VANCOUVER (miningweekly.com) – Canadian miner Eldorado Gold has moved to suspend development of its Skouries project, in Northern Greece, and has launched legal action against the Greek government for not issuing the required permits.

The Vancouver-headquartered company said in a statement Thursday that, despite dialogue continuing with the  government to resolve long-standing issues regarding its suite of Kassandra mine assets, in Halkidiki, the Ministry of Energy and Environment (MoE) has failed to issue the amended electromechanical installation permit for the Skouries flotation plant, as well as other matters, including the relocation of antiquities at the Skouries site.

Eldorado has, through its subsidiary Hellas Gold, filed three lawsuits with the Council of State (CoS), requesting judicial protection against the MoE’s failure to issue routine installation permits, resulting in unjustifiable delays to the development of the Skouries facilities. Eldorado has also filed with the CoS a petition for non-compliance of the MoE with a previous decision granted by the CoS.

Eldorado noted that it would re-assess its $710-million investment in the Skouries project after receiving approval of the required permits, “coupled with a supportive government open to discussions regarding the use and implementation of best available technologies”.

Meanwhile, Eldorado reported that Olympias Phase 1 progress on historical tailings clean-up continues and the ramp-up to commercial production at Olympias Phase 2 during the quarter demonstrates its commitment to high environmental standards and a long-term partnership with communities, as well as its ability to construct and operate mines in Greece.

It also believes that it would be able to extend the Stratoni mine life through exploration drilling.

Eldorado in September threatened the leftist Greek government with halting further investment at its development projects, on the back of government dragging its feet with issuing required permits. Soon after, the MoE issued several long-overdue routine permits for the Olympias project.

The Greek economy has shrunk by more than 25% since Europe’s sovereign debt crisis began in 2008. Since 2010, the country has been under bailout programmes with stringent belt-tightening requirements. It has been working on attracting investments like Eldorado’s – the largest single foreign investor in the country at present – to end the bailouts and tackle high unemployment rates.

However, differences with the country, especially over compliance with environmental regulations, have dragged on – at times very publicly – for years, forcing Eldorado in January 2016 to amend investment plans because of a lack of necessary permits and licences.

Meanwhile, Hellas Gold has received a formal notice from the country’s Ministry of Finance and the MoE initiating domestic arbitration regarding a technical study, submitted in December 2014, which Eldorado completed for the Madem Lakkos metallurgical plant for treating Olympias and Skouries concentrates in the Stratoni Valley. Greece alleges that the technical study is deficient and thereby in violation of the transfer contract and the environmental terms of the project.

Eldorado disputes this, saying it is “highly confident” that the subject technical study is robust and consistent with the transfer contract, the business plan and the approved environmental terms of the project.

Last week, Moody's Investors Service revised the rating outlook for Eldorado from stable to negative, citing Eldorado's elevated leverage, the execution risk in developing key projects in Greece, where government actions have delayed development, and production challenges at its main operating mine in Turkey.