ATHENS – As expected, the planned sale of Greece’s unused state mining firm Larco was called off when a consortium selected to take it over, GEK Terna and AD Holdings, told the Ministry of Finance it was pulling out of the deal.

The companies wrote that unfavorable developments in the global energy and metal markets, especially in nickel products, continuing legal challenges over Larco and the bidding process had become too much to deal with.

They had set up another company, Hellenic Nickel, to transfer Larco’s assets but sent a letter to the Hellenic Republic Asset Development Fund (TAIPED), which oversees the privatization of state assets.

That said they were also canceling  the bidding process for the leasing of the Larymna smelting plant in the Central Greece region, ending the hopes of idled workers who demonstrated in the streets of Athens in June.

“The government, in cooperation with TAIPED, will promptly proceed with a review and, if deemed necessary, the restructuring of the deal, in order to launch a new competitive bid. The aim is to find a viable solution,” the Finance Ministry said of its efforts.

Larco had been a profit-maker before running into financial trouble, mining iron ore and nickel but it has cost the state several hundred million euros in the past few years as it struggled to stay open.

The company went into special receivership in February 2020 just as the COVID-19 pandemic struck because it couldn’t pay creditors, suppliers and the state’s social security agency for workers pensions.

It was 470 million euros ($512.58 million) in debt, including 351.2 million euros ($383.02 million) to the state electricity company PPC and in 2014 the European Union ordered return of 135 million euros ($147.23 million) in unlawful state aid.

The European Court in January 2022 imposed a 5.5 million euro ($6 million) fine on the government for refusing to comply, plus 4.368 million euros ($4.76 million) every six months until the subsidies are fully reimbursed, no report whether that was done either.

The collapse of the plan seems to end hopes of the sale of the Evia and Kastoria mines while the Larymna facility was closed in 2022 after workers were paid from the state budget as it spiraled down.