This is Armenia EITI 2018 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
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.
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
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.
|Copper ore and concentrate||134,788||wmt|
|Zinc ore and concentrate||4,104||ton|
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.
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.
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.
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