Skouries mine

The Skouries mine is the largest of the Cassandra Mines of northern Chalkidiki, Central Macedonia, and one of the largest gold deposits in Greece and in the world.^[1] The mine has estimated reserves of 5.3 million oz of gold and 246.4 million tonnes of ore grading 0.49% copper.^[1]

Cassandra mines scandal

The Cassandra mines scandal of 2003 involves the purchase and immediate resale of the mines of northern Chalkidiki by the Greek government, a practice which the European Commission deemed in breach of the European law. Hellas Gold was created in December 2003 specifically for this transaction. Its main shareholder was Canadian precious metals company European Goldfields (95%) while 5% of the shares was held by Ellaktor S.A., Greece's biggest construction and civil engineering company.

On 12 December 2003 the Cassandra Mines were transferred from TVX Hellas, a subsidiary of Kinross Gold Corp., to the Greek State for €11 million. On the same day the Greek State sold the Cassandra Mines, together with the mining rights and 70 other fixed assets, to Hellas Gold for the same amount, although there was no public invitation to tender and the assets of the mines were not valued by an independent expert.^[2] Six months later the value of the assets was estimated at €408 million.^[3] The transfer agreement also contained other extenuating circumstances, as Hellas Gold was exempted from paying transfer taxes and also paid reduced lawyers and notaries fees.

In 2009, after a formal investigation,^[4] the European Commission took the Greek State to the European Court. On 23 February 2011 the European Court decided the transaction constituted illegal state aid, as it was made at a price lower than the real market value (decision C48/08). The court ruled that Hellas Gold should pay €15,34 million to the Greek state. The Greek State and Hellas Gold appealed against the decision, but the appeal was rejected by the European Court.^[2]

In July 2013, European Commissioner for Competition Joaquin Almunia declared that since the Greek State refused to collect the amount, the European Commission would take both parties again to the European Court. The case is still pending.^[5]

In December 2011 Eldorado Gold initiated a $2.5 billion friendly takeover of European Goldfields. The acquisition, through which Eldorado Gold became the majority shareholder of Hellas Gold and the owner of the assets and mining rights of the Cassandra mines, was completed in February 2012.^[6]

Christos Pachtas, Greek Deputy Economy Minister at the time of the Cassandra mines transaction, became the mayor of the Municipality of Aristotelis, where the mines are located.

Present state

Skouries July 2013

The Skouries mine is at the stage of development, with ore processing expected to start in 2015. Despite growing opposition from the local population,^[7][8] and reports by Amnesty International of possible human rights violations,^[9] Eldorado Gold denied in April 2013 that it is planning to abandon the project.^[10]

Citing the drop in the price of gold as the main reason, the company announced in July 2013 that it will cut capital spending by 35%, thus pushing back the start date of the Skouries mine by at least a year, into 2016 or 2017.^[11] Despite the company's announcement, large scale development works were reported in July 2013 where the ore processing plant is projected to be built.^[12]

References