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Eldorado Gold suspends its investments in Greece

MINING IMPASSE:The Canadian firm said delays in permits and construction licenses hindered its ability to develop three mines. It faces arbitration with Athens


An excavator moves next to a tree line at the construction site of a mine of Hellas Gold, a subsidiary of Canadian mining company Eldorado Gold Corp, in Skouries, Greece, on Feb. 15, 2015.

Photo: Reuters

Canadian mining company Eldorado Gold, one of Greece’s largest foreign investors, yesterday said it planned to suspend investment at its mines in Greece following what it said are government delays in the issuing of permits and licenses.

Eldorado, which runs Greek subsidiary Hellas Gold, operates mines in northern Greece that have faced vehement opposition from parts of local communities on environmental grounds, with protests often turning violent.

Eldorado said it would continue maintenance and environmental safeguards, but would make no further investment in three mines in the Halkidiki area of northern Greece and two projects in the northeastern province of Thrace.

“Delays continue in issuing routine permits and licenses for the construction and development of the Skouries and Olympias projects in Halkidiki, northern Greece,” the company said. “These permitting delays have negatively impacted Eldorado’s project schedules and costs, ultimately hindering the company’s ability to effectively advance development and operation of these assets.”

The firm, which employs more than 2,000 people in Greece, said the “suspension and termination of contractors and employees” would be done according to Greek law.

Greek Prime Minister Alexis Tsipras on Sunday said his left-led coalition government was friendly toward business and investments.

“This government is friendly towards entrepreneurship and investments,” Tsipras said during his annual news conference at a trade fair in Thessaloniki.

However, “we want investments, we want a healthy business environment, but we want to protect labor relations and the environment,” he said.

Reacting to Eldorado’s announcement, Greek Minister of the Interior Panos Skourletis said that according to the contract signed between the company and the Greek state, differences would be resolved through arbitration.

“This is the phase we are at now,” he said, adding that the company’s stance “shows intolerance towards Greek legality.”

“It might be a move of political pressure towards the government at a crucial time,” Skourletis said, noting the announcement came during the Thessaloniki trade fair where the prime minister traditionally lays out his economic policy.

He insisted Greece was friendly toward foreign investments, but that the Canadian project, being a mining operation, was a special case.

“Such kinds of investments no longer exist in the rest of Europe. They’re not allowed due to the great environmental cost they have,” Skourletis said. “So it’s wrong to connect this particular case with the general picture in the area of investments [in Greece].”

The company said it was still awaiting details from the government regarding pending arbitration, and pointed out that Greece’s Council of State, the country’s highest administrative court, had issued 18 decisions in its favor in various permit disputes.

Greece has been struggling to emerge from a deep financial crisis that has wiped out more than a quarter of its economy and left the country reliant on three international bailouts. Attracting foreign investment has been seen as a key in standing on its own feet again.

However, the Halkidiki mines have been mired in controversy for decades, with Eldorado’s predecessors facing similar protests.

Many in the local communities are vehemently opposed to the development of the mines on environmental grounds, saying local forests would be decimated and groundwater could be contaminated.

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