Mining

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Teghut

A leading Armenian mining company said on Tuesday that it is pressing ahead with the development of a massive copper and molybdenum deposit in the country’s north despite strong resistance from local environmentalists.

Gagik Arzumanyan, chief executive of the Armenian Copper Program (ACP), was confident that the Liechtenstein-registered company will soon get final government clearance to start work on the Teghut deposit. He said it is already making preparations for open-pit operations in the wooded area estimated to contain 1.6 million tons of copper and about 100,000 tons of molybdenum.

“We know of no circumstances that can call into question the project’s implementation,” Arzumanian told RFE/RL.

Buoyed by record-high international prices for non-ferrous metals, ACP plans to spend $270 million on turning the wooded area located in the northern Lori region into a huge mine. It intends to extract more than 30,000 tons of copper and molybdenum ores there per annum starting from 2012.

The project, if implemented, will lead to the destruction of 357 hectares of rich forest, including 128,000 trees. Hence, the outcry it has sparked among Armenian environment protection groups. They say that the Teghut mine would wreak further havoc on Armenia’s forest that have already shrunk dramatically since the 1990s.

Hakob Sanasaryan of the Armenian Union of Greens warned on Tuesday that crop-growing and other agricultural activity in the area close to Georgia would also be hit hard. “Even in nearby forests, which are not supposed to be chopped down, it will be dangerous to collect fruits and berries,” he said.

ACP admits the heavy environmental cost of its plans but says it will be more than offset by 1,400 new jobs which it has pledged to create in the economically depressed area. The company has also pledged to build new schools and make other investments in the local infrastructure.

The Armenian government clearly accepts ACP’s arguments, with the Ministry of Environment formally giving its mandatory go-ahead to the Teghut project earlier this year.

“It is beneficial for the state because new jobs will be created, more taxes will be paid to the state budget, and local infrastructure will be upgraded,” said Gagik Haroyan, a senior official at the ministry’s Geological Agency. “If there is a deposit of natural resources, it must be exploited.”

Non-ferrous metals and ores are currently Armenia’s main export products. The local mining sector is dominated by ACP and the German-owned Zangezur Copper-Molybdenum Plant operating in the southeastern Syunik region.

Tukhmanuk

A U.S. company mining gold and other non-ferrous metals in Armenia has announced the discovery of massive deposits which should significantly boost the country’s gold production in the coming years.

The Connecticut-based Global Gold Corporation said this week it has “uncovered a significant gold and silver discovery” in the Tukhmanuk property in the central Aragatsotn region which it acquired in 2005. "We are positively delighted with this new discovery for ourselves and for Armenia,” Global Gold’s chairman and chief executive, Van Krikorian, said in a statement.

The statement gave no estimates as to the physical volume of Tukhmanuk’s gold and silver reserves. But industry sources told RFE/RL that they are comparable to those of Armenia’s largest gold mines at Zod, a mountainous area east of the Lake Sevan.

Armenian Minister of Energy and Natural Resources Armen Movsisyan welcomed the reported discovery, in a further sign of its significance. "Armenia has a rich potential for precious metal mining, and I am happy to congratulate Global Gold on this discovery and its plans to continue development,” the Global Gold statement quoted Movsisian as saying. “Foreign investors should know that this government is here to help, and we are glad that our own experts have played a role in assisting the company here."

The statement stressed that the deposits were explored and ascertained only in Tukhmanuk’s central section that covers 2.2 square kilometers of land. The total area of the property is 51.5 square kilometers.

Global Gold began open-pit mining operations and built an ore-processing plant there in 2007 on the basis of Soviet-era geological estimates of Tukhmanuk’s gold reserves. It now claims to have found much wider “areas of mineralization” containing high concentrations of precious metals than were previously thought to exist there.

According to the Global Gold statement, the so-called gold “veins” are up to 25 meters wide and more than 300 meters long, making them similar in size to Zod’s. The Zod mines are believed to contain at least 220 metric tons of gold.

The mines, which are part of the Ararat Gold Recovery Company (AGRC), have largely stood idle ever since their former, Indian owner, Vedanta Resources, fell out of with the Armenian government in January 2007. Vedanta denied fraud charges brought against it before selling AGRC to a Georgian subsidiary of the Russian financial-industrial group Promyshlennye Investory in December 2007.

Despite record-high international prices for gold, the new owner has so far failed to reactivate the Zod mines as well as AGRC’s ore smelter in the southern town of Ararat. The company’s chief executive, Vartan Vartanian, attributed the bizarre hiatus to repairs at AGRC facilities and the railway transporting ore from Zod to Ararat. Speaking to RFE/RL on Thursday, Vartanian claimed that AGRC has continued to employ and pay at least 500 workers in the past 20 months. He said the company could resume its operations as early as on November 1.

Industry sources are skeptical about these assurances. Some claim that Promyshlennye Investory too has decided to sell its potentially lucrative Armenian subsidiary to another foreign investor. Vartanian denied this, however.

Unlike AGRC, Global Gold does not smelt ore in Armenia and plans to continue to export only ore concentrates in the near future. Company officials said on Thursday the new discovery at Tukhmanuk necessitates a major expansion of the local plant’s ore-processing capacity currently standing at 100,000 tons per year.

They also reaffirmed Global Gold’s plans to invest $32 million in another property which is located in the southeastern Syunik region and is rich in gold, silver and zinc. Most of the planned investment is to go into the construction of an ore-processing plant in the area.

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