On the 17th of September 2010 the vice president of Vallex Group companies Gagik Arzumanyan took part in scientific-practical conference on environmental issues.
Gagik Arzumanyan's report was devoted to the possible environmental issues in the process of the exploitation of Teghout deposit and the main ways to solve them. First of all, he presented the exploitation project of the deposit in general. Speaking about the geological explorations realized during the Soviet times and the results of news explorations realized by the means of Vallex Group, Gagik Arzumanyan mentioned that Teghout deposit is the second in terms of its stock volume coming after Qajaran copper-molybdenum deposit. In Armenia there are 7 million (800.000) tons stocks of copper (molybdenum) 4.5 million (600.000) tons of which is in the Qajaran deposit, 1.5 million (100.000) tons in Teghout mine and the remained 1 million (100.000) tons in the other ten metal mines. The geological explorations have begun in Teghout since 1972 and have lasted about two decades. The stocks have been approved in 1991 by the decision of the State Committee of Stocks of the Soviet Union. It has been followed by the collapse of the Soviet Union, otherwise one could suppose that Teghout deposit would be in such a condition today as is.
Coming to the economic rates of Teghout deposit exploitation project, Gagik Arzumanyan mentioned that about 7 million tons production and processing is being planned, as a result of which, about 25.000 tons copper and 800 tons molybdenum in concentrates can be produced. It will double and will increase by about 20 percent the volumes of molybdenum production in Armenia. The project supposes the investment of about 230 million US dollars and is the hugest industrial project in the history of the country who has recently gained independence. It is planned to create during the construction phase from 1700 to 2000 and during the exploitation process about 1500 working places. Taking into consideration that the axis of the conference was environmental issues, Gagik Arzumanyan circumstantially spoke about Teghout deposit exploitation in the context of environmental issues. He mentioned that as each other economic activity mining supposes certain impact on the environment. In this context, Gagik Arzumanyan gave importance to the equilibration of the social economic and environmental issues, mentioning that mining has a huge weight also for the economies of such states, which can be considered as a model to be followed not only for economic development, but also in the context of the behavior towards the environment. As Gagik Arzumanyan mentioned, the reason for the environmental issues connected with the realized projects in the field of mining in Armenia is that after independence the environmental issues have not been on the appropriate level in Armenia and some businessmen, may be coming out of their interest, have made use of that situation and have not paid enough attention to the environmental issues. However, Gagik Arzumanyan mentioned also about the positive experience in the face of "Base Metals" company of Vallex Group that exploits the copper-gold deposit of Drmbon, the activities of which have been appreciated by the representatives of a number of environmental organizations. He assured that in Teghout there will be a similar kind of exemplary production.
Separating three main elements, Gagik Arzumanyan classified the possible impacts of Teghout deposit exploitation project on environment as impacts on animals and plants, impacts on atmospheric air and impacts on water resources.
In the sense of the impacts on animals and plants, the issue is deforestation necessary for the program realization, the size of which, according to the reporter, will make up 375 ha during the whole realization period of the project. Though in the case of legal deforestation, unfortunately, the Armenian legislation does not demand such thing, Vallex Group companies have proposed an initiative to undertake compensation activities, which surely have been protected by the Government of the Republic of Armenia.
The project of compensation activities is planning to realize afforestation parallel to deforestation in the twice larger territory. Moreover, as Gagik Arzumanyan mentioned, the project supposes not only afforestation but also works of necessary care and the company will consider its mission realized in the case there will be enough conditions to change the territories to the category of forest. It will be possible to avoid the important negative impacts on animals in the sense of big animals. Unfortunately, there are some types of insects which will be in danger, but it is the price we are going to pay for gaining the interests from the exploitation of the deposit.
The impact on atmospheric air will be limited within the territory of sanitary zone. According to the environmental responsibilities undertook by the company, regularly douching will be realized through the douching machines, in order the emissions of dust not to exceed the permissible size. In this context, Gagik Arzumanyan found inadmissible the comparison of the Alaverdi copper smelting company exploited by Vallex Group and Teghout project, mentioning that the smelting company and mining company are completely different types of activities and smelting works are not being planned in Teghout.
Coming to the concerns about the intolerable impacts on water resources, Gagik Arzumanyan mentioned that Teghout will be in Armenia the first mining company where there will be completely closed circulation system of production waters, which means that no outflow will be to the surrounding water environment. As a result of natural steaming of 21 million tons water necessary for annual 7 million tons of mining stones processing, only about 30 percent will be added from the waters of Debet. He also assured that water from other rivers will not be used for the industrial aims.
After the report discussion and question and answer session was organized.
The first question was about the lands near the mine.
Dividing the question into two elements, Gagik Arzumanyan answered that the impacts on the lands, which are outside the territories necessary for the mine exploitation and provided sanitary zone and on other territories, are excluded by the planning solutions.
Coming to the lands that are in the territories necessary for the deposit exploitation, Gagik Arzumanyan mentioned that there have been agricultural territories among them, which have belonged to the individuals and the company has had to obtain them. Some part of them has been obtained according to the free trading principles. In the cases that the previous owner has not expressed a wish to sell his property, the question has been solved by the law adopted based on the Constitution of the Republic of Armenia, according to which if the Government of the Republic of Armenia considers any project as a public priority interest than it is possible to alienate the property belonging to the individual, the citizen by the appropriate compensation. According to the law, the appropriate compensation is the market price of the given property plus its 15 percent. Coming out from it, the company has ordered free assessment of all the property elements, the trading business on voluntary bases connected to which has not been realized, and based on the obtained results, all the owners have been offered market price plus 15 percent as a compensation.
In all the cases, when there have been buildings on those territories the company has been ready to compensate their market price as well, ignoring the fact that those buildings are illegal and there is no legal compensation for them. One part of the owners has denied. In all the cases, when any owner denies in such a situation to alienate his property, the law supposes a possibility to legally argue against the estimated market price. There were owners who have used their chance. Gagik Arzumanayn stressed that there has been no any case to present an alternative estimation during the tens of legal cases, which will present at least in 1 percent higher price for the alienating property than the company suggested. Vallex Group companies have done even more in this sense than the law demands. In the cases, when the farmer has not expressed a wish to be deprived of the possibility of realizing agricultural activity because of his land alienation, he has been suggested to exchange it with a bigger territory situated in not worse place. Some farmers have used that possibility. There have been cases that the farmers expressed a wish to continue their activities in the territories that belonged to them in the past, taking into consideration the fact that the company has not yet begun activity in those territories. Gagik Arzumanyan assured in all those cases the farmers have been provided with that possibility without compensation, namely, as a compensation for its property the farmer has got the price equal to 15 percent more than its market price has been and continues using it at the moment for an unknown period of time.
Gagik Arzumanyan spoke also about the cases when the company had been accused in calculating the size of the compensation based on the lower price than the real price of the alienated lands had been.
In these cases, it is natural to expect that the typical accusation will be grounded at least by the results of the alternative estimation. However, no document of such estimation results have been presented, which they quite often have tried to justify by the lack of the appropriate financial means. As Gagik Arzumanyan mentioned, the company formally has suggested the community to create a special fund for that reason, to which the company is ready to give without any expectations the whole money necessary for alternative estimation of any property of any farmer in order the community to use that money for the realization of the alternative estimation of the given land. No farmer has made use of that possibility. The reason is clear, all people knew that any alternative estimation will justify that the market price suggested by the company, in reality, is not low.
Another raised question concerned the expected interests of Armenians instead of huge deforestation, environment pollution and elimination of ecosystem.
Gagik Arzumanyan first of all spoke about the huge qualification of the sizes of deforestation, mentioning that the evaluation of the volumes will be adequate if we consider them in the context of deforestation realized in Armenia. Bringing the results of environmental organization evaluations, Gagik Arzumanyan mentioned that according to them, the annual surface of the logged trees in Armenia make up about 4000 ha, in the case, when maximum 20 ha territories of trees will be logged in Teghout. The wood volume on the 4000 ha forests annually logged, as Gagik Arzumanayn mentioned, bringing the results of the same environmental organizations, make up 500.000 cubic meters, in the case, when in the whole period of Teghout deposit exploitation about 70 years 57.000 cubic meters will be logged, namely, annually from 2000 to 3000 cubic meters. In the case of illegal cuttings, the country receives no compensation while in the case of Teghout project, as it has been already mentioned, the company realizes afforestation in twice more territories.
Coming to the expected benefits, as a result of Teghout deposit exploitation, Gagik Arzumanyan, first of all, spoke about the place of mining in the economy of Armenia, mentioning that today it has the greatest specific weight in the practical sector and leaving the audience to conclude about the meaning of doubling copper production volumes after 3 to 4 years and increase of molybdenum production volumes by 20 percent, which is the most expensive thing to be exported from Armenia, as a result of Teghout deposit exploitation. According to Gagik Arzumanyan, one of the greatest issues for the Armenian economy is the deficit of trading balance. Naturally, the solution of this issue is the increase in exporting. Mining is not the only field and if there are alternative projects than one must support and encourage them. Naturally, one must realize the mining project which decreasing the possible environmental, allows to essentially improve the competitiveness of Armenia. Concretizing the question for the Lori marz, Gagik Arzumanyan mentioned that in the gross production of marz, the specific weight of mining sphere exceeds 90 percent, 70 percent of which is the share of Alaverdi copper smelting company. The projects of Teghout deposit exploitation will double the production potential of Lori marz. Speaking about the benefits Teghout and Shnogh communities will gain from the realization of the project, Gagik Arzumanyan reminded about the conditions those communities had recently been. According to the official statistics, emigration from Teghout and Shnogh communities has made up 52 percent. Unfortunately, the reality can be even more than official statistics is. Since independence each year the number of first class pupils in Teghout school has decreased. This year for the first time we have growth. During the last decade, annually, men from about 85 families emigrated for outdoor works. This year, for the first time, 82 of them have spent summer in their families. Teghout exploitation project has not yet being realized with its whole strength. At this moment, about 500 people work there, 150 of which are from Teghout, 150 people from Shnogh. The number of the inhabitants who are able to work in Teghout and Shnogh make up 700 people. In the case of Teghout deposit exploitation, the company will have about 1500 workers. In the two frontier communities, which had been at the edge of being evacuated, the labor issue will be solved.
After Gagik Arzumanyan's speech, the organizers of the conference and other representatives of the authorities of the institute quite often quoted him, highly appreciating the meaning of such meetings with the students in the process of professional development.