Urban Political Ecology

COPPER- GOLD MINING IN

NE HALKIDIKI, GREECE

Environmental, Social and Political aspect

Eleni Maniati Anagnostopoulou

Academic Year 2015- 2016

TABLE OF CONTENTS

Introduction

1. Location and Ecology

2. Human- mining- activity

2.1 Multinationals

2.1.1 TVX Gold

2.1.2 El Dorado- Investment plan

2.1.3 Flash smelting

3. Environmental and Social Impacts

4. Social struggle

5. Conclusion

References

Introduction

The liberalization of the markets has caused an increased demand for commodities and raw materials, such as gold. In 2015 only, the total global demand for gold reached 4,212t, 57.3% of it being used for jewellery, 17.4% for investments (bars), 6,3% in technology (electronics) and 14% was used by central banks (World Gold Council). It is important to highlight that the demand for gold in investments has been increasing since 2002 as a result of the worldwide economic crisis (Menzie D.W. et al 2013). Consequently, there is a constant need for increasing gold supplies, and therefore, more resources and sites for extraction have to be found (Arboleda, 2015). The search for such sites is carried out by multinationals and is focused on countries located in Latin America, Asia or Africa, regions which are under unstable political, social or economic situations. In other words, they are vulnerable. However, for the last few years, some European countries, such as Greece, have also been targeted, especially after the outbreak of the economic crisis in 2008. Indeed, according to a research conducted by the independent, non-profit organization SOMO, in the case of the goldmines in NE Halkidiki (Greece):

“The context of a debt crisis, ensuing structural adjustment programmes and high pressure to attract foreign investment is a typical developing country context, which is why commentators are drawing parallels between the current situation in Greece and Latin America in the 1980s. Like Latin America and Africa and Asian countries then, Greece has been hit by a debt crisis so severe it is dependent on external financing and is subject to neo- liberal adjustment programmes imposed by its creditors.”

The common practice for multinational mining companies is to create a subsidiary company in the hosting country, which besides the parent company, has multiple shareholders, often banks. As it happened in the case of Latin America and Greece, these companies purchase large parcels of land for a small price with the help of the government, while they use numerous different strategies in order to gain the acceptance of local communities.

This form of extraction and exploitation is known as extractivism, which according to Alberto Acosta, an Ecuadorian economist and former Minister of Energy and Mines, is a form of accumulation common in colonial and neo-colonial eras. As he mentions in his work “Extractivism and Neoextractivism: the two sides of the same curse”, the main characteristics of extractivism are: lack of economic benefits for the hosting country, great environmental impacts and social degradation. In fact, other authors, such as Arboleda, claim that extractivism leads to territorial and social transformation. The territorial transformation refers to the urbanization of the area, given that the extraction sites have a pivotal role regarding the accumulation of capital. As Brenner and Katsikis (2014) suggested, these areas could be considered as extended forms of urbanization, together with touristic sites, power plants and other infrastructures. The social transformation, which is partially expressed in the form of political and activist movements, is due to the expropriation of people’s lands by multinationals, as well as to all the concomitant results, including the environmental disaster and the change in the local economy and social relations. This sociospatial transformation corresponds to Lefebvre’s approach, known as homogenization – fragmentation – hierarchization. Homogenization refers to the lack of limits between rural and urban areas, achieved through constructions such as roads, as well as through resource allocation resulting from capital accumulation, which consequently leads to the fragmentation of the area in spaces with specific boarders (minefield, factory, residential area etc) (Aborela 2015)

Additionally, in this report, extractivism is viewed as a form of primitive accumulation, given that companies intervene to an area, affecting the relationship that local producers have with their land, and which enhances division of labor. Hence, extractivism is impoverishing and marginalizing, in other words hierarchizing, whole communities, by aiming at increasing the number of laborers obliged to turn themselves to the industry in order to support themselves.

Most studies addressing extractivism and the territorial and social transformation resulting from it, have been focusing on cases in Latin America, therefore, the purpose of this report is to examine the case of Greece, and more precisely NE Halkidiki, where mineral extraction has existed for centuries, but gained interest from multinationals in the last decades, as they want to explore and exploit the area. The increasing presence of multinationals, in combination with the outbreak of the economic crisis, led to intensified resistance of local communities, and has now reached national interest.

In terms of structure, this paper is organized as followed: the first section will describe the area of NE Halkidiki and its value as a natural reserve, which will be highly affected by the extraction. The second section will refer to the mining history of the area, highlighting how Greece evolved to a liberal state, obliged to follow the directives of its creditors, including privatization and the need for Foreign Direct Investment (FDI). Finally, we will analyze the social transformation of the local communities and we will deal with important political actors and their struggle against multinationals and the state.

1. Location and Ecology

Greece is a country rich in minerals and ores, such as bauxite, wollastonite, gold, silver and copper. The mining of gold and copper takes place in the north of Greece and more precisely, in the northeastern part of Halkidiki, where Mount Kakavos and the forest of Skouries are located. This area is surrounded by natural reserves (Mount. Holomontas, Mount. Stratoniko, Athos peninsula etc.) protected by international (UNESCO), European (Natura 2000, Corine) and national (Wildlife Natural Reserve) institutions, because of their unique fauna, flora and cultural heritage, while parts of the mining area, such as Olimpiada, are located mainly in protected zones (Mpalias, 2012).

Regarding the fauna, it includes 159 bird species (EIA, Hellas Gold) and among them, several migratory species have been observed. They are protected by the Directive 2009/147/EC, known as “Birds Directive”, which specifies that the Members of the Union not only have to protect the species, but their habitats too. At least two species are considered to be species present in Europe and endangered worldwide, therefore global measures are needed for their Conservation (category SPEC 1). In category SPEC 2 (Species present principally in Europe and that are in a state of unfavorable conservation) are twenty species, including five that are characterized by the International Union for Conservation of Nature (IUCN) as critically endangered (CR), including Neophron percnopterus and Circus pygargus. Especially in the forest of Skouries, Dryocopus martius and Aquila pennata have been found, which, according to IUCN are considered Endangered (EN). Similarly, the area hosts more than 40 species of mammals, such as Rhinolophus mehelyi and Canis lupus. These two are characterized as Vulnerable taxa (VU), while Lutra lutra and Canis aureus are already Endangered (EN).

The flora of the area is also very diverse due to its topography and consist mainly of three types of forests: deciduous, evergreen and river. Hence, in the broader area of Mount Kakavos, someone can observe trees such as beech, oak and platanus. Among these ecosystems, there are some characterized as primary forests, which means that they have never been disturbed by human activity. Sixteen species are considered to be rare in Greece and at least five are present only in the Balkan countries.

Furthermore, multiple ancient ruins are dispersed around Halkidiki and its three peninsulas: Kassandra, Sithonia and Athos. Indeed, the broader area of Macedonia has been inhabited since ancient times and widely known personalities have been related to it, such as Aristotle, Thucydides and Alexander the Great. Constructions associated with mining can also be found in these ruins, which indicates the important role of ores for humans living in this area. Additionally, Roman and post-Roman ruins, as well as churches from the Byzantium times are present, making Halkidiki a religious center for Orthodox Christians.

Halkidiki is characterized by a unique natural and cultural beauty, that is why it attracts a lot of tourists, not only at its famous beaches, but also at the mountain villages and forests. Indeed, eco- tourist guides describe the area as following:

“Get ready to visit traditional villages, dip in some of the world's cleanest beaches,

hike the dedicated mountain routes, sail around hidden coasts and

experience Halkidiki's spiritual power. Its museums, historic Byzantine churches,

culinary delights, women's cooperatives (for local products) and

agro-farms will also keep you exploring and discovering.”

2. Human- mining- activity

As it has already been implied, there is a notable human activity in this area, which is under multiple environmental regulations. However, according to Natura 2000, it is in within the discretion of the state to establish sustainable reforms and to respect regulations protecting the fauna and the flora. Nowadays, NE Halkidiki is dependent on the Municipality of Aristotle, which comprises sixteen mountains and coastal villages, and has a population of ~ 20,000 inhabitants. The local economy is based for 19.1 % on the primarily sector (agriculture, livestock, beekeeping, logging, fishing), 30,6% on the secondary sector (mining and related activities) and 45.4% on the tertiary sector (tourism, trade, etc.) (ELSTAT). Yet, since 1985, parts of NE Halkidiki have been characterized by the state as Declining Industrial Area (DIA) (EIA, Hellas Gold) due to the unsuccessful efforts to establish an unsustainable and intensive mining activity, which provoked indignation among local communities.

Nonetheless, Halkidiki has a very long and interesting history regarding its mining activity, given that it has been known for its ores since ancient times, during which it was the second most important center for exploitation of gold, silver and lead in Greece (Vavelidis, 2003). The exploitation of these resources became limited after the Romans conquered Greece, because the Romans were more interested in mining areas located in Spain. The organized and systematic exploitation of NE Halkidiki started again in the 16th century, when the Ottomans dominated the area, and the production of ores reached a peak during the years 1520- 1566, which, according to A. Acosta, is also the time period in which extractivism started to be practiced on a large scale. Likewise, one of the most known activist initiatives currently active in Halkidiki, called “SOSHalkidiki”, underlines the fact that, in 2,500 years of mining, 33 million tons of gold were extracted, while the recent extractivist strategy aims at 380 million tones in 30 years.

From the beginning of the 17th century, the activities of the mines were reduced due to the economic crisis of the Ottoman Empire. In the 18th century, efforts were made to save the economy, which included the restructuring of the mines and the implementation of multiple restrictions imposed on locals and miners, actions that sparked outrage among the workers, as well as environmental problems (Kolovos, 2015). Despite these efforts, after the Greek revolution of 1821, the Ottoman Empire went bankrupt. Therefore, in 1893, the mines were sold to an Ottoman- French company, known as Société Ottomane des Mines de Cassandra. This company employed 6,000 workers and, until the beginning of the 20th century, more than 72,000 tons of ores were processed. With the end of the Second Balkan War in 1913, the present Greek province of Macedonia became property of the Greek state and as a result, all of the activities associated with the Ottoman Empire were canceled. In 1920, the Greek state rent the mines to the Anonymous Greek Company of Chemical Products and Fertilizers (AGCCP&F/ ΑΕΕΧΠ&Λ) for sixty years.

The activity in Halkidiki started again at the beginning of the 1970s, when a more coherent effort to exploit the mines was established. Prodromos Bodosakis, the owner of the company, built in 1970 the first enrichment facility in Stratoni, which is still today one of the most important infrastructure of the mines. Until 1976, mixed sulfur ores were exploited there and a second enrichment facility was built in Olympiada. The contract of sixty years coming to an end, the Greek state planned to start the extraction of gold in the area of NE Halkidiki. The contracting entity responsible for this investment plan was the Metallurgic Industry of Aegean (METIA/ ΜΕΤΒΑ).

The final decision concerning the mines in Halkidiki was announced in 1983, generating the merge of AGCCP&F (20%) with METIA (80%). As it will be analyzed later in this text, the gold extraction was never undertaken due to the resistance of local communities. The METIA/ AGCCP&F endeavor came to an end with the assassination of the general director of AGCCP&F Alexandros Athanasiadis-Bodosakis in 1988, killed by the urban guerilla group “17th November”, as they accused him to be the murderer of the working-class as well as of the environment.

2.1 Multinational companies

2.1.1 TVX Gold case

In 1992, the 12 European Community State Members, including Greece, signed the Treaty on European Union (a.k.a Maastricht Treaty). One of the main goals of the treaty was to create a common European currency, but in order for the project to materialize, all of the countries involved had to fulfill the euro convergence criteria concerning control over inflation, public debt and public deficit, exchange rate stability and the convergence of interest rates. Although the treaty was signed by a right wing government, known as New Democracy, the Greek Socialist Party (PASOK) focused on the application of the necessary measures in order to reach the Europeanisation of the Greek economy. Part of this process was to search for Foreign Direct Investment, which led to the sale of the mines in the north of Greece to multinationals such as TVX Hellas, a subsidiary company of the Canadian TVX Gold. This company was interested in mining gold in the area of Olimpiada, which is located in the eastern part of NE Halkidiki. Despite insistence from the company for 7 years (1995- 2002), the project was never executed. After intense resistance from locals, in 1999 the Hellinic Council of the State rejected the attempts of the company to obtain permission, underlining the high costs of the environmental impact resulting from the mining activity. For the second time in the history of Halkidiki mines, the locals won a fight against a company, but this would not put an end to their struggle. In 2003, TVX Gold declared bankruptcy and 480 unpaid workers lost their job. Thus, they pressed the Greek state to find a solution for their lost salaries and jobs. During this period, Greece was preparing for the Olympic Games of 2004, and such problems were threatening the stability of the Greek economy. These implemented the conditions for the emergence of one of the biggest economic scandals of early 2000s.