Eldorado Gold to restart construction of Skouries mine

Construction of a concrete batching plant at Skouries mine. (Image courtesy of Eldorado Gold)

Canadian Eldorado Gold (TSX:ELD) (NYSE:EGO) will resume work at its stalled Skouries mine, one of four Greek major operations where the firm is involved, following an approval of its updated technical study by the Ministry of Energy and Environment.

The Vancouver-based miner had been awaiting a licence for the project in Halkidiki, a forested area in northern Greece, for over a year. But after months of confrontations with the government and some locals, which included demonstrations, as well as permits being revoked and delayed multiple times, Eldorado decided to halt development in January.

The company had been at odds with the Greek government for quite some time and earlier this year suspended work at its Skouries gold mine, laying off 600.

As a consequence, the miner laid off most of its 600 workers at the project, saying the government had been delaying necessary permits. It also threatened to do the same with its Olympias mine, which is located nearby.

In late February, Eldorado’s local subsidiary — Hellas Gold —  was granted a building permit for a processing plant at Skouries, but the firm decided to keep the project halted until the issuance of all pending licences needed to fully resume activities at the project.

Days later, it also received a licence to set up a processing plant in Olympias, crucial for the development of the mine.

Eldorado’s president and chief executive, Paul Wright, welcomed the long-sought approval of Skouries.

“I believe there now exists a greatly improved shared understanding, appreciation and alignment between the company and the ministry in regards to the substantial benefits to be gained by the Greek society and economy through the collaborative responsible development of mineral resources in Greece,” he said in a statement.

Eldorado is not the first miner to struggle in Greece. In the 1990s, the Skouries and Olympias projects belonged to TVX Gold Inc., which failed to develop them because of local opposition.

The gold miner had said it believed it could do better, in part because of its experience in developing mines in both neighbouring Turkey and China.

Currently the company employs 2,000 workers in an area with an unemployment rate above 30%.