Roman Copper Corp, a company controlled by Toronto-based Bayfront Capital Partners, an investment boutique, has fully acquired state-owned mining company Cupru Min, in an open-cry auction for EUR 200.7 million, from a starting price of EUR 57.4 million.
The auction was organized by the Romanian Office of State Ownership and Privatization in Industry (OPSPI) on March 26.
Dutch Dundee Holding and Australian Oz Minerals were also bidders in Cupru Min, which owns Rosia Poieni mine, with a copper deposit of around 1 billion tons.
The Rosia Poieni deposit has a commercial value of around EUR 5.7 billion, considering that copper is currently traded on the London Metal Exchange at around USD 8,500, or EUR 6,400. Royalties paid to Romania would amount to EUR 400 million, around 6 percent of the production.
The mining capacity of Cupru Min averaged at 5,000 tons yearly, but the extraction and processing capacity can be extended to 15,000 tons yearly.
Exploitation of the Rosia Poieni deposit began in 1978, during the Ceausescu regime, while copper production started in 1983.
Romania has agreed to sell Cupru Min by April under the EUR 5 billion stand-by agreement with the IMF, European Commission and World Bank.
The Ministry of Economy said the privatization was made to continue copper mining in Rosia Poieni. The ministry added this will attract financing for technological and environmental investments that will create additional jobs and develop the industry.
Cupru Min had a net profit of EUR 4.4 million and debts of EUR 17 million in 2010, employing 431 people. The turnover stood at EUR 26.8 million.