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By Vahan Hovanissian
Yerevan, 3 April 1997 (RFE/RL) -- Armenia is embarking on an ambitious
program to develop its gold resources.
An American-Armenian joint venture, called Global Gold Armenia, hopes to
produce 18 tons of pure gold from Armenian deposits by
the year 2000. That would make the small Caucasian republic the 13th
largest producer in the world.
An RFE/RL correspondent in Yerevan reports that Armenia is a traditional
source of the precious metal, having produced up to 10 tons
annually in peak years during the Soviet era. But with the dissolution of
the USSR and the growing turmoil in the Caucasus, traditional
rail export routes through Azerbaijan were cut, and exports ceased.
In addition to the external political problems, the technical capacities
of the local industry are limited by the outdated and inadequate
equipment left over from the Soviet times.
Into this environment stepped Global Gold Armenia, which plans to begin
operations by September. The initial target is to produce 6
tons of what is called Dore's alloy, which has a gold purity of only about
70 percent. Plans are in hand however for the construction of a
refining plant which would bring the product up to 99 percent purity.
Our correspondent reports that the next step, as early as next year, is
for the old mine tailings to be worked over for gold left from past
processing. That's expected to yield some 24,000 ounces of gold.
Initial investment is set at $10 million, two-thirds of which will be
provided by the U.S. side of the joint venture, and the remainder by the
Armenians. Exports this time would most likely be routed through Georgia
to the Black Sea, and then to international markets.
If the initial phase succeeds -- and Global Gold's representative in
Yerevan Marcus Randolf is optimistic -- then the scene is set for
bigger things. Mining of fresh ore would begin at two sites: Zod, with a
production target 5 tons of gold, and Meghradzor, with a target
of 2 tons. A new processing plant would also be built.
As there's only about 10 years' worth of known gold deposits in Armenia,
the joint venture also envisages a comprehensive program of
exploration. Mining Industry Ministry official Sergei Hovakimian told our
correspondent there are certain to be sufficient deposits of
gold which have yet to be located
During this second phase the rate of investment would rise steeply, with
inflows from the American partners foreseen as exceeding $200
million. Profits would be split on a 50:50 ratio.
Looking a few years ahead, production at Zod and Meghradzor would be more
than doubled to reach the expected 18 tons of high-grade
gold by 2000.
Our correspondent reports that if the full program goes through as
envisaged, it will represent the biggest investment to date in the
Armenian economy. All being well, the Armenian government hopes to
organize another similar-size investment in the sphere of
non-ferrous metallurgy, specifically copper and molybdenum, by the turn of
the century.
Vahan Hovanissian is a Yerevan-based analyst who contributes regularly to
RFE/RL.
03-04-97
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