Armenia is a state in the mountain-based Caucasus region. Turkey is to the west of Armenia, while Azerbaijan is to the east. Armenia covers a land area of 29,743 km2 and has a population of around 3 million. The Asian Development Bank report depicts a healthy growing economy, with a jump in its GDP from 5.8% in 2021 to 12.6% in 2022.
Armenia has a rich mining history marked by the commencement of copper extraction at the Alaverdi mine in the 1770s, the establishment of the Kapan gold mine in the 1840s, and the initiation of a copper-molybdenum mine at Kajaran in the 1950s.
Image Credit: L_B_Photography/Shutterstock.com
History of Mining in Armenia
Following Armenia's independence, the country's minerals sector's ongoing progress faced challenges, including geographical constraints and difficulties in transporting products to international markets. Technological setbacks have also hampered the industry.
Significant reforms were initiated in the early 2000s, including overhauling regulatory frameworks, liberalizing contractual mechanisms, and privatizing major mining companies.
Mining Products of Armenia
Armenia consists of natural resources of many metals. The major products of the mining sector of Armenia include:
- Molybdenum
- Lead
- Antimony
- Iron
- Copper
- Silver
- Gold
- Aluminum
In addition to these metals, Armenia's major exports are several industrial minerals, such as cement, limestone, and gypsum.
Armenia also produces construction materials like granite, marble, and limestone. Furthermore, the country has developed a diamond processing industry that relies on imported diamonds.
The mining sector contributes significantly to Armenia's economy. Industrial statistics have shown that the mining industry's output boosted by about 14% due to improved government policies and mining equipment. Mining industry products made up more than 30% of Armenia's total exports in 2017.
The U.S. Department of Commerce published statistics related to Armenia's mining sector, containing data from 2015 to 2018.
Table 1: Data About Mining Sector in Armenia (units: Thousand U.S. Dollars) Data Source: U.S. Department of Commerce Available at: https://www.privacyshield.gov/ps/article?id=Armenia-mining-sector
| |
2015
|
2016
|
2017
|
2018 (Estimated)
|
|
Total Local Production
|
462,682
|
534,255
|
699,303
|
550,500
|
|
Total Exports
|
476,900
|
470,900
|
692,300
|
480,500
|
|
Total Imports
|
639,300
|
591,200
|
647,800
|
595,500
|
|
Total Market Size
|
650,082
|
654,555
|
654,803
|
665,500
|
|
Exchange Rates
|
478
|
480
|
483
|
485
|
State of Mines in Armenia
The state inventory of mineral resources, as reported by the Armenian Development Agency, reveals the existence of more than 670 registered solid mineral mines. Among these, 30 are dedicated to base metals and precious metals.
Official government data about mines in Armenia reveals that around 400 mines are currently under exploitation. A total of 22 mines, in particular, contain precious and non-ferrous metal resources.
Thirteen gold mines are present in Armenia, along with three copper mines used for the extraction of industrial-grade copper. Seven registered mines are being operated by companies for the extraction of copper-molybdenum, along with the presence of two iron ore and two polymetallic mines.
Armenia's most important natural resources are molybdenum and copper. In 2010, the country was the seventh-largest global producer of molybdenum.
The key contributors to copper and molybdenum concentrates production in Armenia are the Zangezur Copper-Molybdenum Combine (ZCMC) and the Agarak Copper-Molybdenum Combine. Copper, primarily utilized in industrial processes, experienced a substantial 67% increase in ore exports in 2015.
Armenia boasts significant gold deposits in mines such as the Mghart Mine, Meghradzor, and Sotk Mine. Gold plays a vital role in Armenia's economy, contributing to approximately half of the country's total exports.
Around 13 gold and gold poly-metallic mines are actively operating in Armenia. Noteworthy international entities, including the United States-based Global Gold Corp, have expressed interest in investing and developing gold deposits in Armenia.
Leading Sub-Sectors in Armenia Mining Industry
The Teghut mine, located in Armenia's northern region, has historically been a notable source of copper. However, it ceased operations in 2022 to address environmental concerns.
In 2021, the "Industrial Company," a wholly owned subsidiary of "Geopromining Armenia," acquired a 60 percent stake in ZCMC. Subsequently, the company generously donated 25 percent of its shares to the Armenian government.
Gold is the second most important subsector in mining. In 2023, the Armenian government entered into a memorandum of understanding with Lydian Armenia, facilitating the resumption of activities at the extensive Amulsar gold mine and securing $250 million for the project. As part of the agreement, Lydian relinquished 12.5% of its shares in the gold mine to the government.
A Brief Overview of the Fuel and Energy Sector
Armenia lacks oil and natural gas reserves, making the country heavily reliant on imported fuel resources for energy production. The import sources for oil and petroleum products include Russia, Georgia, Iran, and Europe.
The majority of natural gas comes from Russia through Georgia and involves a limited amount sourced from Iran through an arrangement exchanging electricity for gas. Furthermore, Armenia imports nuclear fuel from Russia to meet its energy needs.
Conclusion
Armenia's mining industry is a key pillar of the country's economy, contributing significantly to exports and industrial growth.
Despite past challenges, including geographic limitations and technological hurdles, the sector has undergone major reforms and modernization since the early 2000s. The nation boasts rich mineral resources, including molybdenum, copper, and gold, with over 400 active mines and major players like the Zangezur Copper-Molybdenum Combine driving production.
While environmental concerns have led to scrutiny and regulatory measures, government policies and foreign investments support the sector’s expansion. However, Armenia relies on imported fuel due to its lack of domestic oil and gas reserves.
References and Further Reading
BBC News, (2023). Armenia country profile. [Online] Available at: https://www.bbc.com/news/world-europe-17398605
International Trade Administration, (2022). Armenia - Country Commercial Guide. [Online] Available at: https://www.trade.gov/country-commercial-guides/armenia-mining-and-minerals
International Trade Administration, (2023). Armenia-Energy. [Online] Available at: https://www.trade.gov/country-commercial-guides/armenia-energy
U.S. Department of Commerce, Armenia - Mining and Minerals. [Online] Available at: https://www.privacyshield.gov/ps/article?id=Armenia-mining-sector
WorldAtlas, (2020). What Are The Major Natural Resources Of Armenia?. [Online] Available at: https://www.worldatlas.com/articles/what-are-the-major-natural-resources-of-armenia.html
Disclaimer: The views expressed here are those of the author expressed in their private capacity and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.