Mining industry's risks are manageable by government, companies and all stakeholders – Vardan Janyan

YEREVAN, July 25. /ARKA/. Speaking at a press conference on Monday, the Head of the Union of Miners and Metallurgists and First Deputy CEO of Zangezur Copper and Molybdenum Combine Vardan Janyan pointed out that billions of dollars have been invested in the mining and metallurgical industry of Armenia, in building of economic infrastructures and training of personnel.

"The mining industry has its own complexities associated with such risks as market fluctuations and unfavorable price environment, investments and return on investment ratio, environmental and social risks. However, these risks do not mean that the mining industry cannot be built on the principles of sustainable development," he said.

According to him, today Armenia's mining assets, working in conditions of crisis challenges, spend serious funds to increase productivity and preserve the competitiveness and at the same time are ready to take the most effective measures to minimize the negative impact of production activities on the environment through introduction of high standards of environmental and social responsibility.

"Thus, companies in the industry are working to improve the quality of corporate governance and systematize the policy of reporting on sustainable development, regular non-financial reporting on ESG, TCFD and other ISO standards. All parties are interested in disclosure of non-financial reporting: investors, lending banks, authorities, local communities," said Janyan.

The state, in its turn, as Janyan noted, pursues a policy to mitigate and eliminate risks by developing suitable strategies, laws and regulations and controlling their application.

"Thus, this year, for the first time in Armenia's history, a mining development strategy was developed and adopted in order to make effective decisions in the field of utilization and preservation of subsoil with application of international standards and approaches," he said.

The Head of the Union also emphasized the significant contribution of the international financial institutions to the development of the mining sector, in particular, the World Bank and USAID, which periodically support Armenia in the development of the new Subsoil Code in line with international norms and standards.

In turn, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are assisting the government to institutionalizee the sector, and the EBRD is also implementing numerous projects with stakeholders, aimed at ensuring the principles of responsible mining.

Regarding the environmental risk management, Janyan said Armenia has become the 52nd country in the world to successfully implement the Extractive Industries Transparency Initiative (EITI) international standard, which has led to the transparency of the mining industry and its accountability to citizens.

"The EITI in Armenia has created a platform for the government, companies, public environmental organizations and civil society to discuss the industry's problems and address its challenges through constructive dialogue. It should be noted that Azerbaijan does not take part in the initiative," Janyan said, noting that according to international studies and monitoring, Armenia is ahead of neighboring countries in the region in terms of environmental efficiency.

According to him, over the past 20 years, the companies of the industry have developed effective mechanisms for resolving, managing and minimizing environmental risks. Moreover, the enterprises that were unable to effectively manage environmental risks fell out of the sector, were closed or mothballed, while modern standards of risk management were introduced by the operating enterprises.

In this context, Janyan cited a number of examples of solving environmental problems in the history of Armenia's mining industry. Thus, he recalled a legislative framework formed for specially protected natural zones, which excludes risky production in the territories of "Sevan", "Dilijan", "Shikahogh", "Arevik" and smaller national parks.

The head of the Union also noted that often the representatives of the mining sphere consciously choose higher production costs to minimize environmental risks, for example, GeoProMining dropped plans to transfer the gold extraction plant from Ararat to Lake Sevan catchment area in 2008. In addition, he pointed out that the Alaverdi copper smelter was closed in October 2018 precisely for environmental reasons. -0-