Armenia

EITI Status Yet to be assessed against the 2016 Standard
Joined EITI in 2017
Latest Data From 2017
Website EITI Armenia
Last updated 9 October 2019

Overview

The metal mining sector is an important contributor to the Armenia’s economy, and is the fastest-growing sector in the country’s largely agricultural economy. In 2015, the mineral industry grew by 50% year-on-year and made up 17% of total industrial production of Armenia. The country’s mineral resources include iron, copper, molybdenum, lead, zinc, gold and silver.

The total value of metal and minerals production in 2017 increased by 13.9% and was at 699 million USD, or approximately 5% of GDP. There are currently 10 major mining and metallurgical companies in operation mainly concentrated in two provinces. Currently the biggest mine is operated by the Zangezur Copper-Molybdenum Combine, CJSC (ZCMC), located in Kajaran (Syunik province).

Armenia implements the EITI to attract foreign investment in the mining sector, bring accountability and transparency into the sector and enable public access to reliable information. By fostering cooperation between government, businesses, and civil society, the EITI has helped to introduce a new culture of dialogue in Armenia.

Beneficial ownership disclosure

Armenia’s EITI workplan lists several activities to ensure the disclosure of beneficial owners of the extractive companies by 1 January 2020. A beneficial ownership roadmap was published in December 2017. On 23 April 2019, Armenia adopted a package of draft amendments to the “Code of the Republic of Armenia about the Subsoil”, Law on the “State Registration of Legal Entities, Separate Divisions of Legal Entities, State Registration of Companies and Individual Entrepreneurs” and Law on the “Public Service”. These will help to make the whole process of beneficial owners’ disclosure more efficient as companies will be required to do so by law.

Source: EITI Armenia

Status of Armenia

The EITI Board has approved Armenia’s EITI candidature application at the Board meeting in Bogota in March 2017.

Production

Copper ore and concentrate is the main mineral for Armenia’s mining sector, representing about 59% of the country’s total metal extraction.  The country also produces significant volumes of molybdenum concentrate, ferromolybdenum, zinc ore and concentrate. Among precious metals, Armenia produces gold ore, as well as gold and silver alloy.

CommodityReservesUnitSignificance
Copper ore and concentrate134,788wmt
Molybdenum concentrate4,378wmt
Ferromolybdenum29,585ton
Zinc ore and concentrate4,104ton

Revenue collection

Metal mining companies pay value added tax, excise and environmental taxes, royalties, customs duties and fees, nature use payments and a number of other taxes and payments to the state budget.

In 2017, the taxes and payments paid by the metal mining companies to the state budget increased by 61%, reaching 87.1 bln AMD or 7.1% of total revenues.

Initializing chart.

Main revenue recipients by government entity

Reconciled revenues by company (top 5)

Revenue allocation

According to Armenia’s 2016-2017 EITI Report, the amount of taxes and payments paid by metal mining companies to the community budgets in 2017 amounted to 1.3 bln AMD, or 1.0% of total community budgets.

Taxes and payments paid to community budgets by metal ore extractive companies are primarily derived from property leases, which form 65.6% of total taxes calculated by these companies in 2017.

It must however be noted that this large revenue was based solely on the payment of one company, “Lydian Armenia” CJSC to one community, Jermuk.

Social and economic contribution

In 2017, the mining and quarrying sector contributed 3.2% of the GDP according to the Statistical Committee of the Republic of Armenia. The sector is ranked 12th among 20 sectors in terms of total GDP share.

Between 2016 and 2017, the share of contributions of mining companies for the socio-economic development of communities increased significantly from 7% to 26.7%. In 2017, these revenues amounted to 352 139 ADM.

The industry sector has traditionally been the third sector of the economy of Armenia by its contribution to total employment following the service and agriculture sectors. In 2017 there were 132.9 thousand people employed in the sector accounting for the 13.1% of total employment. According to the relevant yearbook of the RA Statistical Committee, the share of mining and quarrying sector in total industry employment for 2016 and 2017 was respectively 7.2 and 6.9% with the total number of 8.8 and 9.2 thousand employees.

Innovations

The establishment of an e-reporting platform, which also serves as a data portal, was an important stepping stone towards facilitating collaboration between stakeholders. The portal not only lessens the reporting burden for companies by making it easier to report and makes data more accessible to civil society in open data formats. MSG members can monitor the status of company and government data submissions to the e-reporting portal, enabling them to raise reporting issues in a timelier manner.

Implementation

Armenia joined the EITI in March 2017 with the aim of leveraging natural resource transparency to promote economic growth and poverty reduction. In 2018, the new government became heavily engaged with EITI implementation, particularly in terms of fighting corruption. It committed to undertake systemic institutional and legal reforms, emphasising as an important breakthrough the preparation of the country’s first EITI Report. The government has also expressed its support of/intention to draft laws which would require the disclosure of beneficial owners in a public online register.

Armenia’s first EITI Report was published in February 2019 and covers the 2016 and 2017 fiscal years. In 2018, Armenia launched an online reporting system for industry and government agencies to systematically disclose EITI data.

Currently, the EITI process in Armenia is lead by Deputy Prime Minister Tigran Avinyan.

Source: EITI Armenia

 

Timeline

Validation

Armenia's first Validation against the Standard commenced on 9 September 2019.