Greece promises green light for Eldorado gold project
Greece said on Wednesday it would grant Canada’s Eldorado Gold outstanding permits this week to enable it to fully operate one of its three Greek projects, days after the miner threatened to suspend a major investment in the country.
Eldorado’s investment in northern Greece is among the biggest since its debt crisis began seven years ago and has long been viewed as a litmus test of Greece’s resolve to attract foreign capital.
But differences have dragged on for years, especially over compliance with environmental regulations.
Threat to halt new investment
Eldorado Gold said on Monday it would halt new investment into its Olympias and Skouries projects and the Stratoni mine from Sept. 22 due to permit delays and lack of clarity on an upcoming arbitration process.
The announcement sparked an angry protest outside the energy ministry on Wednesday by dozens of Eldorado Gold workers worried about potential job losses.
In an effort to diffuse tension, Greek Energy Minister George Stathakis said licensing for the Olympias project would be concluded “in the coming days, today and tomorrow.
“Three permits will be issued as we announced in August, allowing Olympias to be fully operational,” he said.
It granted one operational permit for Olympias on Wednesday and will grant the other two this week, a ministry official said.
Eldorado’s Chief Executive George Burns welcomed it as “a positive step forward” but said the miner was still waiting on permits for its other two projects.
In a statement, Eldorado said it may re-assess its investment options once it has received all the required permits, clarity around the arbitration process and “a supportive government open to discussions surrounding the use and implementation of best available technologies.”
Uncertainty hurts share price
The uncertainty about Eldorado’s Greek projects has weighed heavily on its share price, which is down 48 per cent in the past year, touching a 14-year low of $2.24 on Aug. 4.
Trade Minister François-Philippe Champagne told Reuters on Wednesday he had flagged “troublesome” permit delays for Eldorado Gold Corp in a letter to Greece’s energy minister earlier this year.
Champagne had said that Canadian companies expect to be treated fairly and Eldorado has done “everything it can in order to comply with local laws and regulations,” he said.
Eldorado’s shares were up 16 per cent at $2.80 in trading on Wednesday.
Eldorado, which is targeting copper, gold, lead, silver and zinc, bought the Greek assets for nearly $2 billion in 2012 and has invested over $1 billion in developing them. It says it employs about 2,000 people in Greece, where unemployment remains the euro zone’s highest at 21.2 per cent.
Workers rally to save jobs
About 100 workers in yellow vests rallied outside the ministry early on Wednesday unfurling a banner reading “Occupation” in front of a police cordon, and police fired some rounds of tear gas to disperse them.
Eldorado’s plans to develop its mine operations in Halkidiki have also provoked violent protests by locals who fear it will ruin a landscape of pristine beaches and lush forests and destroy the region’s tourist riches.
It is sensitive for Prime Minister Alexis Tsipras’ Syriza party, which opposed the investment before coming to power in 2015. His government now says it wants it as long as it is “environmentally and economically sound.”
Greece says the ores to be produced will contain arsenic well above accepted levels, and the government should make sure the company fully abides by environmental rules. It also wants a metallurgical plant as part of its contractual obligations and for Eldorado to provide further detail on its investment plans.
The Greek energy ministry has said it would launch an arbitration process this week to ensure the company’s Greek unit, Hellas Gold, respects its contractual obligations. The process, expected to last at least three months, is aiming to resolve pending disagreements over the Skouries project and the metallurgical plant.
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