Eldorado Gold halts much of its mine construction in Greece, cuts jobs
Canadian miner Eldorado Gold (TSX:ELD) (NYSE:EGO) is suspending work at its mine in northern Greece and laying off 600 workers following protests by local residents and a fresh spat with the country's left-wing government.
The Vancouver-based company announced the measure late Monday, saying operations at its Skouries gold mine, one of four major Greek sites where Eldorado is involved, have been suspended.
The decision comes after a year of confrontations with the Greek government that included permits being revoked and delayed by the state multiple times.
The straw that broke the camel's back, however, was Greece’s recent decision to delay for over three years a building permit that would allow the company complete construction of the Skouries processing plant.
More job cuts to come
Eldorado Gold said a further 500 jobs were also likely to be cut later in the year, and warned that it would also halt construction at its Olympias project if it did not receive a permit by the end of March. It has suspended development work its Perama Hill and Sapes projects but could restart at a later date.
It is also considering whether to freeze a future expansion of its Stratoni mine, which has around three years of life left.
The miner noted it would rather create more jobs and carry on with construction and development in Greece.
“However, we have a duty to all our stakeholders and the significant time and process risks created by Greece’s Ministry of Energy and Environment have left us with no choice but to reduce activities and personnel,” Eldorado chief executive officer, Paul Wright, said in a statement.
The firm will provide further plans for 2016 on Jan. 25.
Shares in the company were hit hard by the news, trading more than 12% lower after hours in New York to $3.07, the steepest intraday fall in a year.