Skouries mine

Skouries mine
Location
Central Macedonia
Country Greece
Coordinates 40°28′20.60″N 23°42′11.70″E / 40.4723889°N 23.7032500°E / 40.4723889; 23.7032500Coordinates: 40°28′20.60″N 23°42′11.70″E / 40.4723889°N 23.7032500°E / 40.4723889; 23.7032500
Production
Products Gold, Copper
Production in development
Owner
Company Hellas Gold, a subsidiary of Eldorado Gold
Year of acquisition 2003

The Skouries mine is a high-grade gold-copper porphyry deposit located in the Halkidiki Peninsula in northern Greece. Once developed, it will operate as an open pit mine for about seven years, followed by approximately 20 years of underground development.[1]

Development

The development of Skouries has been hampered by lengthy permitting and licensing delays. In March 2015, the Syriza government suspended the application for the building enclosure permit at Skouries from the approval process.[2] Then in August 2015, the government suspended technical studies pertaining to Skouries and Olympias.[3] The Greek Council of State issued a temporary ruling in favour of Eldorado Gold in October 2015 and a final ruling in January 2016.[4][5]

However, on January 11, 2016, Eldorado Gold announced it would suspend development activity at its Skouries project as "a result of the actions and/or inactions of the Ministry and other agencies regarding the timely issuance of routine permits and licenses, which is not only a legal responsibility, but also a contractual obligation of the Greek State".[6]

Opposition to Development

A minority of the local population has vocally opposed the project, citing impacts to the environment, tourism and agriculture. But despite legal challenges to its environmental permit, the Council of State, Greece's highest administrative court, ruled in 2012 that Eldorado's "investment was particularly advantageous for the national economy".[7]

Cassandra mines scandal

The Cassandra mines scandal of 2003 involves the purchase and immediate resale of the mines of northern Chalkidiki by the Greek government, a practice which the European Commission deemed in breach of the European law. Hellas Gold was created in December 2003 specifically for this transaction. Its main shareholder was Canadian precious metals company European Goldfields (95%) while 5% of the shares was held by Ellaktor S.A., Greece's biggest construction and civil engineering company.

On 12 December 2003 the Cassandra Mines were transferred from TVX Hellas, a subsidiary of Kinross Gold Corp., to the Greek State for €11 million. On the same day the Greek State sold the Cassandra Mines, together with the mining rights and 70 other fixed assets, to Hellas Gold for the same amount, although there was no public invitation to tender and the assets of the mines were not valued by an independent expert.[8] Six months later the value of the assets was estimated at €408 million.[9] The transfer agreement also contained other extenuating circumstances, as Hellas Gold was exempted from paying transfer taxes and also paid reduced lawyers and notaries fees.

In 2009, after a formal investigation,[10] the European Commission took the Greek State to the European Court. On 23 February 2011 the European Court decided the transaction constituted illegal state aid, as it was made at a price lower than the real market value (decision C48/08). The court ruled that Hellas Gold should pay €15,34 million to the Greek state. The Greek State and Hellas Gold appealed against the decision, but the appeal was rejected by the European Court.[8]

In July 2013, European Commissioner for Competition Joaquin Almunia declared that since the Greek State refused to collect the amount, the European Commission would take both parties again to the European Court. The case is still pending.[11]

In December 2011 Eldorado Gold initiated a $2.5 billion friendly takeover of European Goldfields. The acquisition, through which Eldorado Gold became the majority shareholder of Hellas Gold and the owner of the assets and mining rights of the Cassandra mines, was completed in February 2012.[12]

Christos Pachtas, Greek Deputy Economy Minister at the time of the Cassandra mines transaction, became the mayor of the Municipality of Aristotelis, where the mines are located.

References

  1. ↑ "Skouries". eldoradogold.com. 2016. Retrieved 2016-02-10.
  2. ↑ Casey, Simon (2 Mar 2015). "Greece blocks construction at Eldorado’s Skouries mine". Globe and Mail. Bloomberg News. Retrieved 12 July 2015.
  3. ↑ "Eldorado Gold Announcement". Retrieved 9 February 2016.
  4. ↑ Bochove, Danielle (2 Oct 2015). "Eldorado Surges After Greek Court Rejects Mining Halt". Bloomberg. Retrieved 9 February 2016.
  5. ↑ Koutantou, Angeliki (20 Jan 2016). "Eldorado Gold wins appeal over Greek mining ban". Reuters. Retrieved 9 February 2016.
  6. ↑ "Eldorado Gold Announcement". Retrieved 9 February 2016.
  7. ↑ Eldorado Gold’s big Greek mining problem, The Toronto Globe and Mail, 27 April 2013
  8. 1 2 ORDER OF THE GENERAL COURT (Fifth Chamber), 27 March 2012
  9. ↑ Στο Ευρωπαϊκό Δικαστήριο και για τα Μεταλλεία Κασσάνδρας, Το Βήμα, 15/03/2009, retrieved 22/07/2013
  10. ↑ State aid: Commission opens in-depth inquiry into €11 million sale of Greek Cassandra Mines to Ellinikos Xrysos, http://europa.eu RAPID
  11. ↑ Κυβερνητικό "δωράκι" 15 εκατ. στην Ελληνικός Χρυσός, Η Αυγή, 11 July 2013
  12. ↑ Eldorado Gold Corporation Completes Acquisition of European Goldfields Limited, http://www.eldoradogold.com
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