The Council of State has issued a decision allowing gold mining in Halkidiki to continue despite complaints by locals about the potential environmental damage it could cause.

Nine residents associations, cooperatives and professional groups from the villages of Ierissos and Megali Panaghia and other parts of Cassandra appealed against a joint-ministerial decision in July 2011, which allowed Hellenic Gold, a subsidiary of Canadian firm Eldorado Gold, to dig in Skouries.

They argued that it would lead to the destruction of a local forest and irreversible damage to the ecosystem.

The company has been awarded an area of 26,400 hectares, of which 410 is forest land. Almost all the trees in the forest will be cut down as part of the mining firm’s plan to extract gold. The company says it will replant trees when it finishes its work.

The court decided to throw out the residents’ appeal because the “investment is very beneficial for the economy.” Judges argued that the mine would employ up to 1,300 people in an area with high unemployment and would help the struggling national economy.

The decision means that mining activity can continue until the residents’ main appeal can be heard.