"Fortune Resources" LLC appealed against Decree N 1033-A of RA Minister of Territorial Administration and Infrastructures (TAI) dated 31.07.2020, which terminated the soil management right of this company to Hrazdan iron mine. The appeal is mentioned in the document entitled "Information on Mineral Extraction Activities" published by TAI Ministry in January 2021.
A positive environmental statement was issued to Hrazdan iron mining project in 2008, which was then submitted by Nagin LLC for examination. This company was supposed to operate the mine in 2009, but there was a big public outcry against the operation of the mine.
The mine was not developed. In 2011, Nagin sold the mine assets to Chinese “Fortune Oil” Company, represented by “Fortune Resources” LLC in Armenia. According to the soil management permit SHATV 29/169 issued to this company on 20.10.2012, the mine was to be developed until 26.01.2032. This company only carried out resource exploration in the mine area. There was a large public protest against the operation of Hrazdan iron mine, so the mine was not developed.
Even today, the population in Hrazdan is categorically against the development of Hrazdan mine. "Our position is the same: we will never agree to the operation of the mine! The mine is located in the center of the town, which is surrounded by community apartments, houses, multi-storey buildings, the Hrazdan River is nearby - our main sources of drinking water. Nobody has proved to us that the operation of the mine will not affect the sources of the springs," Hrazdan Deputy Community Head Varuzhan Safaryan told EcoLur.
"The pit from which the ore was to be extracted would be a little deeper than the foot, and at that foot we have serious springs of fresh water, from which Hrazdan, Tsakhkadzor and a part of Abovyan Town are completely fed. These springs get water from Lake Sevan. We would definitely lose those sources; how many people would be poisoned. Dust management would be difficult. Hrazdan, Tsakhkadzor, Marmarik gorge and Arzakan are areas with serious tourism potential. And we were just going to destroy the potential of those areas," Movses Manukyan, a member of “Healthy Hrazdan” Initiative, one of the pioneers in the fight against mine development, told EcoLur.
"There have been no hearings about the mine. There is no previous document that the community has agreed to. ", - said the deputy mayor Varuzhan Safaryan.
According to Hrazdan Deputy Community Head, there are land areas belonging to Hrazdan residents in the area of the mine. "It's amazing how the subsoil is sold to anyone when the area is privatized. People are also solving a social problem today. They plough land areas and receive income," Hrazdan Deputy Community Head said.
Arsen Arsenyan, a member of "Healthy Hrazdan" initiative, said that the operation of the mine would be a big blow to tourism. "I tend to develop the community through tourism. It will be a long-term development, rather than a short-term development of the mine for 10-15 years. They will destroy it and leave us on a dry and dust land," he said.
Ashot Ohanyan, Chairman of "Healthy Environment" Environmental NGO, Deputy Chairman of Environmental Committee adjunct to Kotayk Region, considered it necessary to change the legislation. "New legislation must be developed to take into account the interests of nature and its inhabitants in the first place," he said.
Tax Liabilities of "Fortune Resources" LLC and Their Performance
Company’s contract for soil management PV 169 dated on 20.11.2012 does not specify specific obligations for participation in community socio-economic development programs, except for the general provisions for participation in the community social programs. As nothing was envisaged by the contract, the soil manager user didn’t make charitable donations or other gratuitous alienations to the community in 2016-2018.
According to the report submitted by RA Environment Ministry, 7 million 84 thousand AMD was paid to the Environmental Protection Fund for the reporting year of 2018, while according to the report submitted by the company for the same year, the payment to the Environmental Fund was only 1 million 28 thousand 460 AMD.
Fortune Resources did not pay property tax to Hrazdan Community, where the company operates. The company paid property tax to the budget of Yerevan City, which made 17 thousand 300 AMD in 2016, 2032 AMD in 2017, whereas it did not pay property tax in 2018.
What do the residents of Hrazdan offer for the development of their community?
• Establish infrastructure for the sale of agricultural products and tourism development
• Asphalt streets and yards (to reduce urban dust), build playgrounds, renovate kindergartens
• Provide free general medical examinations for community members
• Provide community medical centers with the best specialists and equipment
• Support community youth initiatives
• Support entrepreneurs /businessmen
• Create new jobs that do not pollute the environment
• Organize tree planting, preserve green areas and carry out improvement works
• Amend mining legislation to take into account first the interests of nature and residents, and only then business interests
• Pay in full to the community the environmental taxes paid by the organizations operating in the administrative territory of the community for the emission of harmful substances into the environment.
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.
March 30, 2021 at 10:53