382 Million Dram Damage: Violations at Zangezur Copper Molybdenum Combine

The Environmental and Mining Inspection Body of the Republic of Armenia (hereinafter referred to as the Inspection Body) conducted an inspection at the Zangezur Copper Molybdenum Combine closed joint-stock company (hereinafter referred to as the Company) from September 10, 2018, to January 22, 2019. This was reported by the press service of the RA Environmental and Mining Inspection Body.

During the inspection, specialists from the "Reference Laboratory Center" branch of the National Center for Disease Control and Prevention, Ministry of Health of the Republic of Armenia, were involved for the sampling of water (wastewater) and conducting laboratory studies.

The period covered by the inspection was:

• In terms of mineral resource usage: from January 1, 2017, to January 1, 2018.
• In environmental terms: from October 31, 2014, to January 22, 2019.

As a result of the inspection, the following violations were identified:

• The conditions and reserves of the deposit had not been re-evaluated. The last evaluation and confirmation of the deposit's reserves was made in 2006.
• The Company did not maintain a daily record of the movement of mineral resources. In the reports submitted to the authorized body for 2017, discrepancies were found related to the accounting of depleted reserves.
• In 2017, 27.2 million tons of ore were actually depleted from the balance of the deposit, while the mineral resource usage contract provides for a depletion of 22.0 million tons annually. Instead of the planned 22.0 million tons of ore, 19.65 million tons were processed at the enrichment factory. The discrepancy in the actual extracted and processed volumes of ore was accumulated in the open-pit area by the Company.
• The Company operated without emission limits (emission permits) for pollutants from stationary sources from November 1, 2014, to April 20, 2017. During this period, dust emissions totaled 1,754.92 tons, carbon monoxide 435.78 tons, nitrogen oxides 325.26 tons, benzo[a]pyrene 0.002188 tons, hydrocarbons 56.739 tons, manganese oxides 0.0046 tons, soot 12.709 tons, sulfuric acid vapors 0.1725 tons, and sulfur anhydride 24.57 tons.
• The Company was extracting water in accordance with the specified annual volumes in its water usage permit but violated the requirements for environmental discharge, resulting in violations of the ecological flow of the Voghji River during certain months in 2015, 2016, and 2017.
• From April 21, 2017, until the end of the inspection, there were instances where the required purification equipment for large, medium, and small crushing plants, salting plant, reagent production line, and molybdenum concentrate drying unit were absent or malfunctioning.
• During the inspection, it was observed that there were polluted water leakage tracks from the pipes of the siphons, and the existing reservoirs designated for emergency situations were only partially serving their purpose.
• The Company failed to submit the standards for waste generation and their disposal limits for approval by the state authorized body for 2016.

As a result of the Company's economic activities, the impact on water resources and atmospheric air has been calculated by the Environmental and Mining Inspection Body to cause a total environmental damage of 382,431,552 AMD (three hundred eighty-two million four hundred thirty-one thousand five hundred fifty-two AMD). The Inspection Body has submitted a demand for damage compensation to the Company.

Additionally, three responsible officials from the Company were subject to an administrative fine totaling 550,000 AMD.

Recommendations were provided to the Company to rectify the identified violations within the specified time frames.