Eldorado demands $877m from Greece as compensation for permit delays
Canada’s Eldorado Gold (TSX:ELD)(NYSE:EGO) long-dragged issues in Greece, where the miner has been trying to advance two major gold projects for years, are about to grow as the company is asking the government for €750 million (about $877m) in compensation for damages.
The Vancouver-based firm said its application for payment is a non-judicial request, which does not initiate legal proceedings. However, it makes a clear statement about the financial impacts for the company arising from delays in the issuance of permits for the Skouries project, including damages for out of pocket costs and loss of profits.
“The application represents a good-faith attempt to resolve the matter with the Greek State,” President and CEO George Burns said in a statement. “We hope that this matter can be resolved in an amicable manner without needing to go down the route of arbitration.”
Sum relates to damages suffered by the company as a result of a longer-than-expected wait for its Skouries project's permits, including out of pocket costs and loss of profits.
This is not the first time the company tries pressing Greece to act in its favour. Eldorado took a tough stand with Greece last November, freezing investment and halting operations in Skouries. It said at the time it would re-assess the decision only after receiving all required permits, coupled with a “supportive government open to discussions” regarding the use and implementation of best available technologies at the project.
The miner also initiated legal actions against the government in order to enforce and protect its rights in Greece. The measures include three lawsuits against minister Stathakis for failing to issue routine installation permits, which Eldorado said caused unjustifiable delays to the development of Skouries
Earlier this year, the company filed a new technical report for the gold project, which said it "significantly" reduces the development's environmental footprint. Shortly after, it was favoured by an arbitration panel which ruled Eldorado’s technical plan to build a metallurgy plant to process concentrate mined from its Skouries and Olympias gold project was valid. However, the company has yet to receive the necessary permits to start construction.
The main differences between the company and Greek authorities have centred around Eldorado’s plans to mine for gold and other metals in the forested northern region of Halkidiki. Concerns have been raised about the projects’ environmental impacts in the area, with the government even accusing the company's subsidiary, Hellas Gold, of breaching its contractual obligations.
Since 2012 Eldorado Gold has invested about $3 billion in the European country and such figures would double, the company has said, if it was allowed to fully develop all of its Greek assets.