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Tuesday September 19th, 2017 7:50AM

Canadian gold company suspends investments in Greek mines

By The Associated Press
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ATHENS, Greece (AP) — Canadian mining company Eldorado Gold, one of Greece's largest foreign investors, said Monday 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 in an announcement 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.

"Despite repeated attempts by Eldorado and its Greek subsidiary, Hellas Gold, to engage constructively with the Greek government, the Ministry of Energy and Environment ... and other government agencies, delays continue in issuing routine permits and licences 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 company, 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.

A day earlier, Prime Minister Alexis Tsipras stressed his left-led coalition government's credentials as being friendly to business and investments, at a trade fair in the northern city of Thessaloniki.

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.

But 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. The company has countered it is carrying out environmental cleanup work even of its predecessors and rejects accusations of pollution.

When first elected on an anti-bailout platform in 2015, Tsipras' government initially moved to suspend some of the permits that had been granted to the mining company.

Eldorado said the Skoures and Olympias projects and Stratoni mine would start being placed "on care and maintenance" starting Sept. 22, at an estimated cost of $30 million, while environmental protection work would continue. It said sustaining maintenance costs would cost roughly $25 million per year.

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

"It is extremely unfortunate to find ourselves at this impasse when we should be advancing an important commercial project in partnership with Greece and adding another 1,200 jobs to our current workforce of approximately 2,400 people," said Eldorado Gold President George Burns.

The company bought the old Cassandra Mines for nearly $2 billion in 2012. 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.

"However, as a result of the delay in issuing permits by the Greek government, Eldorado is unable to continue investing in the country," Burns said.

The company president had scheduled a news conference in Athens later Monday morning.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Personal Finance
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