Relocation of Armenian Gold Mine Plant to Devastate Lake Sevan, Warn Environmentalists

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YEREVAN (RFE/RL)–Environment protection groups sounded the alarm on Wednesday over what they say are renewed plans by Armenia’s largest gold-mining company to build a new ore-processing plant near the ecologically vital Lake Sevan.
The Ararat Gold Recovery Company (AGRC), currently owned by Russian investors, exploits the country’s main gold mines at Zod, a mountainous area about 40 kilometers east of Sevan. Ore extracted there has been processed and smelted at a factory located in Ararat, an industrial town in southern Armenia.

AGRC’s previous, Indian owner, Vedanta Resources, attempted to close down the Ararat smelter and build a new one near Zod in 2006, citing the allegedly high cost of transporting ore by rail. The Armenian government blocked the $85 million project under strong pressure from local environmentalists. They argued that that ore processing is accompanied by emissions of potassium cyanide, a highly poisonous substance that can wreak havoc on a lake which is central to the country’s entire ecosystem.

Reports in the Armenian media suggested last year that AGRC would like to revive the project and is seeking the government’s green light. AGRC’s Russian parent company, GeoProMining, has declined to confirm or refute those reports. Its representatives in Yerevan could not be reached for comment on Wednesday.

GeoProMining is known to have commissioned several research institutes of the Armenian National Academy of Sciences to research the environmental impact of a possible plant relocation. In a resulting study, they reportedly concluded earlier this year that the new smelter would not put Sevan at risk.

A coalition of Armenian environment protection groups, backed by other non-governmental organizations, has expressed serious concern at the reported study, seeing it as a possible prelude to the implementation of the controversial AGRC project. They appealed to President Serzh Sarkisian last month to step in and avert what they see as irreparable damage to Sevan.

The NGOs reiterated their concerns on Wednesday at a roundtable discussion attended by government officials. Some of them were worried that the authorities will soon amend an Armenian law that prohibits manufacturing operations in the Sevan basin involving dangerous emissions.

“The authorities are saying that they won’t allow any violation of the law,” said Sona Ayvazian of the Center for Regional Development, the Armenian affiliat of the anti-graft watchdog Transparency International. “At the same time they do not exclude that the law may be amended so that illegal actions become legal. We know that in our country laws can be changed overnight after a hasty government decision.”

An official from the presidential administration assured participants that their concerns will not go unheeded. “We will jointly discuss the issue with their representatives and present proposals to the president by May 10,” he told RFE/RL.

Inga Zarafian, head of the Ecolur NGO, cautioned that the authorities had made similar assurances before allowing a metallurgical company in 2007 to mine copper in northern Armenia and destroy a rich forest in the process. “Sevan is much more important than the Teghut forest,” she said.. “It concerns whole Armenia.”

AGRC has operated at a fraction of its capacity in recent years despite record-high international prices of gold. Operations at its Ararat factory ground to a halt in early 2007 after the Armenian government accused the company of large-scale tax evasion and other fraud. Its owner, Vedanta Resources, denied the charges before selling AGRC to GeoPromining, a part of the Russian financial-industrial group Promyshlennye Investory, in December 2007. The Ararat smelter resumed its work only a year later.

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