Chapter 436： Eastern Galicia Heavy Industry Zone (Part 1)

When the news came back to Bucharest, Edel sighed. The problem of coal and iron ore shortage in Romania has finally been solved initially.

In fact, the exploration of the new territory made the government overjoyed. Many new coal, iron, lead, manganese, gold, copper, salt and sulfur minerals were discovered in Transylvania. Among them, the coal is mainly lignite. The output is expected to be around 2.4 million tons, mainly in scattered small coal mines. The iron ore in this area is also dominated by small iron ore with low reserves.

However, there are good discoveries in gold, mineral salts and sulfur. The Kempeni gold mine in Albayonia County is the largest discovery in the area. 179 tons of gold reserves make it the second largest gold mine in Romania.

In the Transcarpathian region, Edel was also delighted by the newly discovered oil resources in the region. Although it has the same sulfur content as the current Ploiesti oil field, its reserves of up to 150 million tons will allow Romania to become an important oil producer in Europe in the next two to three decades.

At present, the region with the most detected resources is Eastern Galicia. Sokal coal mine was found in Lviv; a considerable stock of manganese was found in Ternopil adjacent to it; and in Felankovsk near the Transcarpathian Mountains, iron, manganese, Nickel, aluminum and other minerals, of which iron ore has a few medium stocks of rich ore.

Romania, which has always lacked coal and iron, has a lot of peace of mind, at least the steel industry can finally be said to be free from others.

So after these resources were discovered, the government was immediately ready to start development. Among them, East Galicia, with the most abundant resources, the government intends to build it into Romania's first heavy industrial base. Although it is not as large as the industrial base of Donetsk-Kharkov, which is not yet significant, nor is it comparable to the Czech Republic, which has just independently acquired the Austro-Hungarian Bohemia heavy industrial base, and also provides the world-famous Ruhr heavy industrial zone The shoes don't match, but this is at least the first heavy industry base built by Romania.

In the Prime Minister's Office, a meeting on the construction of a heavy industry zone is being held here, and various high-ranking government officials are here to discuss investment in the heavy industry zone.

"The resources we have discovered in our newly recovered land are very abundant. The reserves of coal, iron, manganese and other minerals found in Eastern Galicia are not small, and they can be built into our heavy industrial zone. Everyone knows our country’s coal before. The scarcity of iron resources has caused the steel produced in China to come mainly from Constanta, and the raw materials of the Constanta Steel Plant are shipped from abroad. In the previous wars, the steel plants have been in a stage of shortage of raw materials, which also led to steel production. Insufficiency has a great impact on our economic development.

Moreover, steel output represents the development of heavy industry and also represents national strength. Needless to say, the United States and Germany have no possibility of comparing the annual output of tens of millions of tons. Britain, France, Russia, and Austria-Hungary all produced thousands or millions of tons. Even Italy, which is lagging behind, also has millions of tons of steel production. We only have an output of 400,000 tons, which does not match our identity at all, nor can we give full play to the driving role of the steel industry in the economy. At present, many of our factories and enterprises need to import steel from abroad, which not only increases their costs, but also reduces their competitiveness. In the long run, the harm to the Romanian economy is also increasing. Therefore, we must have our own heavy industrial base, so that economic development can be better promoted. "

At the meeting, Minister of Industry Karaturi talked about the benefits of establishing a heavy industrial zone in Eastern Galicia. The participants at the meeting were listening carefully to his speech, taking notes from time to time.

After his speech, Minister of Education Florica asked: "Is your Excellency Karaturi wrong? We really need such a heavy industry base. So what plans does the industrial sector have to build this heavy industry base?"

Facing the inquiry from the Minister of Education, Karatuuri spoke of the plans made by the industrial sector. "We intend to build a large coal-iron complex in Lviv, which requires a steel output of 500,000 in three years. The steel output of 800,000 in five years and 1.8 million tons in ten years. Relying on this steel company , We will also build machinery, energy, chemical, materials and other enterprises in Ternopil and Felankovsk, which can meet domestic demand in the short term, sell to Zhouwei in the medium term, and sell in the world in the long term. Our products are available everywhere."

Karatuuri spoke of the ambitious plan their department had made. The other ministers here were sweating coldly. This is not that this plan is not good, but that it is too good. This involves the big issue of Romania’s fiscal distribution. After all, the government’s fiscal revenue is only so much.

Sure enough, after Karaturi finished talking about the Ministry of Industry's plan, the Minister of Education, Florica, who currently occupies the most funding for government departments, could not sit still.

"Your Excellency Karaturi, how much money do you need for this project."

"We have calculated that it will take 2.5-3 billion lei (500-600 million US dollars) of funds to build in ten years. It only needs 250-300 million lei every year, which will not take up too much. More funding."

It seems that Karaturi also knows that the funds required for this plan are too expensive. However, he lay ambush here, only talking about the average annual cost, not to mention that most of the cost needs to be invested in the first three years. Because the initial investment in heavy industry is very large, the procurement of major facilities and equipment, road paving, and personnel recruitment need to be carried out from the beginning.

"This plan is not bad, but it requires too much capital. Private capital has not been considered. I think it is entirely possible to raise funds from the private sector for this plan, and the government only needs to be responsible for the main steel companies and road construction, and then give the private Some policy support for enterprises is a good thing for the government and the private sector."

Sure enough, after Karaturi said the required expenses, opposition immediately greeted him. This is not a clear opposition, but to use the current mainstream plan. To promote this heavy industry plan to the private sector, the government only needs to invest in key enterprises.

Karatuuli saw that it was the Minister of Education Florica who spoke before.

He muttered in his heart Can those who engage in education still be engaged in industry? Then he unceremoniously refuted what the other party said. "His Excellency Florica, the plan you mentioned is currently not suitable for the domestic situation. This plan requires strong private capital, and Romania’s current private capital is not enough to do this.”

Florica continued to say without giving up: "Then it is completely possible for them to join together to invest. If one person is not strong enough, you can find several people. And we can give him some support in policy and finance. I think it will Someone did this."

"There is something I need to explain in advance. This heavy industrial zone is to provide impetus to the Romanian economy, so its profit will not be too high."

Facing Florica’s repeated speeches and objections, Karaturi directly pointed out the biggest shortcoming of this plan for private individuals. Lack of high-profit heavy industry with huge investment in the early stage, Bunsen is not very attractive to private capital unless its pricing power is given to the market.

Here we need to say that there are currently two main types of heavy industry construction. One is to completely push to the market like the United States, and even the pricing power is pushed to the market; the other is like Germany, where the government first builds and then sells to private individuals, but the price is fixed. The power lies with the government. Of these two options, the first is completely useless in Romania, and the second is Karaturi’s idea.