Government protects interests of Alaverdi residents, Prime Minister`s  Assistant assures Alaverdi copper smelter`s staff

ArmInfo. Following the  negotiations between the Government of Armenia and Armenian Copper  Program CJSC (ACP), it was decided to postpone the transfer of  notices of termination of employment contracts to employees of the  Alaverdi Copper Smelter for two months - until February 28, 2019,  Assistant Prime Minister of Armenia Aren Mkrtchyan informed on his  Facebook page.

"Dear residents of Alaverdi, as you know, at the end of October 2018,  Armenian Copper Programs CJSC (ACP) submitted a notice of termination  of employment contracts to employees, according to which it was  planned to terminate labor relations within five days after December  24 of this year.

Following the negotiations between the government of Armenia and  Armenian Copper Program CJSC (ACP), it was decided to postpone the  transfer of notifications about the cancellation of employment  contracts of the company's employees for two months- until February  28, 2019, "he wrote. The Assistant to Prime Minister on  anti-corruption issues expressed the hope that negotiations between  the government and the ACP would continue in a constructive way" in  the interests of the residents of Alaverdi, Lori and the Republic of  Armenia. " At the same time, he assured that the government is  protecting the interests of the Alaverdi residents.

On December 14, ArmInfo, citing the press service of the Vallex  group, reported that rumors of mass dismissal of employees of  Armenian Copper Programs CJSC of the Vallex group do not correspond  to reality. According to the source, since the company suspended  metallurgical production since October 19, 2018, within the  requirements of the Labor Code, notifications of staff reductions  were submitted to all employees of the company until the end of  October. In November-December 2018, employees were not provided with  new notifications. "Attaching importance to the stability of the  Armenian economy, the social situation of the residents of Alaverdi  and the nearest settlements, the vital need to support incumbent  employees and also setting itself the task of eliminating new  tensions during these difficult winter months, the President of the  Vallex group ordered the postponement labor contracts for two months,  after which employees receive new notifications to solve the problem  on February 28, 2019. We hope that our cooperation with the RA  Government will continue to be constructive and mutual  understanding,", the statement reads.

To recall, from October 19, 2018, the activities of Alaverdi copper  smelter producing blister copper were suspended. About 650 employees  of the enterprise lost their jobs. The State Inspectorate for  Environmental Protection fined the plant 380 million AMD ($ 700  thousand) because of a serious violation of environmental legislation  adopted in 2005. The head of the plant, Lusine Mejlumyan, said that  the practical impossibility of fulfilling the requirements prescribed  by the environmental inspectorate brings to the agenda the question  of shutting down the plant. The problem is complicated by the fact  that the property complex of the enterprise is secured by a loan of $  500 million, previously received from VTB Bank for the development of  a large Teghout copper-molybdenum deposit, the operation of which was  also stopped due to environmental problems even last year after the  suspension of co-financing by one from overseas lenders. Under these  conditions, servicing a VTB loan becomes extremely unaffordable for  an enterprise and a serious decline in the level of profitability of  the Alaverdi plant, in fact, may lead to its bankruptcy.

To note, Vallex Group was established in 1998 and unites 20  subsidiary and affiliated companies. Among them is Teghut CJSC,  founded in May 2006, 100% of the shares of CJSC belong to Teghut  Investments Limited of Cyprus, 100% of which voting shares in turn  belong to Armenian Copper Program CJSC, which is fully owned by  Valery Mejlumyan, and also CJSC Base Metals, which operates a  copper-gold deposit in the village of Drmbon, Martakert region, NKR.