Recent Developments 2016

http://www.thepressproject.net/somoen.htmlIn Greece, the mining company Eldorado Gold has produced 723 532 ounces of gold in 2015 and forecasts the production in 2016 to be of 565 000-630 000 ounces.[1] The company operates the Kassandra mines (Skouris, Olympias and Stratoni) on the Halkidiki peninsula near Thessaloniki, through the company Hellas Gold SA. Eldorado also possesses through their companies the Thracean Gold Mining SA and Thrace Minerals SA respectively, the Perama Hill and Sapes mine sites in the Thrace region (north-eastern Greece).[2]

In Skouries and Olympias alone, about nine million ounces of gold, 72 million ounces of silver and 767,000 tons of copper can be extracted. This is worth more than 13 billion dollars.[3] Eldorado Gold invested since 2012 some 700 million dollars in their mining projects in Skouries and Olympia and wanted to spend there 1 billion dollars more.[4] Today about 2000 people and 3000 contractors work for the company in Greece. In the 1990s, before Eldorado Gold, TVX Gold Inc. tried to develop the mining sites at Skouries and Olympias in Halkidiki. [5] Because of delays and opposition of the local population under the lead of Antigold, Save Skouries and the “Save the Homeland of Aristotles” campaign in 2002, they were forced to, first merge with Kinross, a Canadian miner, before they finally got bankrupted in 2003. [6]

Tensions heightened between the government and Eldorado Gold, after the former minister of energy and environment Skourletis, revoked in August 2015 the permits to continue their project in Skouries.[7] He judged the environmental tests to be invalid.[8] Skourletis stated also that the company hadn't paid taxes since 2007. Eldorado Gold affirmed that they hadn't paid any corporate taxes, but that they did contribute 130 million dollars in value added tax (VAT) and social security.[9]

Eldorado Gold managed to avoid paying corporate taxes in Greece thanks to a tricky set-up. They build up an intra-company lending scheme in 2012, to transfer money between their activities in Greece, mailbox companies in the Netherlands and in Barbados.[10] The operations in Thrace and Halkidiki are fully possessed by Dutch mailbox companies, called Eldorado Thrace (Greece) BV, Thrace Investments BV and Eldorado Gold (Greece) BV. They finance the sites with bonds of their Dutch companies, who send the interests of these bonds to the mailbox company in Barbados. These bonds from the Netherlands come in their turn from loans of the Barbados company.[11]

This means that Eldorado Gold like other companies, have only a postal address in the Netherlands without performing real activities there. Still, thanks to having an address in the Dutch country, they can enjoy the fiscal and tax treaty benefits. The main intention is to transfer money from a country with high taxes to one where low taxed are levied. Interest payments on the bonds and loans between the three countries are almost untaxed. This means that the fiscal advantages of the mines are small for Greece and the needed money for development leaves  the country.[12]

However, not everyone supports Skourletis. There are opponents and supporters of the mining site.[13] The left-wing government's resistance to the Eldorado's projects, provoked protest from opposition parties, business groups and labor unions. They believe the government's attitude gives the wrong impression towards international and domestic markets.[14] The mining company reproached the government also of delaying the permits and as a result they quitted the development of the site in Skouries. The same will happen in Olympias, if they don't get the necessary permits by March 2016. As a consequence 1100 jobs will get lost for both sites together.[15]

Also the projects in the Perama Hill and Sapes are stopped, but can be resumed later. The main reason is that the company is tired of waiting for the government's approvals and permits for these sites, they have taken more than two years now.[16] After the ban of the Greek government to further develop the site in Skouries, the Canadian mining company Eldorado Gold appealed to court. The Greek court already agreed with Eldorado in November last year, but a final decision still had to be stated. Finally, Eldorado Gold won the case in their final decision in January 2016.[17]  But local action committees in collaboration with Antigold will continue the struggle and won’t stop until Eldorado leaves Halkikidi.