Controversy over closure of Halkidiki mines

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In May 2003, TVX Hellas - the Greek subsidiary of a multinational mining corporation - filed for bankruptcy, closing its mines in Halkidiki, Northern Greece, where some 500 workers were employed. This move followed a court ruling that gold could not be mined at the site on environmental grounds. The Halkidiki workers protested against the closure and in December the government announced a series of measures to compensate and assist the redundant workers, and to reopen the mines.

Exploitation of the mineral wealth of northern Halkidiki has a long history, beginning in around 1923, when mines were operated by French/Turkish companies. In 1932, a major earthquake created serious problems in the area, but the mines were able to resume operations quickly, thanks to state intervention. In 1950, the mining undertaking was acquired by the Bodossakis Institute, which operated the mines up to 1992, when financial problems began to appear. As a result and in order to find a new source of income, 51% of the undertaking’s shares were sold off to the National Bank of Greece; however, no significant financial progress was achieved.

The following year, for the purpose of finding a viable solution, the sale of the mines by auction was proposed and enacted into law. The winning bidder was the Canadian-based company TVX Gold, whose bid was accompanied by the announcement that one-third of the company’s workforce would be dismissed. This announcement met with opposition from the Halkidiki mines workers and their representative bodies, and set off a series of strong protests by the company’s employees, both blue- and white-collar, with the support of the local community. The mines were finally transferred in 1995 and TVX Hellas Gold became the company’s legal owner.

Reasons for closure

On the basis of the transfer agreement, the TVX Hellas undertook to do the following:

• instal a processing unit for the gold deposit located in Olympiada, Halkidiki;

• modernise the mines and the enrichment plant; and

• initiate a broad programme for restoration and protection of the environment.

This was one of the most important private investments made in recent decades in Greece, and the plans included the development of the area, turning it into a gold mine of international scope. Parallel objectives included continuing and modernising the existing lead and zinc mining activities.

As work began to establish the new gold mining and processing unit, accompanied by environmental studies designed to deal with any possible pollution in the area, the area’s inhabitants began to react. Their basic argument was that there was a lack of suitable measures to protect the marine environment, which would also have adverse effects on the development of tourism in the area. The company responded, maintaining that the specifications for protecting the environment in the area had been met; it proposed additional environmental measures and requested permission from the Greek state to implement them.

Despite the company’s assurances, the opposition of the inhabitants continued, culminating in an action brought to the Council of State by a number of the area’s inhabitants, demanding that the gold unit be closed down. In judgment No. 3615/2002, the plenary session of the Council of State ruled (by a majority) that the benefit to the Greek economy accruing from operation of the gold unit was very small, compared with the destruction of the environment it entailed. Installation of the plant involved extremely serious risks for the environment, according to the reasoning of the judgment, and therefore the decisions of the competent ministries granting it a licence to operate should be cancelled. It should be noted, however, that the proposal of the presenting Councillor was at variance with the judgment; he maintained that the necessary steps had been taken to protect the environment and the antiquities located in the area.

The company then announced that financial reasons forced it to close down the whole Halkidiki undertaking, since to go forward with the investment without exploiting and mining the gold would not be in its interests and would cause it to suffer a loss. At the same time, TVX Hellas’s downward financial path caused it to file an application for bankruptcy with the Greek courts on 5 May 2003, which the court accepted. Its owner, TVX Gold, had merged with Kinross Gold and Echo Bay Mines earlier in the year.

Workers’ reactions and positions

Five trade unions are present in the TVX Hellas mines at Halkidiki, representing: underground metal miners of all categories; blue- and white-collar workers; machinery operators; machinery technicians; and tunnel supervisors. The presence of multiple unions apparently reflects the difficulties and particularities of mining work. This fragmentation is also due to the fact that the undertaking is scattered over three villages, so that an element of 'localism' appears to be strongly present. However, the most basic cause is the number of details the union in each occupation had to be aware of and study. The occupations involved in this type of work are many and difficult. Thus the workers apparently believed that limiting the number of occupations in each union would make it easier to gain a better knowledge of what they represent and what they must defend.

The workers’ reactions to the developments at the mines were unanimous and strong, and had to deal with two fronts. On the one hand, they faced the company’s strong ultimatum: it was threatening to withdraw, since it had not received permission from the state to exploit the gold deposits in the area. On the other hand, they faced the opposition of some of the area’s inhabitants and its municipal council, who used every means to prevent the issuing of a licence to run the gold mining operation, arguing that the measures to protect the environment were unsuitable, as was the overall method of working.

The Halkidiki workers had not been paid for months, and faced the risk of unemployment and an uncertain future, since the operation of the mines provide the area with work and a means of living. They thus launched strong protests, culminating in a hunger strike by 100 miners in the mines, with the threat that they would not stop unless their demands were met.

Following assurances from the government that a solution would be found, the hunger strike was called off, but the workers continued their struggle, whose primary demands were that the mines be reopened and that the workers be paid for time worked and receive lawful compensation.

Recent developments

These developments and the impasse created for around 500 workers following the decision to declare TVX Hellas bankrupt caused the government to announce a series of measures aimed at providing a solution. The Ministry of Finance and the Ministry of Labour announced in early December 2003 the following basic points of the government’s plan for the Halkidiki mines:

• all 470 workers will be dismissed and the termination of their contracts of employment will be accompanied by the payment of compensation and their wages for the period between May and December 2003;

• low-paid redundant workers will receive financial support of EUR 1,800 each;

• all redundant workers from the Halkidiki mines - together with recently redundant workers from the AGNO and Softex companies (GR0304101N and GR0306101N) - will be included in a state-funded training programme. The programme (lasting up to five years) will include payment of all the social insurance contributions that would have been made if they had been employed, so that workers nearing retirement age will be entitled to full pensions;

• a new investment body is ready to take on the operation of the mines and a contract transferring the assets of TVX Hellas has been signed. Parliament is expected to enact it into law, allowing the mines to become operable again; and

• the new investment body will hire as many workers as it deems necessary, under new contracts of employment.

Commentary

Despite the government's announcements, the resolution of the matter and the operation of the Halkidiki mines depend to a great extent on whether a licence to mine gold will be issued, with full respect by the new investment body for the environmental and safety conditions, along with controls carried out by the competent authorities.

The case of the Halkidiki mines highlights the fact that employment cannot be guaranteed without investments and development policy. The issue of the investment in the gold processing unit, upon which the viability of the Halkidiki mines and by extension the economic and social life of the area depend (since most of the area’s families depend directly or indirectly on the operation of the undertaking for their living), must be very seriously addressed, without affecting the natural environment or cutting off tourism in the area. (Anda Stamati, INE/GSEE)