Last week the Romanian government suspended the environmental review process for Canadian company Gabriel Resources’ proposed gold-mining project in the Transylvanian village of Rosia Montana.

The ostensible reason for the suspension was a court challenge filed by the local anti-development activist group and the U.S.-based Open Society Institute about some paperwork unrelated to the environmental review.

As discussed previously in this column and in the documentary "Mine Your Own Business," controversy over the mine has been fabricated by what has seemed to be a leaderless and slapdash international collection of green non-governmental organizations, or NGOs, all oddly focused on this one mining project in a remote part of eastern Europe.

But the curtain is rising on the NGOs’ efforts to stop the mine and it seems that Soros, through the Open Society Institute he chairs, may be at the controls for reasons that have little to do with protecting the environment.

A leaked October 2006 internal memo from an eastern European branch of Soros’ Open Society Institute pleads for help from other central and eastern European NGOs to pressure the Romanian government to stop the Rosia Montana mine, which the memo emphatically (and bizarrely) refers to as a "resource curse."

The memo says the Rosia Montana project "could become a landmark case for keeping bad government in check" where "bad government," according to the tone of the memo, seems to mean any action of which Open Society disapproves.

Could this memo reflect nothing more than overzealous underlings acting without Soros’ personal approval and direction? That explanation seems unlikely given Soros’ April 17, 2007, letter to Wayne Murdy, the chairman and CEO of Newmont Mining Corp., a corporate shareholder in Gabriel Resources.

In the letter, Soros pressures Murdy to use Newmont’s shareholder status to, in turn, pressure Gabriel Resources. "I feel it is my duty to advise you to consider carefully any further involvement with Gabriel Resources and the Rosia Montana project," Soros wrote.

This advice came with a not-so-veiled threat to Newmont’s reputation: "I understand that Newmont is committed to the highest standards of environmental management, employee health and community safety. An investment in a dubious project such as Rosia Montana should not be allowed to call such admirable commitments into question," Soros closed the letter.

But what’s really dubious is the game Soros seems to be playing.

The Rosia Montana is a project that is designed to comply with all European and international standards and will include a voluntary clean-up of a nearby mine that was in operation from the time of the Roman Empire until the fall of the communist Romanian government at the end of the Cold War. But while Soros and his NGO minions bemoan the proposed Rosia Montana mine, Soros has his own extensive mining interests.

According to a review by MineWeb.com, U.S. Securities and Exchange Commission filings indicate that the Soros Fund owns $25 million worth of stock in the Aluminum Corporation of China and more than $40 million of stock in several gold-mining companies.

It’s quite possible that Soros’ mining interests are even more extensive since the filings do not cover his personal investments and other investments that don’t require reporting to the SEC.

While Soros noted in his letter to the Newmont CEO that the Romanian legislature was considering a ban on the use of cyanide in mining, Soros recently purchased an interest in Gabriel Resources’ competitor Goldcorp, which uses cyanide in its mining.

Soros’ criticism of Gabriel Resources’ use of cyanide is even more bizarre given that the standard for cyanide in mining waste under which the Rosia Montana project would operate is about 10 times stricter than the Nevada state standard under which Goldcorp operates.

The Soros groups in Romania oppose the relocation of part of the village of Rosia Montana, yet no similar opposition appeared when a village was moved so that the Soros-owned mining company Apex Silver could develop the San Cristobal mine in Bolivia in the 1990s.

What’s with all this hypocrisy on the part of Soros? Could it be that the estimated $10 billion in gold that might be extracted from Rosia Montana would put downward pressure on gold prices and adversely impact Soros’ gold investments?

Is it possible that Soros is trying to torpedo Gabriel Resources’ project so that one of his own mining interests can take over the Rosia Montana mine?

I would have liked to ask George Soros these questions, but a call to the Open Society Institute was not returned.

Soros’ shenanigans aside, none of this inspires confidence in the Romanian government, which needs foreign direct investment to fuel much-needed economic growth.

Although Gabriel Resources so far has complied with the rule of law, the Romanian government nevertheless seems to have bowed temporarily, at least to pressure from Soros-led NGOs.

This action should give serious pause to Western companies contemplating investing in Romania.

Despite compliance with applicable standards and substantial direct investments, Western companies may well find themselves in a "Banana Republic" atmosphere where the rule of law is disregarded, anti-development activists fronting for outside special interests call the shots and anything goes.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, and advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

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