment.
·
Developing
the private sector in the mining regions able to absorb the labor who will leave the mining activity in the next 5 years.
·
Establishing
an attractive environment for the extension of tourist activities.
·
Adjusting
the educational system to the new economic requirements.
·
Ensuring
an active social assistance for the most disadvantaged groups – children
without living means, senior citizens with low incomes, persons with ages and
professions not attractive for employers, handicapped persons.
4.2
Financial resources to required the objectives of the
strategy
The achievement of strategy objectives requires
appropriate financial resources, according to actions proposed.
The financial resources
on categories of expenditures have been estimated based on studies developed
with IBRD support.
Depending on the implementation stages, there
will be a change of the ratio between the budget financing and the private
financing, by the increase of the private finance.
Because of the stringent priority to
establish new jobs and the delay in developing a favorable business environment
for alternative activities, an important financing effort by the state through
its budget and loans contracted is required.
The
estimated financial resources for 2004 – 2010 required for the implementation
of the strategy amount to 2,212 USD million, out of which 1,200 USD million are
required for 2004 – 2006.
Annual expenditure for each of the social
mitigation measures, as well as the allocation of resources to the most
affected communities based on annual plans fall under the responsibility of the
Inter-ministry Committee and its component institutions.
Annex 3 presents sources and destinations of
the financial resources.
Providing the financial resources required for
the implementation of the Strategy for 2004-2006 represents the main
task of the central public institutions represented in the Inter-ministry
Committee.
The Government is willing to attract the
international financial institutions support, such as the European Union and the
World Bank, in order to finance the project for the “Mining Industry Adjustment
to the Market Economy”, given its dimensions, implications on the Romanian
economy and image, taking into account the EU joining process.
4.3
Institutional framework
For the Strategy implementation a political
co-ordination is required before an institutional co-ordination, because many
public institutions are involved, each of them responsible for a certain part,
but not for the whole. Also, a better co-ordination with trade unions is
required.
The institutional framework for the Strategy
implementation will be provided by the following institutions and committees:
·
The
Minister of Economy and Commerce helding the general responsibility for the
preparation and monitoring of the Strategy implementation program and
working together with ministries and specialized agencies involved;
·
The
Inter-ministry Committee comprising representatives of the main ministries (the
Ministry of Public Finance, the Ministry of Labor, Social Solidarity and
Family, the Ministry of Administration and Internal Affairs, the Ministry of
Transportation, Construction and Tourism, the Ministry of Health, the Ministry
of Agriculture, Forestry and Rural Development, the Ministry of Environment and
Water, the Ministry of Education, Youth and Research, the National Authority
for Tourism, the NAD, the National Agency for Labor, the Regional Agency for
Development, the National Agency for Small and Medium Enterprises and
Co-operation and local administrations) ;
·
The
Management Unit responsible with the implementation of the strategy;
·
The
experts group working for a limited period of time in charge with specific
tasks;
·
The
Inter-ministry Committee Secretariat provided by the Ministry of Economy and
Commerce;
·
NAD local
offices in co-operation with local councils (local communities) in assisted
mining regions.
4.4
Instruments needed for the implementation of the Strategy
The strategy implementation requires firm
instruments to ensure the balance, considering the various interest groups that
may emerge in areas undergoing important economic changes.
The following instruments are required for the
Strategy implementation:
·
a new
mining products pricing system;
·
a new pricing
system for utilities population in the area benefits from (water,
sewage, gas etc.);
·
approval
of the privatization norms for the mining company/society by partnership state capital – private capital
and by employees participation;
·
separation
of service activities from the
mining company and establishing commercial societies in charge with these
activities, with the company as shareholder;
·
privatization
of the above mentioned societies
by attracting resources for their development and modernization;
·
establishment
in the area of a:
o credit system for small enterprises;
o establishment of a grant system to support new
business;
o
establishment
of a public information and business consultancy system;
o establishment of a community public works system to provide
temporary jobs and community sustainability following mines closure.
* *
*
The mining industry problems represent a huge
burden for the Government in the relationship with international financing
institutions and the European Union.
Thus the Ministry of Economy and Commerce is
responsible for the implementation of the mining sector reform aiming at the
financial rentability of mines.
Social problems in all
regions undergoing restructuring are caused by the specific economic activities
developed along the time in these areas, the heterogeneous population, limited
resources unable to sustain other economic activities except the existing ones
and the slow adaptation to change.
It is obvious that in
present conditions no mining area can be closed within a short period of time,
so a medium and long run strategy is required in order to approach the mining
industry in correlation with all related social and environmental factors.
The strategy is the
result of the consultation and participation of all interested factors within
and outside the area, such as disadvantaged groups, local communities, national
companies, local authorities, NGO-s and governmental institutions, as well as
the result of the analysis performed by experts provided by the World Bank
project and the Ministry of Economy and Commerce.
The actions proposed in the strategy will
accelerate the development of the private sector, the only one able to insure a
profitable mining industry on the medium and long run, as well as to absorb
unemployed people, young educated people and the mining industry redundant
employees.
In achieving its medium
and long term objectives, the strategy provides all conditions for the budget
financing of the most profitable mines rehabilitation actions and measures in
view of their privatization and of infrastructure works in order to achieve the
main strategic objective – new jobs and a favorable environment for the private
sector development.
The development along
the time of an attractive business environment and adequate infrastructure will
change the proportion of budget and private investment funds, in favor of
private investment.
The restructuring of
the mining companies/societies operating capacities and the financial
restructuring is one of the Government specific objectives of the present
economic approach.
To continue the mining
industry restructuring process, while reducing the state budgetary effort, on
the medium term the strategy takes into account to accelerate the preparation
of a new World Bank financed project or the extension of the existing one, in
order to insure the viability and modernization of profitable mines, the
closure of unprofitable mines and the social protection by transferring people
employed in mining activities to different activities. To finance this project
the support of international financing organizations will be required.
The Ministry of
Economy and Commerce and the Ministry of Labor and Social Solidarity with the
World Bank support shall analyze, while preparing the new mining sector
project, the NAD role and organization in accordance with objectives, measures
and actions provisioned in the mining industry strategy implementation program
and shall make proposals accordingly.
The strategy is focusing on the mining industry
people, involving them directly in the implementation of provisioned actions
and measures, together with local and central authorities that should provide
the organizational and regulatory framework, as well as required instruments to
achieve the proposed objectives.