By Atom MarkarianThe aggregate output of Armenia’s metallurgical enterprises jumped by 33 percent to about 130 billion drams ($290 million) last year and is on course to maintain its rapid growth in the coming years, a senior official said on Tuesday.
Artur Ashughian, a department head at the Ministry of Trade and Economic Development, attributed the production surge to strong global demand in non-ferrous metals and the privatization of the country’s largest mining plant.
The Zangezur Copper and Molybdenum Combine, which employs thousands of people, was purchased for $132 million in December 2004 by a consortium of local and foreign investors led by German’s Cronimet metals group. The latter owns 75 percent of the company’s stock, both directly and through its Yerevan-based Makur Yerkat smelter. The remaining 25 percent is controlled by two obscure Armenian firms reportedly linked to senior government officials.
According to Ashughian, the privatization has proved to be a blessing for Zangezur as its new owners have already made considerable capital investments in accordance with their contractual obligations. He said they will invest an additional $157 million by 2008. “This year will see a great deal of modernization at Zangezur,” the official told a news conference.
Ashughian stressed that Cronimet and its partners are also honoring their pledge to smelter copper and molybdenum ores mined near the company’s headquarters in Kajaran, southeastern Armenia. “Furthermore, last year they imported ore concentrates for further processing in Armenia from as far afield as Chile and China,” he said.
Armenia’s second largest metallurgical company, ACP, runs copper mines and a smelter in the northern Lori district. Its principal owner, Valeri Mejlumian, has said that it plans to expand its operations in the near future.
Another major player in the Armenian mining sector is the Indian-owned Sterlite Gold firm that controls the country’s largest gold mines. Its four-year track record in Armenia has been highly controversial. The Armenian government agency accused Sterlite in June 2004 of underreporting more than two metric tons of gold extracted from their mines, a charge strongly denied by the company. Industry sources say its owner, Indian mining tycoon Anil Agarwal, is now considering pulling out of Armenia.