An interview with Vardan Ayvazyan, Minister of Environmental Protection

The Ararat Gold Recovery Company (AGRC) and the Ministry of Environmental Protection remain at odds with each other. What are the reasons behind this disagreement?

There can be no talk of disagreement between the two of us because one is a business enterprise and the other is an authorized body within the state government. One supervises the fulfillment of legal responsibilities, while the other is obliged to perform the duties with which it has been entrusted.

The enterprise's claim that they have serious disagreements with the Ministry of Environmental Protection is regrettable. The Ministry has always tried to support them, and they are now trying to present that support as a victory for them, as if they had won a major legal battle.

But in reality the first trial ended in a settlement, and the verdict in the second trial was in their favor.

Yes, that's true. AGRC assured us that they would fulfill the obligations we set before them, and that is why we offered support. We gave this enterprise the opportunity to deal with these problems. This also represents foreign investment, and it is our policy to encourage investors, but this does not include exceeding the law. We prefer responsible investors. This is all true. But let me say that regarding the settlement, there is a clause about 460 kg of hidden gold there. We originally stated that it was around 1 ton of gold, but the final figure came to 460 kg. We offered them support, and taking everything into consideration, settled on a figure of 460 kg.

If they had concealed such a huge amount of gold, what do you mean, "we offered them support?"

The hidden gold is mentioned in the claim.

But AGRC paid a lower fine than the one mentioned in the claim.

They paid a fine of 76 million drams. The fine is not an issue of concern to us. It's a secondary issue, which must be examined over time. The volume mentioned definitely exists and can clearly be seen on their records, as well as on geological records. I mean the 460 kg of hidden gold.

There was a second suit as well, where the amount of hidden gold was mentioned as 600 kg. AGRC disputed this claim, and won a verdict in their favor.

We did not dispute the second claim, because the investigation was opened through the signature of the head of the Department for Environmental Protection. They only disputed the signature, not the contents of the charges. We said fine, since we had the chance to reinvestigate the claims, we would agree. We then conducted a new investigation. Let them dispute it if they can. If they are trying to look good, then let them dispute the claim where the hidden amount also includes the previous 600 kg. They had said that there was a signature missing on the previous claim. But sooner or later, the question of the hidden amount will come up and people will ask where it is. We can punish the department worker and his supervisor, but we also have to ask "If you have been provided with ore and have extracted X kg of gold, but you don't have that amount to show for it, where is the missing gold?" We have filed the claim; let them fight it.

Does the new claim cite 600 kg as well?

No, it claims more. We have presented it both to them and to the Tax Department.

AGRC's lawyer, Armen Ter-Tachatyan, has said that it is impossible to hide so much soil.

Tachatyan should stick to practicing law. You know what, he keeps saying 'so much soil', but this isn't soil. When you extract gold, it is possible to remove the part rich in gold and leave the rest, which contains less gold. But the state has provided them with the remaining part as well, so that they extract gold from it, too. The state never told them to remove the 10-gram piece of gold and leave the 1-gram pieces. The state has said that the riches present within the earth have been provided for utilization. It should be extracted fully, but you are extracting only the 10 g pieces and leaving the smaller ones. Another company will not want to use the mine only to extract the 1 g pieces. So this is a matter of efficient utilization.

This investigation was conducted from 2003 to 2005, so it is the result of three years of work.

If you constantly register hidden amounts of gold, why don't you rescind AGRC's license?

The authority to rescind their license belongs to the Ministry of Trade and Economic Development. We have presented the necessary papers so that they discuss the matter and if necessary rescind AGRC's license.

During your meetings, do they mention why they are not making new investments?

I don't understand what exactly they want, because in one letter they threaten to stop new investments and then in the next they say that they are ready to invest 80 million. They say, "We are ready to construct the plant wherever you want, just name it," but then they say that the Ministry of Environmental Protection should not tell them where to build the plant. When the plant was sold, it was in Ararat, so there was nothing anyone could do. They say that they are ready to build a plant 35 km away from the Sevan basin, but they have to be specific as to where, so that we can say then what problems there may be based on that location. They say that they have spent large amounts of money in preparing the previous project. Those people who approved a project in the Sevan basin and accepted bribes for this purpose should be criminally prosecuted. The law prohibits building plants there, but they went ahead and prepared such a project despite being aware of the law.

Doesn't the plant have any environmental problems?

It has plenty of environmental problems. Work at the Ararat plant was suspended for three months. The tailing reservoir contained 40 mg of cyanogens instead of the acceptable level of 0.1 mg.

Why does the plant continue to function at a loss despite rising prices of gold?

I cannot understand how someone can work in gold extraction and not make a profit. Looking at them, one would think that selling vegetables is probably more lucrative than extracting gold. I don't understand it either, but since they are working at a loss, we want to help them minimize that loss. I've told them that since they are losing money, they should give Sotk to the state. This is our opinion, the opinion of the Ministry of Environmental Protection.

But have you tried finding out why they are working at a loss?

Go ask Sharma, why ask me?

They've claimed that the reserves were miscalculated, that in reality there is a lot less available.

They are exploiting Sotk with old equipment today; they haven't made any investments there. We've told them to go work in Meghradzor, instead of causing a five-fold decrease in the productive capacity of Meghradzor. And if they say that the reserves are too little, we say "Give it back to us if it's too difficult for you to mine."