TAI Response: Why Monitoring Fees Not Set for Mining Companies?

TAI Response: Why Monitoring Fees Not Set for Mining Companies?

Lilia Shushanyan, Deputy Minister of RA Ministry for Territorial Administration and Infrastructure of the Republic of Armenia (TAI), responded to EcoLur's letter on monitoring fees of mining companies in its letter N LSH/ 26.1/16464-2021 dated on 12.07.2021.

It should be reminded that on April 30, 221 at the meeting of Public Council under RA Environment Minister, EcoLur presented certain outcomes of "Responsibility of Non-operating Mining Companies in EITI Process" project on mining issues. According to the agreement reached with Minister Romanos Petrosyan, EcoLur sent to Environment Ministry a list of non-operating metal mining companies for which the amount of monitoring fees is not set.

In response to the letter addressed to Environment Ministry, the letter by RA Deputy Minister of Territorial Administration and Infrastructure Lilia Shushanyan addressed to EcoLur says:

"Part 2 of Article 80 of the transitional provisions of RA Subsoil Code (hereinafter the Code) stipulates: "This Code applies to the rights and obligations arising after the entry into force of this Code in respect of contractual or other legal relations arising during soil management."

The structure and content of the monitoring, the location of the observation posts and the frequency of monitoring is prescribed in the monitoring program of the extracted area of ​​the minerals included in the mine closure plan, the location of the production dumps generated during the extraction, monitoring program for the safety and health of the population of the adjacent communities, which consists of a text part and a drawing appendix.

"The main body compelling the allocations for monitoring is the authorized body," which Environment Ministry in this case.

Considering the abovementioned, we inform that the legal relations with the following Companies ("Teghut" CJSC, "Ler X" LLC, "Mego Gold" LLC, "Fortune Resources" LLC, "Marjan Mining" Company LLC, "Paramount Gold Mining” LLC and “Vardani Zatonq” LLC) was created before 2012, so there can’t be any information on monitoring fees in the appendix to the soil management contracts for the extraction of minerals concluded by the authorized body, as RA Law on Prospecting and Mining (Concession) of Natural Resources and  former RA Subsoil Code did not define the concept of a mine closure plan therein.

Pursuant to the requirements of RA Subsoil Code, which entered into force on January 1, 2012, “AT-Metals” LLC, “Baktek Eco” LLC and “Vayq Gold” LLC, which have been issued the right to manage the soil, have the monitoring fees included in the appendices to their soil management contracts.

Please be informed that in accordance with Article 58.1 of the current RA Subsoil Code, companies must submit a mine closure plan to the Authorized Body two years before the expiration of the mining permit, where as its Part 2, Clause 1 (d) includes “monitoring program of the mined areas, the location of industrial dumps generated in the course of mining, program to ensure the safety and health of the adjacent communities and their population”, which regulated the size of the monitoring payments.

We would like to inform you that the term of soil management right of "Agarak Copper and Molybdenum Combine" CJSC and "Sagamar" CJSC companies has been extended, as a result of which the above-mentioned information is available in the appendix to the companies' soil management contracts."

July 20, 2021 at 12:12