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Deno Gold: Mining Company Threatens the Residents and Environment of Kapan

Canadian “Deno Gold Mining Company” files a slander lawsuit against Armenian environmental activist Yeghia Nersesian 

The company claims that in December of 2012, during a meeting with the Armenian community in the USA, Mr. Nersesian announced that Deno Gold Mining Company applied electric shock to miners[1].

However, the company denies the allegation and has gone to court seeking a refutation of the slanderous charges which it claims tarnishes its “good” reputation. The Armenian press has covered the Deno Gold Mining Company on numerous occasions, thus allowing us to get an insight as to the company’s activities and to gauge the extent as to how really “good” that reputation is.

Deno Gold Mining is one of the subsidiaries of Dundee Precious Metals Inc., a Canadian-based international mining company. The company was established in 2004, in the Syunik Province town of Kapan. In the official web page of Dundee Precious Metals (http://www.dundeeprecious.com)[2] the company’s operating principles are clearly marked - transparency, respect of human dignity, safe working conditions, environmental responsibility, etc. Similar values are indicated in the web pages of almost all mining companies. However, these values are not demonstrated in Armenia and other countries like it, which have essentially become raw material sources for other countries. Deno Gold Mining is no exception to this rule, and has repeatedly violated and continues to violate the above-mentioned values. This is evidenced by numerous press publications, which we would like to refer to in sequence.

Environmental issues 

In its stated principles, Dundee Precious Metals mentions that it has undertaken certain environmental obligations which stipulate environmentally friendly operational activities. However, the facts show that “Deno Gold Mining” does not fulfill its environmental obligations or either does so at an extreme minimum level. For example, the company’s Geghanush tailings dump has experienced a number of break downs[3]. According to studies, on November 15[4] and December 1 of 2012[5] considerable environmental damage was caused to the surrounding land and water resources (the damage was estimated respectively at 2.280 million AMD and 2,000,048 AMD).

In fact, residents of the community initially opposed the construction of the tailings dump[6]. However it was built, thus violating the right of residents to participate in a decision making process that would affect them.

Moreover, the company initially claimed that the Geghanush tailings dump project had been designed by incorporating the best of international experience, and that therefore, the impact of the dump on the environment had been reduced to a minimum. Two accidents that occurred in the tailings dump prove the opposite. In 2013, according to the report drafted by RA National Bureau of Expertise, SNCO, the piping system of the Geghanush tailings dump was constructed on the old dump, that violations were made, and that it doesn’t comply with the original blueprints. Funding was made through a $4 million credit instrument of the European Bank for Reconstruction and Development (EBRD)[7]. If there are deviations in the design and construction, and accidents are being recorded in the tailings dump, hence the funding failed to achieve its objective. Last, but not least, the environment and the residents of the community are not protected against future accidents.

In a 2007 environmental audit of the “Deno Gold Mining” CJSC, a number of violations in the mining sector were uncovered. According to the Syunik Regional Environmental Inspectorate, the fines for the violations exceeded 300 million AMD; that’s to say that 550 kg of gold were misappropriated[8].

In 2008, the company was subjected to a double audit by the RA Ministry of Environmental Protection of RA double audit. As a result, the fines levied in 2007 were reduced by almost 20 fold to 12 million AMD; that’s to say that 50 kg of gold were misappropriated. Mining expert Samvel Gasparyan, a member of the first inspection commission who detected the above mentioned violations, was not included in the inspection commission during the double audit in 2008 and the contract with him was terminated[9].

Hence, reasonable doubts arise that there are corruption risks in the activities of Armenian officials. And the irresponsible operations of mining companies leads to the fact that the organization damages the environment and then avoids full liability. Thus we rightly ask - Did the Canadian company assume environmental responsibility with the intent to only partially implement them, without compensating for the damage caused to the environment and people, via a tacit agreement with corrupted officials?

In addition, scientific studies of the RA National Academy of Sciences’ Center for Ecological Noosphere Studies also shows that as a result of the activities of Deno Gold, the Kapan community and surrounding communities have been polluted by heavy metals and toxic elements. However, the company has not taken any steps to eliminate the damage[10].

Moreover, due to the exploitation by the company of the Shahumyan poly-metallic gold mine, it is being impossible to live and to be engaged in agricultural activities in that area. But the complaints of the residents remain unanswered[11]. 

Respect of a man’s labor 

In its stated values, Dundee Precious Metals notes its respect of a man’s labor and career development, the importance of honesty in communication with partners, and finding solutions which will respect the needs of the people and corporate interests. However, since 2009 Deno Gold has experienced periodic waves of protests and strikes lasting days on end. The reasons for the unrest are unpaid salaries for night shifts and dangerous work, employee layoffs and low wages. Moreover, strikes and complaints are followed by unjustified terminations which trigger new waves of protest[12]. Most of the workers fired are those who have participated in the strikes and have demanded the restoration of their violated rights[13].

As of 2011, according to the data, the company owes its employees 11 million AMD just for night shift payments per month. Hence, it has an annual debt of 264 million AMD just for night shift payments, which accumulated due to the incorrect application of the law[14].

Many of the workers were able to receive their salaries only by court order[15].

It was only in the spring of 2011 that Deno Gold Mining fully paid its former and current employees for their 2005-2007 unpaid night shifts.[16]. One court case vividly illustrates the extent to which Deno Gold Mining takes care of the health and the protection of the rights of its employees.

The company had fired one employee who fell sick due to working in the mine, thus avoiding transferring him to another workplace more appropriate to his state of health and refusing to cover medical treatment costs. The employee was forced to file a lawsuit against the company. Only then was he able to restore his right to work and receive medical treatment[17]. 

Operational Transparency

The company indicates that it works transparently and openly with its employees and partners. However, it mostly does not bring forward legitimate arguments for dismissing its employees. Besides, a significant violation of a transparent work-style is that Deno Gold Mining repeatedly refuses or avoids providing information about its activities, which directly relates to the health of the residents of the RA and environmental problems. The media has repeatedly mentioned that they are not provided with the results of the environmental audits of 2007-2009. 

Environmental organizations have also applied to “Deno Gold Mining” in order to obtain the copies of environmental audit acts implemented to date and inquiries have been sent to find out whether the employees have medical insurance, what kind of medical examinations the workers undergo, what kind of diseases were discovered, etc. 

In fact, “hetq.am” online newspaper notes that they have a document at their disposal where the results of another audit conducted in 2010 are marked. According to this audit the following amounts were not calculated in the reports of the first quarter; Zn-152.20 t, Pb-22.7 t, Au – 38.81 kg, Ag -100 kg. Deno Gold Mining was fined 250 million AMD for the uncovered violations. Today, however, there is no such legal indictment and the Ministry did not note this audit in its reply to Hetq Online. Where did this indictment disappear and what kind of transparency and accountability can we speak about?[18] 

But many of the inquiries remain unanswered to this day. During a recently organized conference, the company’s newly appointed director Hrach Jabrayan publicly announced that he is not going to provide environmental activists with any information about their activities because “they have offended him”[19]. This merely goes to prove that the company is not working openly and transparently.

Safety at issue

The company also points out that the health and safety of their employees is of paramount importance in their system of values and that there can be no question about the safety of workers. But unfortunately, a number of deaths have been recorded in the Deno Gold mine. There are at least 6 deaths recorded by the Armenian press that occurred in 2006, 2008, 2009 and 2011.[20] We are aware of the investigation results of only one of these deaths. According to the results, a number of mandated working conditions have not been met, which could lead to these accidents, although not being the direct causes of them[21]. The question is, which are the security guarantees which cannot be subject to further discussion and which should protect the lives, health and safety of the employees of the company. Do employees in fact have life insurance contracts? By the way, on the official Dundee Precious Metals website, only one death at Deno Gold Mining Company has been listed[22]. What answer has Deno Gold Mining Company given concerning all the deaths mentioned in the media? What are the causes of the deaths of these employees? Why has the company failed to provide any public explanation to date?

Community and social projects

It’s hard not to share the belief of Dundee Precious Metals Company that companies must strive to create better living conditions for the residents of the community where they operate and to make further investments in this matter if needed. But as a result of Deno Mining Company’s operations, a lot of people have either left their place of residence or have been evacuated. But the question arises, how does the company envisage helping the community and making it a better place for living? Is evacuating residents from their homes the best solution they have got?

A lawsuit against an environmental activist and a new project on exploitation of mines

 Deno Gold Mining Company has repeatedly violated the rights of its employees. Its operations have damaged the environment and caused injury to people’s health. It has not ensured the safety of the tailings mine that was being exploited. To date, no information requested by the public has been provided. Despite all of this, the company still has plans to openly exploit the Shahumyan gold mine, even when there are numerous professional arguments against it[23]. It’s true that the company denies the rumors of ever using electric shock on its workers and is trying to regain its “good reputation” through a lawsuit. However, it must be pointed out that this information has appeared in the media long before Yeghia Nersesian’s speech. According to the periodical Syunyats Yerkir, former Deno Gold Mining Company General Manager Robert Faletta was willing to subject disobedient miners to electric shock. According to the periodical, “the owner of the company has been informed about it a little bit late, which caused it to become a subject of special consideration”[24].

In April 2012, one of the environmental activists, Mariam Sukhudyan, had pointed this out during an interview[25], but to date the company has not presented a refutation demand. Incidentally, in an article placed on 1in.am, it is noted that “Arajin Lratvakan has been successful in verifying the fact that electric shock equipment had been purchased. But it was not for disobedient workers and had to be used in special cases”[26]. Now the company denies that they ever purchased electric shock equipment. Probably the news site also had to be summoned for questioning? So shouldn’t the news site be questioned as well and asked to clarify the exact source of this information? One notable fact is that the company general manager Robert Faletta was fired in 2011, after continuous worker strikes and court cases and rumors about the use of electric shock.

The question then arises, why was a lawsuit filed against Yeghia Nersesian and why especially after the speech he had made in the United States? Conclusion can be drawn that Yeghia Nersesian’s speech in the USA enjoyed wider publicity, and Deno Gold Mining Company demands not to tarnish its reputation to have better opportunities to get a 40-million-dollar loan for exploiting a new mine. However, many citizens are skeptical about its statements because they have already witnessed serious contradictions between the values proclaimed by Deno Gold and its actual operating procedure. The good reputation of the company is being tarnished due to its own flaws, violations and lethal activities. Therefore, we have substantial reason to believe that the pressure used against activists seeks to silence the voice of the environmentalists and to implement the company’s next project, which is to exploit an open mine situated only 1.5-2 km away from a residential area.

We demand that Deno Gold Mining Company, owned by Dundee Precious Metals, remains committed to its declared values of not causing harm to the environment. They must also adhere to their assumed obligations and respect the rights of the workers and provide them with working conditions that will not endanger their health and lives.

We would like to appeal to our compatriots the world over to give voice to their complaints regarding the irresponsible and illegal functioning of German, Canadian, American and Russian companies. We urge our compatriots to follow the operations of all those companies which exploit mines in Armenia and fail to meet their obligations, thus causing harm to the Armenian people and the nature of Armenia. We make this appeal because your direct participation and support in this matter is of crucial importance.

We urge you to join our struggle through any means accepted by the law – appeals, claims, petitions, preparing and publishing complaints, interviews with the media, protests in front of the administrative offices of these companies and other major events. Any lawsuits filed against environmental activists cannot stop us to fight against the eco-colonization of Armenia and for the protection of Armenia’s Mother Nature and for establishing social justice. Through concerted efforts we will be able to put an end to the numerous environmental problems in Armenia much more easily and quickly. Be informed, join, give your support and don’t forget that the protection of the environment is also the protection of Armenia!

(For references, we have put those articles which are translated into English in the Armenian media, the ones that have not been translated, you can find in Armenian).


Pan-Armenian Environmental Front

Facebook group: https://www.facebook.com/groups/armecofront/
E-mail: [email protected]

Contact persons : Levon Galstyan, Anna Aghlamazyan, Mariam Sukhudyan

Skype: armecofront 

[1] http://www.youtube.com/watch?v=HnbdQbRDEKQ (22:28)

[2] http://www.dundeeprecious.com/English/sustainability/overall-approach/our-values/default.aspx

[3] http://www.pastinfo.am/hy/node/6459

[4] http://www.ecolur.org/en/news/mining/already-second-breakdown-at-deno-gold-mining-in-2012-photos/4348/

[5] http://arminfo.am/index.cfm?objectid=6217C0D0-3D2E-11E2-9013F6327207157C

[6] http://archive.168.am/am/articles/30704-pr

[7] http://www.ecolur.org/en/news/waste/what-other-surprises-prepared-from-geghanush-tailing-dump-if-it-construction-with-violations-of-norms/4753/

[8] http://old.hetq.am/am/ecology/deno-4/

[9] See link 7

[10] http://www.ecolur.org/en/news/cities/doing-whatever-they-want-wherever-and-how-they-want/3824/

[11] http://www.ecolur.org/en/news/mining/environmentalists-and-deno-gold-mining-crossed-swords-again/656/

[12] http://old.hetq.am/en/court/dino-gold-5/

[13] http://www.azatutyun.am/content/article/1955563.html

[14] http://hetq.am/arm/print/1774/

[15] http://www.ecolur.org/en/news/mining/who-will-pay-for-night-shift-at-underground-shafts/1058/

[16] http://ecolur.org/en/news/mining/deno-gold-mining-company-served-debts-for-overtime/2545/

[17] http://econews.am/hy/?p=13155

[18] http://old.hetq.am/en/economy/pdac/

[19] http://www.youtube.com/watch?v=vfGwZ7FYgCE

[20] 1) http://hetq.am/arm/print/10709/, 2) http://www.armtown.com/news/am/a1p/20080110/56200/, 3) http://old.hetq.am/en/society/dino-9/, 4) http://news.am/eng/news/47135.html

[21] http://www.ecolur.org/en/news/mining/deno-gold-mining-company-workers-death-cause-revealed/2262/

[22] http://www.dundeeprecious.com/English/sustainability/our-people/health-and-safety/health-and-safety-data/default.aspx

[23] http://www.ecolur.org/en/news/mining/we-oppose-to-opencast-development-of-shahumyan-polymetallic-mine-in-kapan-armenia/2008/

[24] http://www.1in.am/arm/armenia_society_10446.html

[25] http://www.1in.am/arm/a_a_17788.html

[26] See link 21

Comments (9)

Below you can find the main goals of Pan-Armenian Environmental Front. We pursue the realization of our goals irrespective of the companies we have to deal with. The aim of Pan-Armenian Environmental Front (PAEF) is to ensure the protection of nature, rational economic development and social justice in Armenia. To achieve this goal PAEF will pursue the protection, restoration and development of the environment, rational usage and reproduction of natural resources, as well as will aim to prevent and remove negative impact of the economic or other activities on the environment and distribute natural resources on the principle of social justice. To achieve the stated goals, PAEF organizes a pan-Armenian coordinating network of environmental monitoring, which will act exceptionally on principles of legality, transparency, accountability and rationality. The results of the monitoring will be presented to the society and the Government. If the Government for some reasons doesn’t have the opportunity or the wish to stop the violations and solve the raised problems, PAEF will be determined to demand solutions within the scope of Constitution and laws or, by its own efforts, prevent and recover the damage, which was caused or/and is going to be caused to the nature.
Dear Hetq, Thank you for your attemt at clarification, however it does not justify what you have done. By providing a forum for them to write their slanderous lies, you are guilty by association. If you do not agree with what they have written, why would you post it on your site? It is an article chock-ful of lies, yet you have chosen to publish it. There is no lawsuit against an environmentalist, there is however a lawsuit against a so called activist who tells lies and throws around accusations without any proof or evidence. The onus does not lay on Deno Gold to prove its innocence against any false claims, lies, or ludicrous accusations by someone who has nothing better to do. This is the same person who calls himself a soldier. When the acussing party comes with even a little bit of proof, then by all means go ahead and write what you want. However, at the moment, you are just encouraging an organization to spread false information against a company which is very well respected. They have also cited Hetq as a reference, as well as having information against Deno. When the above article is proven to be a lie, then many of your readers are going to be left wondering as to why Hetq would allow a piece like this to be on its website. With all due respect, not many people have heard of the Pan-Armenian Environmenatl Front. Have you tried googling the website? So the general public is not going to say they heard the false tales from them, the fingers will be pointed squarely at you. I sincerely hope that Hetq would be wise enough to remove this piece from its website, and restore some of the integrity it is know to have. I implore you as a concerned citizen of Kapan, not to partake in spreading lies and rumours about the one company in the city which helps us prosper. I believe in freedom of speech just like any other person, however, the said words should be substantiated with evidence, and the burden of proof belongs to the ones slinging the mud. Dear Hetq, again, I kindly ask you to remove this article, as its contents are far more poisonous to our society than any mine could ever be.
Shahumyan mine will be developed closed only way for residents of Kapan does not matter which company will develop Shahumyan mine. For the state, too, does not matter which company to develop Shahumyan mine. For the state, it is important that the company is in the development of the field did not steal the gold. For the state, it is important that the company is in the development of the field meet the governmental requirements and not to private individuals.
Dear Tankdown, Let us again clarify some points. Said “activist” Yeghia Nersesyan has been taken to court by Deno Gold for the accusations he made against the company. As you state, it is up to the defendant to prove his claims as valid. If not, he will be held accountable. The Pan-Armenian Environmental Front, in its article cites a number of articles of various Armenian media outlets, not merely Hetq. If you peruse these citations you will see that many deal with past legal proceedings involving Deno Gold dealing with unpaid salaries, safety and other issues. That’s to say they deal with real issues and not innuendo. The Front also cites the RA Academy of Sciences report (via Ecolur) about Kapan pollution concerns. It would behove the company to refute these and other charges in an official capacity. You argument that “not many people have heard about the Front” is really beside the point. Again, the current court case will decide whether activist Nersesian engaged in slander or not. In the meantime, Hetq would welcome a company rebuttal to the Front’s article. As you state, we all believe in a free and open press that serves as a forum for opposing viewpoints.
Dear Tankdown, We all want to get correct and unbiased information about the activities of mining companies in Armenia. If all the violations, cases of death, risks of corruption and etc. stated in this article do not correspond the reality, people will be glad to get the opposite facts. If the news sites give misleading information and cast a shadow on the good reputation of the company, let Deno Gold file a lawsuit against the news sites as well (we all see that the activist's one sentence was enough to file a lawsuite against him). It's very important that people see all the violations by mining companies, see the contradictions between the values proclaimed by these companies and their actual operating procedure, realise the negative long- and short-term impacts that mining industry can have on their health, nature and community.
Please check out these two articles by Hetq.am as well. Does the company reject the statements and facts brought in this research? http://old.hetq.am/en/court/dino-gold-8/ http://old.hetq.am/en/economy/dino-gold-9/
հմմ, բա դատարան տալիս են ինչ որ բան ապացուցելու համար: Խնդիրը որն ա? Է թող դատարանը արդարացնի, կամ չարդարացնի, ինչի եք սենց տառապում?
Մեր ճակատի հիմնական նպատակները սրանք են, որոնցով զբաղվել ենք և շարունակելու ենք զբաղվել` առանց տարբերություն դնելու թե ինչ ընկերություն է գործունեություն ծավալում Հայաստանում... «Համահայկական բնապահպանական ճակատը (ՀԲՃ) նպատակ է դրել մեր հայրենի բնության պահպանության, տնտեսության բանական զարգացման և սոցիալական արդարության ապահովումը: Այս նպատակին հասնելու ճանապարհին, ՀԲՃ-ն հետամուտ է լինելու բնական միջավայրի պահպանմանը, վերականգնմանն ու զարգացմանը, բնական ռեսուրսների ռացիոնալ օգտագործմանը և վերարտադրությանը, շրջակա միջավայրի վրա տնտեսական և այլ գործունեության բացասական հետևանքների կանխմանը և վերացմանը, սոցիալական արդարության սկզբունքով բնական ռեսուրսների օգտագործման արդյունքների բաշխմանը: Նշված նպատակին հասնելու և խնդիրների իրականացման համար ՀԲՃ-ն ձևավորում է բնապահպանական մոնիթորինգի և գործողությունների կազմակերպման ու համակարգման համահայկական ցանց, որը բացառապես պետք է գործի օրինականության, թափանցիկության ու հաշվետվողականության, բանականության սկզբունքներով: Մոնիթորինգի արդյունքները կներկայացվեն հանրությանը և պետական մարմիններին: Եթե պետությունը տարբեր պատճառներով հնարավորություն կամ ցանկություն չի ունենա վերացնելու խախտումներն և լուծելու ներկայացված խնդիրները, ապա ՀԲՃ-ն ձգտելու է Սահմանադրության և օրենքների պահանջների սահմաններում պահանջելու կամ ինքնուրույն կերպով կատարելու բնությանը հասցված և/կամ հասցվելիք վնասի կանխարգելման և վերականգնման աշխատանքը»:

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