Topics Covered
Welcome to Armenia
Overview of Resources
Metals
Investment
Sources
Welcome to Armenia
Armenia is a landlocked nation located in southwestern Asia between Azerbaijan and Turkey. The total area of the country is 29,743 km2, and it has a population of 2,970,495 as of July 2012. The country’s climate is highland continental.
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The national flag of Armenia.
Image Credit: CIA Factbook |
After facing severe hostility from neighbouring countries for several years, Armenia finally gained independence in 1991. However, clashes with Azerbaijan continued and derailed the progress of the nation to a certain extent. After the economic downturn in 2009, its economy has begun to recover steadily with a 2.1% growth in 2010 and a 4.6% growth in 2011. The GDP of the country was $18.17 billion in 2011.The economy of Armenia depends upon large loan packages from Russia, the IMF, and other international financial institutions. Armenia joined the WTO in January 2003.
The natural resources of Armenia are very limited with small deposits of gold, copper, bauxite, molybdenum, and zinc. The mining sector is small in scale.
Overview of Resources
In 2010, Armenia ranked seventh in the world in molybdenum production. The mining sector also produced other metals such as gold, silver, copper, and zinc, and industrial minerals such as cement, limestone, diatomite, gypsum, and perlite. Aluminum foil was produced using the aluminum imported from Russia. Local ores enabled the sector to produce ferromolybdenum and rhenium salt. Diamond-cutting industry has also evolved in the recent past.
Mining experts claim that Armenia has a variety of resources such as iron, lead, basalt, granite, marble, tuff, agate, jasper, obsidian, bentonite, and zeolites. The country hardly had any local production of fuel in 2010 and depended on fuel and natural gas imports from Russia.
The national map of Armenia. Image Credit: CIA Factbook
Metals
Ararat Gold Recovery Co. (AGRC), a subsidiary of GeoProMining, was involved in mining activities at the Sotk deposit in 2010. AGRC owned a gold processing facility in Ararat, and a large open pit gold mine at Zod in eastern Armenia.
ARMENAL aluminum foil rolling mill is one of the leading production facilities in Armenia. Its annual capacity so far has been 18,000 Mt of thin foil and 7,000 t of household foil. The output was exported to the U.S., Europe, and the Middle East.
Zangezur copper-molybdenum complex and Agarak copper-molybdenum mining and processing complex are two of the leading producers of copper and molybdenum concentrates in Armenia.
In 2010, GeoProMining conducted extraction and processing operations of polymetallic ores such as copper, antimony, and molybdenum, and precious metals such as gold and silver.
Similarly, Armenian Molybdenum Production LLC (AMP) was involved in ferromolybdenum production with a capacity to produce 3,600 Mt/yr. Yerevan Pure Iron Works produced pure molybdenum, ferromolybdenum, and potassium perrhenate. The company’s output was exported.
Investment
Armenia relies on international aid, foreign direct investment and remittances from Armenians employed abroad to maintain its economy, especially as it politically isolated by its nearest neighbors, Turkey and Azerbaijan.
The mineral industry of Armenia is largely operated and owned by foreign investors. However, many hindrances affect the future of investments in this industry such as lack of transparency in the tax system and customs procedures and one-sided competition between domestic and foreign companies.
In 2005, the Armenian government granted Geoteam, a subsidiary of Lydian International Ltd, a 25-year license to develop an open-pit gold mine to extract 2.5 million ounces of gold from Amulsar Mountain, near Jermuk. The company plans to begin operations in 2014. Environmentalists and locals, however, are concerned that the mine might be a big ecological threat to the picturesque town of Jermuk by polluting it with hazardous emissions and causing a potential threat to Spandarian, Armenia’s second-largest reservoir.
In 2006, Lydian International discovered the Amulsar project covering a region with gold mineralisation in central Armenia. The company has completed feasibility study and plans to begin production in 2015.
Given the political situations and disputes with Turkey and Azerbaijan, experts believe that Armenia is likely to continue promoting its processing facilities of copper, gold, and molybdenum in the coming years.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.
Sources
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