2016年-世界发展银行全球_Armenia___Strategic_Mineral_Sector_Sustainability_Assessment_156页_11mb

Summary of Armenia: Strategic Mineral Sector Sustainability Assessment

Core Content

This report provides a comprehensive review and sustainability assessment of Armenia's mineral sector, focusing on its potential to support long-term economic development while addressing environmental and social challenges. The assessment was conducted between October 2015 and April 2016, commissioned by the World Bank to assist the Armenian government in formulating a minerals strategy aligned with international best practices.

Armenia is a small, landlocked country with a population of about 3 million and a GDP contribution of 2.2% from the mining and quarrying sector. The sector is considered crucial for economic growth due to its role in generating export revenues, attracting foreign direct investment, and creating formal employment, particularly in rural areas. However, the sector is heavily dominated by a single large operation, the Zangezur Copper Molybdenum Combine (ZCMC), which accounts for over 60% of the sector's turnover. This concentration raises concerns about the sector's resilience and long-term sustainability.

Key Findings

Economic Sustainability

• The mining sector contributes significantly to export earnings and foreign exchange inflows, with annual exports reaching USD 500 million in the past five years.
• However, only a few metal mining operations are profitable, and most smaller companies face economic challenges.
• The sector lacks strong economic linkages with other industries, limiting its broader economic impact.

Environmental Sustainability

• Environmental management is inadequate, with many operations failing to implement proper reclamation and rehabilitation plans.
• Pollution from mining and processing activities affects air and water quality.
• Tailings dams, particularly the Artsvanik dam, pose significant environmental risks due to outdated construction methods and insufficient monitoring.
• A large number of abandoned mines and waste facilities represent a substantial environmental liability.

Social Sustainability

• Mining operations provide employment, especially in rural areas where alternative economic opportunities are limited.
• However, there is no widespread "social license to operate" due to public distrust and lack of transparency.
• A culture of secrecy within the sector hinders meaningful public participation and informed decision-making.
• The sector suffers from a lack of diversity in workforce, with women being severely underrepresented.

Recommendations

For the Government

• Strengthen the implementation of environmental and social regulations.
• Improve transparency and public access to data and information.
• Promote the reprocessing of tailings to reduce environmental risks and enhance economic returns.
• Develop a comprehensive minerals strategy that aligns with international standards and best practices.
• Invest in improving the capacity of relevant institutions to oversee and regulate the sector effectively.

For the Mining Sector

• Encourage the adoption of modern, safer, and more environmentally friendly technologies.
• Enhance local content by involving Armenian businesses in the mining value chain, including technical consulting and geological exploration.
• Improve the management and rehabilitation of mine sites and waste facilities.
• Ensure that companies are held accountable for their environmental and social impacts, including liability for past operations.

Institutional and Regulatory Framework

• The RA Mining Code, enacted in 2012, governs mineral rights allocation, but it is characterized by frequent amendments and a lack of policy development prior to legal drafting.
• The process for granting mineral rights is based on a first-come-first-served basis, with limited security of tenure.
• The regulatory framework lacks clarity and enforcement, leading to poor implementation of environmental and social laws.
• The Ministry of Energy and Natural Resources (MENR) oversees the entire sector, but lacks specialized geological survey functions.
• The Ministry of Nature Protection (MNP) and Ministry of Emergency Situations (MES) are responsible for environmental and safety assessments, respectively, but face challenges in capacity and expertise.

Conclusion

The Armenian mining sector is economically important but environmentally and socially unsustainable. The sector's heavy reliance on a single large operation and lack of diversification, combined with poor regulatory enforcement and public engagement, pose significant risks to its long-term viability. A more transparent and accountable approach, supported by modern technologies and improved institutional capacity, is essential for achieving sustainable development in the sector.