The Macedonian government has said it is mulling plans to cancel the concession agreement for the construction of the Kazandol mining complex in southern Macedonia after enviromental concerns were raised.

Sardich MC, a company set up with British and Ukrainian capital, signed a concession deal with the Macedonian authorities for the exploration of copper, gold and silver at the Kazandol site in 2015. The company also has a licence for geological exploration works at the Petrosnica and Plavus sites in Macedonia.

The government did not provide reasons for its plans to cancel the deal, but asked the Ministry of Economy to prepare information within seven days about the fulfillment of conditions for termination of the concession agreement. 

If the agreement is cancelled, the license for exploitation of mineral resources will be also revoked, the government said in a statement following its regular session on March 13.

The Kazandol site stretches across three municipalities: Valandovo, Bodgdanci and Dojran. Citizens of these three municipalities voted last year to halt the construction of the Kazandol mining complex, over concerns about environmental pollution.

The referendums followed an aggressive campaign by local environmental groups, who said the authorities should not issue a licence to open the mines because mining would pollute the area near the Greek border.

They argued that the gold ore would be extracted with explosives that would ruin the mountain where the mine was planned, while the use of cyanide for separating the gold would cause disastrous pollution in the area, which is mainly used for agriculture but also for tourism.   

Sardich MC launched construction works for the production of copper cathodes at the Kazandol complex near the town of Valandovo in August 2016. Investments of €35mn were planned. 

Revenues from the Kazandol mine were expected to amount to €135mn in the first seven years, or around €20mn per year.

Exploration works showed that Kazandol has reserves of 33mn tonnes of ore with an exploitation period of 20 years.