Greece Sees Gold Boom, but at a Price
Questioning Greek Growth:
Suzanne Daley, a Times correspondent, reports from Greece on efforts to
raise revenues with gold mining despite worries of environmental dangers
and lax oversight.
By SUZANNE DALEY
Published: January 13, 2013 31 Comments
IERISSOS, Greece — In the forest near here, bulldozers have already
begun flattening hundreds of acres for an open pit gold mine and a
processing plant, which Canada’s Eldorado Gold Corporation
hopes to open within two years. Eldorado has reopened other mining
operations around here, too, digging for gold, copper, zinc and lead
from nearby hills.
Multimedia
New mines near Ierissos, Greece, have sparked protests.
Angelos Tzortzinis for The New York Times
A mine in Skouries, Greece, owned by the Eldorado Gold Corporation of Canada.
Angelos Tzortzinis for The New York Times
Rania Ververidis, 62, said a police officer injured
her during a protest against the mining projects.
Angelos Tzortzinis for The New York Times
Inside a new gold mine on the Chalkidiki Peninsula in northern Greece.
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For some residents, all this activity, which promises perhaps 1,500 jobs
by 2015, is a blessing that could pump some life into the dismal
economy of the surrounding villages in this rural northeast region of
Greece.
But for hundreds of others, who have mounted repeated protests, the new
mining operation is nothing more than a symbol of Greece’s willingness
these days to accept any development, no matter the environmental cost.
Only 10 years ago, they like to point out, Greece’s highest court ruled
that the amount of environmental damage that mining would do here was
not worth the economic gain.
“This will be a business for 10, maybe 15 years, and then this company
will just disappear, leaving all the pollution behind like all the
others did,” said Christos Adamidis, a hotel owner here who fears that
the new mining operations will end up destroying other local businesses,
including tourism. “If the price of gold drops, it might not even last
that long. And in the meantime, the dust this will create will be
killing off the leaves. There will be no goats or olives or bees here.”
Tensions over new development schemes are being felt elsewhere in
Greece, too, as the country stumbles into its sixth year of recession,
eager to bring in moneymaking operations and forced by its creditors to
streamline approval processes. Environmentalists are objecting to plans
that would sell off thousands of acres for solar fields and allow oil
exploration near delicate ecosystems.
“We see laws changing, policies changing,” said Theodota Nantsou, the
policy coordinator in Athens for the World Wide Fund for Nature. “We see
things getting rolled back under the guise of eliminating impediments
to investment. But over the long run, all these things will have a heavy
cost.”
The fund says standards are widely being ignored or lowered, affecting
air, water and land use, from the reduction of mandatory environmental
impact reviews to plans for increasing coal use and the likelihood that
95 percent of Greece’s environmental fund — more than $1 billion
collected for projects like improving energy efficiency and sustaining
nature conservancies — will be absorbed into the general government
budget.
In June, the fund issued a report saying it was witnessing an “avalanche
of serious environmental losses.” It said some rollbacks were an
attempt to fulfill the demands of the trio of creditors, the
International Monetary Fund, the European Central Bank and the European
Commission, that have been sustaining Greece in recent years. But it
said that, to an equal extent, the losses were because of initiatives
put forward by various ministries.
No project, however, appears to have elicited more of a public outcry
than the resumption of mining operations in the mineral-rich hills here,
where legend has it that Alexander the Great also mined for gold. Past
mining operations here have been boom-and-bust enterprises, their
fortunes swinging with the price of metals, leaving behind ugly piles of
sandy gray tailings. Virtually everybody in the area has stories about
the runoff from old mining operations, which turned the sea yellow at
times.
But perhaps as much as anything, the anger over the mines is a
reflection of the fundamental distrust many Greeks feel toward their
government: a firm belief that most officials are busy enriching
themselves, their friends and their families at the country’s expense.
Nick Malkoutzis, a columnist for the conservative daily newspaper
Kathimerini, wrote that it was hard to blame villagers for their
distrust, when so often companies had been allowed to ignore
regulations. “Perhaps in another country, locals would feel more
comfortable with the project because the process for awarding public
contracts or environmental certificates is transparent and trustworthy,”
he wrote, adding that in Greece, that was not the case.
Opponents complain, for instance, that while making the deal with
Eldorado, the government failed to make sure that Greece received a
percentage of the earnings, a common practice in mining contracts.
And they believe the 50 million euro letter of credit the government got
as a guarantee against any problems is not nearly enough.
A spokesman for Eldorado, Kostas Georgantzis, said the Canadian mining
company had actually offered more, but that was all the government
wanted.
Until recently, environmentalists were beginning to feel optimistic
about Greece. Environmental issues dominated the political agenda after
George Papandreou was elected prime minister in 2009. He established an
Environment, Energy and Climate Change Ministry and appointed a noted
environmentalist to head it. He talked with enthusiasm of eco-tourism
and renewable energy.
But as Greece’s financial problems snowballed, the head of the ministry
was replaced by the former finance minister, George Papaconstantinou,
who is now embroiled in a scandal over whether he removed family members
from a list of Greeks with Swiss bank accounts. Shortly after his
appointment, the permit for Eldorado’s mining plans was issued, though
it is still under review in the courts.
Officials of Greece’s environment ministry, responding in writing to
questions, acknowledged that they were overhauling regulations with a
view to making “modern environmental policies” go hand in hand with much
needed investments. But they said the WWF report was “excessively
negative” in its conclusions.
They also defended the decision to reintroduce mining in the Chalkidiki
area, saying that northern Greece constituted a “wealth reservoir” of
metals worth more than 20 billion euros based on current prices. The
officials said the permit was issued after an eight-year period of
preparations, evaluations and public consultations that ensured that the
mining activity would not damage the environment.
In fact, the officials said, the new activity would ensure that the
acidic runoff from abandoned mine operations would be averted and modern
practices of waste management implemented.
The ministry officials said they were unable to explain the 50 million
euro letter of credit because the official in charge of that was on
vacation.
Eldorado has big plans for the region. It intends to invest one billion
euros in various mining operations there, and its executives expect
mining activities to last 15 years or more.
But some opponents question that too, noting that right now the price of
gold hovers around $1,700 an ounce, making even the tailings left
behind by past mining efforts valuable. Eldorado is already at work
reprocessing those tailings, which still contain about 300 grams of gold
per ton. But the new open pit mine is expected to produce only 100
grams per ton. What will happen if the price of gold drops?
Eldorado officials say the villagers need not worry because the open pit
mine will also yield copper. But the villagers are not so sure.
The new mining operations have divided the region, in some cases setting
brothers against each other. Most often it is those that live close to
the sea, where tourists arrive in the summer, who oppose the project.
Those that live in the hills where there is little work generally
support it.
“These jobs mean that the barber and the doctor will have work too,”
said Kostas Karagiannis, who has been working clearing the forest. “It
is not just the miners who benefit.”
But opponents worry about dust and ground water pollution. In the last
year, opponents of the projects, many of them retirees, have staged more
than a half-dozen demonstrations, some of which have been broken up by
police shooting tear gas and rubber bullets. Both sides point fingers.
Mining officials say the villagers surrounded city hall and kept the
mayor imprisoned for eight hours at one point.
But the villagers say that at one particularly large demonstration at
the end of October, when 21 villagers were arrested, the police used
brutal tactics.
Rania Ververidis, 62, said that she had been ordered out of her car and
told to kneel. At that point, she said, a police officer had stomped on
her ankle. She was still limping three weeks later, she said.
But she said she intended to protest more. She fears that Greece is in the process “of selling everything.”
“We can’t let that happen without doing anything,” she said.
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