Greece kicks off arbitration process over Eldorado Gold’s projects
Greece has sent Canada’s Eldorado Gold (TSX:ELD)(NYSE:EGO) a long-awaited arbitration notice regarding the company’s plant for treating concentrates from the Olympias and Skouries project, in the country’s in the Stratoni Valley.
The announcement comes of the heels of a violent protest staged by workers Wednesday over potential job losses coming from Eldorado’s recent decision to shut down all operations unless long-delayed licenses are issued in time.
The notification alleges a technical study for the company’s Madem Lakkos metallurgical plant submitted in 2014 is deficient and thereby violates environmental terms for the project.
The arbitration is a formal process that is binding on both sides, and will deal with various differences between Eldorado and Greek authorities.
“Despite the Greek government's refusal to engage with Eldorado, we believe that this matter could still be resolved through good faith negotiations. We again invite the Ministry to engage with us for such purpose,” President and chief executive George Burns said in the statement.
He added the firm, Greece’s biggest foreign investor, is ready to defend its rights and employ all legal means at it disposal.
The arbitration notice was one of the pending issues the Greek government had said it would take care of this month. It comes less than 24 hours after the miners protest in Athens and the Environment Minister Giorgos Stathakis’ decision to grant the firm two key permits — the Olympias Operating Permit and the modified Electromechanical Installation Permit for the tailings management facility at Kokkinolakkas.
Burns has said he’s confident the arbitration process will do nothing but demonstrate Eldorado's adherence “to all applicable laws and regulations and its commitment to developing its Greek assets safely, responsibly and with utmost care for the environment.”
Arbitration notice comes only three days after the miner threatened to suspend its investments in the country over delays in the issuing of permits.
The Vancouver-based miner, which has one mine and three projects in Greece, has been trying to develop the Skouries and Olympias projects in the north of the country for years, but local opposition and differences with Greek authorities, especially over compliance with environmental regulations, have delayed progress.
Not including Stratoni’s $2 billion acquisition, the gold miner has invested about $1 billion in the European country since 2012, and such figure would double if the it could fully develop its other assets in Halkidiki, northern Greece, the company said Monday.
Several in the community oppose mining in the forested country’s north because they believe the activity would hurt the regional tourism industry, destroy the area’s rich vegetation and pose a contamination risk to the groundwater.
Eldorado counters that together with generating new jobs and bringing hundreds of millions into Greece’s struggling economy, it has taken all necessary measures to protect the surroundings. Further, the miner says it’s still carrying out environmental clean-up work even of its predecessors.
Uncertainty about the company’s projects in the European country has weighed heavily on its share price, which is down 48% in the past year, touching a 14-year low of $2.24 on Aug. 4. In the last 24 hours, however, the stock has gained about 17% in both, the Toronto and New York exchanges.