Canadian Miner Eldorado Gold Faces New Obstacles to its Controversial Mine in Greece

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  July 8, 2016

Canadian Miner Eldorado Gold Faces New Obstacles to its Controversial Mine in Greece

Maria Kadoglou of Hellenic Mining Watch explains that a newly issued decision of Greece's Ministry of the Environment means that the battle over the Skouries mine in Chalkidiki is far from over
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DMITRI LASCARIS, TRNN: This is Dmitri Lascaris reporting from Lesbos, Greece for the Real News.

For several years now, a multi-billion dollar Canadian mining company named Eldorado Gold has been constructing and attempting to put into operation highly controversial mines in Halkidiki, a region of northern Greece known for its extraordinary beauty and pristine forests. Eldorado's Skouries mine on Mt. Kakkavos in Halkidiki is the main source of conflict with the local people. More than 340 hectares of unique forest, parts of which are old growth forest, will have to be wiped out in order to make way for the mining facilities, including a 700-meter wide, 200-meter deep pit, as well as a floatation plant, two tailings facilities and various other facilities.

The story of fierce local opposition to the Skouries mine featured prominently in the recently released documentary of Avi Lewis, "This Changes Everything." Here is some of what that documentary had to say about this conflict.


LASCARIS: In January of this year, local opponents of the mine thought that they had scored a major victory against the project when Eldorado announced that it was suspending construction and development activities at Skouries due to the delays in the issuance of routine permits and licenses by the Greek authorities.

But on May 9 this year, Eldorado announced to its shareholders that it had received from Greece's ministry of energy and environment approval of an updated technical study. This approval enabled Eldorado to recommence construction activities at the Skouries project. The company has long touted this project as being of critical importance to its future growth, so when it issued this statement the price of the company's shares, which are traded on the stock exchanges of New York and Toronto, soared.

But within the last 48 hours the Greek ministry of the environment has issued a new decision in relation to Eldorado's mines in Halkidiki. This decision raises serious questions about the future of this highly controversial project.

Now here to discuss this news with me is Maria Kadoglou of Hellenic Mining Watch. For several years Maria has sought to draw the public's attention to the environmental and other risks associated with this mine. Her efforts have included traveling to Canada from Halkidiki, where she resides, in order to raise awareness about the mine among the Canadian public.

Maria, thank you for joining us.


LASCARIS: Now, why don't we start by talking about the announcement in May in which the company told investors that it now essentially had the green light to proceed with the project? What, in fact, happened in May, and what was the status of the mine at that stage?

KADOGLOU: Well, in fact the permit that was given to Eldorado two months ago was a secondary permit. It only related to the modification of certain surface facilities at Skouries. It was really very limited importance, and in my view it did not–It was not Eldorado presented it to be. It was not a green light to go ahead with the project.

Only a couple of days later, the minister himself said that the main issue of the Halkidiki projects, which is the metallurgy plant, the [inaud.] smelting process that will be used for the metallurgy plant is still an open issue. And a few weeks later, the deputy minister of environment, Mr. Tsironis, also said the same thing. So, Eldorado knew that this was an open issue.

LASCARIS: Why don't you tell us a little bit about the metallurgy plant and its role and importance to the overall operation of these mines in Halkidiki?

KADOGLOU: Okay. In Halkidiki Eldorado has two mines, two projects, which is Skouries. Skouries is gold, copper–it's a gold and copper mine. And Olympias, which is a gold, silver and base metals mines. Also the project includes the construction of a gold metallurgy plant that will produce pure metals so that there is added value to exports and more tax profits can be generated for the Greek state.

Just as a parenthesis, I would like to add here that Eldorado already has in place a scheme so that its profits from Greece are shifted via Amsterdam to Barbados, so there will be no profits for Greece whatsoever.

So, the metallurgy plant is central to the contract between Eldorado and the state, and it is also central to the environmental permitting and all the permits that follow the environmental permit. The way it has been permitted, Eldorado is only allowed to use one particular method, which is [flash] smelting. This is the method Eldorado proposed to use, and it was approved and permitted by the Greek state. If this method is proven not to be able to work in Halkidiki, then the whole project is going down.

LASCARIS: So, why don't you explain for us what role flash smelting plays in the overall operation of these mines?

KADOGLOU: Okay. There are two stages of processing. The first stage is the beneficiation of the ore, which produces concentrates. Concentrates are a kind of intermediate product, and concentrates are fed into the metallurgy plant in order to produce pure metals, meaning gold bars, copper and silver.

LASCARIS: So, with that as background, what did the most recent decision that was just issued this week by the ministry of the environment have to say about the metallurgy plant and flash smelting?

KADOGLOU: The study that Eldorado submitted to the ministry is false and inadequate, and it cannot be approved as is. So, they have identified certain areas that needed correction, and they are asking from Eldorado to correct all this and re-submit the study within two months.

LASCARIS: And, broadly speaking, what are the defects found, or the deficiencies found, with the information that was provided by Eldorado?

KADOGLOU: Eldorado was obliged to do a series of metallurgical tests that would prove the applicability of this particular method to the ore and concentrates of Halkidiki, and the results from this test work would be fed into the production of the technical study for the metallurgy plant. So it–There are so many inconsistencies between the body of technical study, the annexes that were submitted, and previous studies that it was found that the results of this test work had not in fact been incorporated in the study.

There are several deficiencies relating to the management of the highly toxic [off] gases and fugitive emissions containing large quantities of arsenic in the plant.

LASCARIS: And those quantities of arsenic presumably pose a threat to the workers and possibly to the community surrounding the mines [inaud.]

KADOGLOU: Absolutely. In fact, the ore of Olympias has a very, very high arsenic content, which is in the order of 10 to 12 percent, whereas the maximum content of arsenic in smelting plants worldwide is only 0.5 percent. According to the ministry, a quantity of about 20 thousand kilos of arsenic gas per year will be emitted from the flash smelting process. This is a huge quantity, and the problems from the flash smelting of this ore have not been adequately addressed.

The test work that was done by Outotec. Outotec is the Finnish company that has developed the flash smelting process, and the test work has been done by Outotec at its facilities in Pori, Finland. But, it was proven that this test work was only for half the process, meaning that Eldorado is obligated by its contract with the state to produce pure metals: gold, silver and copper. But this process, these tests that Outotec conducted only resulted in the production of a salable gold and copper concentrate. This is in violation of both the terms of the contract and the environmental permit.

LASCARIS: So, the ministry found that the results indicate that what this methodology will produce is not a finished product at all but an intermediary product that will have [crosstalk] to be further refined.

KADOGLOU: [interceding]–It is an intermediate contract, and it is in violation of their contract because they are obliged to produce pure metals.

LASCARIS: And so, in light of these deficiencies and the ministry's decision, what do you anticipate will happen now with respect to this mine?

KADOGLOU: Well, the minister's decision gives Eldorado a period of two months in order to complete and correct their study according to their guidelines.

LASCARIS: And if there's a failure to do that?

KADOGLOU: If they fail to do that then there is no project. Because the flash smelting method, as I've said before, the flash smelting method is central both to the contract and to the environmental approval. If the flash smelting method is proven not to be applicable in these specific ores then they have to go through the permitting process, the environmental process all over again, which means they are back at point zero. They have to choose a different processing method and do it all over again.

LASCARIS: Well, it certainly sounds like the years-long battle over the Skouries mine is far from over, and I hope we'll be able to have you back on the Real News in order to discuss subsequent developments, Maria. Thank you very much for your time.

KADOGLOU: Thank you, thank you.

LASCARIS: And this is Dmitri Lascaris for the Real News.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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