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» » War will cause serious damage to the mining industry of Armenia

War will cause serious damage to the mining industry of Armenia

The mining industry of the Republic of Armenia is one of the main driving forces of the country’s national economy. The country is rich in iron, copper, molybdenum, lead, zinc, gold, silver, antimonite and aluminum, and there are currently 670 mineral mines in the state register (including more than 25 metal mines).[1] In 2019, the share of the mining industry in the country's GDP was 2.8 percent.[2] In addition, this industry accounts for a significant portion of the country's exports. So, in 2019, the total export volume of Armenia amounted to only 2.6 billion US dollars, and the export of precious and semiprecious stones, precious metals and products made from them amounted to 16 percent or 415 million US dollars of the total export volume. Among them are gold with item code 710813, rods, wires, profiles, plates and sheets in other semi-finished forms. In 2019, exports of copper and copper products decreased, while exports of aluminum and aluminum products amounted to 100 million US dollars. The export value of ferrous metals was equal to 150 million US dollars.
Ferrous metals
Aluminum and aluminum products
Copper and copper products
Precious metals
  Figutr 1. Export of precious and base metals and products made from them from Armenia, in millions of US dollars
As we can see, precious and base metals and products made from them account for more than a quarter of Armenia's exports. Over the past 5 years alone, the volume of foreign currency received by Armenia from the export of mining products averaged over 500 million US dollars per year. This shows that mining industry is an important one and brings currency to Armenia. Also, along with Russia, Switzerland is the second main export partner of Armenia. The production of metal ores and concentrates accounts for about 98% of the production value in this sector.[3]
The counter-offensive operation of the Azerbaijani army, launched in response to the provocations of Armenia, undertaken against our country on September 27 this year, hastened the decline of the mining industry of this country. So, it is expected that the complete cessation of work only at the Sotk gold mine will have a significant impact on the production in the mining industry of the country as a whole.[4] 
For information, it should be noted that Sotk is the largest gold mine in Armenia and is located on the border with Azerbaijan. Along with the exploitation of the Sotk mine, the Armenian side also illegally developed the Seyudlyu-Zod gold ore field located in the territory of Azerbaijan. It should be noted that immediately after the liberation of the Murovdag peak, as a result of the successful operation of the Azerbaijani army, the suspension of mining operation at Sotk field was announced. In addition, the beginning of military mobilization in Armenia also led to a slowdown in other mines. The matter is that the majority of the workforce in the mines are men who, as part of the mobilization, are called up to serve in the army. According to our preliminary calculations, during only 21 days of hostilities, due to problems in the mining industry Armenia’s economy was damaged for more than 20 million US dollars. Naturally, a downturn in this industry will lead to a corresponding reduction in exports. At the same time, the reduction in production will have an impact on the Armenia’s state budget revenues.
[1] https://uk.practicallaw.thomsonreuters.com/w-014-5093?transitionType=Default&contextData=(sc.Default)&firstPage=true#co_anchor_a890771
[2] https://www.1lurer.am/en/2020/08/14/In-2019-the-share-of-mining-industry-in-Armenia-s-GDP-was-2-8-Minister/294133
[3] https://ewsdata.rightsindevelopment.org/files/documents/86/WB-P173686.pdf
[4] https://armenpress.am/eng/news/1029426.html?__cf_chl_captcha_tk__=977da0308b1216feef15c7b7e8fb340f966ef01e-1602336828-0-Aa-t4waWPHWIsxY5oGGf1eCaKRDfNY18jA_Q4WaOsAR8jvEFhiumypcHSgpNt0zG-PEQFgpN7G-boVKLHjYJmtNVfLFwWe67xZ4mr68sNpuhEh_7TZjlnJOsT8VxMlfKuj6VVoufEz7GoxPr1p12qVaWmVxdsxDehG60oaUs8nIRdF5hRjDkDEQqS0umZOP-TFEakU-H3Ed5T6UTKAkSorwkv265q057JYaUcZ7zWrYeiclzLzamjBMQvhYfiN8Dj44iybRHvldb4V_TASeEHsaHW682LTbFSogvNGcChi0cak3U45IMmEnS2xX_5rAwLzT4OIwMmOHVhiPkbleApFiKkALmlAm1MaFypuW8lulxJ6ZbG6G0K5cRLklIFBkJgkNL3C-N4lUho_GnFIfc1nMoAZxRRRFPsTo1Hw9R1yR_faiTzTv_T5OPHqK6R_fOLXfUT-TzIDNYnh9OfVY6vTneX8hUsUyjeDU6x-w5AwUtcPfxRCfsgNYRXP7hiCGBL0MAQ_zmueXQ4GGbb_-cBNvwEhe_eeUTDH1f7kvVs-qBfx0sV8ojhWzN6xFMcFaE2HMAzwILusUQDqEWAqDeJQI

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