Mine in Greece to Shut Down

Approximately 100 miners have shut themselves in the undergound Mavres Petres mine in Stratoniki, northern Greece , and are on a hunger stike, protesting against the decision of TVX Hellas to declare bankruptcy.  The Greek subsidiary of TVX Gold, which was recently absorbed by Kinross Gold Corporation, has filed a bankruptcy suit in an Athens court on June 4 and the court’s decision is expected within the month.

The bankruptcy suit did not come as a surprise to those familiar with the history of TVX and the Kassandra Mines. In 2001, the Greek Council of State cancelled TVX’s project for developing the rich goldmine of Olympias, thus justifying the long struggle of its people. The second severe blow to TVX came in December 2002 , when the country’s highest administrative court ruled that the base metals Mavres Petres mine – the only source of revenue for TVX – was illegal, because it had expanded underneath the town of Stratoniki without a legal permit, causing land subsidence and significant damage to houses.

Kinross’s first move as the new mine owner, in January 2003, was to declare “force majeure” and suspend all operations in Greece . The suspension of mining under Stratoniki came after a direct order by the Ministry of Development, in accordance with the Council of State ruling. “Declaring force majeure, however, means that the company is planning to file a compensation claim against the Greek State , for not allowing the company to develop the gold mines. This was a specific commitment made by  the Government when it ratified the mines’ acquisition agreement by law ”, says Tolis Papageorgiou, founder of the Hellenic Mining Watch and resident of the area.

Under the threat of compensation claims and the pressure of the 500 people employed at the mine, the Government issued a new permit for mining underneath Stratoniki, in less than a month, a permit “of disputable legality, just like the previous one”, according to the Stratoniki Committee for Struggle against mining. The mine however did not reopen, as Kinross made it clear that it did not wish to operate the mine under the town in such a hostile environment and that, if it weren’t allowed to recover the gold, it would pull out of Greece altogether.

For the past five months, the Government has been trying to put together a joint venture, with the participation of private investors, that would undertake to operate the mine.  “It is not an easy task”, says Mr. Papageorgiou. “Which company will dare to try developing the goldmine, when the Council of State has already ruled against it and the public opposition has this far driven away two mining companies? And if recovering the gold is out of the question, which private company would want to operate a dangerous mine, underneath a town, with public outcry raging against it?”

Though the bankruptcy suit has already been filed, the Government claims that the new investment scheme will be officially announced in the following days. The basic shareholder is said to be the state-owned mining company LARCO.  Government officials however admit that serious problems exist as no one agrees to pay TVX’s debts to the Greek State , banks, providers, employees and social security foundations.

Meanwhile, the people of Stratoniki have filed one more petition to the Council of State, asking for the annulment of the newly   issued permit for mining under their town. “We have applied to the courts in order to protect our homes from the company’s dangerous and illegal mining activities”, says Stella Tome, member of the local Committee for Struggle. “It is sad that 500 miners are left without a job, but it was impossible to tolerate the blastings under our homes”. Stratoniki lives with the fear of land subsidence. During the past year, the land surface has collapsed in seven locations – the last of these incidents occurred only two days ago. “Unless the adits are properly sealed off, our village will still be in danger”, she continues.

To miners, bankruptcy means they will probably loose not only their job but also the compensation they are legally entitled to. But there are more “financial liabilities” that no one wants to be burdened with - the severe impacts to the environment from mining exploitation, the mountains of toxic wastes, the cavities beneath Stratoniki, the mine’s acidic waters. TVX was obliged by law to continue operating the mine water treatment plant for ten years after the termination of mining operations. It is doubtful whether Kinross will do so.

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