ATHENS - A gold mine project in northern Greece operated by a Canadian company that was shut down by the former ruling Radical Left SYRIZA will be restarted under a revised contract approved by the Parliament controlled by the New Democracy government.
Licensing and environmental battles and violent opposition from local residents worried about damage to the economy and tourism and SYRIZA not wanting foreign investors had stymied the development for years.
The project is the work of the Vancouver-based Eldorado Gold and a Greek affiliate, concentrated in its Skouries, Olympias and Stratoni works in northern Greece, known as the Kassandra mines.
SYRIZA had revoked permits and delayed licensing for Eldorado’s mining operations, prompting the company to halt part of its investment plan and seek several hundred million euros in compensation for lost revenue, Reuters reported about the reboot.
Arbitration failed to resolve the differences as SYRIZA, with a hard-core element not wanting foreign companies, also effectively prevented other major developments in Greece, including the 8-billion euro ($9.56 billion) plan for the abandoned Hellenikon International Airport on Athens’ coast.
The conservative government of Prime Minister Kyriakos Mitsotakis reopened talks with Eldorado after routing SYRIZA in July 7, 2019 snap elections, saying the project was a crucial investment to spark a faster recovery from a near decade-long economic and austerity crisis.
Foreign Direct Investment (FDI) has become even more critical now with the economy shrinking more than 8 percent during the year-long COVID-19 pandemic that has brought three lockdowns of non-essential businesses.
The government in February signed an amended agreement with Eldorado, including a bigger investment plan of $3.1 billion for the mines, creation of additional jobs and higher royalties.
“We do need foreign investment…and, certainly, this cannot be achieved if we send away the ones we have already attracted,” Environment Minister Kostas Skrekas told Greek lawmakers before the vote on the amended agreement.
The agreement is mutually beneficial, Eldorado said in a statement. “We will continue to bring leading safety and environmental practices to the development of Greece’s mineral resources for the benefit of its people,” Chief Executive Officer George Burns said, the news agency reported.
Eldorado has said the revised deal will allow it to complete construction work and start production in Skouries, expand output in Olympias and boost exploration investment in Stratoni, with no response so far from environmentalists or the local residents fiercely opposed to the work.
Under the revised deal, Eldorado will also submit a new proposal for building a gold processing plant in 12-24 months and will further evaluate financing options for Skouries.
SYRIZA, now the major opposition, said the deal will prevent environmental officials from being able to impose needed restrictions and lose - not increase- tax revenues because the company won’t now be required to build a gold processing plant.