Gold Mine Exploited Illegally for Years with Authorization from Officials; Criminal Case Launched

Based on information and documents received from the Office of the Prime Minister of Armenia, the Public Interests Protection Department of the RA Prosecutor General's Office has studied the conditions of operation of a gold-multi-metal mine in the Lori Province of Armenia and the legality of land use for mining purposes.

The investigation revealed that the mining area was granted to 'S...' LLC through a mining extraction act, effective from 2015 until March 1, 2049, covering an area of 278.6 hectares.

Following an order from the Office of the Prime Minister, the Lori Provincial Municipality in 2019 investigated the registration and valuation data of land parcels in the Stepanavan community, uncovering that the aforementioned LLC owns 89.9 hectares of land, of which 76.4 hectares is agricultural land and only 13.5 hectares is intended for industrial, mining, and other production purposes.

Moreover, it was found that the company has been using approximately 128 hectares of land for mining purposes, of which only 77.6 hectares are owned by it. The remainder has been illegally utilized from community (41.6 hectares) and private (8.74 hectares) lands. This occurred despite the fact that the company could only use non-owned lands with the owner's consent or through a land use agreement.

According to the Armenian mining and land codes, the company could not use agricultural land for mining purposes without changing its designated use, which had not been done. As a result, the company did not pay the community budget the difference in cadastral values for the 76.4 hectares upon changing its designated use, amounting to approximately 299 million AMD.

Additionally, should the designated use of the utilized land for mining purposes have transferred to industrial, mining, and other specific production purposes, the rental fees for 2016-2018 could have amounted to about 7.8 million AMD, and land tax approximately 2.6 million AMD.

According to land and local government legislation, as well as requirements arising from a corresponding presidential decree at that time, the oversight authority over land use by communities, allocation of land parcels, collection of rents and taxes, purposeful use of land resources, and compliance with land laws rested with the provincial governors and community leaders.

As a result, the examination of materials received from the Office of the Prime Minister has yielded evidence suggesting that during 2015-2019, responsible officials of the Lori Province Administration and Stepanavan community failed to fulfill their oversight duties by not taking measures to change the designated use of the 76.4 hectares owned by the LLC, thereby preventing the illegal land use, ensuring compliance with land legislation, and consequently causing around 309.4 million AMD in unpaid cadastral value differences, rents, and land taxes to the community budget. Furthermore, responsible officials of the company have caused significant damage to the community through the misappropriation of trust.

In relation to these facts, a criminal case has been initiated by the Public Interests Protection Department of the RA Prosecutor General's Office under Article 184, Part 2, Clause 1 and Article 308, Part 2 of the RA Criminal Code, with the investigation assigned to the Investigation Committee of the Republic of Armenia.