The Armenian government approved on Thursday a tax break for a multimillion-dollar mining project in the northern Lori province that is fiercely opposed by local environment protection groups.
Vallex Group, a private firm, had asked the government to delay by three years collection of a 20 percent value-added tax (VAT) from 2.7 billion drams ($6.7 million) worth of imported industrial equipment which it plans to use for mining copper and uranium in the Teghut forest.
The government unanimously approved the request at a weekly cabinet meeting chaired by Prime Minister Tigran Sarkisian.
Economy Minister Tigran Davtian, who recommended the decision, said the tax concession is essential for the success of the controversial project that should result in 1,000 new jobs. Davtian said Vallex Group plans to invest $338 million in the project in the next few years. Equipment imports will make up more than one-third of this sum, he told fellow cabinet members.
“The import of the first batch of the equipment [worth 2.7 billion drams] to Armenia is already in progress,” added the minister.
The Teghut forest lies atop deposits containing an estimated 1.6 million tons of copper and about 100,000 tons of molybdenum. Their extraction would lead to the destruction of some 128,000 trees. Vallex Group says it will offset the damage by planting new trees and creating new jobs in the impoverished area.
Critics say, however, that the project would wreak further havoc on Armenia's green areas that have already shrunk since the 1990s. They say it would also pollute air, water and land in the picturesque region.
Armenian environmental activists have for years been campaigning against the Teghut project with street protests and other actions. In January 2012, more than 200 of them marched to Teghut to demand a halt to ongoing preparations for the launch of open-pit mining operations there planned for 2014.
The government remains adamant in rejecting those demands, however. According to Davtian, the mining project is now being “actively” implemented.