Economic Impact

Economy

The economic consequences of this mining project will be enormous. The Greek government sees the project as a way out of the crisis. Eduardo Moura, vice president of Eldorado and General Manager of the Greek branch, states that the Skouries project offers opportunities: “it creates jobs, improves infrastructure, generates tax income and income from export”. This claim is in sharp contract with the outcomes of the economic analysis made by SOMO (Centre for Research on Multinational Corporations): “Eldorado has a highly developed tax evasion structure with 12 Dutch mailbox companies and several daughter companies in Barbados, the British Virgin islands and the Cayman Islands. There are strong reasons to believe that Eldorado Gold will not make any significant contributions to the country. As part of a lack of good legislation about gold mining the Greek Mining Code means the country doesn’t raise royalties on mining concessions and so the Canadian company will only pay taxes on the wages of its employee. In 2013 there were 1250 people employed, in 2014 this amounted to 1500 and by 2017, 2000 people will be employed there. After the mining activities end (in 7 years), this tax income will fall away completely.

Last year, Eldorado stated that they will put in place their own royalty plan so that the Greek state would be paid 3 million euros yearly. This way the royalties wouldn’t be enforceable. This spontaneous proposal is not so surprising, given the expected profits from the mine are extremely high. If the company extracts 85% of the 100 tonnes of gold, and much more copper reserves, this should generate around 10 billion euros (at current market prices). This means Eldorado is offering to contribute minimum 0.2% of its profits to Greece in the form of royalties.

The Greek government failed to make an economic analysis on the impact that the air, water and soil pollution have on the current revenue sources in the Halkidiki region. Agriculture (grazing land, organic farming, and beekeeping) and fishing (open water and aquaculture) are the main income sources. These will be strongly effected by the pollution of air, water and soil. In addition, small-scale activities such as forest management, picking berries/herbs and hunting are an important addition to other incomes. Although the economic value of these activities is often ignored, experts emphasize their significant impact on the livelihood of local communities. The deforestation and forest degradation caused by mining will strongly influence these activities.

A final, important economic activity that characterizes the Halkidiki-region is tourism. Tourists from home and abroad are an important source of income for the people in this region. Calculations say that 15-20% of the GDP of Northeast Halkidiki is related to tourism. Pollution, destruction of historical sites and deforestation will have a negative impact on the region’s image and cause a decrease in tourism in the long term. Specialists consider the actual calculation impossible but agree that the balance is negative for the region. Although the short-term profits for Eldorado Gold are relatively easy to calculate, the long-term costs of job loss in the tourism, agriculture and fishing industry, as well as the ecological and archeological damage, are almost impossible to express in a monetary value. The ecological study by Hellas Gold also leaves out the economic impact of the ecological damage from mining activities.

Because of the lack of regulation, Eldorado Gold is not held responsible for the ecological damage. Both the decreasing value of the land due to the irreversible ecological damage, the remediation of the repairable ecological impacts and the influence on other economic sectors will therefore have to be paid by the Greek society. An impact analysis by the environmental committee of the Aristoteles University in Thessaloniki concludes that economic growth in the mining industry does not contribute sustainably to the interests of society.