Why International Mining Companies Flock to Armenia

A gold mine in Armenia

YEREVAN (Hetq.am)—A report recently released by two environmental activists in Armenia suggests that international mining companies are flocking to Armenia because the government is incredibly lax when it comes to levying environmental usage fees.

The report, “Environmental and Environment Usage Payments in the Mining Sector” was prepared by Marineh Baghdasaryan, a graduate of the State Institute of Economics, and Bedya BGO President Erik Grigoryan.

Comparing Armenia’s mining sector with that of the USA, Great Britain and Germany, the authors found that another probable attraction for international companies is that the royalties for extracting metal ores in Armenia is much less.

In the United States, for example, royalties paid by mining companies to the government stand at 30%, followed by Canada (25%), Great Britain (20%), Great Britain (15.8%) and China (10%).

In Armenia, the royalty rate is 4+%.

Baghdasaryan says that other countries also tax pollution discharges while Armenia does not.

“Our comparative data shows that strict tax mechanisms operate in other countries and that responsible mining is the norm, something that isn’t the case in Armenia. Here, it’s an open wide sector and creates a favorable business climate for foreign investors,” Baghdasaryan said.

Their report was made public at an international conference “Responsible Mining in Armenia: Opportunities and Challenges” held in the Armenia Marriott Hotel in Yerevan this past March 25.

At the conference opening, opponents of unbridled and unsupervised mining in Armenia staged a counter-conference outside the hotel.

Baghdasaryan noted that while the largest taxpayer in Armenia is the Zangezour Copper-Molybdenum Combine (paying 37.8 billion AMD in taxes in 2013), only a tiny portion is in the form environmental and natural resource usage fees.

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7 Comments

  1. Arman said:

    Everyone must see the film “Armenia’s Breaking Backbone” on YouTube. The film shows what the real situation is in Armenian mining, which is much more like THEFT OF NATIONAL WEALTH, and not mining.

  2. ronnie said:

    Before any mining in the US ,a company is required to make a deposit/ down payment of 120 million us dollars or the estimated amount to reclaim the site back to nature.
    BEFORE the start of any mining operation open pit or not. That amount is on top of any other permit and is obviously non refundable.

  3. Sokimag said:

    Such a shame. I don’t understand how can the armenian government accept such things. Our beautiful land is being used by foreign companies. Armenia is supposed to be for us Armenians, not for some foreign companies. When will the idiotic armenian government wake up? Why are they being that weak?

  4. Anthony said:

    Well armenia does still get Money since they have To pay to get to Armenia they as well have to send miners making Armenia still get money,1 company with 20 miners will give a lot of money to Armenia
    2,000 x 20 =40,000$ and they have to get a hotel or something for a month for example if it’s 1,000 dollars per a week 40,000 x 1,000 =$4,000,000 see so Armenia can get good money still.

  5. Seda said:

    It is well known that extractive industry companies prefer developing countries, because the price they pay in those countries, including the price for potentially harming the environment, is cheap. In this sense, I find that a report comparing Armenia to only high developed countries is flawed. If they had found that in Armenia situation with taxes and royalties is much worse than in other similar countries, that would make a stronger statement. As Armenians, we tend to feel very strong about these kinds of information, forgetting that the situation in other states with similar levels of development and social environmental conciousness (or lack thereof), is not much better.

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