Greek govt. vows not to touch Eldorado’s mine

Greek govt. vows not to touch Eldorado’s mine

Construction of Skouries mine and processing plant. (Satellite photo by Schizophonix | Wikimedia Commons)

Greece leftist new government has vowed not to block Canada’s Eldorado Gold Corp (TSX:ELD) (NYSE:EGO) Skouries gold-copper project, but it warned it is going ahead with a thorough review of permits related to a proposed processing plant at the site.

Speaking to Reuters, a senior energy ministry official said the cabinet was reviewing the process through which the miner was granted permits for the processing facility.

"According to our legal advisers, there are some shortcomings related to the site planning," the official was quoted as saying. "As a ministry we have ordered some of the permits to be recalled to re-examine whether the activity of the company is the one described in the approved permits."

Skouries has had locals divided since early 2011, when the Vancouver-based firm’s subsidiary Hellenic Gold received government approval to mine in the northern peninsula.

Some claim the mine, owned 95% by Eldorado, may hurt tourism and the environment, while others believe the operation is good news for Greece because it will generate new jobs and bring hundreds of millions into the struggling economy.

Greek govt. vows not to touch Eldorado’s mine

Skouries — Grading and flotation buildings. (Image courtesy of Eldorado Gold)

Truth is Skouries was the flagship project of the last government’s foreign investment drive and, for many, remains a test case that would reveal whether Greece could protect foreign investors despite local opposition.

But Eldorado Gold has not let any controversy ruin the party. Last month the company announced it was committing close to $200 million this year to develop the mine, with construction expected to finish late 2016.

To date, the project is one of the biggest foreign investments in the country that just today has secured an extension to its lifeline financial bailout with promises to implement ambitious reforms and stick to its financial commitments.