From B.C. to A.D.: The Significance of Mining to Greece’s Socio-Economic Prosperity

The contribution of mining to Greece’s economic growth and cultural development has a history as old as the civilization itself.  Since 1,000 B.C., Greeks have been using their mineral resources to build cities, establish trade networks and expand empires.  Revenues from the high-grade silver mines of Laurion, south of Athens in Attica, financed the emergence of Athens as a cultural, economic and military capital in the 5th century B.C.  Poetry, philosophy, architecture and quality of life all flourished as Athens expanded as a trading and naval power.  Further north, the gold deposits of central Macedonia and Thrace funded Alexander the Great’s conquest east and the creation of an empire that, at its peak between 334-323 B.C., stretched across three continents.

Today, the Olympias, Skouries and Perama Hill deposits that Canadian Eldorado Gold is developing in northern Greece have the potential to make the Country Europe’s leading gold producer.  “The benefits these projects are estimated to generate for local communities, municipal and national governments and the Greek economy are significant,” says Eduardo Moura, Eldorado’s Vice President and General Manager of Greece.  “With combined mine lives in excess of 50 years, we see huge potential for our projects to contribute to Greece over the long term.”

Some benefits are already clear.  In a country where unemployment exceeds 27% and almost 1.4 million people are out of work, Eldorado has created 800 new jobs and tripled its direct labour force in the past year.  With approximately 1,300 employed currently, Eldorado estimates that another 3,700 direct and indirect jobs will be created when Olympias, Skouries and Perama Hill reach full production.  The projects have the potential to sustain generations of Greeks in family-supporting jobs across a range of industries.

Communities are also benefitting from the development projects.  Eldorado has provided ~€3 million annually to the Municipality of Aristotle to cover various municipal expenditures such as street paving, lighting, sewage and other infrastructure improvements.  In Thrace, where Eldorado’s Perama Hill project is located, the company is committed to providing ~€1 million annually for similar municipal initiatives once the environmental permit of the project is approved by the Greek government.

Benefits to the country are evident as well.  With foreign direct investment (FDI) in Greece 47% lower in the past three years versus 2007-2009, Eldorado’s projects are a valuable source of FDI for the Country.  Last year, Eldorado’s investment of more than €100 million contributed over 4% to FDI in Greece.[1] With plans to invest over €780 million in the next five years, Eldorado alone could account for up to 8% of FDI in Greece going forward. [2]

Greek exports will also be positively impacted by the metals mined from Olympias, Skouries, Stratoni and Perama Hill.  When in full production, Eldorado will be one of the largest exporters in Greece with export revenues of ~€530-€750 million per year depending on metal prices.  These will help to reduce Greece’s current trade deficit and will contribute significantly to the trade balance of the country.

With more than €750 million in direct taxes estimated to be generated for the Greek State from Eldorado’s projects over the next 20 years, the mining industry in Greece once again has the potential to contribute significantly to the socio-economic prosperity of the Country.

Louise Burgess, Eldorado Gold Corporation

[1] Net FDI in Greece in 2012 was €2.3 billion.  Invest in Greece (Accessed: August 2013) http://www.investingreece.gov.gr/default.asp?pid=21&la=1

[2] Assuming net FDI averages €2 billion per year over the next five years.