Russian Oligarch Trotsenko Concentrating Armenian Subsoil Resources; Aiming to Become Owner of 5 Mines Including Teghut

Roman Trotsenko, a Russian businessman who recently acquired a 60% stake in the Zangezur Copper-Molybdenum Combine, is reportedly preparing to purchase shares of the Teghut mine, thus gaining control over five major mining sites in Armenia. Notably, he is also a significant shareholder in the Sotk gold mine. Trotsenko owns the Agarak Copper-Molybdenum Combine and the Meghradzor mining site.

It is noteworthy that the acquisition of shares in the Zangezur Combine was conducted in a manner not entirely transparent to the public, with Trotsenko having donated 15% of his stake to the Armenian government. His intention to acquire Teghut suggests a consolidation of control over major mining operations in Armenia.

According to Factinfo, discussions between Roman Trotsenko and Armenian Prime Minister Nikol Pashinyan were mediated by Deputy Prime Minister Mher Grigoryan. The Russian businessman successfully obtained a 60% stake in the combine, and he also demanded that the Armenian authorities cease the criminal prosecution against former major shareholder Mher Palaskov.

This murky transaction will be further analyzed by Factinfo, but it is evident that Trotsenko is establishing a dominant position in Armenia's mining sector, effectively creating a monopoly.

Factinfo also sought to understand the potential risks associated with the concentration of Armenia's subsoil resources in the hands of a foreign oligarch. Nairi Sargsyan, the head of the Chamber of Auditors, noted in an interview with Factinfo that there are certainly risks involved. He emphasized that ideally and necessarily, subsoil resources should be under the control of the Armenian state: “Since our privatizations go back much further, this must be implemented through careful steps. So that the state's reputation is not harmed. A reverse process should occur and become public, state property,” he stated.

When asked how Armenia’s subsoil resources could be returned to the country without giving negative signals to investors, Sargsyan remarked that this should not take place within the framework of statements from the current government. This process should occur exclusively within the legal framework, taking into account the interests of potential investors and all current stakeholders.

“They should not be forcibly returned, but rather the situation should mature in such a way that when the owner wishes to sell shares, the state acquires them at that time. In other words, during the buying and selling process, it should acquire the shares,” Sargsyan explained.

In response to the observation that the transfer of 15% of the Zangezur Copper-Molybdenum Combine's shares to the Armenian government, particularly to the Prime Minister's Office, raised mistrust among the public, Sargsyan stated that the Prime Minister's Office should stay out of such matters, as they lack expertise in share management. “When we refer to the Armenian government, we do not mean the current authorities. This should be managed, for example, by the Ministry of Finance. The entire shareholding should belong to the State of Armenia, with a clear procedure for the appointment of officials to ensure that all corruption risks are excluded,” he emphasized.

Furthermore, he deemed the concentration of mines in one person's hands very dangerous, noting that Armenia’s subsoil and strategically significant objects are accumulating in one person’s possession, putting the country in a position of dependence on that individual, thereby jeopardizing state independence. “For example, a decision could be made that the mines will not operate for six months as they undergo re-equipment. Can you imagine what would happen, how many people would be left hungry, how much currency inflow would cease, what would happen in the tax collection field based solely on one person's decision? Armenia would be on the brink of collapse,” Nairi Sargsyan warned, adding that the government must consider all possibilities and tools available to prevent such situations from occurring in the future.

Sargsyan also pointed out that during the election campaign, the current Prime Minister repeatedly claimed he would take back everything that had been privatized. In this context, receiving shares as a gift poses risks to Armenia's investment environment. “I recently met with several potential investors. Each investor asks whether their business in Armenia would be seized or harmed. If in one country, the Prime Minister targets someone else's property and states he will seize it, this is highly dangerous,” he cautioned.

Source: Factinfo