ECONOMY

TVX threatens to halt operations

Canadian mining group TVX Gold yesterday dropped a bombshell in the government’s lap as it announced its decision to suspend all activities by its Greek subsidiary TVX Hellas at the base metal mine at Stratoni in northern Greece on December 11 because of the lack of progress and cumbersome red tape regarding the project. TVX Hellas has been prevented from operating the mine, despite holding a legitimate permit, due to a suspension order from the northern Greece mining inspector, TVX Gold said in a statement yesterday. TVX took over the Cassandra Mines in Halkidiki in 1995, but plans to develop Europe’s largest known gold deposit of an estimated 90 tons have been dogged by problems, both bureaucratic and environmental. Encouraged by a 1999 feasibility study which showed that the mine can produce 254,000 ounces of gold along with 2.3 million ounces of silver, 21,500 tons of zinc and 22,500 tons of lead annually in the first five years of its operation, TVX has sunk more than $250 million into the venture. The massive outlay makes this one of Greece’s largest-ever foreign investment projects. Despite the huge sum spent in developing the project and the legal permits awarded by the authorities, the company continues to be disappointed by the bureaucratic blocks, arbitrary official actions and the lack of progress regarding time limits and procedures as set out under Greek law, TVX chief executive Sean Harvey said. One of the company’s grouses is the delayed response to its application for a permit for additional work. The Greek State which was supposed to deliver a decision on November 26 regarding the matter has yet to do so to date. Harvey said the company will revoke the planned suspension in the event the government rescinds restrictions on the Straton Mine and issues the license sought as well as fulfilling its obligations. TVX’s announcement apparently came as a total surprise to the government. Development Ministry spokesman Lazaros Hatzinakos told Kathimerini English Edition that the government had no idea that it would reach this far. He said the company’s decision had more to do with the mining inspector’s action than anything else. Development Minister Akis Tsochadzopoulos who was due to return to Athens late last night from a European Union industry ministers’ meeting in Brussels is expected to respond to TVX today. Resolving the issue will be critical to the government’s efforts to attract foreign private investment, which is one of the centerboards of the new national economy and finance minister’s strategy.