“Vallex” group companies announce, that on October 19, 2018, the operation of Alaverdi Copper Smelter of “ACP” cjsc has been suspended (copper production in Alaverdi has been stopped for four times during its 250-year history). Reasons for the suspension of “ACP” activity are several and are presented below:

Since October 1, 2017, despite the permissible limits of sulfur dioxide’s annual allowance of 5,600 tons, the volume of the emissions of Alaverdi copper smelter to the atmosphere was about 38,000 tons annually. According to 2017 data, the company has paid AMD 323 million to the state budget for the above emissions, and according to the results of January-September, 2018 – 340 million AMD. Part of the above mentioned amounts, as set by law, has been returned to the nearby communities as a compensation for environmental damage. At that, the reason for those emissions is technological, and the only solution for this is the construction of a modern technology copper smelter on the base of Alaverdi copper smelter, which requires large investments.

As a result of the inspection in the Company in August, 2018, the Environmental protection and Mining Inspection body submitted to the company an additional penalty act for AMD 380 million, which refers to the emissions in the period from July 2015 to July 2018. According to the instruction given in the same act, the Company is required to reduce the emissions for 90% by December 25 of the current year.

At present, it is impossible to realize neutralization of a sulfur dioxide with the equipment and technology currently used in the smelter. For the emissions  neutralization, it is necessary to establish a chemical workshop in the copper-smelter complex. Taking into account the situation of mining and copper production in our country, “Vallex” group has repeatedly stated, that in terms of environmental protection and to secure the modern copper production a new factory is needed. For the construction of the last, negotiations with Chinese “Citic Group” company had been held. New factory construction project by Chinese project is now under development. Its construction would be especially efficient in the territory of Alaverdi copper smelter, where all the necessary platforms and infrastructures are available.  At this point, we can say, that as a result of numerous meetings and lengthy negotiations with the Chinese party, there is a positive shift in the realization of the project on new copper smelter construction.  At that, the role of the government in the implementation of the above-mentioned complex program and the support within its competence are essential. For this aim, a working group has been set up in the government.

At the same time, we inform, that for the credit funds borrowed from VTB Bank for the construction of Teghօut mining complex, the bank,  along with the other guarantees, had  demanded to pledge also the assets and shares of ACP cjsc (for the same loan). However, legal procedures for the Bank’s collateral sale have not yet been implemented.

We also inform, that the aim of all types of meetings with the government was to find solutions, which are beneficial for all stakeholders, and first of all for our citizens.

Taking into account the aforementioned and the issues, related to the future operation of the plant, the Company has made a difficult decision – to suspend the activity of the copper smelter and, accordingly, to resolve employment contracts with employees, on the initiative of the employer, in accordance with the procedure and terms established by the Labor Code of the Republic of Armenia. Over the next couple of working days the employees will receive notifications on resolving labor relations on the basis of staff reduction. The relevant state structure also will be properly informed about this.

Mass media and PR department of “Vallex” group companies