Bulgaria’s Environment Minister said on August 2 that a 30-year gold mining concession deal with a Canadian company needed revision because it did not suit government interests, Associated Press (AP) reported.

“It is a question of national interests. The state must also benefit from the concessions,” Environment and Waters Minister Djevdet Chakurov said, quoted by the news agency.

Canada’s Dundee Precious Metals Inc, through its Bulgarian subsidiary, Chelopech Mining, acquired a 30-year concession three years ago to mine gold in the region of Chelopech near the capital Sofia.

The company is also trying to get government approval for two investment projects - to expand the Chelopech mine and to exploit another gold deposit near the southern town of Kroumovgrad.

Both projects won the approval of the Economy and Energy Ministry, but Chakurov has so far refused to grant final approval, saying he wanted to consider “all aspects of the case”.

Laurence Marsland, Dundee’s vice president, however, has said the company would rather withdraw its investment projects at Chelopech and Kroumovgrad than bow to pressure. The projects are worth a total of $250 million (196 million euro), AP said.

The company also lodged court action against the Chakurov’s failure to clear the two gold mining projects. Hearings in Bulgaria’s Supreme Administrative Court have been scheduled for the autumn.

The final decision whether to seek revision of the gold-mining concession must be made by the Economy and Energy Ministry. The ministry, which has so far backed Dundee’s investment projects, refused further comment.

The Chelopech mine has an estimated 120 metric tons of gold deposits, more than 290 metric tons of silver and 435 000 metric tons of copper deposits, according to official data.

The total value of the deposits is estimated at more than 4.6 billion euro.

Under the current concession agreement, Chelopech Mining has to pay the government an annual concession fee of $600 000 (470 000 euro) and to invest $18 million (14 million euro) in the mine by 2010.

In another development on August 3, Chakurov deepened the controversy by saying that Bulgaria needed to revise its legislation on oil and drilling concessions to provide for a state stake along with concessionaires and use the money to improve infrastructure.

“I think that legislation on mineral wealth, ores and oils should be revised, referring to participation of the state, as in many other countries,” Chakurov told reporters.

The state should use funds from such stakes to pay for infrastructure and co-financing of operational programmes under European Union funds, he said.

“I have discussed this with most of my colleagues on the Cabinet. We need also to hear the voice of civil society,” said Chakurov.
Dundee Precious Metals was again on Chakurov’s mind.

“The first case on the agenda is Chelopech, but that framework should be applied for the other deposits as well,” he said on Thursday.

Along with Chelopech and Krumovgrad, the minister listed the Popintsi licence of Canada’s EurOmax Resources Ltd, which continues to have problems accessing its site in South-eastern Bulgaria due to local residents’ protests and blockades.