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http://www.ft.com/cms/s/0/d2ba2702-d853-11e4-ba53-00144feab7de.html#axzz3WGR2DP4n
(full text)
CANADIAN MINER AND GREEK MINISTER CLASH OVER PROJECTS
Kerin Hope in Skouries
Eldorado Gold was making steady progress with a €1bn project to extract copper,
gold and other minerals in the Halkidiki region of northern Greece, known since
ancient times for its rich ore deposits.
Then the Canadian mining company came up against Panayotis Lafazanis, Greece’s
new minister for productive recovery, energy and the environment.
Once a favoured investor that promised to bring thousands of jobs, the company
has found its projects stymied by Athens, showing how much harder life has
become for many businesses under the radical left Syriza government.
Since his appointment in January, Mr Lafazanis has focused on reversing
pro-market policies agreed between Greece and its international lenders,
hampering Athens’ attempts to unlock urgently needed bailout money.
He has cancelled the planned privatisation of state-controlled electricity
assets, reassuring trade unions at the power company that it will remain a
near-monopoly and made clear to foreign investors preparing final bids for the
national grid that the sale will not take place.
Mr Lafazanis has even risked the wrath of European partners by cosying up to
Moscow and making a preliminary deal with Gazprom on a bilateral energy
package. If formalised, the agreement would include cuts in gas prices and an
invitation to Russian companies to bid for offshore oil and gas exploration
rights in Greece.
As leader of Left Platform, Syriza’s hardline faction, Mr Lafazanis enjoys a
special authority that Alexis Tsipras, the prime minister, is reluctant to
challenge for fear of splitting the party.
True to his ideological past as a senior official in the Greek communist party,
he maintains that private companies should be excluded from developing the
country’s natural resources.
The Syriza government is facing resistance to its plans to tackle the country’s
massive debt burden. That goes for Eldorado, which has embarked on three
separate mining projects and a large-scale clean-up of waste from an old mine
on a densely wooded 320 square kilometre concession in Halkidiki.
“We are 100 per cent against it [the Eldorado project] and we will use all
possible legal means to stop it,” Mr Lafazanis said when he took office.
“We’re going to review fully the permitting process to ascertain whether
everything was done legally, especially by the local authorities,” he added. Mr
Lafazanis could not be contacted for comment.
His ministry has since revoked Eldorado’s permit to fell trees in one area of
the concession, along with an approval for a building to house an ore-grinding
facility at Skouries, where an open-pit mine is due to begin extracting
gold-bearing copper ore next year. Without a building, the facility cannot
operate, says Paul Wright, Eldorado’s chief executive.
Mr Wright insists the company’s Greek subsidiary, Hellas Gold, obtained all its
permits and licences through correct procedures.
“We continue to fulfil our legal obligations as an investor with the contract
with the Greek state. However, presently, unfortunately, the government is
failing to fulfil all of its obligations, to the detriment of the investment,”
he said.
Eldorado’s predicament is in sharp contrast with its previous status of
“flagship investor”, a rare success story for the previous centre-right
government of Antonis Samaras and its drive to attract investment to pull
Greece out of a crippling recession.
The Halkidiki venture was fast-tracked through the Greek bureaucratic maze as a
priority project that would eventually create 4,000 jobs in a depressed rural
area with an unemployment rate close to 35 per cent.
Eldorado’s geological studies hold a promise of further exploitable gold
deposits in a region that 2,300 years ago produced enough wealth to finance
king Alexander the Great’s military expedition to conquer Persia.
“Halkidiki could have a thriving, large mining industry based on deposits
already identified, and there are good opportunities to find more deposits in
the region that could be developed,” Mr Wright said.
Mr Lafazanis’s opposition to the project is not shared by the majority of local
residents, many of whom work for the company. Eldorado’s trade union bosses
visited him in Athens to plead the company’s case. A group of woodcutters
facing redundancy after the tree-cutting permit was withdrawn recently picketed
his ministry.
“Families moved back to
