Background on Eldorado Gold’s Proposed Mines in Northern Greece

Jamie Kneen

National Program Co-Lead

A delegation from northern Greece will be visiting Canada from May 26th to 31st, 2013, to alert Canadians to the current situation with Vancouver-based Eldorado Gold’s proposed Skouries and Perama Hill mining projects. The Greek delegation includes the Mayor of Alexandroupoli, Vaggelis Lampakis; Tolis Papageorgiou of Halkidiki; and Maria Kadoglou of Hellenic Mining Watch.

Eldorado is planning to build a combination of open-pit and underground gold mines, linked to its existing Stratoni lead-zinc mine. While the company plans to use closed-circuit processing, not open-air heap leaching (as it does in Turkey, where it has caused serious problems), the potential impact on ground water and surface water flows is huge; the mines will also require the destruction of significant areas of forest.

In December 2003, the Cassandra Mine assets of TVX Hellas S.A. in the Halkidiki peninsula were transferred by law to the Greek State for 11 million euros. They were sold the same day to Hellas Gold S.A. for the same price, without any economic assessment of the assets or an open competition. The assets included mining and exploration concessions covering 317 square kilometres, 310 homes, 11,000 square metres of urban land, 2.5 square kilometres of land, 30,000 square metres of offices and industrial buildings, 2 underground mines with shafts and underground tunnels, pumping systems, two ore treatment plants, vehicles and mine machinery.

Today, Hellas Gold S.A. is 95 per cent owned by the Eldorado Gold Corporation – a Canadian company based in Vancouver. Eldorado has a market capitalization of  $2.9 billion USD and the value of the minerals in Halkidiki is estimated at $19.9 billion USD. Eldorado claims to have doubled its reserves in the last five years, with proven and probable reserves now estimated at 25.7 million ounces of gold and 72.3 million ounces of silver. The company’s goal is to produce 1.5 million ounces of precious metals annually by 2015 in a $1.7 billion mining development.

According to Greek mining regulations, the company has full possession of the minerals contained in the concessions granted and there are no royalties payable to the State – providing little economic security to the region or the State. Due to current political instability in Greece and the accompanying state-wide austerity measures, Greek authorities have displayed little tolerance for displays of opposition from citizens in the region.

In addition, Eldorado’s proposed mines have been “fast-tracked” by the Greek government. The “fast-track” law was designed for investment projects that are considered “strategic” and it shortens and simplifies all permitting procedures. National and international protection conventions are no longer barriers to development; any activity that disturbs mining is prohibited in designated mining areas; and private land can be expropriated.

The Perama Hill project is a 1,000,000-tonne open-pit cyanide-leach gold mine. Despite the fact that it is a private investment, which means there will be no revenues to the State except taxes, it was one of the first projects to be designated for permitting under the new “fast-track” process.

The region currently generates its major economic activity in the form of tourism and agriculture –economic sectors that will suffer tremendously with mining development in the area. In March 2012, 4.1 square kilometres of public forest was handed over to the company to begin construction of the Skouries mine. Leading academics in Greece have estimated that the Eldorado Gold Corp. (Hellas Gold S.A.) mining operations will cause irreversible major destruction of physical capital at local, national and European level and a violent alteration of the region’s development model. The environmental impacts of mining are well documented by various organizations and MiningWatch Canada has several comprehensive reports outlining the disastrous effects to waterways and the issue of perpetual care of contaminated sites.

The Skouries mine, on mount Kakavos, is the main source of conflict with the local people. More than 340 hectares of unique forest, parts of which are old-growth forest, will have to be wiped out in order to make way for the mining facilities, including a 700 metre wide, 200 metre deep pit as well as a flotation plant, two tailings facilities, and various other facilities. So far, 340 hectares of public forest in Skouries has been ceded to the company by the regional administration. The area of the second tailings facility, 92 hectares, doesn’t belong to the state but to a Mount Athos monastery. For the citizens of the nearby towns, a major concern is water. Mount Kakavos holds the largest water reserves in the entire Halkidiki peninsula, which already suffers from water shortages.

These economic and environmental concerns feed into the social impacts from the mining developments. Halkidiki and Thrace are nearby to where Eldorado has begun digging the mine’s open pits and clear cutting forested area. Since late 2011, there has been growing opposition by the residents, and growing police attention.

The Greek government’s silence has only exacerbated the situation. In October, 2012, police clashed with over 2500 protesters with citizens reporting false arrests, gratuitous brutality and overwhelming force. These clashes have become more frequent as opposition to the mine has grown. The latest videos show police using excessive force against a group of women staging a peaceful protest on the mining road on Mother’s Day (May 12, 2013). A group of residents marching against the clear cutting of the forest were met by riot police. There were reports of gunfire between the protestors and the police, leading to concerns of possible police provocation in order to falsely accuse the opposition of gun violence.

It has become increasingly evident that the situation has become increasingly violent as police repression of protests has spiraled out of control. Amnesty International has expressed concern over the deteriorating situation and have called for an inquiry into the actions of police. Unverified activities include reports of chasing down and savagely beating peaceful protestors, firing teargas into people’s vehicles, illegally extracting DNA samples from ‘suspects’, and breaking down doors in the middle of the night to make arrests.

The Canadian Ambassador to Greece is on record making clear Canada’s involvement and support of the project. Eldorado is a Canadian company that is supported by Canadian funds. The Canadian Pension Plan (CPP) and the Quebec Pension Plan (RRQ) both have millions of dollars invested in Eldorado’s mining activities, and Export Development Canada (EDC) was recently named a major lender to Eldorado to as part of an “amended and restated credit agreement” (AARC) to support “growth opportunities and general corporate purposes.”