Armenian Mining Company Faces Shutdown

YEREVAN (RFE/RL)–A Canadian-owned mining plant in southeastern Armenia employing about a thousand local residents may be shut down next week because of the global economic crisis, according to local government officials.

The Deno Gold Mining Company located near the town of Kapan already laid off 300 employees and sent hundreds of others on mostly unpaid leave as it scaled down its operations last November, citing a sharp decrease in international prices for non-ferrous metals.

The company, purchased by Canada’s Dundee Precious Metals group in 2006, has for decades mined and processed copper and zinc ores in the mountainous area close to the Armenian-Iranian border. It is Kapan’s single largest employer.

Artur Atayan, mayor of the unemployment-stricken town, told RFE/RL this week that operations at Deno Gold’s mines and ore-processing plant may be stopped altogether on February 19. “According to the plant’s director, if the metal prices do not rise substantially they will have to shut down the plant. They are closing down both the plant and other facilities.”

Atayan found the Deno Gold management’s justification for the likely shutdown unconvincing, saying that the company can successfully operate in the current circumstances. “There were times when metal prices were even lower,” he said. “We must definitely try to force them to operate the plant at any cost because if it is shut down, about 1,000 people will join the army of the unemployed, which could have quite sad consequences.”

Officials at Deno Gold could not be reached for comment.

Deno Gold is one several Armenian mining and chemical enterprises that have slashed hundreds of jobs to minimize their losses resulting from the global economic recession. Still, the country’s largest metallurgical company, Zangezur Copper-Molybdenum Plant, has not resorted to any layoffs until now. Its top executives have announced plans to boost output this year.

Zangezur is located near Kajaran, an industrial town about 30 kilometers southwest of Kapan. It is mostly owned by the German metals group Cronimet.


Discussion Policy

Comments are welcomed and encouraged. Though you are fully responsible for the content you post, comments that include profanity, personal attacks or other inappropriate material will not be permitted. Asbarez reserves the right to block users who violate any of our posting standards and policies.