Greece tries making peace with Eldorado, grants final permits for Olympias
Canada’s Eldorado Gold (TSX:ELD)(NYSE:EGO) scored Friday a fresh victory in an ongoing battle with the Greek government over permits for its projects in the country’s north, as authorities issued all pending licences for the company’s Olympias project.
The news follows the miner’s threat earlier this week to halt investment and operations beginning Sept. 22.
The Vancouver-based firm, Greece’s biggest foreign investor, cited years-long permit delays and a lack of information on an arbitration process to settle differences with authorities as main reasons.
Local miners protested Wednesday outside government buildings in Athens against the potential job losses Eldorado’s decision would bring. Police tried dissolving the demonstration with tear gas, but a group pushed past and entered the premises.
The riot ended with Environment Minister Giorgos Stathakis promising to issue all pending permits for the company’s Olympias project before the end of the week.
While Stathakis delivered of its promise, Eldorado is still awaiting permits for its Skouries project, the main bone of contention between the company and Greek authorities.
“Upon receipt of the required Skouries permit and the Greek government being willing to engage with us in constructive discussions, the company will then be in a position to re-assess its investment options in Greece,” it said in a statement.
On Thursday, the company was officially informed that the government had kicked off an arbitration process over Eldorado’s technical study for the Madem Lakkos metallurgical plant. The document, submitted in 2014, has been qualified by Greece as “deficient” and in violation of the environmental terms previously set for the project.
Eldorado’s president and chief executive George 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.”
The Canadian gold producer, which has one mine and three projects in Greece, has been trying to develop the Skouries and Olympias 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 27% so far this year, touching a 14-year low of $2.24 on Aug. 4. In the last 24 hours, however, the stock has gained about 21% in both, the Toronto and New York exchanges and it jumped again in pre-market trading Friday, up 1.26% to $2.41.