Political cost stalls projects

The government’s policy of attracting foreign investment to develop metal deposits, located mostly in northern Greece, seems to be restricted by the reactions of local communities. The case of TVX Hellas, whose investment in a gold mine in Halkidiki never managed to get off the ground, despite divided local views, is the most typical. In view of the municipal elections in the autumn, ministers appear even more hesitant to approve relevant schemes, obviously mindful of the possible political cost. Of course, the sensitivities and arguments put forward by local agencies and communities regarding environmental protection are not unreasonable. Nevertheless, the entire problem is the responsibility of the government itself, which should have established more reliable procedures for attracting and implementing such investments, ones that cannot be so easily annulled by the courts, as in the case of TVX Hellas, and that do not encourage extreme reactions. Three such investment schemes in northern Greece, in Kilkis, Rhodope and Evros prefectures, remain in limbo and, according to sources, will stay so at least until the elections are over. The three projects have been proposed by Metalleftiki Thrakis, a subsidiary of the UK’s Greenwich Resources PLC, for a gold and copper mine in Sappes, Rhodope, by Chrysorychia Thrakis, a joint venture of Greece’s Silver & Baryte and US-based NewMont, for a gold mine in Perama, Evros, and by the multinational Rio Tinto group for an exploratory assessment project into deposits of gold, lead and zinc in Kilkis. All three projects have been blocked by local reactions. Last March, the Development Ministry issued an international invitation for expressions of interest in, initially, exploration to determine the exact size of gold, lead and zinc deposits in two areas in Kilkis, and then in concession rights. The only offer forthcoming was from Rio Tinto for the Krouses deposit. Three months later, nothing has emerged from the Development Ministry’s assessment committee and, according to sources, no development looks likely before the fall. Metalleftiki Thrakis, which has undertaken to explore and operate the publicly owned mine M5, submitted an environmental effects study in August 2001, envisaging the processing of metal ores without the use of cyanide at any stage of the process, in an obvious attempt to allay local concerns. In January, the Environment Ministry sent the study for an opinion to the Rhodope prefecture and nothing has been heard since. The study has apparently been shelved until after the elections. The company, which has been active in the area since 1993, obtained ministerial approval for the site as early as February 2000, but the local Sappes municipality has filed a suit against it with the Council of State, which is pending. Metalleftiki Thrakis’s general manager, Dimitris Constantinidis, says the company has spent more than 19 million euros on surveys and basic planning for the operation and the resulting waste management. It has leased the exploration and surveying mining rights after winning an international tender and signing a contract with the government, and plans to invest about 45 million euros. The setting-up expenses of the project are estimated at 83 million euros, while around 200 people will be employed during the construction period and 130 after operations are launched. The final output is estimated at 560,000 ounces of gold, 257,000 ounces of silver and 3,250 tons of copper. Constantinidis attributes the reactions to misinformation. «Unfortunately for the company, we have a difficult past behind us. I am certain that the well-intentioned critics of the project will be persuaded of the credibility of our pledges and that the mining process envisaged will be implemented to the letter,» he says. The investment by Chrysorychia Thrakis, in which NewMont, a Colorado-based company, has an 80-percent stake, has obtained preliminary approval for the projected site, has also been opposed by the local community in Perama, Evros, in the courts. An environmental effects study, submitted in November 2000, seems to have been held up at the Environment Ministry. The company discovered deposits of 1.3 million ounces (41 tons) of gold after spending 15 million euros. The 11 million tons ascertained as worth tapping are thought to secure the mine’s viability for nine years, giving jobs to 220 people. The total value of the deposit is estimated at 412 million euros, while the projected cost of investment is 88 million, plus 15 million euros for environmental reclamation. A company official said that while the company intends to use cyanide in ore processing, it was a tried and tested method already applied in Italy, Spain, France and Sweden. It is also considering suspending operations if «we see nothing moving.» The government’s inability to look the problem in the face has as much to do with the unions’ aggressive tactics as the opposition parties’ antagonistic stand. «No one is prepared to take a long-term view of the issue,» said an observer. «It seems that unionists are not interested in what their children will be facing. As for the opposition parties, the short-term political agenda is taking priority over the social security issue.»

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