Larisa Paremuzyan

Lori Regional Governor Warns of Mining Job Cuts Due to Drop in Metal Prices

Hetq talks to Artour Nalbandyan, Lori Provincial Governor of Armenia, regarding the current crisis in the region’s mining sector.

How would you describe the current state of manufacturing in Lori?

Right now, the manufacturing situation in Lori isn’t all that encouraging given the decrease in international metal prices. This crisis has negatively impacted the province’s economy. The gold mine belonging to Stepanavan’s Sagamar Ltd. has been shut for the past month. The gold content in the ore has been a bit less than expected. The plant has sent two-thirds of its 400 workers home. It can’t operate in the black.

What about the Akhtala Mine Enrichment Plant, Teghout Ltd., and the Alaverdi Copper-Molybdenum Plant?

The situation is the same for them. I recently met with the owner of Vallex Group and the Alaverdi plant management. Vallex Group VP Gagik Arzoumyan said that if the crisis continues in this vein, the company and the copper smelting plant can incur yearly loses of US$4-5 million.

This concerns us given that 610 people work at the Alaverdi smelter. If it closed, the impact would be devastating since we cannot offer alternative employment. We have talked to the management at the Armenian Copper Programme and Teghout CJSC about expanding their mechanical production unit in order to hire the laid off workers.

People are talking about 400 workers being laid off at Teghout Ltd. What have you heard?

Teghout Ltd. is also going through tough times due to the fall in copper and molybdenum prices. It’s also had problems with paying off various loans. I don’t want to believe that Teghout will dismiss 400 workers in one swoop. I think the cuts will happen gradually. We must try to find these people other employment.

On the one hand, mining is in a crisis, while at the same time new geological surveys are going on in Lori, especially in the Toumanyan area. What will happen if the surveys have positive results?

Conducting surveys doesn’t automatically mean that mines will open. After studying the reserves, a decision will be made whether to start mining or not.

Unfortunately, mining companies do not hide their inclination to open mines if survey results are promising. Do you agree that all the surveyed mines should open?

I don’t think it will be possible to open all. Take the mine in Fioletovo. The investor wanted to operate the mine but the community opposed the idea. The work stopped. The community’s opinion is very important.

Today, the community of Tzaghkashat is opposed to the proposal made by Teghout Ltd. to conduct a mining survey. Would you support the community on this issue?

Of course. Both I and the government would support residents who have legitimate reasons to oppose operating a mine in their area. Take the Trchkan waterfall incident as an example where the public opinion won. It’s not like the government turns a blind eye to public opinion. 

Photo: Lori Governor Artour Nalbandyan