Technical summary of the gold mining at Skouries

Struggle Committee of Megali Panagia, 14 January 2024

 

Gold mining and gold metallurgy, as well as the mining industry in general, is one of the most polluting activities worldwide, with immediate and long-term effects on the natural environment and humans. In this report, some basic characteristics of gold mining and metallurgy will be elaborated, as briefly as possible, in order to illustrate what gold mining is, how it is carried out and what are its effects. At the same time, some data on the Eldorado Gold project for gold mining and metallurgy in Skouries will be highlighted. The paper also provides a timeline connecting the initial with the updated/new investment plan agreed upon with the Greek government.  

Land grabbing 

First of all, gold mining companies take over the land. In this case, a vast area of public forest land around 31,700 hectares (or 317 square km), is reserved exclusively for the mining project. This means that the mining company has exclusive mining rights over any other activity, for example, logging, beekeeping, agriculture, as well as public research programs or archaeological investigations. But this also means that the company can log and exploit the timber itself. 

Deforestation 

Meanwhile, giant deforestation and clearing of vegetation takes place. The forests surrounding the Skouries mining project are valuable. Being near populated areas, they protect against surface runoff and supply drinking water springs. These forests are habitat to a great variety of fauna and native “keystone species”. They are living examples of the primary forest ecosystems of Europe. 

Additional roads 

A vast network of roads is necessary for transportation. In order to facilitate the Skouries project, it is planned to construct hundreds of kilometers of new asphalt road through the forest land, interconnecting with the existing provincial road network. A massive number of heavy-duty vehicles will be passing through this network every day, further damaging the forest and creating traffic congestion on the existing road networks. Further consequences will be dust and noise levels in inhabited areas.  

Mining waste 

Mining companies need a place to dump their waste. Dams will need to be built, in order to create basins to store liquid waste from the metallurgical process. The dams are usually constructed with solid waste from the metallurgy process, and the basins, called tailing ponds, will stay long after the mining process is finished and the mining companies are gone. In the case of the Skouries investment project, the tailing ponds are to be located where one of the primeval forest trees once stood, with a trunk diameter of 1.5 m. The deposition capacity of the tailing ponds will be approximately 65 million cubic metres and the dam wall will be 140 m high, approximately 51 million cubic metres of solid mining waste will be used. 

Open pit mining 

After all the necessary infrastructure is built, mining can start. In the case of Skouries, the project is based on open pit mining, also known as opencast mining. Τhis is a surface mining technique, which involves digging a cone shaped crater with a diameter of hundreds, or even thousands of meters, with the use of TNT explosives. The surface mining will be followed by underground mining. The total quantity of soil to be extracted is around 175.8 million cubic metres, the size of the crater will be around 1 Κm and the total depth of surface plus underground mining 900 metres. Dust emissions from blasting, vehicles and other activities will likely reach 3.116 t/h. 

Metallurgy processing 

Along with mining, the metallurgy processing will take place on site. Giant dumper trucks will transport the mined soil to the metallurgical facilities, in order to be milled into a fine powder. This powder will be transferred into large floatation tanks, where gold concentrate or pure alloy (Dore 99% Au) can be extracted in various stages, with the use of chemical reagents. Out of the 175 million cubic metres that will be mined, the average gold concentration is merely 0.4 g/t, so a huge volume of soil will end up in the tailing ponds and dams. Needless to say, these wastes will be contaminated with the poisonous chemical compounds used in the process of gold extraction. The presence of cyanide and its compounds in gold metallurgy have deadly effects on living beings and its potential use was one of the main arguments against the gold mining projects, both in Olympiada in the past, and in the ongoing struggle in Skouries. In Greece, cyanide use is actually prohibited. 

So it is not by chance that the company, in its initial investment proposal for Skouries, promised a so-called revolutionary, cyanide-free method for gold metallurgy, called flash-smelting, a technique which was eventually abandoned as non feasible in the updated agreement. 

Water grabbing 

The process that takes place prior to everything is the draining of the underlying aquifer. This is a major reason for the mobilization and opposition of the local people against the Skouries project. It is necessary to get rid of the water first because it is impossible to dig a hole in water and it is impossible to work with surface water in the facilities. So, first they come for the land but also for the water. In the updated mining plan, the mining company has absolute power over the water of the area, specifically it will be able to divert, pump and use as much water as it needs. 

At Skouries mining has been happening in a much smaller scale over many years. The draining of the Skouries mountain has been an ongoing process to which all the mining companies have contributed, but nowadays the process has intensified. Pre-drainage canalization of underground water through tunnels, and a great number of drilling projects are necessary. The dozens of boreholes around the perimeter of the mining site will reach up to 140 metres below sea level. Add to those another 157 exploratory boreholes in the wider mining zone, and we are talking about tens of kilometers of drilling in total. 

The main aquifers are in the forest of Skouries, as well as in the wider mountainous area in the NE of Halkidiki. Several streams that enrich the largest river of Halkidiki and a great number of springs that unfortunately are drying up year by year are located in this area. In the last two years, a dramatic decrease in the flow of 5 springs around the village of Megali Panagia have been noticed and some of them have even dried up. The irony is that the Greek government authorities put the blame on climate change when asked for the underlying reason of the phenomenon. 

Water pollution 

In response to public concern on the draining of the mountain, the company came up with another, equally controversial method called 'forced re-entry' of the water in the aquifer. This involves 15-16 re-injection drillings around the perimeter of the site, which will be used to pump the water back into the aquifier. In other words, on the one hand, drainage drillings will drain the water out of the aquifer and on the other hand, re-injection drillings will refill it with contaminated water. 

A number of pollutants such as lead (Pb), mercury (Hg), copper (Cu), manganese (Mn), iron (Fe), arsenic (As), cadmium (Cd) , chromium (Cr), sulfur (S), will become concentrated in the underground and surface water. As an alternative to forced re-entry, in case this method fails, the mining company proposes to channel the water to adjacent streams, assuming that this will contribute to the water supply of the area. It is worth mentioning that arsenic (As) has already been detected in underground water around the area of former mining activity. 

Mining company strategy 

Mining companies are working on the long term. As mentioned before, the time needed to create the infrastructure for mining and metallurgy is long and depends on various factors, such as stock market and metal prices, the financial liquidity of the acting company, bureaucratic responses, social resistance, etc. Mining is a long term process, but mining companies watch the bigger picture for the right time to act.  

As a case in point, the mining company submitted its initial investment plan in 2006, stating its intention to mine and vertically integrate production by the flash-smelting method. The products would be pure metals, alloys of gold, copper and other minerals. It is now clear that this cyanide-free process was proposed strategically, in order to soften local community reaction. It was also designed to sweeten the Greek government, as this vertically integrated procedure would mean the production of pure metals as end products, and as such subject to a 'mining fee' bringing state revenue. 

Some 13 years later, in 2019, the mining company strikes a new, revised investment agreement with the Greek government, on the grounds that the existing one is outdated. It subseqently succeeds in being exempted from the obligations and duties stemming from the previous investment agreement, on vertically integrated production using flash-smelting. 

New investment agreement and public responsability 

In other words, the mining company in charge of the largest investment for decades in Greece, is the owner of a huge forest area, where it operates with little public accountability, having fulfilled few of its initial obligations. While the obligation to start mining in 2009 has not been met, the company is further exempted from its initial responsibilities, while the Greek state undertakes even more obligations, by ratifying a new agreement in “good faith”. This term is repeated a lot in the new agreement and it has created a great deal of concern. A separate article in the agreement will examine what this means. 

One example of how “good faith” works, is the memorandum of understanding and cooperation (sic) between the mining company and the Greek Archeology Department. The company has already announced the existence of three archeological sites where the future crater is located and around the main site. In the memorandum the department commits that, in the case of archaeological discoveries it will comply with the company's project implementation timeframe; otherwise, this will constitute a so-called 'event of public responsibility'. This term has also created a lot of community concern and consists in the fact that the Greek government, in certain cases of violation of the agreement, must undertake a series of actions in order to rectify the violation. If it fails, then it has to compensate the company. All licensing and permits from the Greek state, also fall under the “event of public responsibility” clause. 

People are pawns and laws are there only to be bent. The mining company has always treated employment as a leverage over the local community. This has triggered conflict among the citizens of the village of Megali Panagia, which led to the rupture of the social fabric, a wound that has not healed yet. Targeted employment offers were made to certain people during the early years of the company, in order to create a positive climate. While the company in its initial agreement with the Greek state had committed to hiring 90% of its workforce from local communities, in the new agreement it will only prioritize the local population over non-locals, provided that they have the required skills. 

Unprecedented degradation of labor rights 

In the new agreement, there is an unprecedented degradation of established labor rights. For example, strikes are now considered to be an event of force majeure, just like earthquakes, extreme weather phenomena, wars, acts of terrorism, etc., therefore the company can suspend its obligations. Non-peaceful protests are also considered an event of force majeure, and if they take place the company will once again have the right to suspend its obligations. 

In September 2023, three retaliatory dismissals were announced by the mining company as a result of the workers attempts to unionize. The workers then went on strike for this. Since ratification of the new agreement in 2019, hundreds of workers have been laid off. It is already clear to them that the future is not as bright as initially promised. 

Resolution of disputes in international arbitration courts 

While the right to strike and demonstrate are being infringed, the company, contrary to standard practice, enjoys an unprecedented, untouchable status as the resolution of disputes with Greek state will no longer be within the jurisdiction of Greek courts, but will be resolved in international arbitration courts. The company is also protected from prying eyes, since confidentiality agreements between the company and the Greek state are to be signed. It is also important to point out that although environmental inspections are to be carried out by independent auditors, these will be hired by the company itself. The new agreement also includes clauses for further tax exemptions for the company, on the merit that it is funded by foreign capital, based on a dubious -but nevertheless an existing- legal framework also used for the tax exemptions of Greek ship-owners and the Golden Visa program. Notes by the Megali Panagia Struggle Committee describe the financing of the mining company by foreign capital, including by the EBRD. 

In conclusion, with the unprecedented level of influence that the company has achieved, it is not far from truth to say that local communities have found themselves in something of a hostage situation.