Eldorado Gold threatens to suspend investments in Greek mines
An aerial view of a gold mine complex in Skouries, in the Halkidiki peninsula, northern Greece. (Hellas Gold via AP)
Elena Becatoros, The Associated Press
Published Monday, September 11, 2017 12:39AM EDT
Last Updated Monday, September 11, 2017 10:20AM EDT
ATHENS, Greece - Canadian mining company Eldorado Gold on Monday threatened to suspend a major investment in Greece in 10 days, accusing the government of delaying permits and licences.
One of Greece's largest foreign investors, Eldorado operates mines in northern Greece that have faced vehement opposition from parts of local communities on environmental grounds, with protests often turning violent.
"This decision is not one that we have taken lightly," Eldorado President and CEO George Burns told reporters in Athens.
A company announcement 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.
The decision will take effect on Sept. 21 unless talks with the government ended permit delays, Burns said.
"Approvals must not be held hostage to political posturing or other agendas put forward by a vocal minority," he said. "I keep hearing the permits are coming, but they're not coming in a timely fashion."
Burns said the company was unable to legally continue work without the permits, which it needs by Sept. 21. He said he was open to dialogue with the Greek government, and hoped to have the issue resolved in time. If that didn't happen, however, the company's investments would be suspended and it would carry out only maintenance and environmental work.
Burns said he had sent three letters to Prime Minister Alexis Tsipras during the last five months since he took over the helm of Eldorado, but had not received any reply.
Eldorado employs some 2,400 staff and contractors in Greece through its local subsidiary, Hellas Gold. The company said 90 per cent of the workers faced being suspended temporarily from their jobs if the permits don't come through in time.
The company took over old mines in 2012, paying nearly $2 billion. Burns said it had since invested a further $1 billion in Greece, a figure which would double if the company could fully develop its assets in Greece.
Monday's action comes as Greece struggles to emerge from years of recession and stagnant growth and attract investment.
Interior Minister Panos Skourletis said disagreements would be resolved through arbitration.
"This might be a move to (exert) political pressure on the government at a crucial time," Skourletis said.
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," he said. "So it's wrong to connect this particular case with the general picture in the area of investments (in Greece)."
The Halkidiki mines have been mired in controversy for decades, with Eldorado's predecessors also facing protests.
Many in the local communities vehemently oppose mining development on environmental grounds, saying it would hurt the area's tourism industry, destroy forests and pose a contamination risk to the groundwater.
The company counters that it's carrying out environmental cleanup work even of its predecessors, and rejects accusations of pollution.
The company said it is 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 favour in various permit disputes.
Burns said he remained optimistic that a solution could be found. "I'm confident these mines will be built," he said.
When first elected on an anti-bailout platform in 2015, Prime Minister Alexis Tsipras' left-wing government initially favoured the suspension of the permits that had previously been granted to the mining company.
Greece's confederation of industries urged Tsipras to personally intervene to rescue the gold mine investment.
Derek Gatopoulos in Athens contributed.