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The Armenian government has given the green light to the construction of a new metallurgical plant which officials say will create more than 1,000 jobs and recycle industrial waste from other mining enterprises generating much of Armenia’s export revenue.

The privately owned facility is to extract ore from several “tailings” dumps in southeastern Syunik province that mainly belong to the Zangezur Copper and Molybdenum Combine (ZCMC), the country’s largest mining company.

The ZCMC’s principal shareholder, the German metals group Cronimet, signed last October a corresponding memorandum of understanding with the government and two other, little-known firms: VSEI Ventures Group and Alyotig. The latter is apparently based in Armenia, while VSEI might be connected with VS Energy International, a Dutch-registered holding company controlled by Russian and Ukrainian investors.

A government statement released on May 7 said Alyotig will be primarily in charge of the project envisaging the construction of a tailings-processing plant in Syunik that will cost $240 million. Some 1,000 permanent and 500 temporary jobs are to be created during the first phase of the project’s implementation, which will run through 2019.

“The project is quite good and we hope that [its first phase] will be fully implemented in the next two or three years,” Energy and Natural Resources Minister Yervand Zakharian told reporters on Wednesday. He said work on the recycling facility will start in the coming months.

Zakharian shed no light on the owners of the new mining operation or the source of their promised investments.

Government permission given to the project took the form of a special draft law that was approved by Prime Minister Hovik Abrahamian’s cabinet on May 7. It is not yet clear when the government plans to push the bill through the parliament.

Zakharian and other officials have argued that the new plant will not only create jobs and boost output in the Armenian mining industry but also stem the decades-long growth of tailings dumps and ponds in Syunik. Hazardous leaks through their protective dams and pipes leading to them have not been uncommon.

According to government estimates, the ZCMC’s tailings storage facilities alone have over 300 million tons of mining waste containing non-ferrous metals.

Mining and metallurgy is a key manufacturing sector of Armenia’s economy, employing more than 10,000 people and accounting for nearly half of Armenian exports, which totaled just over $1.5 billion in 2014.

The mining industry received a major boost in December with the inauguration of an ore-processing plant in the Teghut forest in the northern Lori province. The factory reportedly employing 1,300 people was built as part of a $380 million project to mine copper and molybdenum, which has been fiercely resisted by Armenian environment protection groups. Open-pit mining at Teghut will lead to the destruction of 357 hectares of rich forest.

Earlier in December, the government gave its final approval to a British company seeking to develop untapped gold reserves in the southeastern Vayots Dzor province. The company, Lydian International, plans to invest over $300 million in the Amulsar operation.

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