Last Update: 08:44
Canada’s Eldorado Gold Corp said on Monday it would suspend investment at its mines and development projects in Greece due to a delay in obtaining permits from the Greek government.
This represents a major blow to the recent efforts of Greek PM Alexis Tsipras to portray his government as being friendly towards enterprises and foreign investments.
The company said no additional investment will be made into the Olympias and Skouries projects and the Stratoni mine in Greece, and will place them on care and maintenance as of Sept. 22.
In a press release the company said:
“Despite repeated attempts by Eldorado and its Greek subsidiary Hellas Gold, to engage constructively with the Greek government, the Ministry of Energy and Environment and other government agencies, delays continue in issuing routine permits and licences for the construction and development of the Skouries and Olympias projects in Halkidiki, northern Greece. These permitting 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“.
Eldorado has applied for licensing but the energy ministry said that it would launch an arbitration process this month, to ensure that the Toronto-based miner respects its contractual obligations.
The company said it was awaiting additional detail from the Greek government over the arbitration process and would re-assess its investment options in the country after the approval of the permits.
George Burns, President and Chief Executive Officer of Eldorado Gold, commented:
“It is extremely unfortunate to find ourselves at this impasse when we should be advancing an important commercial project in partnership with Greece and adding another 1,200 jobs to our current workforce of approximately 2,400 people in Greece.
“We have a responsibility to our shareholders to allocate capital to projects not only with the best rates of return, but also in locations where host governments are supportive of our investment and work with us to grow a sustainable future. As such, Eldorado cannot continue to put capital at risk without these permits and will pursue all avenues to advance its investment and contractual rights.”