Thursday, 20 September

“MultiGroup” to the Rescue? Company Resumes Operations at Mghart Gold Mine



The mining sector in the district of Tumanyan, nestled in the picturesque natural splendor of Lori Marz, is expanding without hindrance. The rich copper and gold reserves found here are controlled by three of Armenia’s biggest companies. The mine at Teghut is owned by Vallex Group; Metal Prince Ltd. owns the twelve mines in Shamlugh and the Mghart gold mine is in the hands of Gagik Tsarukyan’s Multi Group.

These companies have made super-profits by selling the mineral ore underground. Metal Prince pays no property tax to the local municipality. This company pays its employees relatively low wages in light of the dangerous conditions they must work in to mine the precious metals. One would think that such a community, despite the production dangers involved, would have seen some trickle-down benefits from such an operation and that the residents would be relatively well-off. However, local residents can be counted amongst the poorest in the district.

“The mine has just done us damage”

Recently, and again without any public notice, Gagik Tsarukyan’s Multi Group resumed operations at the forty hectare open pit gold mine in the village of Mghart and a second tailings dam has now appeared alongside the old one on the grounds of the ore processing plant that he owns in the community. Mghart resident Samson Dallakyan says, “Other than doing damage, the mine brings the village no benefit. All the pasture land has been destroyed. Bulldozers brought in to excavate the pit have blocked off roads leading to our pastures. Only two guys from the village work at the mine.” Multi Group has leased an additional 447 hectares of prime pasture land from the Mghart Municipality for exploratory purposes and large-scale construction is planned for the site. The company is also carrying out exploratory testing in the nearby villages of Ardvi and Hagvi. 16_11-v_avdalyan

Plant Director Varuzhan Avdalyan said, “The former processing plant that belongs to Multi Group was put back on line in May of this year.” On February 4, 2008, “Hetq” covered the issue of back wages owed forty six employees at the Mghart gold mine owned by Gagik Tsarukyan’s “GM Magharo” company. We tried to find out from Mr. Avdalyan whether the workers were ever paid the wages owed them. “I have no information about that. I wasn’t employed by the company back then. The mine didn’t belong to Multi Group at the time in question. Back then, “GM Magharo” leased the gold mine from Multi Group and operated it. Thus our company isn’t responsible for its actions,” argued Mr. Avdalyan. He told us that the processing plant is now producing gold concentrate from the mined ore.

Workers at the mine average 40,000-50,000

“Nothing is being sold right now. There are fifty-four people working in the plant and ten are on assignment. The workers hail from Yerevan, Ararat, Mghart and the nearby village of Ghachaghan. The average wage is 40,000-50,000 AMD per month. Some just get 30,000,” the director said. He was very hesitant about divulging any information on the plant. When asked about the plant’s production numbers he responded, “I really can’t reveal any numbers regarding production. It’s not that they are a secret but we don’t go around advertising those figures. The gold ore used to be sold off to the Alaverdi plant owned by Valery Mejlumyan. They would separate the gold, copper and other minerals from the ore. Today, we don’t sell any of what we mine. The ore stays here.” We also attempted to get Mr. Avdalyan to tell us something about the dispute that flared-up in 2007 between ACP (Armenian Copper Programme) and “Multi Group”. (ACP, a Vallex Group holding, had filed suit with the courts alleging that the mineral content of Multi Group ore was actually less than reported and that, as a result, ACP had incurred $2 million in losses. After the suit, ACP fired some of the employees involved.) Al Mr. Avdalyan could say was, “I have no knowledge of the matter.” 16_11-mghart-1 According to Director Avdalyan, the processing plant is not negatively affecting the local environment. “Everything is operating normally; the chemical processes and the tailings dams.” The Mghart Municipality informed us that the company has also paid its property taxes for the forty hectares on the mine site. This year MultiGroup has paid 1,444,500 in property taxes and 1.4 million for the rent on the pasture land it has leased. Plant Director Avdalyan also said that the company has never turned down a request by the village for help and that MultiGroup has contributed in various ways to the well-being of Mghart. As an example he stated that a few tears ago the village asked them to spare a few of their dump trucks to ferry in some soil and that the company didn’t hesitate to pitch in.


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