Eldorado Gold Corp. is putting its plans to develop a mine in northern Greece on hold because of what it calls "an openly confrontational attitude" on the part of the Greek government.
The Vancouver-based company said its subsidiary, Hellas Gold, is suspending construction of the Skouries gold and copper project because the country's Ministry of Energy and Environment has blocked the issuance of "routine" permits and licenses required for work to be completed. Eldorado has already spent about $300-million (U.S.) on the project, located on the picturesque Halkidiki peninsula in the northern part of the country.
Eldorado added that it would also halt work on its Olympias processing plant by the end of March if it does not receive a required permit by then. The Olympias project, also located in Halkidiki, employs 500 people.
Hellas Gold has been seeking approval from the Greek government for the Halkidiki developments since 2011 but has faced opposition from anti-development and environmental groups that say the projects would hurt tourism and the environment.
Last year, the government revoked or suspended some of the permits that had been previously granted. Eldorado has been locked in legal battles to overturn those judgments.
"This has been an incredibly frustrating four years," chief executive Paul Wright said in a conference call Tuesday. He said the Skouries projects have become a "political toy" within Greece.
Eldorado has been one of the largest foreign investors in Greece, but is signalling that its patience is running out. In addition to its projects in Halkidiki, the company said it is mothballing two projects in Thrace, in northeastern Greece. The Perama Hill and Sapes projects have been waiting for various government approvals and permits for more than two years.
The decisions to suspend work have "nothing to do with metal prices," Mr. Wright said. He said he was unwilling to proceed until he saw a clear road ahead for development of the projects and a more constructive attitude on the part of government.
He expects to meet with the Greek Minister of Energy on Wednesday and said he remains optimistic about reaching an agreement that will allow the company to proceed.
"Since 2012, we have created approximately 2,000 direct jobs in the country and invested in excess of $700-million (U.S.) towards development of the Skouries and Olympias projects – including tax payments in excess of 120-million Euros to the Greek government," Mr. Wright said in a statement released late Monday.
"However, since the beginning of 2015, the Ministry has adopted an openly confrontational attitude towards our business and investments."