New Conditions under RA legislation for Soil Managers in Armenia

New Conditions under RA legislation for Soil Managers in Armenia

In 2020, RA National Assembly adopted a number of laws aimed at regulating RA soil management sector, which set new conditions and rules for soil managers.

One of them was the legislative package of amendments to RA Subsoil Code and several other related laws adopted by RA National Assembly on July 16, 2020:

With these legislative changes:

·        The construction of ascending tailing dumps is prohibited in Armenia due to its location in the seismically unstable region of Armenia. There are 23 tailing dumps in Armenia, 8 out of which are closed and 15 are operational. Most of the tailing dumps are located in Syunik and Lori Regions. The tailing dumps are mainly constructed in an upward manner, which, according to experts, is extremely dangerous in terms of high seismic risk and the risk of landslide collapse. Naturally, the law will not apply to existing tailing dumps.

·        With a capacity of up to 500,000 tons, mining companies must use only solid-waste tailing technology. It should be noted that a few years ago "Akhtala Ore Processing Plant" CJSC tried to use a similar technology, in parallel, the company planned to reclaim Nahatak tailing dump in March. However, the plant did not achieve the expected result while applying this technology, it continued to dump liquid tails in the Nahatak tailing dump, raising its dam. The company has just initiated the process of environmental expert assessment for tailing dump reclamation in accordance with the law. The first hearing on the tailing dump reclamation project took place on July 29.

·        In case of the capacity over 500,000 tons, a closed type circulating water system must be applied. It should be noted that the requirement to use a closed type circulating water system is mainly laid down in the opinions on environmental expert assessment of soil management projects, nevertheless, in practice, these systems mainly break down during operation, so companies do not often operate them.

·        In case of defaulting on 70% of the works envisaged by soil management right, the soil manager will not be able to apply for the extension of the soil management right. The soil manager will also be rejected in this regard in case of not making payments to the Environmental Protection Fund and not making allocations for monitoring. It should be noted that the financial declarations submitted by the companies within the framework of the EITI show that a number of companies did not make appropriate payments to the Environmental Protection Fund.

·        In case of not makings allocations to the Environmental Protection Fund to the full extent and termination of the soil management right, the competent body may file a suit to court for not making allocations to the fill extent for the monitoring of the mining area, the location of the mining dumps generated during the mining operations, the safety of the population in the adjacent communities.

·        From now on, the expert opinion will be approved by the relevant administrative act of the authorized body. It should be noted that this will allow disputing the environmental expert opinion in court as an administrative act. Prior to that, the expert opinions were considered as evidence in the court proceedings, and the claims to annul the expert opinions were not examined in court.

·        The term for granting soil management permits for metallic mines was set at 25 years instead of the previous 50, and 20 years for solid non-metalliferous minerals and mineral water development.

·         In the case of metallic mines, geological prospecting and soil management permits will be issued only if the mine has been assessed and reserves have been approved during the last 5 years, in the case of non-metalliferous mines during the last 10 years.

·        The pledge of the soil management right will be carried out not by notification, but by prior agreement procedure. The pledge must be aimed at performing the obligations of the soil manager. An agreement will be given in case the loan obtained on the basis of the pledge is used for the development of the given mine and performance of the obligations of the soil manager. 

The other law regulating soil management sector is the law "On Making Amendments to RA Law "On Targeted Use of Environmental Tax Paid by Companies" adopted by RA National Assembly on May 27, 2020. According to this law, from now on, deductions from the environmental tax paid by all companies with the right of soil management for the development of metallic minerals must be made, reflected separately in the budget of the community in the territory of which the activities of these companies have a detrimental effect.

It should be noted that before that a large number of companies operating metallic mines were not mentioned in the law, their environmental fees, which were directed to the state budget, were not available to the affected communities to implement environmental and health programs in the communities. According to the amendments to the law, the Government of the Republic of Armenia shall lay down the procedure for making the list of communities and residential settlements and calculating the  distribution amount of contributions according to the communities and  residential settlements within six months.

Prior to this legislative amendment, after the enlargement of the communities, a number of affected settlements lost their right to use environmental fees for the implementation of environmental and health programs.

The distribution of allocations was carried out by the municipality of an enlarged, multi-dwelling community; very often the settlement directly affected by the mine was left out of those projects. The law now stipulates that exclusively affected communities and residential settlements can benefit from environmental fees. This is a step towards resolving one of the sectorial issues, but it remains to be seen what criteria will be used to determine the affected communities or residential settlements. The methodology for determining the affected community has not yet been developed. There are a number of residential settlements that are affected by harmful activities but have not been identified as affected.

This material has been prepared within “Liability of Non-Operating Mining Companies in EITI Process'” project implemented by EcoLur with the USAID support within the frames of “Engaged Citizenry for Responsible Governance” project implemented by Transparency International Anticorruption Center.

This article is made possible by the generous support of the American People through the United States Agency  for International Development  (USAID). The contents of this article are the sole responsibility of the authors and do not necessarily reflect the views of USAID or the United States Government.


August 04, 2020 at 12:21