The landscape of Armenia has started to be researched most actively since 2002. It is when the law on concessions and law on mining started to be applied. Recently, YSU professor and archaeologist Mihran Grigoryan shared his concerns about the ineffective exploitation of minerals with 168-Zham newspaper. According to professional analysis, the mining areas of Armenia have a life of about 100-150 years. However, if the current rates of exploiting the mining areas continue, those would have a life of only 20-25 years. As a response to this statement, the head of the mining department of the RA Ministry of Trade and Economic Development, Artur Ashughyan said, “Whoever says such a thing is sounding like a donkey. Write it down like that. It’s like saying that oil reserves will be gone, what are we going to do? I am responsible for the regulation of the mining sector and starting from 2002 this sector has been regulated in accordance with the law.”
Interview with A. Ashughyan
– During Soviet years they didn’t rush to exploit the mining areas, saving it for the generations. There are even beliefs that our statesmen of the Soviet period provided untruthful information about our mining potential to the Kremlin.
– Our grandfathers didn’t hide anything. There was a powerful country with resources, which was conducting research to see where its resources were most opulent. If this logic continued, then half of our mines wouldn’t be exploited now.
– After the legal regulation of this field, who has applied so far?
– Many people came from different countries – Germans, Americans and local residents.
– Who are the owners of the Meghri gold mines? Are the investors our compatriots from the Diaspora?
– No, the Australians work that mine.
– What are the responsibilities of the miners and how many licensed companies do we have?
– About 300 organizations have licenses. Those clearly define the conditions and terms of exploitation, technologies of refining, and deadlines. We have two types of licenses – special and regular. The regular one is issued for 12 years and the special one for 25, after the completion of which the organization may prolong the contract. We as a state have the right to survey the activity of the organizations to decide whether we wish to grant a contract or not.
– Do you have cases of denying contracts? How many of the mentioned 300 terminated their contracts?
– There are examples. We have terminated about 60 licenses and those mines are still free.
– Is it possible to illegally exploit mines?
– Yes, it happens but they get caught just like in each case of stealing.
– How much is the state fee?
– About 500 thousand AMD is defined annually for non-metal mines and 10 million AMD for metal mines.
– My impression is that the law encourages mining as much as possible. And perhaps in 25 years those mining areas will not be available for mining because of the previous miners.
– Why would they mine so much? Where would they sell it? They don’t have a market.
– If there are no markets then why is the private sector so interested in mining?
– Who says there is no market at all? The metal, which is mined, is exported by 100% and our country is paid taxes – nature protection fees, profit tax, royalties, which is counted at the expense of the profit tax. This business is accepted to be an area that requires great investments, which slowly justifies the means. That’s the reason we provide them with long-term contracts. The first 5 years require the greatest investment. Archaeological researchers are the highest wage earners in the world.
– Do those criteria work in Armenia too?
– If we had such high level experts in Armenia we wouldn’t have to invite others from abroad. The foreign specialists make about 17,000 USD. So if we had local specialists they would definitely get hired. Our specialists would cost less and of course businessmen would prefer our experts.
– Two years ago oil reserves were found in the crevices of Shirak. Why were the further activities interrupted?
– This program was not financed by the government. Americans did. They didn’t find anything. That’s why the work is stopped. There is this method of economic calculation. Why don’t Americans lease a rock mine? What are they going to do with those rocks?
– This sector seems to be the monopoly of the local businesses. Thus they raise the rock price due to the increase of construction levels in the country.
– It’s not desirable to have monopolies. In this case it’s worth mentioning that the demand exceeds the supply because we don’t import rocks.
– To what extent is the mineral sector of Armenia conducive to the development of other industrial units in the country?
– The raw material of the “Pure metal” Yerevan factory and Alaverdi copper-molybdenum plant is received at the expense of the Kajaran factory. Besides, we don’t have the infrastructure to make one serve for the other. Mining has a great prospect in RA. We have rare mining areas, and of course the best one is molybdenum, which is among the top ten in the world.
– During the Armenia-Diaspora symposiums, is the mining sector also presented? Is there any cooperation seen so far?
– Perhaps not. They don’t think it would be profitable to spend money because they don’t know whether they’d have profits or not.
– You have spoken about taxpayers. The foreign investors are exempt from profit taxes for two years, as defined by RA legislation. It means that our state receives profit taxes just for one year.
Let’s note that among 300 licensed mining companies Artur Ashughyan mentioned only 3 as greatest taxpayers – copper-molybdenum plants of Kajaran and Alaverdi and the “Pure metal” factory. And this is noteworthy under circumstances when this sector compared to 2002 was supposed to be developed 5 times creating dual-digit economic growth in Armenia.