Canadian firm Dundee Precious Metals finally got the green light from the Ministry of Environment and Water Affairs to expand operations at its Chelopech mine, the ministry announced on its website on July 31 2008.

Dundee has seen Environment Minister Djevdet Chakurov to approve the company's environmental impact assessment that the company needs to increase the mine's output.  Chakurov's silent refusal has led to the company filing a complaint against Bulgaria before the European Commission and presenting it as an example of abuse of power.

Chakurov has been a long-time promoter of reinstating the state as a shareholder in the mine and did nothing to approve Dundee's request even though the Supreme Administrative Court has ruled twice that he has to decide on whether or not it will issue an EIA.  The case led to the intervention of Canadian government officials who held talks with Bulgarian authorities.

The company achieved a major breakthrough on March 10 this year when Dundee signed an agreement with the Bulgarian Government that made the latter shareholder of the mine, with a 25 per cent stake.

Two months later, however, the agreement was still on paper and the saga seemed to have continued. Things were quiet until July 25 when, according to Dnevnik daily, Sofia's city prosecutor's office started an investigation against Chakurov for alleged abuse of power.
 
The investigation was started after a tip-off from Democrats for a Strong Bulgaria in late 2007, Re:TV announced in the evening of July 25, according to Dnevnik.
 
The March 10 agreement:

Besides allowing the state to become a shareholder in Chelopech, the agreement, which Prime Minister Sergei Stansihev called “the first of its kind in the European Union”, provides for Dundee to pay a higher concession fee and means it will have to withdraw its complaint to the EC.

The Canadian firm has also promised to finance the rehabilitation of all the land affected by the mine’s operations, at a reported cost of $155 million. According to Stanishev, this is the first deal of its kind in the European Union. In return, the Government pledged to approve Dundee’s investments in both Chelopech and Kroumovgrad. The latter has not yet been discussed.

Dundee has also acquiesced in a doubling of concession payments. The extent of the fee will be directly bound to returns: the fee will be between two to eight per cent of extraction revenues, based on returns ranging between 10 and 60 per cent. The current Ordinance sees concession fees fluctuating between 0.8 and four per cent on returns from 10 to 50 per cent.

The new concession arrangement will translate to a large increase in concession proceeds. While last year gold output in Chelopech brought 1.7 million leva in revenue, the new arrangement should accrue at least 51 million leva a year to the state coffers. This means that the fees should bring 700 million leva in revenue over a 10-year period.