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MINING IN ARMENIAMinistry of Energy Infrastructures
and Natural Resources, RA
OUTLINE
INDUSTRY OVERVIEW
REGULATORY FRAMEWORK
CURRENT OPERATIONS
WHY ARMENIA?
Mining in Armenia
• Mining announced as priority along with IT, Banking and Tourism
• Armenia applied to join EITI
• Government of Armenia sees dinamic mining industry as opportunity to:
✓ Strengthen economic efficiency and stability
✓ Recovery other industries (cable and machine engineering)
✓ Development of heavy industry, agriculture, construction materials.
• Currently negotiations are underway with investors for the construction of
copper smelter in Armenia.
INDUSTRY OVERVIEW
10 operating mines in Armenia
Main commodities copper, molybdenum, gold, iron, lead, zinc, silver
as well as a range of other metals
Over 120 exploration permits of metallic minerals
Mining and Downstream processing contributes to ~4% of GDP and over
50% of exports
Strong cluster supported by professional education delivered by Yerevan
State University and National Polytechnic University of Armenia with their
specialized departments of Geology and Metallurgy (500-1000 graduates
annually)
REGULATORY
FRAMEWORK
MINING REGULATIONS
Both exploration
and mining
permit areas can
be expanded at
licensee’s
request
Clearly defined
procedures for
obtaining
exploration and
mining permits
Guaranteed
right to obtain
mining permit
with successful
exploration
Exploration permit
(geological investigation
rights) being provided for
up to 3 year period, with
the possibility to extend 3
times by 2 years each. An
extension by one more
year is possible after the
approval of reserves, for
the purpose of preparing
mining program
Mining permit for up
to 50 years, with the
possibility to extend
further (with no
practical limitations)
REGULATORY
FRAMEWORK
EXPLORATION RIGHTS
Exploration
permit
Exploration
agreement
Exploration
plan
Exploration
rights
Application for Exploration permit to be
accompanied by the Exploration plan
And initial EIA (including Environmental
Action Plan)
EIA approval within 30 days
Exploration permit granted within 60 days
From the application date
Exploration agreement (including EAP)
signed within 10 days
Explorations concluded with reserve
assessment approved by State Reserve
Committee)
REGULATORY
FRAMEWORK
EXPLORATION PERMITES FOR METALLIC DEPOSITS
REGULATORY
FRAMEWORK
MINING RIGHTS
Mining
permitMining
agreement
Mining
plan
Mining
rights
Process initiated by the receipt of ToR for
EIA from the Ministry of Nature Protection
Application for Mining rights shall include
Mine plan, ESIA, Mine closure plan
Technical safety expertise and EIA
Expertise conducted by relevant
Government bodies
Mining permit granted within 180 days
from the application date
Mining agreement (including EMP) signed
within 10 days
Mining
assignment
MINING POLICIES
Exploration and Mining rights transferable upon formal approval of the
Government
Exploration and Mining rights can be pledged with a notice to the
Government
Transparent royalty regime (basic royalty at 4% of Mine revenue, plus
12.5% of profits)
Grandfathering for three years for changes in royalty and taxation regime
The Government of Armenia committed to implementing the EITI standard
and currently the process is well underway
CURRENT
OPERATIONSSOME OF PAST AND PRESENT INTERNATIONAL PLAYERS
Cronimet
Ferrolegierungen
(Germany)
GeoProMining
(Russia)
Lydian International
(UK/USA/Canada)
Dundee Precious
Metals
(Canada)
Polymetal
(Russia)
Centerra Gold
(Canada)
Orogen Gold
(UK)
CURRENT
OPERATIONSMINING EXPORTS
$ mln
CURRENT
OPERATIONS
EXPORT GEOGRAPHY, 2015
(INCLUDING DOWNSTREAM PROCESSING)
$ mln
97
41
97
79
164
123
CANADA
NETHERLANDS
GERMANY
BULGARIA
CHINA
OTHERS
CURRENT
OPERATIONS
EXPORT STRUCTURE
(INCLUDING DOWNSTREAM PROCESSING)
data for 2015
Copper concentrates
Precious metals
Blister copper
Ferro-alloys
Others2%
9%
11%
17%
61%
WHY
ARMENIA?STRENGTHS
Industry specific competitive taxation
system
High Score (38) on the WB Doing
Business Ranking
Streamlined and fast licensing procedures
EITI implementation
Highly educated workforce