major sectors of the economy : jewelry and diamond processing : manufacturing : information technology : natural resources : chemicals and pharmaceuticals : agriculture : food processing : tourism : construction and construction materials : energy : transport : telecommunications : water

Natural Resources

The government has drafted a program for reviving and developing the mining and metals industry, which involves raising ferrous metallurgy extraction and smelting capacity. The program will be concentrated on the city of Charentsavan, 35 kilometers north of Yerevan, the base for three engineering works represented by the Dvin industrial concern. In the initial stage, at a cost of US$ 3 million, smelting capacity at these enterprises will be raised to 50,000 tones per year. Scrap metal, of which Armenia possesses 0.5-1 million tones, will be used as raw material. Plans for this stage have been drawn up by IMC Mackey & Schnellmann (UK), as part of the TACIS program.
The second stage will envisage recovering iron from tailings at the Zangezur copper-molybdenum plant. The tailings dumps contain over 200 million cubic meters of waste with an average iron content of 2.5 per cent. The iron can be recovered by magnetic separators to obtain 50,000- 60,000 tones of 65 per cent concentrate a year, which could be used to smelt metal at the Charentsavan works. In the final stage, the Hrazdan iron ore field, close to Charentsavan, containing over 50 million tones of iron ore, will come on stream. Armenia's iron ore reserves total over 294 million tones.

Copper and Molybdenum

As part of the non-ferrous metals industry program approved in October 1999, US$ 2 million will be spent on redevelopment of copper mines at Shamlug and Alaverdi. It is hoped that by 2001 these mines will produce 350400,000 tones of copper ore a year. The copper, copper-polymetal and copper-molybdenum deposits in the north of Armenia contain about 475 million tones of mineable ore. The ore will be processed at the Akhtala mill, which has been inactive since 1989, but which has a projected capacity of 30,000 tones of copper concentrate per year. MetalPrince (Romania) has expressed readiness to invest US$ 950,000 to restart the Shamlug copper mine and recommission the first stage of the Akhtala mill.
Alaverdi-based joint venture Manes-Vallex (Liechtenstein-Switzerland, established in 1997 with capital of US$ 1.8 million) would recover 4,000-5,000 tones of copper per year, and plans to raise production by 10,000 tones by shipping in concentrates from the Madneuli field across the border in Georgia. In 1998 Manes-Vallex produced 2,800 tones of blister copper.
Armenia also plans to attract US$ 100 million in foreign investment for a long-term effort to develop the copper and molybdenum industry from 2003-10. This would involve bringing the Armanist copper polymetals deposit and the Tekhut copper-molybdenum deposit on stream after 2003 at costs of US$ 40 million and US$ 60 million respectively. In all, the non-ferrous metals program calls for investment of US$ 5 08 million between 2000 and 20 10.
One of the plans involves a tender for concessions to build a copper and a molybdenum processing plant in the south of Armenia, to process initially 10,000 tones of copper and molybdenum respectively each year. The copper would be sold in Armenia to revive production of electric equipment and cable. Ores would be provided from the Kadzharan and Agarak copper-molybdenum deposits. Kadzharan yielded 5.4 million tones of ore in 1998, 6.5 million in 1999 and is expected to produce 8.9 million tones in the near future. The Agarak mine requires investment of US$ 4.5 million to raise output from 372,000 tones in 1998 to 2.5 million tonnes per year by 20 10.
MCC (China) has expressed interest in a major investment in Armenian mining and metallurgy, with a proposal for the development of gold, copper, lead and molybdenum mines as well as for investment in three new oil fields and the above-mentioned copper and molybdenum plants.
The Akhtala, Agarak, Kapan and Zangezur mines and processing plants are all on the current privatisation list. The Zangezur copper and molybdenum plant is to benefit from mining equipment worth US$ 8 million, to be supplied by Japan's Mitsubishi in exchange for molybdenum concentrate.

Gold

First Dynasty Mines (Canada) has a joint venture with Haywoski, the state gold mining enterprise, to recover gold from the Sotk (also known as Zod) and Meghradzor mines and process the ore at the Ararat gold refining factory. The joint venture is known as the Armenian-Canadian Ararat Company and is 67 per cent owned by First Dynasty. The Sotk mine has now restarted activity, and aims to produce 500,000 tones of ore per year. This will enable an increase of production at the Ararat factory from 30,000 to 80,000 ounces per year. The factory is being expanded with investment of US$ 4 million. First Dynasty plans to invest a further US$ 35 million over the next few years, ultimately expanding production to 160,000 ounces per year.

Other metallurgy

In the final quarter of 1999 the government launched a tender on joint production at the Kanaker aluminium plant (known as KANAZ), which has been idle for over two years. The successful candidate was Siberian Aluminum (Russia). In the 1980s KANAZ produced up to 25,000 tones of aluminum foil and 50,000 tones of rolled metal and was the main supplier to the USSR market. Siberian will have a 75 per cent share in the joint venture, which is called Armenal. Siberian plans to invest US$ 8.3 million to restart and develop the works, and US$ 21.4 million in working capital. In 2000 the joint venture is expected to produce 2,200 tones of foil per month, making annual profits of US$ 529,000. KANAZ was partially privatized in 1994 when employees and private investors bought 26 per cent of the shares. Siberian has worldwide export markets and expects to boost KANAZ sales.