THE ISSUE

Τhe mines of Stratonikon mountain (former Kassandra mines) in eastern Halkidiki.

As of December 2003, the owner of the Stratonikon mountain mines (former Kassandra mines), is the HELLAS GOLD S.A. that acquired the assets of the former company, TVX HELLAS S.A., with the total sum of 11 million euros. Among the shareholders of the new company are: «AKTOR», a Greek construction company and EUROPEAN GOLDFIELDS Ltd, another corporation controlled by the Romanian shareholder,  Vasile Frank Timis, that has been sentenced  for heroin trafficking and has been associated with money laundering operations. The mines of Stratonikon mountain (former Kassandra mines) consist of:

  • The mine of «MAVRES PETRES», reopened in September 2005 that produces Zinc, lead and Silver (Zn, Pb, Ag).
  • The mine and enrichment facility in Olympias, which has been inactive since the mid ‘90s.
  • The mine and enrichment plant  in Stratoni along with its harbor facilities.
  • The facilities in «MADEM LAKKOS».
  • Housing blocks, buildings and land properties  in Stratoni, Olympias, Stratoniki and other places.
  • Mining rights on 317000 acres of land all over eastern Halkidiki.

Up to now, the extraction of all mixed sulphides  takes place exclusively under  the village of Stratoniki. The company, in violation of the extraction terms and license obligations, uses explosives instead of mechanical digging and numerous cracks have been observed in public and private buildings in the village above. The residents of Stratoniki have taken their case to the Supreme Court that turned down their appeal in Dec. of 2009 after 7 consecutive postponements. The residents have also sued the company but the District Attorney flatly dismissed their allegations.

What is in the works regarding the investment plan of HELLAS GOLD S.A.

HELLAS GOLD S.A. plans to develop mining activities in three sites in NE Halkidiki: at the operational mine of «MAVRES PETRES» in Stratoniki, at the dormant mine in Olympias and finally, at a new mine site at Skouries in Megali Panagia, (locations of Tsikara in Gomati, Fysoka and Vina in Stratoniki, Piavitsa in Neohori and  Stanos). The mines will be of  the surface and underground types. In tandem, the plan includes the creation of two gold smithing plants -at Madem Lakkos in Stratoniki and Skouries in Megali Panagia- and a sulfuric acid (H2SO4) production plant. The Company aims to produce gold (Au), copper (Cu), silver (Ag), lead (Pb), zinc (Zn) and sulfuric acid (H2SO4).

HELLAS GOLD S.A. to overcome the public outcry -that in effect shelved the previous company’s (TVX HELLAS S.A.) scheme to use cyanide solutions in their gold extraction operations- suggests a new method called “Flash smelting” in their business plan and environmental impact assessment. Flash smelting is a typical smelting method that so far has only been used in an experimental fashion and not in the production process of gold separation. From the smelting of the various metals there will be an enormous production of different  gases and particles from a variety of extremely dangerous chemical compounds that HELLAS GOLD S.A. promises to magically eliminate in a hocus pocus fashion.

As for the separation of the rest of the metals, the company suggests the use of water oxidation methods utilizing various chemical substances like cyanide (in the form of NaCN), thus verifying the suspicion that under this guise, they will eventually make use of cyanide in the gold separation process as well. There is also mention of the use of various chemical methods for the removal of arsenic, sulfur and other hazardous substances with no safeguard regarding their short and long term environmental impact. We must bear in mind that the suggested methods, according to the people behind the environmental impact assessment, are considered better in comparison to others and in no way do they negate any environmental impact by the dangerous substances used.

The port of Stratoni will be turned to a heavy industry harbor. Taking the natural layout of Stratoni in mind, the beach of the village and the properties around it will be transformed to a storage depot and ship service area. It is obvious that the gulf of Ierissos and its beaches will be effectively ruined from a touristic and fishing standpoint with catastrophic financial consequences  for the residents of the area.

Apart from the environmental and social catastrophy it entails, the issue has a legal dimension as well.

For the E.U., there is the obligation -based on the Maastricht and Amsterdam treaties and the Rio summit agreement- to render sustainable all human social activities. International studies have shown that the production of gold via the use of cyanide leads to extensive environmental damage regardless of the use of neutralization and detoxification methods. In Germany and Hungary, gold extraction with cyanide use has been banned on all open and free spaces. Numerous accidents and leaks worldwide have shown that mining companies generally do not behave with the necessary care and attention and therefore seek to expand their activities in countries with inadequate law specifications and control mechanisms. The positive financial gains of any mining activity are short term. The extraction of gold is a monstrous operation. More than 1 ton of dirt needs to be dug up to extract  1 to 5 grams of gold.

Overall, the enormous strain that the new mining investment plan of HELLAS GOLD S.A. will put on our region can be described as follows:

  1. Gigantic amounts of underground water reserves from the mining sites will be lost for decades (hundreds of cubic meters will be squandered per hour and per site, millions for the whole project and its projected duration) resulting in the drainage of the surface ground over the mines and the adjacent areas. The final disposal (after treatment) of all liquid waste to the sea is extremely dangerous bearing in mind the potential for accidents and adverse weather conditions, especially for a region that earns a living from the tourism industry and the use of the sea and the local beaches.
  2. During the enrichment process of the various metals and the production of condensates, huge amounts of waste materials  -in liquid or semi-solid form-  are produced  that contain various diluted metals in concentrations hundreds of times over the permissible limits.
  3. The areas that are subjected to surface mining are destroyed once and for all and as practice has proven cannot revert to their original natural condition for millennia. All theoretical studies on natural rehabilitation of such areas hold no water, literally. Furthermore, the underground tunnels as well as the slopes of the various constructed dams pose a constant threat for caving, collapses and enormous damage to settlements above and near the mines, all the more when we bear in mind that  NE Halkidiki is often hit by earthquakes.
  4. For  the duration of all mining operations a number of environmental measures need to be taken and after mining has ceased at a region the natural habitat has to be carefully rehabilitated for decades. These procedures are considered way too complicated for the present mining company and also for the state authorities that are supposed to oversee the whole venture and there is a well substantiated fear that the necessary measures will be abandoned altogether and the environmental impact will be much worse than predicted.
  5. Financially, the venture is deemed catastrophic as the only advantages it provides are the salaries and insurance benefits of the employees of the mine. Moreover, if the area is earmarked as mining, all other investments will cease meaning that 20 or 30 years down the road the residents of the region will be left with no infrastructure and technical and professional skills that have to do with occupations and activities that the area is best suited for, as farming, cultural development, environmental tourism, forestry and aquaculture.
  6. According to the estimates of the mining company in the next 20 years a total of 250 million tons of ore will be extracted from the area, when from antiquity until today only 150 million tons have been extracted!!!

In short, the suggested extraction methods proposed in the environmental impact assessment are extremely intense metallurgical and chemical procedures that will cause significant, permanent and to a great extent non reversible damage to the natural and social environment even if all procedures outlined in the  environmental impact assessment are applied flawlessly.

The deterioration of the soil and subsoil of vast areas among which lie fragile ecosystems, NATURA 2000 protected sites, archeological sites and world heritage monuments will have adverse long term environmental, financial and social ramifications in the whole region and demands continuous control procedures for decades by the understaffed and inefficient public services. Concurrently, such business ventures undermine the social and financial potential of the region and for this reason they are deemed regionally and nationally harmful from any standpoint.

It is reminded that for the scandal of the mines of Stratonikon oros (former Kassandra mines)  Greece was indicted in the European courts for the purchase and resale of the mines by the Greek state. On the 12th of December 2003, the Greek state bought the mines of Stratonikon Oros (former Kassandra mines) from HELLAS GOLD S.A., a subsidiary of the multinational Kinross Ltd for the sum of 11 million Euros. On the same day, the mines along with 70 more assets were resold by the Greek state to HELLAS GOLD S.A. at the same price while no public bidding took place in violation of European legislation. 6 months later, the market value of the assets of the mines was estimated at 408 million Euros (37 times more than the sale value). In tandem, the transfer arrangement (N.3220/2004) provided the new company with amazingly reduced lawyer and notary fees and transfer duty elimination. Greece faced the European courts for this case as it was regarded unlawful state aid.

 

Struggle-reaction

The residents of eastern Halkidiki and the Strymonic gulf have been engaged in a non-stop struggle against the earmarking of the area as a mining site and against any mining activity in general for more than 15 years. Citizens, scientists and people of high caliber from all over Greece and abroad support this effort. The environmental council of the Aristotelian University of Thessaloniki, with its February 2007 resolution regarding the mining venture in our area, points out the potential dangers for the public health and the environment, the grave degradation of the unique natural and cultural landscape of Halkidiki and the unprecedented projected consumption of the natural capital of our country. A disproportionate consumption indeed in comparison with any public benefits the mining venture may ever produce. The former vice-chairman of the state council of Greece and current chairman of the environmental and sustainability chamber of Greece, Mr Michalis Decleris, has repeatedly intervened with various articles and lectures and has repeatedly chastised the “insistent gold miners” having stated that “any effort to extract gold from old or new mines in the area, is completely devoid of sustainability and constitutes an unreasonable environmental disaster and a direct insult to the basic human right to nature and life”.

Historical data

The area of Madem Lakos in Stratoniki (where the current mining complex is located) and Olympias (north and south face of Stratonikon mountain) have been  mining centers since the ancient times. There are reports of gold and silver mines in the area of present day Stratoniki and lead and zinc mines in Olympias (the site of ancient Stagira, birthplace of Aristotle)in ancient texts.

According to finds in the area dating back to 200 BC, during the Hellenistic times the mines of the area were fully operational and they continued their operation during the Roman invasion as well. Later, around 850 AD, there are written references, in many documents from Mt Athos, to a site called Sidirokafsia (burning iron),a site located near present day Stagira.

The peak of mining activity of Stratonikon mountain in NE Halkidiki starts during the Ottoman occupation of the area, during the times of Murat the 1th, around 1409-1425 AD.

In the early 19th century, there’s the setting up of the Mademohoria (iron villages)cooperation. The mines are rented by the Turks via a special permit that grants the cooperation tax exemption but the cooperation villages are expected to deliver a specific amount of silver to the sultan every year. The villages of the Mademohoria name their unified administration, the «Koinon tou Mademiou», (the common of iron. The afore mentioned villages were a self ruled part of the Ottoman empire. During the revolt of 1821, the villages of iron take part in the uprising under the command of Emmanuel Pappas and are razed to the ground by the Turks.

After a long period of inaction the Ottomans sell mining rights to Hanrico Misrahi, a French citizen of Jewish descent. In 1888, by Sultan decree the bey Nikolakis Psycharis,an Ottoman citizen, was also granted mining rights for the lead mines in Isvoros (Stratoniki). The afore mentioned mining right was conveyed to the French-Ottoman “Kassandra Ottoman Limited Company”. The vice-governship of Halkidiki of the Ottoman governship of Thessaloniki was mistakenly called Kassandra (which is the name of the western peninsula of Halkidiki) and so the mines of the Stratonikon mountain have been called «Kassandra mines» until today.

After the liberation of Greece in 1912, the mines were bought by the Greek Limited Company of chemical products and fertilizers. The company modernizes the mines and establishes a sanding unit at the present day enrichment site in Stratoni.

During world war 2 all mining activity stops and in 1947 the company is purchased by Prodromos Athanasiadis Bodosakis that gives a new push to the mining activity in the area. New installations are constructed and new shafts are opened in Madem Lakkos and Olympias. Also, new research is done and a substantial deposit of mixed sulphides is extracted. In the mid 80’s the company faces economic problems and in 1992 it is placed on a program of special liquidation because of the drop in the price of metals internationally and the reduction of the metal deposits in the tunnels.

In 1995, the mines are sold to the Canadian company TVX Gold Inc. The Canadians had planned to set up gold extraction and metallurgical installations but the residents of Olympias and the Strymonic gulf were mobilized against the venture as it is extremely hazardous in terms of pollution and it entails cyanide and arsenic waste material. In tandem, there is illegal digging in the mine of «Mavres Petres» which lies exclusively underneath the village of Stratoniki. The residents of the village demonstrate against the digging and keep a constant pressure with daily gatherings in the village square trying to block the miners from getting to the tunnels.

At the same time, 4 riot police squads are stationed in the village for more than 8 months -since February 2002- policing the “terrorist” residents that try to protect the last vestige of their dignity as they are daily “violated” by the miner’s explosions. There are cracks in many houses, in the church walls and the school and also extensive caving all over the village. Inevitably, there are clashes with the police and the subsequent arrests of 208 residents of the village of Stratoniki that are formally accused in criminal courts. The 613/2002 resolution of the Greek State council on the setting up of gold extraction installations in the neighboring village of Olympias is announced in early 2002 and is negative for the plans of TVX Gold Inc. (the company had earmarked a space immediately adjacent to the site of ancient Stagira, the birthplace of Aristotle, for  the building of the gold metallurgical factory. The decision of the State Council ended as follows:”…from what we can gather from the above data, the natural capital used for the building of the project, meaning forest lands, streams and generally the space to be occupied by the installations as well as the hazards placed by the operation of the installations themselves in light of the chosen method of gold extraction, appear disproportionate in comparison with the projected benefits from the introduction of novel technologies for the exploitation of the mineral wealth of the country and the increase in employment of the local work force. Therefore, the contested case shows that the scope of the projected venture is not adequately covered by the Greek constitution when the threatened damage to the natural environment is to be taken into account as any such damage is against the law and must be annulled for this reason”.

  • December 6th 2002: The resolution of the Greek State Council that judges the digging under the village of Stratoniki as illegal is officially announced. With the tolerance of the ministry of development and the prefecture of Halkidiki, TVX Gold Inc. continues with the digging.
  • Jaqnuary 7th 2002: The ministry of development instructs TVX Gold Inc. to stop digging and the explosions stop. The residents hail the decision but the case is not resolved yet.
  • February 18th 2003: The very same secretary of the ministry of development of PASOK authorizes TVX Inc. to dig anew under Stratoniki. The residents appeal to the Greek State Council once more.
  • Spring 2003: TVX Gold Inc. is incorporated in the multinational metallurgical consortium KINROSS, places all 480 personnel in suspension and leaks rumors that the company is to apply for bankruptcy status exploiting the election period that has just started.
  • November 2003: The company that was hailed by the administrations of PASOK as a grand investor and the savior of northern Halkidiki “abandons ship”.
  • December 12th 2003: The Greek State buys the mines of Stratonikon mountain (former Kassandra mines) from the subsidiary of KINROSS. On the same day, under the guidance of minister Hristos Pahtas, the mines along with 70 other company assets are resold to the Greek company HELLAS GOLD S.A. that is the owner of the mines until today.
  • Since 2003, the share scheme has beeen altered through different periods of time. On February 24th 2012, the canadian company Eldorado Gold Corporation completed the friendly acquisition of the holding company of “Hellas Gold S.A.”, European Goldfields Ltd., in which the main shareholder was the greek construction company ELLAKTOR. Hence, “Hellas Gold S.A.” belongs to the canadian company Eldorado Gold Corporation in which shareholder becomes the greek constructive company ELLAKTOR.

 

 

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