Minister softens stance, cites need for ‘compromise’ in standoff over Skouries mines

A bitter feud between the relevant environment minister and mining multinational El Dorado Gold, which holds the concession to the Skouries gold mining operation in northern Greece, appears to have cooled, with Minister Panos Skourletis on Thursday referring to the need for a compromise with the Canadian company.
An acrimonious round statements and counter-statements came in February when the energy and environment ministry, which Skourletis heads, slapped a suspension on Hellas Gold’s activities at the Skouries complex, citing legal and environmental violations. The concessionaire’s parent company, El Dorado, reacted angrily and threatened to close down all of its activities in Greece, including at another mining operation in Olympiada, near Skouries. Both sites are located in northern Halkidiki prefecture.
In late February, Skourletis accused El Dorado CEO Paul Wright of deliberately “shorting” shares when he announced that a suspension of operations in January. Meetings between company executives and ministry leadership proved fruitless throughout January and February.
In statements to Bloomberg, the Greek minister went as far as saying that the top mining executive “told his friends” of the multinational’s plans to suspend mining at the Skouries site so that they could sell and buy-back at a lower price.
A company spokesperson at the time replied that the statement was “utter nonsense” and defamatory and Wright has threatened legal action against Skourletis.
Nevertheless on Thursday, the minister referred to a “necessary compromise by all sides” in dealing with Skouries, which is the biggest foreign mining investment in Greece, exceeding a projected one billion euros.
Leftist SYRIZA party, when in the opposition, was bitterly opposed to the Skouries investment, although once in government top party cadres softened their stance towards foreign direct investment, especially projects and privatizations directed cited in the third bailout agreement’s terms.

 

source: naftemporiki.gr- english

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MICHALIS THEODORAKOPOULOS: “IN GREECE, ENTREPRENEURSHIP HAS BEEN DEMONIZED”

The CEO of Hellas Gold – subsidiary of EL Dorado Gold-, operating at the mines of Northeastern Chalkidiki in Greece, Mr. Michalis Theodorakopoulos gave an interview to the radio station of Thessaloniki “Focus 103.6” and journalist Dimitris Venieris on the occasion of his candidature in the elections of the Federation of Industries of Northern Greece.

Inevitably at some point the conversation led to the investment of Hellas Gold in Northeastern Halkidiki. Mr. Theodorakopoulos talked about some very interesting issues in the interview, such as the demand for labour in the mines, which has reached 7,000 applications, his satisfaction that the Minister Productive Reconstruction Mr. Lafazanis included in his requirements – apart from the protection of the environment and public interest – the investor’s profit, and the obvious fact that the strength of the private sector favours the public sector, and many more…

But when he started talking with figures the truth emerged, as numbers answer to those who claim that the company does not pay taxes and the state does not benefit from the presence of El Dorado in Greece:

  • From the average of 45,000 Euros corresponding to the cost of each worker for the company, half go to the State in the form of taxes and contributions.
  • Every year 30 million Euros goes to the State as insurance contributions.
  • Every year 30% of the turnover is returned to the State in taxes, regardless of whether the company has profits or losses. Today the turnover amounts to 100 million Euros and the full development of the project is projected to reach 800 million Euros. We are talking about 240 million Euros per year going to the state!!!
  • 300-400 million Euros per year are planned to be invested for the next 2-3 years.
  • According to the most optimistic predictions the first gold will be mined in 2022 and it will continue for another 23 years. We are talking about a 30 year investment.
  • According to the investment plan 20 million Euros per month are expected to be invested and because of the bureaucratic setbacks this amount has been reduced to 9 million Euros.

Another point stressed by Mr. Theodorakopoulos is that  El Dorado essentially made its appearance in 2012 to invest in an idea of ​​Greek engineers since 2005, concerning the exploitation of the national mineral wealth.

Regarding the controversial issue of the environment, the CEO of Hellas Gold reiterated that the Environmental Impact Study that has gone through appeals to the Council of State follows the European legislation which is much stricter than that of North America.

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THE LOSSES OF ELDORADO GOLD & THE CONSEQUENCES ON THE GREEK MARKET

The involvement of the company Hellas Gold – subsidiary of EL Dorado Gold – in the gold mine project in Skouries Chalkidiki, Greece, resulted in not one, but two big losers. So far, all the attention has focused on stock losses recorded by the Canadian group of El Dorado Gold, as the share which it is trading in the market of Toronto (and in Wall Street) has lost 26.5% of its value since the beginning of the year. The plunge of the stock created a domino effect as it took its toll on the financial figures of the Greek group of Ellaktor, participator of Hellas Gold, where the business interests of Bobolas famiy are expressed. Indeed, the losses exhibited in the first quarter of this year by Ellaktor (12.3 million Euros) are almost entirely due to the decline of the El Dorado Gold stock. This is because the Greek group owns 1.1% of the Canadian company, while at the same time it also owns 5% of Hellas Gold that operates in Skouries. It is significant that at the end of 2004, the participation of Ellaktor in El Dorado Gold was valued at 77.342 million Euros. In the end, however, of last March, the value of this shareholding was forfeited to 64.97 million Euros, thus creating a financial hole of 12.372 million Euros in the financial data of Ellaktor for the first quarter of the year. It is evident, however, that the adventure for the Bobolas group does not end here, as the share of El Dorado is continuing its descent thus increasing the negative impact on the accounts of Ellaktor. This is because at this moment the participation value has gone down to 57.4 million Euros. That is, the Bobolas group has lost 7.6 million Euros more. The downfall for the stock market course of El Dorado came after the intervention of the Minister of Productive Reconstruction, Environment and Energy Mr. Lafazanis and the new government policy which was against the project of gold mining. At the beginning of this year, the stock of El Dorado was at 7.8 Canadian Dollars, while now it is at 5.20. At the same time, the market value of the Canadian company has decreased by 2 billion Euros.

DEAL NEWS, 19/06/2015

 

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