Greece Wants Bigger Payments from Canadian Gold Mine Co.

Energy Minister Costis Hatzidakis. (Photo by Eurokinissi/Yiannis Panagopoulos)

ATHENS – A condition for letting a Greek subsidiary of a Canadian gold mine to restart a stalled project in northern Greece is higher royalties from its operations and more jobs, Energy Minister Kostis Hatzidakis said.

Canada’s Eldorado Gold had threatened to pull the plug on the project as it was being repeatedly stalled during the 4 1/2-year reign of the anti-business former ruling Radical Left SYRIZA, with the new New Democracy government promising to get it going again.

Vancouver-based miner Eldorado has two operating mines and two development projects in northern Greece and its planned investment is one of the biggest in the country in years, with Reuters reporting in an exclusive that the government wants more money and jobs as part of its push to lure more foreign investors and boost a slow recovery from a 9 1/2-year economic crisis.

Activists and local residents have fiercely fought, sometimes violently, to stop the project claiming it will harm the environment and tourism and got a friendly ear in SYRIZA, which has hard-core elements wanting to keep out foreign companies.

Earlier in September, the government issued installation permits for Eldorado’s Skouries project near Greece’s second-largest city of Thessaloniki.

“We want to move ahead with a contract which, on the one hand, will send a business-friendly message, and on the other hand, a contract that will secure more jobs, more royalties and clear environmental protection for the region in line with European standards,” Hatzidakis told the news agency.

“There are negotiations right now. What we have told Eldorado Gold is that we don’t want these negotiations to slow down, but it also depends on the proposals they will present. We cannot reach an agreement at any expense.”

Another obstacle had been the company’s plan to build a metallurgical plant to process ores mined in Skouries.

Eldorado is open to revisiting royalty rates in the country, Chief Executive George Burns said at an industry conference in Denver, Colorado.

“The royalty scheme in Greece, I would say, is modestly in the middle of the range worldwide for countries, so we are open to discussions about that,” he said in an interview with the news site.

He said the company is awaiting a permit for its dry-stack tailings and a separate approval for relocating antiquities at the project site.

Eldorado wants another partner to help fund the remaining $680 million in development costs at Skouries while retaining the role of project operator, Burns said. Prime Minister Kyriakos Mitsotakis has said that the government could consider revising the contract to possibly include a new investment by Eldorado in another Greek region.