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Greece’s gold mines are revived

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The Greek parliament has approved a revised contract with Canada’s Eldorado Gold Corp., paving the way for a major investment in mining that has been suspended for years due to licensing and environmental protection.

The Canadian mining company has been in conflict with Greece for years over environmental issues surrounding its Skouris, Olympia and Stratoni projects in Halkidiki, northern Greece, known as the Cassandra mines. They have deposits of gold, silver, lead, zinc and copper, and Olympia alone can produce 650,000 tonnes of concentrate a year.

The problems surrounding the Kassandra mines have lasted for almost 20 years, with several Greek governments and various private investors actively involved. The deposits have been opened, closed, resold, compensations have been paid, and the case with them even reaches the Court of Justice.

Alexis Tsipras’s previous SYRIZA government revoked permits and delayed the licensing of Eldorado’s mining operations, prompting the company to suspend part of its investment plan and demand several hundred million euros in compensation for lost revenue. Arbitration was even reached, but the two sides failed to settle their differences, Reuters recalls.

Kyriakos Mitsotakis’ current government has resumed talks with the company after it came to power in 2019. It sees the project as a vital investment for the country, which is still struggling with the effects of a decade of financial crisis.

Last month, Greece signed a revised agreement with Eldorado, including a larger $ 3.1 billion investment plan for the mines, job creation and 10% higher concession fees.

The new agreement provides a modernized legal and financial framework for the future development, construction and operation of the Cassandra project. It provides better investor protection, better revenue for the Greek treasury and opportunities for local community development. “We need foreign investment … and certainly this cannot be achieved if we send those we have already attracted,” Environment Minister Costas Screkas told Greek lawmakers ahead of the vote on the amended agreement.

The Mitsotakis government has vowed to unblock foreign investment to boost the economy, which has shrunk by a quarter during the financial crisis, and to help recover from the coronavirus pandemic.

The new deal will allow the Canadian company to complete construction and start production at Skouris, expand production at Olympia and increase investment in exploration at Stratoni. The three mines will remain open and modernized, employing almost twice as many workers – 3,070 compared to 1,650 at the moment, Energy Minister Costas Skrekas announced. Jobs will reach 5,000, including mine-related products and services. EUR 70 million will be invested in a program for social development of local communities.

Within 1-2 years, Eldorado will present a new proposal for the construction of a gold processing plant and will make an additional assessment of the investment opportunities in Skouris.

“We recognize the government’s dedicated efforts to make Greece an attractive destination for global investment and welcome the mutual benefits it will bring,” a joint statement from the US and Canadian embassies in Athens said.

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