ArmInfo. Representatives of the mining industry and the government signed a memorandum establishing a joint platform for discussing mining issues. A group will be created that will professionally study the sector's challenges on a daily basis, examining them from both the industry's perspective and the government's. This was announced by Armenian Prime Minister Nikol Pashinyan, speaking to participants of the 3rd international Mining Armenia Forum.
Pashinyan noted the importance of Armenia's mining industry meeting the highest possible standards, which in turn is linked to public perception of the industry. This primarily concerns environmental issues, as this is a global issue, as planet Earth faces serious environmental challenges. "We must work in this direction, and this is important from an international policy perspective to enhance the country's prestige," the prime minister noted.
Speaking about public perception and environmental standards, Pashinyan noted that they must be high enough to prevent the public from perceiving the sector as a gross exploitation of national resources. "And the extent to which the public is involved in this process, the more positive its perception of the industry tends to be," he emphasized. He noted that the government has already taken some steps in this regard – it has become an owner of stakes in major mining companies. But, as Pashinyan stated, this is only a first and insufficient situational step, as it lacks an institutional basis.
Pashinyan believes that an institutional approach involves reorganizing the legal status of industry players into public companies – open joint-stock companies. "Our strategic approach is that the mining industry should become a pioneer in the development of public company institutions. And first and foremost, it is important for companies to be listed on the stock market. This will have positive effects on three fronts, as a company cannot be listed on the stock exchange if it is not transparent, if it is not efficient, if it does not meet, at a minimum, certain international standards. Otherwise, the company's capitalization will be low. Moreover, the fourth direction is very important – access to the open market through public status will allow citizens to become shareholders of the company. "I will openly say that our approach to government stakes in Amulsar (a major gold mining project) and the Zangezur Copper and Molybdenum Combine (ZCMK) is linked precisely to this vision for the industry's development. "The government must set an example and provide significant support for the development of an organized capital market in Armenia."
Pashinyan noted that the government has not yet done this because it doubts its competence and lack of experience in such reforms. He believes the government must be confident that the shares will reach broad segments of the population and not be a repeat of the infamous voucher privatization of the mid-1990s. "But we are viewing the industry's development through this logic, and this concerns not only citizens having new investment instruments for their available funds, but also the companies themselves, who can attract affordable market capital for their development. Both will improve public perception of the sector among the population, who will be directly involved in the industry's operations," Pashinyan emphasized.
Speaking about other medium- and long-term challenges for the mining industry, Pashinyan noted that Armenia needs to maintain production chains within the country, rather than simply export raw materials. This is especially true today, given the constantly rising prices driven by global demand. "It is very important for the country's economic development, for GDP, and for export volumes – to export finished products whenever possible." Although the government failed to initiate this process for various reasons, it is nonetheless on the agenda.
As Pashinyan also noted, the constant rise in raw material prices opens up opportunities for developing even small, insignificant deposits in Armenia, since efficiency is no longer dependent on unpredictable price fluctuations. Therefore, the Prime Minister believes that it is necessary to address the aforementioned issues of institutionalizing and standardizing the industry and its public perception, as well as begin a revival of geological exploration in the country. "We need to open a new chapter in geological exploration in Armenia. And in the future, together with our international partners, we must begin further exploration and further study of our subsoil to understand what additional opportunities exist. And the fact that they exist is... "This is obvious, and we should be talking not only about metal deposits but also about non-metallic ones," Pashinyan said.
It should be noted that the Mining Armenia Forum is organized by the Mining Forum Development Fund and the Armenian Mining and Metallurgy Association. The forum's strategic sponsors are the country's largest mining players, the Zangezur Copper and Molybdenum Combine, and the gold mining company, Lydian Armenia. The forum's main sponsors are Ameriabank CJSC and Teghut CJSC.
