"Baktek Eco" LLC Entitled to Develop Arjut Gold Mine in Facts and Figures

"Baktek Eco" LLC Entitled to Develop Arjut Gold Mine in Facts and Figures

In 2014 "Baktek Eco" LLC received a permit to develop Arjut gold mine in Lori Region, Armenia, but the mine has not been developed yet. According to soil management contract № P-515 dated on 22.08.2014, the development permit issued to the Company was issued for a period of 25 years (until 2039). According to the contract, the company could extract 100 thousand tons of ore a year. According to the soil management contract, 2423.9 thousand tons of ore has been approved in Arjut mine, out of which 3467.4 kg of gold, silver - 20.39 tons, copper - 6821.0 tons.

Arjut CommunityLori Regionis affected by Arjut gold mine. In the absence of the mining operations, EcoLur team studied the performance of tax and soil management obligations by "Baktek Eco" LLC towards the affected community, the impact on the environment, as well as the impact on the social situation of the local population.

Arjut Community Head Vardan Mkrtchyan told EcoLur that there is a problem of changing the purpose of the lands for soil management, which, according to him, has become the reason for the non-development of the mine.

"This problem is still in the process. After that, apparently, they will build the factory and operate it. Will they start working probably in the fall or in the spring of 2021?”

According to EcoLur, the problem of changing the purpose of land has been going on for about 6 years, during which time the company has not performed its social, economic and environmental obligations to the community and the state.

"Baktek Eco" LLC received the positive conclusion BP-58 on the environmental impact assessment of "Arjut Gold Mining Working Project" on 06.08.2014, whereas on 19.09.2015 the company received the positive conclusion BP-74 on on the environmental impact assessment of "Arjut Gold Mine Processing, Construction, Plant and Operation Working Project”. As the mine has not been developed within a year after receiving the conclusions, the ore dressing plant has not been built, the conclusions are declared invalid in accordance with Article 20 (7) of RA Law on Environmental Impact Assessment and Expertise.

Performance of Social Obligations by "Baktek Eco" LLC

According to the soil management contract, "Baktek Eco" was obliged to pay 650,000 AMD to Arjut community every year, out of which 100,000 AMD for participation in economic development programs, 400,000 AMD for purchase of stationery and repair of the school and kindergarten buildings, 100,000 AMD for the repair of community equipment, and 50,000 AMD for purchasing medicine for insecure families.

According to the report by "Baktek Eco", in 2017 and 2018 the company has not fulfilled its socio-economic development obligations to the affected community under the mining contract. Whereas the report of the Ministry of Territorial Administration and Development says that in September 2017 the Company 250,000 AMD transferred to the community budget for socio-economic development. Arjut Community Head Vardan Mkrtchyan also assured that the company had supported them.

Thus, the Company has violated the contractual social obligations. According to the residents, they have no environmental problems with the impact of the open pit, as the mine has not been developed. Meanwhile, "Baktek Eco" LLC is focused in Arjut community’s five-year development program for 2017-2021. In particular, the existence of a polymetallic mine in the community is listed among the strengths of the community.

It is mentioned that according to the program presented by the Company, social programs will be implemented in the community every year in the amount of 10% of the net income received from the operation of the mine and that of the plant. 250-300 million AMD required for asphalting the central street of the community is expected to receive at the expense of the co-financing by the community, the state budget and "Baktek Eco" LLC.

"Baktek Eco" LLC has not fulfill its tax obligations

 According to the report by "Baktek Eco" LLC, published on the official website of the EITI Armenia, the Company did not pay an environmental fee to the state budget in 2016, 2017 and 2018.

 "Bactek Eco" did not make the financial allocations to the Environmental Protection Fund as laid down in the law for 2016-2017 either. According to the Company's report, the base amount of money to be allocated to the Fund for "Baktek Eco" LLC is 2,440,000 AMD, out of which in 2016-2017 the company had to pay 82960 AMD for each year, which the company hadn’t done.

According to the Company report, It hadn’t paid  mony to the Fund in 2018 either, but it is mentioned in the report of the Ministry of Environment, that the Company has paid 697840 AMD to the Fund  in 2018.

The company also did not pay the fees for environmental and health monitoring for 2016 - 2018.

Currently, the Vanadzor municipal landfill site near Arjut community is a priority for the community.

"Garbage trucks raise dust on the road, the dust resides on the laundry, on the orchards․․․ "There is no air to breathe in, the wind brings the smoke of the landfill site and the smell to the village," the residents of Arjut complained. We present to the attention of the relevant bodies the suggestions made by Arjut residents in their conversations with EcoLur:

To plant trees for dust prevention in the areas adjacent to the mine,

To close down Vanadzor municipal landfill site adjacent to the community and reclaim it,

To increase the capacity of the local medical center, increase the number of medical staff, open a pharmacy selling first aid medicines, improve the quality of emergency medical services serving the community,

To solve the problems of repairing the internal water network and repairing the drinking water line.

As a perspective of community development, in addition to mining, to consider the establishment of small enterprises for the processing of local raw materials, the development of eco-tourism, the development of livestock, which, however, is hindered by the limited community budget; the community needs state support.

In July 2020 EcoLur sent a request to "Bektek Eco" LLC to get information, but so far we have not received any response.

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 28, 2020 at 14:18