BMI's Executive Summary

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Romania's mineral endowments comprise small low-grade deposits of iron ore, bauxite, copper, lead, zinc, gold and uranium. Statistics reveal mineral reserves for bauxite are estimated at 2.5mn tonnes, while that for lead and zinc are 600,000 tonnes and 1.4mn tonnes, respectively. Copper reserves are 1.5mn tonnes. These reserves suffer from lack of maintenance and investments. The nation's most productive mining locations are situated in Neogene volcanic zones in the Metaliferi and Oas-Gutai Mountains, as well as in the Banat region and the Bihor massif.

The mining sector, which was previously a privileged sector under communist rule, had a relatively high wage structure and a politically influential trade union. The close-knit relationship between the miners and the Romanian government continues to influence current relationships, making reforms more challenging.

The sector is also characterised by a poor environmental record. The sorry state of affairs is also evident from the massive drop in employment numbers in the mining sector. Romania had over 175,000 miners in 1997, of which only 57,000 remained in 2005. This trend is expected to continue following Romania's EU accession and other related agreements with the IMF.

At the onset of 2007, 50 non-profitable mines were expected to be shutdown, meaning a layoff of another 16,000 miners. Although this initiative aims at cutting out the excess mining companies operating in the country, the move would result in a complete abolition of government support for the industry. In 2007 the government plans to witness a scenario where companies that are able to support their own production costs will be the only ones functioning. Government subsidies for lignite, ferriferous and non-ferriferous ores are also likely to be eliminated in 2007, while those for pit-coal are to be gradually eliminated by 2010.

Contents

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Executive Summary

Chapter 1 - Industry Trends And Developments

Market Overview

Regulatory Structure

Chapter 2 - Project And Property Updates

Metals

Minerals

Precious Stones

Table: Mines In Romania

Chapter 3 - SWOT Analysis

Romania Political SWOT

Romania Economic SWOT

Romania Business Environment SWOT

Chapter 4 - Business Environment

Legal Issues

Effectiveness Of The System

Labour Force

Table: Demographic Indicators

Table: Employment Indicators

Foreign Investment Policy

Table: Emerging Europe Annual FDI Inflows

Chapter 5 - Political Environment

Domestic Political Outlook

Table: Romania Cabinet & Other Key Posts (as of March 2007)

Foreign Policy

Chapter 6 - Industry Forecast Scenario

Global Overview

Regional Analysis

Romania Mining Industry Forecast

Table: Romania Mining Industry Forecast

Chapter 7 - Competitive Landscape

Chapter 8 - Company Monitor

Mechel

Moldomin

European Goldfields

Appendix A: Mining Ratings: Methodology

Introduction

Breakdown of Ratings

Breakdown Of Components

Appendix B: The World Economy

Outlook And Risks

Table: Global Assumptions

United States

Soft Landing Ahead

Risks To Outlook

Europe

Moderating, But Solid Economic Growth

Medium-Term Growth Outlook

Japan

Japan In 2007 & 2008

Japan's Medium-Term Prospects

China

China In 2007 And 2008

China's Medium-Term Prospects

Commodities

Correction To Continue

Lower Metal Prices, But Still Historically High

Risks To Outlook

Oil

Appendix C: Regional Demographic Data

Table: Wages (ave. labour force per annum), US$ PPP

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn