ECONOMY

New company hopes it will be allowed to dig for gold

The new ownership of the Cassandra mines is likely to be a transitional one. Yesterday, Parliament approved the transfer of all assets of the former TVX Hellas to Hellenic Gold, a company in which the majority of shares is jointly held by European Goldfields (30 percent) and Global Mineral Resources (21 percent). Greek construction firms, led by Aktor and including Themeliodomi and Technical Olympic, as well as private Greek capital, account for the other 49 percent. Kinross’s comeback It appears that mining company Kinross, which acquired the mines after its merger with TVX Gold, is ready to join the new company as well, only months after abandoning the investment. It is expected to take a 10 percent stake through a capital rise in Hellenic Gold. Kinross’s interest lies in the rich gold deposits at the site of the mines, in Halkidiki prefecture. However, a decision by the State Council invalidating the initial agreement to extract gold, and the resulting $300 million loss that burdened TVX Hellas, had caused Kinross to abandon the investment. The setup of the new company was the result of the State’s decision to keep the mines open and maintain the jobs of some 500 employees. Kinross’s renewed interest in the project stems from the terms of the new contract. The fact that local authorities will get a 9 percent stake in the company will serve to dampen local protests about the mines’ operation. On top of that, the Greek government has promised a quick examination and approval – within 10 months – of the new plans for mining the gold deposits. The same sources say that Kinross would like to expand its holding beyond 10 percent. It and the other shareholders are optimistic that the Council of State will raise no objections this time. The mines will have to begin operating within three months. Initially, production will concentrate in other metals, such as zinc. Gold mining is expected to start within five years. If estimates about the deposits are correct, Greece will become Europe’s second-largest producer of gold. The setup of the new company will provide employees with the money owed to them from the previous operation – about 17.6 million euros. The operators will also have to address environmental problems, such as subsiding soil that threatened nearby communities. Employee benefits The State will also provide for those miners near retirement age and who are unlikely to be employed by Hellenic Gold. A special program, lasting for six years, will provide full insurance coverage, including auxiliary insurance. The new agreement was voted on only by a majority of Socialist MPs. Opposition parties accused the government that it made secret dealings to conclude an agreement that disadvantages the State. Opposition MPs said that the government ought to have kept Parliament informed about the progress of negotiations. The same agreement had been brought to Parliament last month, but was withdrawn because of opposition objections. With elections now looming less than two months away, the government decided to ignore the objections.