Boston, MA -- (SBWire) -- 07/12/2013 --We expect Romania's mining sector to see only modest growth over the coming years as coal output, which accounts for the majority of the mining sector's value, sees little expansion. However, one bright spot, which will mitigate against some of the losses in the coal sector, is that the gold sector will see rapid growth from its low base. Overall, we expect the mining sector value to decline to US$5.93bn in 2017, from US$5.4bn in 2012.
In one of the most important mining projects in the country during 2012, Romanian energy officials revealed the Chinese government is considering investing in the EUR700mn (US$997.7mn) Doicesti coalfired power plant in southern Romania. China Huadian Engineering Company signed an MoU with stateowned utility Termoelectrica, with the former understood to be preparing a feasibility study on the project.
Coal Sector In Decline
Romania coal production is set for declines over the coming five years, continuing a decade-long trend as falling grades and environmental concerns weigh on the sector. Romania is one of Europe's largest coal producers, with output in 2011 coming in at 35.3mnt , with the majority being lignite coal. Romania possesses 801mnt of hard coal and 1.36bnt of lignite coal reserves, some of the largest in Eastern Europe.
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However, these deposits are not only low-grade but also by lack sufficient maintenance and investment. Our Power team estimates that in 2011 coal-fired generation accounted for 39.5% of supply, with gas-fired power claiming a share of 15.6%. Hydroelectricity contributed an impressive 26.8%, with nuclear energy accounting for 14.8%.
In 2011, the European Commission (EC) called on member states to shut down loss-making hard coal mines by October 1 2014, in a move that would affect coal mines in Romania's Jiu valley. The decision requests the shutdown of the mines, but leaves lignite coal mines intact and allows state subsidies for hard coal mines that have a closure plan in place. The decision brings forward a hard coal mine closure plan to 2018.
Gold Sector To Drive Growth
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New Market Study Published: Romania Mining Report 2013
New Market Study Published: Romania Mining Report 2013