Page 23 - bne_newspaper_February_09_2018

Eurasia
February 9, 2018 www.intellinews.com I Page 23
Mining group hit by toxic waste claims in Armenia to lay off most staff
Carmen Valache in Berlin
Mining company Vallex Group, facing a furore over claimed pollution, is to lay off most of its 1,200 employees active in Armenia, it says in an an- nouncement posted on its website.
The Liechtenstein-registered company, which has been exploring for copper and minerals such as molybdenum in an open-pit mine, has been in- volved in heated disputes with villagers and farm- ers over the alleged environmental violations. Vallex Group operates two mines in Armenia and one in the disputed breakaway region of Nagorno- Karabakh. Environmental groups have claimed that leaks from a waste dump in the vicinity of one of the mines in Teghut are polluting a nearby river. The company has dismissed the claims as "lies".
Mining, particularly of gold, is Armenia's largest source of export revenues and an important contrib- utor to GDP. However, environmental activists have long complained about the lack of transparency and environmental due diligence in the Armenian min- ing sector, in which the government has been com- plicit. Some companies active in the industry are said to be in clear violation of environmental regula- tions. Furthermore, the mining companies' obliga- tion to conduct multi-stakeholder consultations with the locals living in the vicinity of their mines has not always been conformed to. Companies are said to have either disregarded locals' concerns or failed to consult with them in the first place.
Vallex Group has previously placed some employ- ees on leave, while saying it would not fire anyone and that its intention, after the environmental dif-
Armenia's Teghut Mine, opened in December 2014, contains copper and molybdenum valued at billions of dollars, but hundreds of acres of forest had to be cleared to make way for it.
ficulties were solved, was to increase production. In its latest announcement, however, the company said that it would only retain a small number of staff to guard its premises, maintain its facilities and perform important back-office operations. It could not afford to pay all the staff while produc- tion was stalled, it said.
The company specified last year that its plan was to increase copper production at Teghut. Local farmers who criticised its plans said pollution had affected their orchards and that the company had lied to the government. One farmer has sued the company, but the trial has not moved forward for a decade. Mean- while, villagers were threatening to collect signatures on a petition to have the company's environmental permit revoked, and send it to the prime minister.
Vallex Group's latest annual operating revenue in- creased by 32% y/y to $358mn thanks to a recov- ery in global copper prices, the company revealed in its financial report published in January.
Last December, residents of two villages in Ar- menia protested against plans of a little-known company, Miram, to pursue open-pit gold min- ing. The mining would take place in a 200-hectare region located in the south of the country, close to the villages of Ardvi and Mghart.
Miram is a company that does not have an online presence, possibly indicating that it is a shell com- pany. The parliamentary leader of the ruling Repub- lican Party, Vahram Baghdasarian, has been linked to the company but has denied any involvement.