Greece’s decision to start an arbitration process with Eldorado Gold Corporation over a gold mine development could undermine the Canadian company’s 2.8-billion-dollar investment project and cost hundred of jobs.
The decision – announced by Energy Minister Giorgos Stathakis after his meeting Wednesday with the management of Eldorado’s unit in Greece, Hellas Gold – will take effect at the end of August and is seen as the latest round of tension between the government and the company in a relationship which has been uneasy since SYRIZA came to power.
Eldorado is developing projects at Skouries and Olympias in northern Greece. According to the ministry, licensing for Olympias is in the final stage, while permits for Skouries are pending.
The mine at Skouries has been a source of friction in recent years over the testing methods used and environmental regulations.
The government’s critics say that the Skouries mine and the issue of education are considered the last bastions in the leftist-led coalition’s bid to save face and atone for signing on to harsh austerity with the country’s creditors. Raising obstacles to the project may also jeopardize hundreds of jobs.
“If permits are not given for the Skouries project, the factory cannot continue to operate and 1,200 workers will be fired,” sources from Hellas Gold told Kathimerini Friday, while describing the government’s decision to move for arbitration as politically motivated.
Meanwhile, Eldorado Gold president and CEO George Burns said the company had not been formally informed, and that the government’s statement did not result in any additional clarity regarding the details of the intended arbitration.
“To be clear, we have not yet received formal notice of arbitration and permits applied for remain unissued. We continue to evaluate all capital spending and development timelines at our projects in Greece,” he said, adding that, at this time, “commissioning at Olympias and reduced development works at Skouries are continuing.”