The heavy price of Greek gold

Jim Wickens Halkidiki Sunday 21 July 2013

The birthplace of Aristotle is being laid waste by a vast mining project, opening a rift in a cash-strapped society

Shadowed by security guards who film his every move, Giannis Verginis gazes out over the slope of Mt Kakavos, listening to the whining of chainsaws in the valley below.

“We used to come to this area with my family and children,” says Mr Verginis. “Up until a few months ago it was a beautiful place and we used to have fun. Now the entire area is deforested and if my children were here they would cry seeing this.” 

The large-scale clearance on this remote mountain-side in north-eastern Greece is only the preliminary part of a gold mining project green-lighted by the country’s cash-strapped government; a development that will see open-pit mines and several huge tailing dams built within a concession that spans over 31,700 hectares of ancient forest and farmland.

The peninsula of Halkidiki is the birthplace of Aristotle, a timeless landscape where bee hives stand amidst flowering gorse bushes, overlooking the glistening ripples of the Mediterranean sea. But with plans for the mining development firmly under way, the people living on this sleepy headland now find themselves dragged into the harsh economic realities of modern-day Greece, and at the centre of a bitter struggle over the direction the country should take in order to lift itself out of bankruptcy.

Despite harbouring an underground treasure trove of precious metals estimated to be worth as much as €15.5bn  (£13.5bn), the Greek government sold the Skouries concession in Halkidiki in 2003 for just €15.3m, in circumstances that remain unexplained. 

It is now owned by Hellas Gold, a Greek subsidiary of Eldorado Gold Corporation, a Canadian mining company. Eldorado plans to exploit the gold, copper and silver hidden under the surface. Despite the potential loss of forest and farmland that the mining scheme involves, it has easily gained traction in the depressed economic climate that Greece finds itself in today, as it offers jobs and investment in a rural backwater beset by unemployment and starved of financial assistance.

In Stratoni, a community nestled along the coastline of Halkidiki, elderly men play cards, talk politics and drink ouzo, It is one of the few villages in the area to support the mine, as Zagorakis Nikos, the village president, explains. “We welcome the investor as long as they follow the rules: environmentally-friendly mining, contributing to the local society, reducing the [local] unemployment rate from 40 per cent to zero. It means that our region will recover and there will be work for everyone,” says Mr Nikos.

Further along the coastline, Costas, a local fisherman agrees. He wearily ponders the prospect of the mine as he guts the night’s catch on the quayside in the early morning light. “If they do it properly, then it should be done, because we’re talking about lots of jobs. It’s a matter of life and death. Without development there’s nothing. We can’t all become ecologists. We need food too”

Travel closer to the site of the proposed mine however, and attitudes change. Ioannis Stahoris is a worried man. A successful entrepreneur, his feta cheese factory employs 22 people, buys milk from 103 local farms and exports cheese around the world. But all this could be about to end, he says.

“I believe that our final product will greatly deteriorate, as well as our name and our region. We’ll no longer have what we have right now, the pure milk, the pure product that people ask for in unpolluted areas. I believe this gold investment will destroy our water, the air we breathe.”

He is not alone. On the roads that surround Skouries, banners hang across lamp posts demanding that “Eldorado go home”. The protesters are a coalition of local people and businesses, alongside academics, anti-austerity advocates and environmentalists.

Scrambling up the Kakavos mountain in Skouries, Annie Vasileiou guides us to a river valley deep in the forest that is due to be destroyed. It is an area of breathtaking beauty, with crystal-clear streams and mossy timbers nestled within the deep gorges that are carved into the mountain here. The forest in this region straddles several protected Natura sites and is home to otters and migrating birds. But activists say much of the forest in Skouries is set to be destroyed.

The mines are scheduled for construction close to a seismic fault line, on a mountain that supplies water to thousands below, opening up the possibility of water contamination.

The area’s gorges will be blocked and built over to construct tailing reservoirs whose function is to hold mining waste. The tailings are likely to include arsenic, mercury and possibly cyanide.

“We’re talking about arsenic … an element that kills humans and then follows them to the grave and then comes out again to continue killing other humans too,” said Theocharis Zagas, Professor of the Natural Environment at the University of Thessaloniki. “Even hearing these words should frighten us.”

Overlooking a tumbling stream on the Skouries mountain, Ms Vasileiou reflects on the situation for communities nearby: “People in the region are very angry that we’re on the receiving end of this bitter medicine to help rejuvenate the Greek economy. Mining activities worldwide come in and destroy ecosystems. People in small-scale tourism, people who make honey, people who make a living cultivating fields, who fish for a living, people are put at threat if this goes ahead. Yes you are creating 1,300 jobs, but how many are you taking away?”

Protests against the mining site in recent months have been met with tear gas, and running battles have ensued between riot police and protesters. Rania, a grandmother who did not want to give her second name, says she now suffers constant pain after being dragged from her car and stamped on by a police officer whilst attending one such protest.

She is one of a growing number who question the Greek government’s commitment to the mining project.

“For what reason do they show such interest in this investment, why do they chase us, why do they beat us, why so much violence in order to defend this investment which doesn’t offer anything to Greece?” she said.

In recent months tensions on both sides have escalated following arson attacks on temporary construction offices and vehicles linked to the mine in February.

“While we respect the right of individuals to voice their opinions in a safe, legal and responsible manner we fully condemn any activities that put the safety of our employees, contractors and assets at risk,” said Paul Wright, CEO of Eldorado, in a statement released in response to the attack.

The police response to the attack has seen entire villages searched and schoolchildren as young as 15 forced to give DNA samples. An all-women protest on Mother’s Day this year ended in mass arrests. A fresh round of protests erupted this week.

Reams of razor wire now snake across the forest alongside guard dogs and blacked-out cars carrying private security guards, who film journalists and local residents alike, following their every move.

“You feel that the mountain doesn’t belong to you any more, doesn’t belong to the state any more, you feel that it’s under occupation,” Rania says.

What perplexes many bystanders in the debate around the mine is that despite the riches that lie underneath the soil – and despite some media reports – the Greek government will not receive royalties from the new mine.

It is a sentiment shared by the European Commission in Brussels, which ruled that the sale of the Kassandra mining complex – as it was then known – for just €15.3m in 2003, took place below market value and without an open tender of valuation of the mine’s worth, in breach of EU rules.

In a further twist to the legal confusion surrounding the mine, when the commission ruled that the amount underpaid, plus interest, be returned to the Greek state, it was the Greek Environment Minister who appealed to the court in an effort to try to quash a ruling that would see the private investors pay millions back to the cash-strapped government. The appeal has yet to be heard.

Critics claim that the economic crisis is being used as an excuse to press forward with controversial projects across Greece, from hotel developments in protected areas through to planned deep sea drilling in sensitive marine habitats.

They point to a Europe-wide trend of weakening environmental laws from governments who are desperate to attract external investors and kick-start sluggish economies through get-rich-quick development projects.

“What we are seeing in Greece is actually a small part of a much bigger picture. What’s happening right now in Spain, in Portugal in Italy … [shows that] there’s a real environmental rollback taking place”, says Demetres Karavellas, CEO of the environmental group WWF Greece.

On the mountain of Kakavos, Annie is moved to tears as she gazes into the clear waters of the stream.

“Economics or the environment? For me it’s a false question. Can we think and talk before we act? ‘No, no time, there’s an economic crisis,’” she mocks. “It’s definitely a tragedy in the making”.

Both the Greek environment ministry in Athens and Hellas Gold turned down the opportunity to comment on this story.

This article was reported in partnership with the Investigative Fund at the Nation Institute.

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