Monday, February 24 2020 14:28
Alexandr Avanesov

Head of SRC: Armenia is actively negotiating with China on the  construction of copper smelting complex in the republic

Head of SRC: Armenia is actively negotiating with China on the  construction of copper smelting complex in the republic

ArmInfo. Armenia is actively negotiating with China on the construction of a copper  smelting complex in the republic. This was announced on February 24  at a meeting of the RA National Assembly Commission on Regional and  Eurasian Integration by Chairman of the State Revenue Committee (SRC)  of the Republic of Armenia David Ananyan, who presented a draft  agreement on the exchange of information on goods and vehicles of  international transportation moving across the customs borders of the  Eurasian Economic Union ( EAEU) and the People's Republic of China  (PRC).

According to David Ananyan, the negotiations with the Chinese side  were permanent, either pausing or resuming. From the end of last  year, they resumed with renewed vigor.  The head of the Committee  noted that the construction of a smelter involves attracting large  investments, and this requires an economically sound project. In this  context, various options are being considered, including the  possibility of creating a consortium of large Chinese companies.

The chairman of the SRC emphasized that the share of exports of  Armenian products to the Chinese market is made up of ore  concentrates.

Thus, in 2018, imports of Chinese goods to Armenia amounted to $  376.5 million, and in 2019 this figure increased to $ 453 million.  Moreover, the first 10 largest groups of goods in 2018 accounted for  25.3% of the turnover, in 2019 - 24.7%.

On a large scale, shoes ($ 24 million), tires ($ 14.3 million),  equipment for washing natural stones ($ 13.3 million), as well as  cell phones, diode transistors, etc. are supplied from China to  Armenia in the 10 largest groups of goods. In 2018, the export of  Armenian products to China turned out to be at the level of $ 97.5  million, of which 99% of all exported products accounted for ore  concentrate. In 2019, export volumes increased to $ 186.1 million, of  which the specific gravity of ore concentrate again turned out to be  predominant - 99.8%.

In this regard, as David Ananyan noted, the construction of a smelter  is becoming a priority for Armenia, which will allow exporting not  concentrate, but finished products.

Earlier, ArmInfo reported that discussions began in Armenia on  conducting research on the principles of public-private partnership  with the participation of the largest Armenian market players -  Zangezur Copper-Molybdenum Combine, Vallex Group, Teghut CJSC,  Akhtalin and Agarak Copper-Molybdenum Combines. In order to avoid  risks, it was decided to conduct in- depth and comprehensive studies  in order to develop a serious feasibility study for the project.  The  Armenian authorities express the hope that it is the Armenian  companies that will order further research.

It should be noted that Chinese investors showed interest in building  a new, modern copper smelter in the Armenian city of Alaverdi. At the  end of October last year, the office of the Deputy Prime Minister  announced that the Chinese company Citic was interested in the  project to build a new copper smelter in the city of Alaverdi,  equipped with new technologies that almost completely neutralize  emissions, and was ready to discuss further details. It was agreed  that in the near future a delegation of the Chinese company will  visit Yerevan to continue negotiations.

To note, Citic or formerly the China International  Trust Investment  Corporation is one of China's largest state-owned  investment  corporations, which was founded in 1979. The company  conducts  activities in the field of financial services, resources,  energy,  manufacturing, engineering, real estate, etc.

Meanwhile, in July this year Vallex Group of Companies issued a   statement in which it welcomed the statement of the lawmaker from the   ruling bloc "My Step" Aren Mkrtchyan, made at a parliamentary hearing   on July 19 that VTB Bank was ready to donate to the Armenian state   the property complex of the Alaverdi plant, which was transferred to   the bank as collateral.

Information appeared on the market that the Teghout copper-molybdenum   mine was already sold by the bank or transferred to the management of   the investor in the person of the Russian Copper Company, one of the   shareholders of which is Russian businessman Norayr Petrosyan. After   resolving the issue of neutralizing the environmental risks   associated with strengthening the tailings dam, the field, around  which disputes have not subsided for many years, will be   re-activated.

It should be noted that the property complex of the Alaverdi smelter   producing crude copper is secured by a VTB Bank loan of $ 380   million, which was granted to the Vallex group of companies for the   development of the large Teghout copper-molybdenum deposit, which was   discontinued due to environmental problems as early as last year  after the suspension of co-financing by one of the foreign lenders.   In these conditions, credit servicing became extremely unbearable for   the group.

Moreover, at the beginning of this year, the blast furnaces of the   Alaverdi enterprise itself were also extinguished due to serious   environmental risks. Previously, the company worked to circumvent   stringent environmental rules through informal agreements with  relevant government agencies to ensure the production and export of   blister copper and to preserve jobs. However, the new government,   worried about risks, set stringent conditions and the company had to   be stopped.

To recall, the Vallex Group CJSC was established in 1998 and until   recently had united 20 subsidiary and affiliated companies. Among   them were Teghout CJSC, founded in May 2006, 100% of the shares   belonged to the Cypriot Teghut Investments Limited, 100% of the   voting shares of which in turn were controlled by the Armenian Copper   Program CJSC (ACP), wholly owned by the group's president Valery   Mejlumyan , as well as Base Metals, which operates a copper-gold   deposit in the village of Drmbon, Martakert region of the NKR. ACP   also operated the Alaverdi Copper Smelter, where raw materials from  the group's fields were delivered for rough processing.

Over the past 2-3 years, the Vallex Group has been negotiating with   Chinese investors to create a new, modern, environmentally friendly   metallurgical enterprise on the site of the old Alaverdi plant, which   has 200 years of history. However, the results of the negotiations   are not yet known. It is only known that by the decision of the   Deputy Prime Minister of Armenia Tigran Avinyan on July 12 last year,   a working group was created to provide state support to the   preparatory work as part of the program for the construction of a new   smelter by the Armenian Copper Program CJSC. It was reported that the   composition of the working group has already been approved, which   will be headed by the head of the office of Avinyan Varag Sisserian.   It included representatives of 4 ministries - Deputy Minister of   Economic Development and Investment Avag Avanesyan, Deputy Minister   of Nature Protection Gnel Sanosyan, Deputy Minister of Finance Arman   Poghosyan and Deputy Minister of Energy Infrastructures and Natural  Resources Vardan Gevorgyan. ArmInfo has not yet succeeded in attempts   to verify the accuracy of the information and find out the details of   the negotiations. 

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