Canadian mining firm threatens to suspend Greece investment

Canadian mining company Eldorado Gold on Monday threatened to suspend a major investment in Greece in 10 days, accusing the government of delaying permits and licenses.

One of Greece's largest foreign investors, Eldorado operates mines in northern Greece that have faced vehement opposition from parts of local communities on environmental grounds, with protests often turning violent.

"This decision is not one that we have taken lightly," Eldorado President and CEO George Burns told reporters in Athens, noting the company has made a $3 billion-investment in the country.

A company announcement said it would continue maintenance and environmental safeguards, but would make no further investment in three mines in the Halkidiki area of northern Greece and two projects in the northeastern province of Thrace.

It said the permit delays "have negatively impacted Eldorado's project schedules and costs, ultimately hindering the company's ability to effectively advance development and operation of these assets."

Burns said the company's decision will take effect on Sept. 21 unless Eldorado receives the permits.

"Approvals must not be held hostage to political posturing or other agendas put forward by a vocal minority," he said. "I keep hearing the permits are coming, but they're not coming in a timely fashion."

But Environment Minister Giorgos Stathakis said European and national law had to be upheld, and that the company had still not completed all necessary procedures, including completing an investment plan detailing production methods.

He also said some pending permits were scheduled to be given in mid-September for six months, allowing the company to operate during the arbitration process.

"The company's choices toward the employees are clearly their responsibility," Stathakis said. "We are witnesses of an extraordinary event, of a company that through its CEO holds press conferences and makes statements judging prime ministers, ministers and political parties in Greece."

Burns said the company was unable to legally continue work without the permits, adding he was open to dialogue and hoped to have the issue resolved in time.

This is not the first time Eldorado has suspended operations in Greece. In January 2016, it had threatened to suspend work at one of its sites and lay off 600 workers following protests by local residents and a spat with the government. Work restarted several months later.

Burns said he had sent three letters to Prime Minister Alexis Tsipras during the last five months, since he took over the helm of Eldorado, but had not received any reply.

Eldorado employs some 2,400 staff and contractors in Greece through its local subsidiary, Hellas Gold. The company said 90 percent of the workers faced being suspended temporarily from their jobs if the permits don't come through in time.

The company took over old mines in 2012, paying nearly $2 billion. Burns said it had since invested a further $1 billion in Greece, a figure which would double if the company could fully develop its assets in Greece.

Monday's action comes as Greece struggles to emerge from years of a deep financial crisis and attract investment.

Interior Minister Panos Skourletis said disagreements would be resolved through arbitration. The company, however, counters it has not been officially informed of what the arbitration would be about.

"This might be a move to (exert) political pressure on the government at a crucial time," Skourletis said.

He insisted Greece was friendly toward foreign investments, but that the Canadian project, being a mining operation, was a special case.

"Such kinds of investments no longer exist in the rest of Europe. They're not allowed due to the great environmental cost they have," he said. "So it's wrong to connect this particular case with the general picture in the area of investments (in Greece)."

The Halkidiki mines have been mired in controversy for decades, with Eldorado's predecessors also facing protests.

Many in the local communities vehemently oppose mining development on environmental grounds, saying it would hurt the area's tourism industry, destroy forests risk contaminating the groundwater.

The company counters it's carrying out environmental cleanup work even of its predecessors, and rejects accusations of pollution. It noted that Greece's Council of State, the country's highest administrative court, had issued 18 decisions in its favor in various permit disputes.

Burns said he remained optimistic that a solution could be found. "I'm confident these mines will be built," he said.

When first elected on an anti-bailout platform in 2015, Prime Minister Alexis Tsipras' left-wing government initially favored the suspension of the permits that had previously been granted to the mining company.

Greece's confederation of industries urged Tsipras to personally intervene to rescue the gold mine investment.

Nikos Panairlis, head of the workers' union at one of the mines, described the company's move as "a catastrophe for us," adding that workers were looking to organize protests.

The mood among opponents of the mine was cautious. Aristotelis municipality mayor Giorgos Zoumbas accused Eldorado of "using the workers and their jobs to blackmail and get the permits."

Local residents, he said, would be happy if the suspension goes ahead, "but they're still cautious."

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Derek Gatopoulos in Athens and Costas Kantouris in Thessaloniki, Greece contributed to this report.

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