News that Greece had voted in a far left government earlier
this week sent ripples through global markets, including
commodity and mining indexes.
The election of the first anti-austerity government in
Europe has not only shaken up the industry but also the
political spectrum. With this shift in government towards
Alexis Tsipras’ Syriza’s left, the
country has firmly pitched itself against what Tsipras calls
the "troika" of institutions — the European
Commission, The European Central Bank and the IMF.
While it is too early to judge what the implications may be
for the county's extractive sector, the Syriza party has made
some salient points around the subject of foreign investment in
the country and the impact of the new Prime Minister being
sworn in sent gold and copper stocks on some exchanges heading
south. The Johannesburg Stock Exchange reported a slump in
South African mining stocks following the election news, while
European indices climbed higher.
"We (...) expect that the Greek government will recognise
that the mining sector, although not so extensive, is a
dynamic, innovative, export oriented and technologically
advanced sector with highly skilled and trained employees, with
noticeably above average salaries and long-term job security,"
Dimitris Kalogeropoulos, corporate strategy manager for Grecian
Magnesite told IM.
"Many had expected the Greek election to unleash chaos on
markets, but with the European Central Bank having launched
quantitative easing and the impact of the new government in
Athens being so difficult to quantify, it looks as if the
default setting in Europe remains "buy on the dips"," Chris
Beauchamp, market analyst at IG, said, following the
"The problem with the Greek elections, which did not apply
to the European Central Bank decision, is that the consequences
are so unclear," Beauchamp added.
In terms of a government, Tsipras has said he will shrink
his cabinet from 20 members to 10. The final line up is made up
of leftwing academics with very little political
"This is likely to raise some fears among foreign investors
that Athens may pull back on economic reforms, attack big
business interests and take a hard line on renegotiating
Greece’s debt burden," the London Financial Times
wrote in an opinion column.
The appointment in the streamlined cabinet of a Transparency
Minister, Panayotis Nicoloudis, signifies that Tsipras is
serious about cracking down on corruption and tax evasion. The
appointment of Yanis Varoufakis, an Athens university professor
and blogger, as finance minister could also put the wider
finance communities’ heckles up.
Mining in Greece
Pannayotis Lafazanis, a
leftist hardliner, is in charge of environment,
industry and energy, which presumably means that mining
will fall under his remit.
The mineral industry in
Greece is regulated by the Mining Code, Legislative
Decree 210/1973, as amended by a number of laws and
ordinances on technical and procedural issues. It is
also subject to EU regulation such as the Environmental
Impact Directive and the EU Mining Waste Directive. And
there is no reason to suggest this will change.
|Where will Alexis Tsipras and and his Syriza
party take Greece and it's mining industry?
SOURCE: Mirko Isaia
Geological exploration has been carried out by domestic
companies, or by the Institute of Geology and Mining
Exploration Management (IGMEM).
Industrial minerals in Greece
In terms of industrial minerals, Greece is the
world’s second ranked bentonite producer after the
US, with S&B producing on Milos Island. Now the company is
owned by Imerys, the
world’s largest industrial minerals miner, but it
was previously owned by the Kyriacopoulos family (61%) and the
New York-based private equity firm, Rhone Capital (39%). The
company also produces wollastonite and perlite.
Grecian Magnesite produces caustic calcined magnesia (CCM)
and dead burned magnesia (DBM) with a combined capacity of 420
tpd. It produces more than 50 different grades of DBM and CCM
as well as monolithic refractories.
The company is proud that it has kept its workforce intact
throughout the financial crisis without any reductions in
salaries and benefits. And, despite Greece being at its lowest
point, economically, over the last three years, the company has
continued to invest both at home and abroad and is in the
process of strengthening its production and commercial
"Based on the announcements of the new government, regarding
the reconstruction of the economy – transformation and
upgrading of the country’s "productive" system and
recourses – we expect greater interest and
understanding of the value/contribution of industrial minerals
in the economic recovery such as in employment and exports,"
Kalogeropoulos told IM.
"Too much attention has been directed to the "far away" hope
of developing the production of oil and natural gas," he
Grecian Magnesite also expects that further investment in
employment, export, investment and research and development
(R&D) incentives will take place, as well as much-needed
improvements in infrastructure , including those to ports and