Romania to decide fate of gold mine in November

BUCHAREST, Sept 17 (Reuters) - Romania's parliament voted overwhelmingly on Tuesday to create a special commission to assess plans by a Canadian company to set up Europe's biggest open-cast gold mine in the Carpathian Mountains.

The commission, made up of 21 deputies and senators, has until Oct. 20 to issue a report on a government-backed bill to give Canadian miner Gabriel Resources a green light to develop the Rosia Montana site. The report will be submitted to parliament for a vote, expected in early November, legislators said.

The leftist government of Prime Minister Victor Ponta approved a draft law to allow the project to go ahead in August following a deal to raise the state's stake in the business and the level of gold royalties.

But Ponta said this month that parliament was set to reject the project because of mounting resistance from the public and many political leaders, who are concerned about its impact on the environment.

Thousands of people in cities across Romania have staged protests over the past two weeks against the mine project, which would use cyanide to extract 314 tonnes of gold and 1,500 tonnes of silver from the picturesque mountain region. The company says the process is safe.

Protesters also gathered in Rosia Montana at the weekend to support the project, which they said would create jobs.

Ponta went underground on Sunday to meet 33 miners who had staged a five-day sit-in to demand the mine project go ahead, saying jobs would be lost if it failed. They ended their protest after Ponta promised them a parliamentary inquiry.

"We need to finish our work by October 20th," a member of the commission, who declined to be named, told Reuters. "A vote may be held in a parliament session in early November.

"The commission can endorse or change the government's bill," the official said without elaborating.

On Monday, Ponta's rival, President Traian Basescu, who has backed the gold mine project, said the government should withdraw its bill from parliament, saying to pass legislation targeting a single company through the assembly was unconstitutional. If a challenge is filed after the bill clears parliament, a court will convene to issue a ruling.

Gabriel Resources has been seeking the necessary permits for the mine for the past 14 years. The company, whose largest shareholder - hedge fund Paulson & Co - has a 16 percent stake, said it may resort to legal action if Romania rejects the plan.