The classification of our country as unstable and at high financial risk adds a burden on business endeavour in the era of capital controls, says the new chairman of the Greek Mining Enterprises Association, Athanasios Kefalas.

Greek mining enterprises have managed to develop from suppliers of mineral raw materials to strategic partners for their customers, helping the sector to go fairly well commercially, with satisfactory financial results, despite the international turmoil and the great internal crisis.

What are the problems faced by the member companies of the Greek Mining Enterprises Association (SME) in the current period of capital controls;

Most member companies of SME have a clear export orientation and collaborations or activities abroad. The main problem faced by our industry with the implementation of capital controls is the considerable difficulty in payment of obligations due to the malfunctioning of the banking system and the demands of many suppliers (foreign and local) to pay “in cash”. There are difficulties in the safe collection of receivables (income) either due to failure of the banking system or due to malfunction of the cheque clearing cycle. There is freezing of funds for the exceptional, significantly higher than usual, storage of raw materials and fuel, to enable seamless customer service without risk for penalties for non-performance of long term contracts. We have considerable difficulties in exporting products with trucks and containers, because there is a decrease in the imported shipments and because travel became unprofitable or too expensive, but due to the demand of payments “in cash” that could not be done. There are considerable difficulties in the timely payment of salaries and other benefits to employees, but it did not reach the point where we were unable to pay them. But apart from the immediate issues, a key issue is the classification of our country as unstable and at a high financial risk, which may result in due time in the loss of international markets, with adverse effects on the productive activity of the sector in Greece and the country’s trade balance. Here I would like to point out the high cost of managing this crisis with the creation and long operation of team forces, the need for communication organization regarding the staff, customers and suppliers etc. But, ultimately, due to the effective mobilization of our companies we believe that we have managed to limit the adverse impact of the restrictive measures to keep the production almost unabated and create a sense of security to our customers, staff and suppliers.


What is the assessment for the first six months in terms of the performance of the industry and how are things in the marketplace in terms of supply and demand for the products of the industry in Greece and abroad?

In the international market the prices of metals are low with a continuous downward trend. Aluminium, for example, has reached 1,630 dollars per tonne, dragging down the premiums, while nickel went down to 13,500 dollars per tonne. But it should be noted that the exports of Greek bauxite exhibit growth at good prices. A big advantage at this stage for the mining metallurgical industry sector is the significant drop of the Euro/dollar rate. This balances out the sharp drop in metal prices. Similar problems occur with magnesia products, the price of which exhibits a strong downward trend due to the oversupply of Chinese products. Moreover, there is oversupply of cheap steel in international markets from China, and this factor affects the operational restriction of many foundries and the natural absorption of magnesia products. In terms of industrial minerals, their demand is maintained at acceptable levels. The situation with aggregate building materials is very difficult because of the prolonged economic crisis. Therefore, excluding the construction materials sector, despite the international turmoil and great internal crisis the sector is going quite well commercially, with satisfactory financial results.

Are the businesses of the industry resistant? Should we expect a wave of exits from the country?

Mining enterprises have managed to cope with the challenges of the prolonged crisis due to three factors: extroverted orientation, timely reconstruction of operating structures and by switching from sales of ores and minerals to providing integrated solutions in the markets we serve. Greek mining products, starting from deposits with very good features, are driven by more than 65% by foreign markets – also the size of the Greek market would not allow the development of the sector at today’s levels. To maintain and improve their competitiveness, Greek extractive industries proceeded promptly to changes in their business model and investments aiming at the increased flexibility in the organization of work, quality assurance of products, training and staff motivation, improvement of working conditions, increased productivity etc. Most importantly they managed to develop from suppliers of mineral raw materials to strategic partners who provide total solutions to their customers, thus greatly improving the added value of their products and their competitiveness at an international level. As for businesses exiting the country, we categorically reply “no”. Mineral resources are a competitive advantage for our country. High quality Greek ore deposits, industrial mineral marble etc. constitute a “magnet” for foreign investments in our country. Meanwhile, foreign investment groups in the Greek mining industry constitute a “vote of confidence” for the Greek mining businesses and the financial prospects of our country. Additionally, the strategic cooperation of Greek mining enterprises with international players such as IMERYS, ELDORADO, KERNEOS Lafarge Holcim etc., has considerably strengthened their competitiveness, either through significantly lower costs of financing or utilizing and leveraging their international structures. However, it is important to emphasize that given the nature of the object – deposits cannot be moved and the entire mining and primary processing chain remains in Greece – the bulk of the output value of the activity remains in our country in the form of workers’ pay, purchases of services from the domestic market, the payment of taxes and fees, as well as contributions in implementing corporate social responsibility programs. The last six years of the crisis (2009-2014), the mining industry was perhaps the only sector in Greece that maintained its job positions and production structures. During the period 2009-2014 the mining industry had a total turnover of around 15 billion Euros and exports exceeding 10 billion Euros. At the same time its investments in research and development of products exceeded 100 million Euros. During the same period, it has realized total investments in new projects, new equipment, modernization of production and waste management practices or utilization of by-products of more than 2 billion Euros, while 100 million Euros were spent for environment protection and restoration of the environment.

What are the persisting issues of the industry which must be urgently addressed by the state?

The priorities of Greek mining companies for which we are working closely with the state to proceed quickly and efficiently are the following:

  • Full implementation of the National Policy for the Exploitation of Mineral Resources (MRM), with the issue of the necessary legislation that will include timetables for implementation actions.
  • Integration, in a horizontal manner, of the National Policy Guidelines for the MRM across all individual policies and plans to ensure the optimal use of reserves and the public benefit.
  • Taking initiative together with the state to inform local communities about the importance of exploiting the mineral resources of the country in regards of regional development and national economy, always respecting the principles of sustainable development.

What is your vision for the industry as the new president of the SME?

My main concern is, in close collaboration with the state, to quickly make steps that will highlight the comparative advantages for the national economy and regional development of our country by exploiting the country’s mineral resources with respect to the principles of sustainable development.