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Brussels, 23 February 2011

State aid: Greek mining company Ellinikos Xrysos needs to repay around €15 million in illegal subsidies.

After an in-depth investigation, the European Commission has concluded that the sale of the Cassandra Mines, in 2003, to Ellinikos Xrysos was carried out below its real market value and, therefore, involved subsidies in breach of EU state aid rules. The subsidy was calculated at €14 million. As the company also did not pay transaction taxes, the total amount to be recovered from the beneficiary to the State's coffers is €15.3 million, plus interest.

Following an in-depth investigation opened in December 2008 (see IP/08/1927), the European Commission has found that the 2003 sale by the Greek State of the Greek Cassandra mines to Ellinikos Xrysos for €11 million was carried out at below their real value. The mines are situated in the Cassandra area, in the Chalkidiki region, northern Greece. They are known for producing gold but also copper, zinc, lead and silver. Ellinikos Xrysos was established for the purpose of acquiring the mines. It is presently owned by European Goldfields, a Canadian mining company.

The sale was carried out without an open tender or a valuation of the mines' assets by an independent valuator. The sale contract also provided for the waiver of transaction taxes. The Commission received a complaint in July 2007.

The Commission based its decision on the findings of a report commissioned for Ellinikos Xrysos shortly after the sale and put the value of the mines at €25 million. The taxes that should have been levied on the sale amount to €1.34 million.

The Commission has, therefore, concluded that Ellinikos Xrysos benefitted from illegal state aid, which Greece needs to recover, including interest.

The non-confidential version of the decision will be made available under the case number C 48/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

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