Greeks say gold mines will pollute environment, harm local business

Canada's Eldorado Gold (NYSE:EGO) may have gotten a thumbs up from the Greek government on its gold projects in the country but many inhabitants of the Halkidiki peninsula have not backed down on demands to stop the mining operations.

Ongoing protests over the past year have resulted in violent clashes between riot police and demonstrators as large-scale clearance lays bare a portion of the Skouries mountainside in the Municipality of Aristotle – the birthplace of the famed philosopher.

Although operations at the Perama and Skouries sites have been delayed by at least one year, local communities fear that the mining sites will pollute their water supplies and destroy protected forest sites, The Independent reports.

In addition to the ecological concerns, many are questioning the economic rationale behind the proposed mining projects.

Hellas Gold Mine, Eldorado's Greek subsidiary, will not be paying any royalties to the state – although the firm estimates that the project will generate about $1 billion in taxes over the next 20 years.

The economic incentive, according to Eldorado, is the employment the projects will create. It estimates about 5,000 additional direct and indirect jobs in an area where the youth unemployment rate reaches 60%.

The companies will also provide about $3.8 million per year to the Municipality of Aristotle for community programs, Eldorado has announced.

Not all locals are convinced. One cheese producer tells The Independent that he fears mining operations will contaminate his product.

"We’ll no longer have what we have right now, the pure milk, the pure product that people ask for in unpolluted areas," he told The Independent. "I believe this gold investment will destroy our water, the air we breathe.”

A professor at the University of Thessaloniki is concerned about tailings which he believes may include arsenic, mercury and cyanide.

The gold producer recently slashed its exploration budget by nearly 50% due to weak gold prices. Greek plans are delayed and production is projected to begin in 2016, rather than the previous estimate of 2015.

Creative Commons image by: Paul Pela