Years 2005-2006 were quite noisy years for mining industry. The exploiters of the sector were constantly battling with the Ministry of Nature Protection of RA. The Ministry was accusing them of abusing their rights and violating laws.
Why is the ministry of environmental protection so tolerant towards all the miners in Armenia and intolerant towards the owners of the gold mines in Ararat and Sodk? Is the ministry likely to cancel the license of these owners because Russian companies are interested in these mines, and they need to clear the way for them. The reporters asked these questions to the minister of environmental protection Vardan Ayvazyan on February 16 at the National Press Club. He stated that no foreign country can make pressure on him because he is a member of the Armenian government and obeys the decisions of the Armenian government. Perhaps it is a hint that if there is pressure, there is pressure on the government of Armenia and not on him, and Vardan Ayvazyan carries out the orders of this government. Of course, Vardan Ayvazyan states that he is not carrying out orders, he is applying the law. He says the owners of the gold mines at Ararat and Sodk operate the mines badly, they are not conscientious and break the law. Vardan Ayvazyan said they had conducted a monitoring and revealed a number of breaches of the operation of the mine since 2003. Meanwhile, the owner of the mines, the American Global Gold Company insists that Vardan Ayvazyan had demanded a bribe, they refused, therefore he is angry with them. Even the U.S. embassy interfered, which released information that the company provided facts on corruption which they had handed to the Armenian government. The government stated that they had studied these materials and found out that they do not correspond to the reality. Vardan Ayvazyan did not exclude that Global Gold may lose its license. The minister said he has offered a proposal to the government but there are no sufficient grounds. Currently a legal process is underway, and its outcome will determine the outcome of this story. “If we break a minor law in their country, they will sue us right away. In our country we demand legal activity, and we are criticized,” Vardan Ayvazyan says. He told that in the United States he was not allowed to cross the line of the passpower check. Vardan Ayvazyan tried to approach his wife whom the officer of the passport check was asking a question at that moment. “It was in English, I could answer, and I went nearer to say that it was my wife. I stepped on the line, the official said if I crossed the line once more, they would refuse entry to the United States and would send me back,” says Vardan Ayvazyan. He says they did not even take into account that he is a minister. Environment Minister Vartan Ayvazian again accused an Indian-owned company developing the bulk of Armenia’s gold reserves of large-scale fraud and mismanagement, insisting that the Armenian government revoke its operating license. “They are not doing a good job,” Ayvazian told reporters. “Shouldn’t we punish them? They have wreaked havoc on the mines.” The Armenian subsidiary of the London-based Vedanta Resources was reportedly placed under a criminal investigation last month after Ayvazian’s ministry issued a fresh report accusing it of underreporting ore extracted from its Zod and Meghradzor gold mines. The ore is turned into gold at a smelter in the southern town of Ararat. Prosecutors reportedly raided the offices of the Ararat Gold Recovery Company (AGRC) last month amid media speculation that the Armenian authorities have decided force Vedanta to sell it to a Russian mining giant. The speculation followed President Robert Kocharian’s late January meeting with his Russian counterpart Vladimir Putin that focused on economic issues. Kocharian described mining as a new promising area of Russian-Armenian economic cooperation. AGRC already faced fraud allegations in 2004 after a regular inspection of its gold mines by the Environment Ministry’s Ecological Inspectorate. The agency charged in a report that the company underreported 900 kilograms of gold to evade millions of dollars worth of taxes. The Indians strongly denied the allegations and took the ministry to the court. Still, they had to pay a $500,000 fine in an out-of-court settlement reached in March 2005. Later in 2005, officials from the Ecological Inspectorate again inspected the mines and claimed to have uncovered another 1.3 tons of hidden gold. AGRC was also found guilty of serious violations of safety regulations which Ayvazian said have killed five company workers in recent years. The findings of the second inspection are also challenged by the company in the court. Vedanta has been dogged by controversy ever since its 2002 takeover of AGRC, until then a joint venture of the Armenian government and the Canadian company First Dynasty Mines. It pledged to breathe a new life into the Armenian gold industry by making large-scale investments and significantly boosting production levels. However, AGRC’s output has since declined considerably despite a surge in the international price of gold.