YEREVAN (RFE/RL)–A German metals company that owns Armenia’s largest mining enterprise on Thursday pledged to make at least $60 million in additional investmen’s to expand its operations in the country.
Guenter Pilarski, chairman of the Cronimet group, made the pledge during a visit to Yerevan that involved talks with Prime Minister Serzh Sarkisian and local businessmen.
Cronimet had teamed up with two Armenian firms in late 2004to buy a 75 percent stake in the Zangezur Copper-Molybdenum Plant in a $132 million deal. As part of the takeover, it undertook to invest $150 million in modernizing the Soviet-built plant, which is located near the southeastern town of Kajaran and currently employs about 3,000 people. Much of the modernization is due to be completed by the end of this year.
Speaking to journalists in Yerevan, Pilarski said the extra investmen’s will be channeled into building a copper smelter in the same mountainous area close to Armenia’s border with Iran. “The project will not create any ecological problems,” he said.
Pilarski made similar assurances at a meeting with Sarkisian on Wednesday. He said the planned smelter will have modern equipment and technology that inflict no damage on environment.
Zangezur currently only enriches most of cooper and molybdenum ores extracted from its Kajaran mines. The rest of it is turned into metal at the Yerevan-based Makur Yerkat smelter, which is also owned by Cronimet.
Both Zangezur and Makur Yerkat have significantly increased production levels in the past three years on the back of record-high international prices of copper and other non-ferrous metals. Virtually all of their production is sold abroad.
Sarkisian was quoted by his press service as telling Pilarski, who is also Armenia’s honorary consul to Germany, that his government considers development of the mining sector a top economic priority and will save no effort to facilitate Cronimet’s operations in Armenia.
In other mining news, prosecutors pressed on Thursday fraud charges against Armenia’s largest, Indian-owned gold company, in a move that will likely speed up its takeover by another foreign investor.
The Office of the Prosecutor-General said it has formally asked the country’s Economic Court to strip the Ararat Gold Recovery Company of all operating licenses and fine it almost $22 million for tax fraud and other violations of the law.
The development follows a criminal investigation that has forced AGRC’s owner, Vedanta Resources, to put the company up for sale. The company, which develops Armenia’s largest gold deposits, has stood idle ever since prosecutors raided its offices last January.
AGRC’s Indian top executives have rejected the charges as baseless and accused the Armenian government of illegally forcing Vedanta to leave the country. Vedanta is already looking for buyers for its Armenian subsidiary, which it had purchased in 2002. The Russian financial-industrial group Promyshlennye Investory is reportedly close to gaining ownership of AGRC.