Economy Trade and industry

Greece: Gold fever is difficult to shake

7 February 2013
El País Madrid

Construction work at the Skouries mine in Greece, in October 2012

Construction work at the Skouries mine in Greece, in October 2012

The Greek government has sold off new mining concessions in the north of the country as a way of reducing its debt. But the inhabitants, though hit hard by unemployment, are wary of the environmental consequences of the big dig.

“There, you see? That's where they want to dig the hole.” Lazaros Toskas points his finger at the top of the mountain. Up there, amid forests of oak, beech and pine, a mining company, Hellas Gold, plans to excavate an immense pit to extract the treasure hidden in the bowels of Mount Kakavos in Skouries.

The wealth of this corner of Chalkidiki in northern Greece has been known of for millennia: copper, silver, lead, zinc – and especially gold, which has quadrupled in value over the past 10 years. But where some see business and job opportunities in a land awash in unemployment, others fear the destruction of an ecosystem by an urge to develop, driven by the economic crisis, that they mistrust.

Toskas is a 54-year-old civil engineer. He lives in Megali Panagia, the town closest to the proposed Skouries mine, and is one of the leaders of the movement against the project that has organised several protests in recent months. The engineer shows the work that has already been done for water drainage: “They have to hollow out the mountain to build the galleries.” Under the open pit, which will be up to 250 metres deep, tunnels will be driven up to 700 metres down. The population fears for the water in the area. “There are a lot of minerals in the ground, and they include high percentages of arsenic. We don't know what can happen,” says a worried Toskas. The subject of arsenic often comes up in the talk of those who oppose the mine. The process the company wants to use to extract the gold, they say, is not feasible on a site with high concentrations of arsenic.

Water worries

Eduardo Moura, vice president of Eldorado Gold (the Canadian mining giant, which owns 95 per cent of Hellas Gold), responds by e-mail: the company, he writes, operates in strict compliance with European and Greek environmental regulation. “The environmental impact study of the Chalkidiki mine,” he adds, “has taken five years to be prepared, reviewed and approved by the Greek state.” As for the production process, the company claims to have made “tests that prove it can be used successfully.”

“I'm neither for or against,” says the owner of a jewellery store in Ierissos, the tourist centre of Halkidiki that has become the headquarters of the protest against the mine. “But I would prefer to see jobs coming from somewhere else.” The jeweller sums up the worries of the people, and even of those who, like him, have not marched in demonstrations. “The water we drink comes from the mountain. If it gets contaminated, what will we do?” Then there is tourism. “Do you think anyone would come if he knew there was a mine just a few kilometres away?” He assures us that understands the worries of the unemployed; it's employment that is the main dividing line between backers and opponents of the project. The company does already employ 1,100 workers, and, explains Moura, “our operations will create more than 5,000 direct and indirect jobs.”

Many, however, believe that the benefits will not outweigh the risks, and they distrust the official line. To explain why, they point to the way the state grossly undersold the exploitation rights to the mining project in a region of northern Greece that has metal reserves worth about €20bn euros.

Quick dealing

In December 2003, the Greek government took control of the mine after an out-of-court settlement with TVX Hellas, the former owner, which shut down the project because of the protests from the locals. The state bought it for €11m and sold it the same day for the same amount to Hellas Gold, founded three days earlier, ceding the company all rights to exploitation. Shortly thereafter, 95 per cent of the company's shares were acquired by a Canadian company, European Goldfields (EG). The market value of the company was then estimated in an audit to be about €400m. In 2012, Eldorado took over EG.

The company defends the project, claiming that “it has all the necessary environmental permits.” But groups opposing the mine have appealed against the environmental impact study to the Greek Council of State, which has still to hand down its final ruling.

“Here, between 1947 and 1949 the major battles of the civil war were fought out,” says unemployed Yorgos Tarazas, who has been in the front lines of the protests against the project. Some have ended in violent clashes with the police. Once, last summer, after a pitched battle on the mountain, the riot police retreated back into the centre of Ierissos, where they charged and used tear gas. “Some of us had only ever seen the riot police on TV,” says Tarazas.

Translated from the Spanish by Anton Baer