Parliament of Armenia ratifies investment program on re-treatment of tailings of Zangezur Copper Molybdenum Combine

National Assembly of Armenia has ratified the investment program on re-treatment of the tailings of the Zangezur Copper Molybdenum Combine (ZCMC) in the second reading on June 22. 

When presenting the bill "On the investment program on re-treatment of the tailings of the Zangezur Copper Molybdenum Combine" at the National Assembly, Armenian Deputy Minister of Energy and Natural Resources Areg Galstyan pointed out that the bill looked to settle the issues related to the attracted investments. The settlement of these issues would allow carrying out full-scale operations to resolve a number of environmental problems.  The bill envisages construction of a plant that will contribute to creation of new jobs and improvement of the economic situation. At present, there are two decommissioned tailing dumps near the villages Voghchi and Pkhrut (3.2 mln cu m and 30 mln cu m, respectively). The largest tailing dump is Artsvanik (310 mln cu m).  The first phase of the program that will last till 2018 envisages investments worth $330 mln. The state will pawn its property. In particular, the matter concerns Voghchi and Pkhrut, whereas Artsvanik is being developed by the ZCMC and is considered to be the ZCMC property. Once the law is adopted, the investor is to work out a master plan within a year, which is to be approved by the Government within 3 months.

Afterwards environmental and technological examinations will be conducted, and then the project will be launched. The first phase will involve 1,200 people in the project.  The second phase to be implemented in 2018-2025 will double both the investments and the operations. The first construction stage of the plant is to retreat 12.5 mln tons of exhausted ore per annum, and the second stage - 25 mln tons per annum. 

On May 7, the Government of Armenia approved a USD 330 mln investment program on re-treatment of the tailings of the Zangezur Copper Molybdenum Combine (ZCMC). The relevant memorandum of intention was signed in mid 2014 among the ZCMC, Cronimet Mining (the key shareholder of ZCMC), VS Energy International Group, Alyotig LLC, and the Armenian Government, which approved the document on 16 October 2014. According to the program, the investors are going to build a re- treatment plant with a capacity of 12.5 mln tons per annum.  Alyotig LLC will be the general contractor of the project (the founder and the only project participant is Vardan Shahnazaryan, and the director general is Manvel Voskanyan). The company has technological developments, which will enable the efficient re- treatment of the waste rocks. The investor of the program is VS Energy International Group (with its shareholder being Ukrainian businessman Eugeny Ginner).

The matter concerns the launch of tailings re-treatment near the Vokhchi, Pkhrut and Artsvanik rural communities. The tailings have been accumulated here since the 1940s. Now their volume is 300 mln tons and it increases by 18-20 mln tons per annum.  Under the project, the ZCMC transfers the ownership of the process waste in the decommissioned tailing dumps to Alyotig LLC. The investors are also planning to build a plant for production of composites for processing nonmetallic trash. The plant will have a capacity of 10 thsd tons. It is envisaged to launch production of import- substituting products, hail suppression devices, as well as to manufacture raw materials for construction, machine tool industry, etc.  
Earlier Deputy Minister of Energy and Natural Resources Levon Shahverdyan reported that the project would allow launching advanced waste processing (95%- 98%). "This project will be of great importance for Armenia and will allow creating 1,500-1,800 new jobs," Shahverdyan said. Previously, Vazgen Safaryan, Head of the Union of Local Producers of Armenia, told reporters that 1.5 billion tons of tails have been accumulated at tailing dumps in Armenia.  In case of processing 80 million tons of tails per year, 10,000 tons of pure refined copper, 3-4 million tons of iron, 250,000 tons of free sulphur, 170 tons of tellurium, 3.6 tons of gold, 142 tons of silver, as well as rhenium and other alloy materials could be recovered.  There are 17-19 metal-containing ore tailing dumps in Armenia and the tailings disposal facility could operate for 30-40 years.

To note, "Zangezur Copper Molybdenum Combine" CJSC is the largest mining enterprise in Armenia and exploits the Kajaran deposit, which is the richest in the CIS by its copper content. ZCMC was privatized for 132 mln USD on 14 December 2004. Afterwards, 60% of its shares passed into the ownership of Cronimet ?ining (Germany), with the remaining 15%, 12.5% and 12.5% having gone to the Pure Iron Plant (Yerevan), "Armenian Molybdenum Production" CJSC and "Zangezur Mining" LLC, respectively.  According to the data of Cronimet Holding (headquarters in Karlsruhe, Germany), over the past few years the total investments in "Zangezur Copper Molybdenum Combine" CJSC amounted to over $500 mln. To note, Cronimet Mining also owns 51% of "Pure Iron Plant" OJSC's shares and 51% of "ELBAT" CJSC, an automotive battery production plant. 

At the early stage of the project's operation, the principal shareholder of the ZCMC replaced the leadership of the enterprise - the new General Manager is Nil Stevenson.  The assembly of shareholder decided to create set up a Board of Director headed by the ex-general manager maxim Hakobyan.  In 2015, the Combine is set to process 20 million tons of products, and in 2016 -22 million tons.  The Combine staff includes 3400 employees at the average salary of 320,000 drams. In 2014, the Combine was on the 4th place in the list of the biggest taxpayers of Armenia paying 19.9 billion drams.  According to ArmInfo's annual Ranking of the Biggest Industrial Enterprises of Armenia, ZCMC received 7.5 billion drams net profit in 2013, with a 56% year over year decline.