Why Mghart Mining Was Stopped and What Are Mghart Residents’ Expectations from Soil Manager

“EcoLur” Informational NGO continues presenting the liability of companies having been issued metal mining permits, but not operating them, for performing the obligations stipulated in soil management contracts and their execution, the findings of the studies on the ecological and social situation created as a result of the decommissioning of mines. In this publication, we are presenting the activities of “Multi Group” Concern having the right of soil management for No. 5 and No. 8 ore bodies of Mghart Gold Mine in this regard.

Mghart mine has not been developed for several years. According to soil management contract No. PV-213 dated on 20.12.2012, “Multi Group” Concern should have developed No. 5 and No. 8 ore bodies of Mghart Gold Mine by 2031.

In 2018, "Multi Group Concern" LLC submitted an application to RA Ministry of Nature Protection for environmental expert assessment for opencast mining in the central part of  Mghart gold mine for 2018-2037. According to the project, ore production will be 100,000 tons per year. For that purpose, a pilot ore processing plant will be equipped, a new tailing dump will be designed and built on the site of the previously built catchment basins. To date, the application has not been issued an expert opinion.

Mghart settlement of enlarged Odzun Community is affected by Mghart mine.

“Atmospheric pollution was noticeable during the operation of the mine, but not now. Samples should be taken from soil and water. Studies can be carried out to find out what impact the mine has had so far. Landslide disturbance is one of the visible effects of the mining operations. In the future, if the mine is developed, mining operations should be carried out more competently, especially if expansion is planned, using new technologies, minimizing the damage to the environment and human health," Armine Mikayelyan, Deputy Community Head of Odzun said.

Mghart administrative representative Avag Mosinyan especially outlined the problem of drinking water in the village, which the Company promised to solve during the  public hearings held in 2018, but haven’t done. "They stopped working and never came back," said Mghart's administrative representative.

Mghart residents expressed an opinion to EcoLur that the lack of spring water is due to the mine explosions. "The explosions of the subsoil affected the waters coming from the mountain. There is no water in the village: the water collected during the movement of the land was lost," they said. Currently, the Armenian government is solving the problem of drinking water in Mghart through Territorial Development Fund of Armenia.

Due to the non-operation of the mine, the residents said that the air was clean and there were no explosions. "Houses were also affected, there were shakes due to the explosions, as if there were an earthquake," one of the residents said.

"Jobs will be created, we will be able to sell agricultural products to their employees," Avag Mosinyan said. However, he noted that it is necessary to review the salaries of the residents of the community working in the Company - the rent of community lands. "They paid a small salary in the gold mine, there were conditions beyond the labor code without vacations, days off and a specified schedule. The guards are currently paid 60,000-70,000 AMD… Besides, the rent shall be increased.

Avag Mosinyan highlighted the review of the soil management contract. "I would like the contract to be revised, social programs amounting to five million AMD per year shall be made in Mghart," he said.

The soil management contract signed between “MULTI GROUP CONCERN” and RA Ministry of Energy and Natural Resources in 2012, does not mention the commitments to be undertaken in the field of socio-economic development of the community, which contradicts to the requirements of Article 54 (4(9)) of RA Subsoil Code.

It should be noted that till 2020, "MULTI GROUP CONCERN" was not included in the list of companies defined by Law “On Targeted Use of Environmental Fees Paid by Companies”, as a result of which Mghart did not use the Company's environmental fees for environmental and health programs. According to the report published by the Company on the official website of the EITI, the Company did not pay an environmental fee to the state budget in 2017, nor did it pay soil management fees, as the mine did not operate in 2017. According to the same report, the Company did not pay the monitoring fee in 2017 either. The line of allocation to the Environmental Protection Fund (EPF) of the Company's report for 2017 is zero.

Meanwhile, the report of Environment Ministry for 2017 states that the base amount to be paid by "MULTI GROUP CONCERN" to EPF is 6,315,000 AMD. The total amount of money to be allocated to the Fund as of December 31 of the year preceding the reporting year was 3,514,430 AMD, out of which 1,180,630 AMD was paid. The calculated amount of allocation to the Fund for the reporting year was 233,381 AMD, which was not paid.

Within the framework of these studies, in order to receive information from "MULTI GROUP CONCERN" LLC, EcoLur sent an inquiry on the following issues:

“1. What are the reasons for not developing No. 5 and No. 8 ore bodies of Mghart Gold Mine, Lori Region, handed over to your company?

2. Is the mine planned to be re-developed, if yes, starting from when?

3. Has the target significance of the land areas used by the Company been changed, if yes, how many hectares have been changes for mine and how many hectares have been changes for the company's infrastructures?

4. Does the company intend to resign soil management contract No. PV-213 dated on 20.12.2012 and prescribe provisions on providing social assistance to affected Odzun community (Mghart residential settlement) (according to the requirements of Article 54 (3(9)) of RA Subsoil Code)?

5. Please, indicate the support provided to the affected community over the years under charitable programs.

6. What measures does the company take to control mineral water and tailing dump leaks, as well as to prevent atmospheric air and soil pollution? ”

In response to the enquiry, "Multi Group" Concern Acting Director Arayik Kesoyan’s letter N37/31.07.2020 says:

“1) Based on the results of the geological exploration works carried out during 2005-2013, the reserves of the central part of Mghart mine were re-assessed. New mineral bodies were found and explored at the mine, which are located parallel to each other within the existing open mine. By decision N 372 of the Mineral Resources Agency of RA Ministry of Energy and Natural Resources, new qualitative-quantitative data of the mine reserves were approved. That is why a new project has been drafted for the mine development, which is still in the stage of expert assessment since 2018. The industrial development project of Mghart gold mine has been drafted for the extraction of ore from ore bodies No. 6, 6a, 62, 64, 67, 7a, 75, 76 and 8 prospected as a result of geological and economic re-evaluation of the Central section of the mine, where as ore body No. 5 will not be developed due to environmental conditions.

2) Mghart gold mine will be developed after the accomplishment of project expert assessment. 3) The land areas occupied by mountain works make up 40 hectares, and their significance has been changed to the industrial one. The mountain lease area from the mentioned land areas will make up 25 hectares.

4) Upon the resumption of the works, the soil management contract No. 20.12.2012, PV-213 will be resigned, where provisions will be prescribed to provide social assistance to affected community of Odzun (Mghart residential settlement) (according to the requirements of Article 54 (3(9)) of RA Subsoil Code).

5) During the operation of the mine, the company has always supported Mghart community; a solution has been given in case of any questions raised. In particular, every year the village roads were repaired after the floods, we participated in the gasification works of the village school, gas stoves were set up in the classrooms. The village house of celebrations is currently being renovated, for which 2 million AMD have been provided. Since 2005, 2-4 million AMD has been paid annually the budget of Mghart (Odzun) community for leased lands for geological prospecting and mountain works.

In 2018, with the funds of the company, the sources of all the springs entering the village from the forest called "Yelkut" were cleaned, new catchment manholes were built. A 50-meter-deep well with a low water flow was drilled in the same area to provide drinking water to the village.

6) An EIA is attached to Mghart opencast mining project, which provides detailed answers to your question.

The mine will be developed in an opencast manner. The ore is processed in a gravity method, i.e. there is no chemical dressing. 

The open mine is provided with a natural flow of surface water. The drainage will be done from the bottom of the open pit, through the drainage stream, which will have a flow plane with a slope from north-west to south-east. There are no old water-covered ditches or other ponds (rivers, lakes, artificial ponds), such as landslides or karsts, in the area of the open mine. The use of technical water is entirely irreversible water use.

The water supply of roads and platforms is calculated in such a way that the dust settles and there is no leakage. Making the mountain mass humod can also not cause leakage. The number of open pit emissions and the hazard class are given in the tables.

According to sanitary standards CH 245-71, Mghart gold mine is a second-class enterprise with a sanitary protection zone of 500 m. The tailing dump will be built in the gorge on the high terrace on the left bank of the gorge.

The tailing dump will be filled with gravity-dressed ore tails. The gravitational method extracts 85-90% of the total amount of sulfides, and 75-80% of the gold in the ore.

The amount of sulfides in the ore is 40-50%, so in case of such extraction, the sulfides in the mass going to the tail pipe will make 4-6%. The ore is processed with clean technical water, which is taken from Lori canal, no chemical reagents are used during the processing of the ore.

During the operation of the tailing dump, there will be no acid drainage from the rocks, as it will be permanently covered with water, there will be no oxidation zone.

The floor of the tailing dump is naturally covered with a layer of clay-sand and limestone rocks, which can act as a water-repellent layer. The suspended clay solution of the pulp will also act as a water-repellent layer when it settles down. These circumstances will not allow the pulp water to mix with the groundwater.

There are no red-listed animals or plants at the construction site of the tailing dump. The purified water of the tailing dump will be used through a circulating water system, which will save water resources. In dry weather, there will be no dust in the tailing dump, as it will always be wet.

The tailing dump will serve for about 10 years, afterwards it will be closed. The following measures will be taken after the closure of the tailing dump.

1. All types of technical structures will be dismantled.

2. After the complete drying of the tailing dump, trees will be planted along the dams, and reclamation works will be carried out in the whole area. A layer of soil with certain humus of 10-15 cm thickness will be filled and grass seeds will be sown. This method will protect the environment from the dust of dried tails and from the decomposition of sulfide minerals available in the rocks.

• MGHART MINING COMPLEX MONITORING REPORT is submitted in the EIA report for effective security, health, disaster prevention measures, rational nature use and environment. Environmental monitoring is a comprehensive monitoring of the environment, including environmental components, natural ecosystems, their processes, positive or negative shifts, the situation, which allows assessing and predicting changes in the state of the environment.

The goals of ecological monitoring are: environmental impact assessment and normalization, control of sources of impact/emissions, physical impact, residual impact, hazards/ quality control of environmental components. All this is necessary for the development of preventative measures aimed at the safety of the population of the affected communities, to ensure rational nature use and nature protection.”

1. To entitle the affected community to offer its conditions in the process of issuing mining permit.

2. To develop the mine applying modern new technologies, minimizing the negative impacts on the environment and complying with the requirements of normative documents.

3. To develop the cultivation of agricultural, ecologically clean crops in the community; to establish small raw material processing factories - canned food, dried fruits, edible greens, to develop ecotourism and cattle keeping.

4. In order to increase the Company's accountability and transparency, the Company's financial, environmental and other reports need to be available to the affected population so they are published on their website.

5. Activate cooperation with the community, organize meetings, present their activities, discuss their programs.

6. To increase the fees for the rented pastures from the administrative territory of the community.

7. Remunerate the members of the community working in the company in proportion to the work performed, as it was very low in the past.

8. The company will assume corporate social responsibility.

9. Signing a contract with the community on social programs.

This material has been prepared within “Liability of Non-operating Mining Companies in EITI Process” project impletmened 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.

September 01, 2020 at 16:39