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Armenian Parliament Passes Bill to Lighten Mine Exploiters’ Financial Burden

Armenia’s National Assembly today passed a government-drafted bill to amend the law “On Environmental and Natural Resource Payments” which lightens mine exploiters’ burden of responsibility in case of violations of the law – wrong calculation of payment, late payment, and failure to carry out other obligations.

Under the amended law, mining companies will be exempted from paying royalties for violations committed before 2016; the law also envisages changes in the procedure for calculating royalty rates. Previously, the rates were calculated on the basis of international prices for the concentrate; now, however, the rates will be determined on the basis of the final metal content of the concentrate and the metal’s monthly international price. Furthermore, the average international price of metals will be established an Armenian government-authorized body in the financial sector. The law, however, does not provide any specific information on the “authorized body” in question.

“It is envisaged that [mining companies] will produce a record number of 450 000 tonnes of copper concentrate in 2017. In such circumstances, this is an incomplete law allowing an unknown entity to determine the metal composition of minerals. We are against such a project,” Prosperous Armenia Party lawmaker Mikayel Melkymyan said before the vote.

The MP noted that mining production volumes in Armenia have been growing steadily over the years; however, miners keep paying the same low royalties to the state. In 2016, for instance, miners produced 33 thousand tonnes of copper and molybdenum minerals, and 3.5 tons of gold; the state budget, however, received only 23 billion drams in royalties. With the new amendments, Melkumyan stressed, state budget revenues will decrease even further.