The new ownership of the Cassandra mines is likely to be a transitional one. Last week Parliament approved the transfer of all assets of the former TVX Hellas to Hellenic Gold, a company in which the majority of shares as jointly held by European Goldfields (30 percent) and Global Mineral Resources (21 percent). Greek construction firms, led by Aktor and including Themeliodomi and Technical Olympic, as well as private Greek capital, account for the other 49 percent.
Kinross’s comeback
It appears that mining company Kinross, which acquired the mines after its merger with TVX Gold, is ready to join the new company as well, only months after abandoning the investment. It is expected to take a 10 percent stake through a capital rise in Hellenic Gold.
Kinross’s interest lies in the rich gold deposit at the site of the mines, in Halkidiki prefecture. However, a decision by the State Council invalidating the initial agreement to extract gold, and the resulting $500 million loss that burdened TVX Hellas, had caused Kinross to abandon the investment.
The setup of the new company was the result of the State’s decision to keep the mines open and maintain the jobs of some 500 employees.
Kinross’s renewed interest in the project stems from th eterms of the new contract. The fact that local authorities will get a 9 percent stake in the company will serve to dampen local protests about the mine’s operation. On top of that, the Greek government has promised a quick examination and approval –within 10 months- of the new plans for mining the gold deposits. The same sources say the Kinross would like to expand its holding beyond 10 percent. It and the other shareholders are optimistic that the Council of State will raise no objections this time. The mines will have to begin operating within three months. Initially, production will concentrate in other metals, such as zinc. Gold mining is expected to start within five years. If estimates about the deposits are correct, Greece will become Europe’s second-largest producer of gold.
The setup of the new company will provide employees with the money owed to them from the previous operation –about 17.6 million euros. The operators will also have to address environmental problems, such as subsiding soil that threatened nearby communities.