* Eldorado halted from developing mine in northern Greece
* Case tests Tsipras govt's approach to foreign investment
By Angeliki Koutantou
ATHENS, Oct 2 (Reuters) - A Canadian company appealed to
Greece's top court on Friday to overturn a ban on its plans to
develop a gold mine in a forested area of northern Greece, in a
case widely seen as a test of the leftist government's approach
to foreign investment.
Vancouver-based Eldorado's ELD.TO venture to extract gold
and other ores on the verdant Halkidiki peninsula is seen as one
of the top investments in a country racked by a debt crisis
since the end of 2009. The company has put in more than $600
million since 2012 and plans to invest another $1 billion in its
quest for gold, copper and zinc at two other sites.
But a day before resigning to call a general election, Prime
Minister Alexis Tsipras' government revoked Eldorado's permit
for the Halkidiki mine in mid-August, citing environmental
grounds, in a move that showed Greece remains a risky bet for
investors.
Eldorado then suspended all its activities at the mine and
made most of its 1,300 workers temporarily redundant.
Some 500 of its workers demonstrated on Friday in support of
the company's appeal outside the Council of State, Greece's
highest administrative court, some carrying a banner that
proclaimed: "No future without the ores".
Their trade union has joined the company's lawsuit against
Greece's energy ministry, which had tried to block the
investment since February. On Aug. 19, Energy Minister Panos
Skourletis, a hardline leftist, accused Eldorado's Greek unit,
Hellas Gold HELr.AT , of violating environmental safety
guidelines.
After hearing oral arguments for about two hours, the court
gave both sides until Oct. 7 to make full written submissions,
Eldorado's lawyer Eleni Trova told reporters.
The court will hold several sessions before it issues a
ruling.
"We're awaiting the court's ruling which we believe will
vindicate us," said Yiorgos Hatzis, head of the workers' union,
after the hearing. "People in Halkidiki are tired of being
unemployed because of unfair decisions."
The high-profile case came to court in a week when Tsipras,
who won re-election on Sept. 20, appealed to foreign investors
on a visit to the United States to put their money in Greece's
future.
"The message to investors is that they are welcome in
Greece," he said at a Clinton Global Initiative event on Sunday.
"The message is that now we have stability and a government with
a clear mandate from the Greek people to make all the necessary
changes. So they have nothing to lose."
That's not the way it looks to Eldorado or to investment
bankers advising foreign companies in Greece.
"The issue has a very bad resonance abroad and doesn't help
in attracting investors at all," said one investment banking
director of an Athens-based bank, speaking on condition of
anonymity.
Investor interest in Greece had edged up after the country
signed up to an 86 billion euro ($96 billion) third bailout
with euro zone governments last month, he said, but there was
still a long way to go to restore business confidence.
Athens University economist George Pagoulatos said the ban
looked like a political gambit to rally voters for Tsipras'
leftist Syriza party in northern Greece before the election, and
the government would probably be relieved to be overruled by the
supreme court now.
The court is also expected to decide on a request by the
company and its workers for an injunction that could open the
way for a temporary resumption of works at the mine before the
final verdict.
($1 = 0.8961 euros)
(Writing by Paul Taylor; Editing by Mark Trevelyan)