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Greens Union of Armenia to Represent Teghut Project Alternative Analysis

Greens Union of Armenia to Represent Teghut Project Alternative Analysis
14:43 March 29, 2012

Hakob  Sanasaryan, President of the Greens Union of Armenia

The Republic of Armenia Ministry of Environment gave a license to the Armenian Copper Program CJSC (ACP) mining company to study and then to exploit the Teghut copper molybdenum mine in the Tumanyan district of the Lori marz (region).    Land allocation is as follows: 1,970 hectares have been provided to the company, of which 1,589.6 are forested and 380.4 are community lands.

The relief of the territory allocated to the mine is complex, broken up by four gorges through which flows the Shenogh river with its three tributaries - Krunk, Kharatanoc and Dukanadzor mountain streams.

The forest in this region represents one of the richest bio-diversity spots in the Republic of Armenia.  According to the project document presented by the company, this forested area contains 10 species of reptiles, 4 of amphibians, 86 of bird species (according to experts, there are 208 species of birds in this area, of which 28 are listed in the Red Book of the Republic of Armenia), 5 species of fish, and 55 species of mammals. Many of these animals are listed in the Armenian and International Red Books.

Also in this region, there are numerous archaeological and historical-cultural monuments from the antique and other periods.

The source of drinking and irrigation water for the villages of Teghut and Shenogh is the River Shenogh, whose tributaries are fed from the mountain slopes allocated to  mining. The overburden and empty rock will be dumped into the gorges of Krunk and Dukanadzor streams, and the mine tailings will occupy the gorge of Kharatanoc.

According to the “Environmental Impact Assessment” document, during the 25 years of mining, 175 million tonnes of copper-molybdenum ore (containing 0.355% copper and 0.0215% of molybdenum) will be processed, from which 85.78% of the copper and 70.05% of the molybdenum will be extracted. During the construction period (3.5 years) 1100 jobs will be created, and during the exploitation period, 900 jobs will be filled (1432 according to the “Operational Plan”).

Over the duration of 28.5 years, ACP will pay a total of 101.7 million dollars to the RA in profit tax and  will make a net profit of 406.2 million dollars.

A Discussion of Costs of Damage

Teghut mine Environmental Impact Assessment (EIA) and Operational Plan (Plan) documents have been drafted with violations of the RA laws.   Also, these documents are incomplete: there are incorrect calculations, falsifications and cover-ups.

Let us point out a few:

  1. In the EIA and in the Plan, the volumes of the ore, overburden rocks, industrial and economic waste, water to be used, fuel, and extracted metals are calculated for 25 years, whereas the damage to the soil, to the water supply system, to the plant and animal world has been calculated for only 8 years.   For example, the surface area of the open-pit mine is projected to be 240 hectares, yet the economic damage is calculated for only 65 hectares, and the damage from the planned mine-tailings dam (“a reservoir”, “a storage pond”) which will occupy 214 hectares, is calculated for only 54 hectares. (Plan, volume 7, page 72).
  2. Calculations of the cost of damage caused to the economy of the RA have been extremely reduced in the EIA and in the Plan.  For example, the cost of 1 square meter (sq m) of the forest to be allocated to the tailings dam is calculated at 22.4 drams (0.056 USD).  Tailings, which will continue to be dangerous to the health of plants, animals and humans alike, for thousands of years to come, will be occupying the gorge of the Kharatanoc  river.   At present, this area has many fruit trees (walnuts, plums, sour cherry, apricot, almond, pear, apple, cornelian cherry, etc.) and bushes, as well as cultivated fields and historical-cultural monuments.  Yet, 17 sq meters of this land has been valued at just 1 dollar.
  3. Waste dumps;  1 sq meter of forest, that will be covered by  overburden and ‘empty’ waste rock containing heavy metals, has been assessed at  7.4 drams (0.018 USD) (the damage to 54 sq meters of forest being 1 dollar).  The aforementioned waste will be dumped also into the gorges of Krunk and Dukanadzor streams.   As in the Kharatanoc gorge, here also, there are vast numbers of fruit trees and bushes.
  4. 1 sq meter of the area, allocated to the open-pit mine, is assessed at 2.8 drams (0.007USD) when, after the exploitation of the mine, that area, currently covered by the forest, will become an open pit of over 600 meters deep...Thus, the cost of destroying over 143 sq m of forest is only 1 dollar!
  5. The area of forest, allocated for the construction of the ore processing factory and other structures, is valued at 1.2 drams a sq m (0.003 USD), (damage to 333 sq m: 1 dollar).
  6. The area of forest, allocated for the creation of an artificial lake, is valued at 0.8 drams a sq m (0.002 USD) (damage to 500 sq m is valued at 1 dollar).
  7. In the “Mineral Resources’ Balance Description” table of the EIA, there are three masses of ores explored (page 23).   In the first mass, estimated at 5.448 million tons of ore, the amount of available silver in a ton is 31.7 grams, the quantity, 303.8 kg and that of rhenium is 5.6 grams, the quantity, 44.8 kg.  However, according to our calculations based on the data of the same table, the available quantity of silver is 172701 kg and that of rhenium is 30509 kg.  This is to say that the mining company has presented the amount of available silver 568 times less than the estimate and that of rhenium 681 times less. The same table, with exactly the same errors, is to be found in the Plan, written one year after the EIA.
  8. In the calculations of “the quantity of dangerous substances emitted from roads and trucks during the transport of ores and empty rocks by vehicles” in both the EIA and the Plan, the coefficient in the formula expressing the share of the dust entering into the atmosphere is 0.1 in the explanation, and 0.001 in the formula for the calculation; that is, 100 times less.
  9. According to the EIA the number of trees to be logged is 127000, while the calculations in the tables of the same document (NN 8.4.2, 8.4.3, 8.4.4, 8.4.5, 8.4.6 and 8.4.7) show that there are 170883 trees present. The logging of 43883 trees has been concealed, and the economic loss due to such logging has not been presented in either the EIA or the Plan.

10.  There is no mention in the corresponding table of the EIA of the timber arising from the planned logging of 53333 apple trees (of which 43333 have trunks of 26 cm in diameter). The economic loss from the mentioned 43333 apple trees is presented as 584.995 million drams, when the calculation using the same coefficient is 866.66 million drams. In other words, the loss has been presented 281.665 million drams less.

11.  No evaluation of the economic loss for hundreds of thousands of fruit and other species of bushes and medicinal and nutritional plants has been made.

12.  According to EIA there are more than 2 million young trees in the areas to be despoiled and destroyed (page 140).  The economic loss on these alone, using the calculating coefficient given above, comes to 9 million drams, which is not reflected in the EIA or the Plan.

13.  A pear tree with a trunk of 36 cm in diameter has been valued at 1000 drams only (2.5 USD).

14.  The 260 species of insects presented in the EIA and Plan belong not to the forests of the Teghut mine of the Lori marz but to the forests in the environs of Teghut village (neighbouring the town of Dilijan) in the marz of Tavush.

15.  The damage to the animal world as a result of the violation-destruction-annihilation of the territory by mining and processing has been presented as 175 thousand drams (437USD) and that, only for the fish caught during one year. The loss and damage caused to other creatures is ignored. The method used for calculating the damage caused to the fish world is incorrect. According to the EIA and the Plan, 130 kg of different species of fish are caught each year in the Shenogh river and its tributaries. These have a market value (by weight) of 175 thousand drams. This, when the law states something else, as for example, in the “Law on the compensation tariffs for damage caused to the animal and plant world as a result of environmental offences.” This law, by which the damage to different types of trees has been calculated, states that in the case of illegal hunting  and/or annihilation of different types of  animals, for each unit animal, independent of age, tariffs are: Karmrakhayt- 5000 drams and other species of fish- 1000 drams. Calculations show that the tariff for the quantity of fish mentioned in the EIA and Plan is 6.3 million dram, bearing in mind that for each mature fish there must be at least 2000 fry present.

16.  In the Plan  it states that over a period of 25 years 175 million tons of ore (stripping ratio of 0.664 cubic meters) will be extracted resulting in 116.3 million cubic meters of “empty” rock (Plan, Volume 7, page 39). Taking the concentration as 2.5, it will result in 290 million tons of “empty” rock. In the case of processing of 175 million tons of ore, 172.8 million tons of tailings will be produced (this is the powder remains of the ore, once its basic useful elements have been extracted).
The tailings comprising heavy metals and other toxic substances and the “empty” waste-rocks are not reflected as waste in the RA law on Wastes. The intention is obvious: so that those in the mining industry do not have to pay taxes for dumping such waste. The damage caused by tailings and “empty” rocks are not calculated in projects for exploitations of mines, when such an approach would sharply alter the cost-benefit ratio. These practices are the reason why the mining industry does not comply with economic rules in the country and has become a severely dangerous sphere for the Republic of Armenia, which gives rise to long-term, unsolvable problems.

It is beyond doubt that tailings are toxic waste of the highest degree and “empty” rocks are of the second or third degree. According to the RA law on Tariffs for Environmental Fees, the rate for depositing first-degree toxic waste into the environment is 48000 drams (120dollars) per ton, while that for second degree waste is 24000 dram (60$) and third degree is 4800 drams (12$).

Consequently, for depositing 172.8 million tons of tailings in the environment, 8,294 trillion drams must be paid to the state, while for 290 million “empty” rock (even if we consider it third degree toxic waste), 1.392 trillion drams must be paid. In other words, for the aforementioned waste, ACP should pay into the state treasury more than 9.686 trillion drams (24.2 billion USD). However, mining companies are exempted by law from paying taxes on the aforementioned waste.

17.  It states in the EIA that “the financial impact (damage) on the environment is I=Ia+Iw+Is+Ial+Ig= 6465,4+366,9+21917,25+2475425+3709,5=2,508 billion drams. (I – Overall impact, Ia - annual impact of hazardous waste emitted into the atmosphere, Iw – annual impact of hazardous waste dumped into water pools, Is - annual impact on the violation and contamination of the soil, Ial - annual impact of alienation of land, Ig - annual impact due to geological instability). This shows that the expected losses for one year and for 28.5 years have been united in one amount. Also, we can see that there is no mention either in the EIA or in the Plan of the impact of the mining waste which will be produced.

It is due to such biased calculations that the unimaginably huge losses that Armenia will incur are not apparent.

According to the EIA drafted by ACP, the exploitation of the mine will supposedly cause the RA damages worth only 2.508 billion drams (6.27 million USD).   In the Plan, ACP has reduced the cost of damage to 2.07 billion drams (5.17 million USD)!  It must be noted that this sum will not enter the state treasury, furthermore, it is, as yet, not clear as to which RA law gives such privileges to mining companies and in general, if, in fact, such a legal norm exists or whether it is being done by verbal order.

Discussion of Law and of Rights Issues

The Plan for the exploitation of the Teghut mine contradicts the RA Constitution and many laws arising from it (the principles of the RA legislation on Nature Protection, Land and Entrails Codes, Laws on Flora and Fauna, Law on Historical and Cultural Monuments, on Preservation and Use of Historic Environment, etc.), as well as  a number of international conventions which have been ratified by the RA, such as the Treaties for the Protection of Cultural and Natural Heritage, the Fight Against Desertification, Agreements on Bio-diversity, Landscapes, Climate Change and so on.

In the appeals and announcements directed towards the RA President and the Prime Minister, it has been demonstrated that expert examinations of the EIA and Plan of the Teghut mine have not been conducted by the RA Ministry of Nature Protection, yet a positive conclusion has been issued. Unfortunately, the RA Government, on the basis of this positive conclusion which has no legal foundation, has changed the status of 1572.284 hectares of land and has allocated it for 50 years to ACP which is a member of “Vallex Group”, allowing the felling of around 357 hectares of forest coverage and the exploitation of the Teghut mine (decision N1278-Ն, 01.11.2007). The decision N1278-Ն has recognised 81.483 hectares of agriculture land belonging to physical and legal entities as exceptional, eminent domain.

Besides the fact that the Government’s decisions have no legal basis, they include also many inexplicable points. For example, the land beneath the open mine has been leased for 50 years when it is obvious that this forested area will be transformed into a 600 meter deep pit, or that the land beneath the tailings dam and “empty” rocks (which is also leased for the same length of time) cannot be returned to its original condition and designation as that area is to be filled with toxic waste.

In other words, it is being formulated by the state that these lands are being leased out for 50 years, when in reality a part of them will be destroyed altogether, and the other part will be covered for ever with millions of tonnes of extremely hazardous waste. Or, why is it being stated that around 357 hectares of forest will be felled when the area of forest to be felled is incomparably greater?

For example, it is written in the Plan that 561.4 hectares of land are being designated only for the open mine (240 hectares), tailings dam (214 hectares) and waste dump (107.4 hectares). Those areas are covered by forest and are to be totally felled. The forest is to be cleared for areas designated for production enterprises, roads and other structures. There are also serious grounds to say that a greater area will be lost beneath the tailings dam and waste dump than has been presented in the Plan and Government decision.

Let us bring one more example of how baseless the Teghut project is.  At the consultation with Prime minister Tigran Sargsyan, concerning the issue of exploitation of the Teghut mine, when it was substantiated that the EIA and Plan of the Teghut mine, apart from being under calculated and including falsifications, was also incomplete, being calculated for 8 years and not for 25 years, it was decided by the Prime Minister to create an EIA based on a 25-year calculation for the Teghut mine (Registration N 50-88, 20.06.2008).

Point c) of the Registration states - “Carry out the project’s EIA examination of the exploitation of the mine for 25 years with the participation of local and, if necessary, international experts.” This in turn corroborates that the previous EIA and Plan, on which the RA Government had based its decision on the exploitation of the Teghut mine, are no longer valid legal documents. During the consultation, the “Vallex Group” representatives assured the Prime Minister that the EIA for the Teghut mine’s 25 year-exploitation would be ready in December 2008. Consequently, the Prime Minister directed, [12.09.2008, see record number 88-180], “until the end of December’2008, EIA of the Teghut mine must be given to local NGOs for a review. “  To date, the new EIA document has not been drafted. 

Taking all of the above into account, it can be said that the government’s decision of reclaiming the agricultural lands of legal owners in Shenogh and Teghut villages as eminent domain has no legal basis. As a result of this decision, many of the inhabitants of the villages have lost their private lands, which were their main sources of income.

Thus, over hundreds of villagers have been taken to court by Vallex Group, and the court, basing itself on the Government’s decision of reclaiming their agricultural lands as eminent domain, has resolved all their cases in Vallex Group’s favour.  The latter has transferred the money to be paid for those properties to the local notary and occupied the lands of villagers.

One sq m of the orchards has been valued at an average of 72 drams (0.18USD), arable land at 50 drams (0.13 USD), and meadows at 36 drams (0.09USD).  It is important to note that these lands will go under the tailings dam and the “empty” waste rock dump.  In other words, the villagers will be losing these lands forever.  This is plain robbery.   Both state and private property is being stolen.

Summary

RA Government decision N1279-Ն reclaims the agricultural lands belonging to physical and legal entities in Shenogh and Teghut villages as eminent domain, on the grounds that the Teghut mine project carries important significance for the republic and that its realisation will greatly benefit the strengthening of the economic security of the country and will be a serious stimulus to the social-economic development of the region.

However, those who scrutinise this project will easily be convinced that the prevailing interest in this Project is that of the exploiters of the mine.  Yet, it is not the exploitation of the mine, but the hydro-geological structures, mountain rivers, water supply systems, forests, historic-cultural monuments, arable lands, orchards, meadows of Teghut and Shenogh, that are of national significance and hence must be preserved and used rationally.

As far as the assurance given that implementation of the project will greatly benefit the strengthening of the economic security of the country, this also is not justified. Causing the loss of over 3000 stable agricultural jobs, ruining, destroying, contaminating the environment, making fertile territories uninhabitable, by creating temporary new jobs and hastily consuming the natural resources, not only it’s not possible to strengthen the economic security of the country, but such practice will inevitably bring about the collapse of the economy.

Also not justified is the provision in the decision that supposes the realisation of the project will seriously stimulate social-economic development in the region. We would like to know where are those villages and towns, where social conditions have improved as a result of the exploitation of mines in the neighbourhood of these towns or villages.

Despite the fact that Teghut mine project does not, as of yet, exist, nevertheless “Vallex Group” is felling the forest, also causing much destruction by changing the course of mountain rivers.

To summarise, it is possible to say that if detailed and unbiased calculations of the damages which will be inflicted upon the Republic of Armenia are made, with all possible components, using methods and tariffs reflecting reality, then it will be safe to assume that the damages will billions of times exceed the so-called “benefits” of creating 900-1432 temporary jobs (average annual wage of 2400 USD, Plan, Volume 9, page 14) and of the profit tax to be paid into the state treasury of only 101.7 million dollars in 28.5 years!

Those who examine the materials pertaining to Teghut mine will easily be convinced that the authors of the Plan, as well as the government decision-makers on the issue, have ignored the interests of nature, the nation and the state.

Hakob  Sanasaryan

President of the Greens Union of Armenia

armgreen@ipia.sci.amarmgreen@rambler.ru