Struggling Greece sees gold boom, but some fear environmental price

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IERISSOS, Greece -- In the forest near here, bulldozers have begun flattening hundreds of acres for an open pit gold mine and a processing plant, which Canada's Eldorado Gold Corp. 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.

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 they 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.

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.

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 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.

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