A leading Armenian mining company said on Tuesday that it hopes to resume soon production operations at a large copper mine in northern Armenia and rehire hundreds of people that worked there until this month.
The company, Vallex Group, sent the vast majority of its 1,200 employees working at the Teghut deposit on indefinite leave on January 12, citing the need for “planned prophylactic repairs” of the mine’s waste disposal facilities. It announced on February 2 that it will lay them off due to what it expects to be a “prolonged stoppage” of mining and ore processing at Teghut.
In its latest statement, Vallex specified that the layoffs cover over 85 percent of its Teghut workforce. But it said it will keep a skeleton staff of around 300 employees tasked with maintaining sophisticated equipment and guarding the vast mining site.
The company also said 200 other laid-off workers will be transferred to other mining enterprises belonging to it. Those include a copper smelter in the nearby town of Alaverdi and metal mines in Nagorno-Karabakh.
“The company is hopeful that in case of a favorable course of events it will manage to restore, within a short period of time, the [Teghut] staff formed over the years,” added the statement. It cited no possible time frames, saying only that Vallex will be able to “quickly relaunch production after solving problems facing the company.”
The Liechtenstein-registered company announced the layoffs several months after expressing its intention to significantly increase copper ore extraction at Teghut. It said on February 2 that it needs to hire Armenian and foreign consultants for conducting “scientific research” for that purpose. It did not elaborate.
In recent months, environment protection groups have repeatedly reported toxic leaks from Teghut’s waste disposal dump contaminating a nearby river. Vallex has denied those reports.
The environmentalists opposed open-pit mining at Teghut even before it was launched in 2014. They argued, among other things, that the multimillion-dollar project will lead to the destruction of hundreds of hectares of rich forest.
Vallex pledged to plant a new and bigger forest in adjacent areas. It also promised to create 1,300 jobs, build new schools and upgrade other infrastructure in nearby villages.
The Teghut mine generated over 42 percent of Vallex’s total operating revenue which soared by about 32 percent to $358 million last year. The mining group benefited from rising international prices of copper and other non-ferrous metals.
A loan extended by the Russian commercial bank VTB has covered most of $380 million in capital investments which Vallex claims to have made in Teghut. The company also tried to secure through VTB a $62 million credit from a Danish pension fund for buying Danish mining equipment.
Denmark’s Export Credit Agency (EKF) initially agreed to guarantee the export credit. However, EKF withdrew the guarantee in October, accusing the Teghut operator of failing to comply with environmental standards.
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