German Mining Giant Pledges More Investments

By Anna Saghabalian

Radio Liberty, Czech Rep.
Aug 2 2007

A German metals company that owns Armenia’s largest mining enterprise
on Thursday pledged to make at least $60 million in additional
investments to expand its operations in the country.

Guenter Pilarski, chairman of the Cronimet group, made the pledge
during a visit to Yerevan that involved talks with Prime Minister
Serzh Sarkisian and local businessmen.

Cronimet had teamed up with two Armenian firms in late 2004to buy a
75 percent stake in the Zangezur Copper-Molybdenum Plant in a $132
million deal. As part of the takeover, it undertook to invest $150
million in modernizing the Soviet-built plant, which is located near
the southeastern town of Kajaran and currently employs about 3,000
people. Much of the modernization is due to be completed by the end
of this year.

Speaking to journalists in Yerevan, Pilarski said the extra
investments will be channeled into building a copper smelter in
the same mountainous area close to Armenia’s border with Iran. "The
project will not create any ecological problems," he said.

Pilarski made similar assurances at a meeting with Sarkisian on
Wednesday. He said the planned smelter will have modern equipment
and technology that inflict no damage on environment.

Zangezur currently only enriches most of cooper and molybdenum ores
extracted from its Kajaran mines. The rest of it is turned into
metal at the Yerevan-based Makur Yerkat smelter, which is also owned
by Cronimet.

Both Zangezur and Makur Yerkat have significantly increased production
levels in the past three years on the back of record-high international
prices of copper and other non-ferrous metals.

Virtually all of their production is sold abroad.

Sarkisian was quoted by his press service as telling Pilarski, who
is also Armenia’s honorary consul to Germany, that his government
considers development of the mining sector a top economic priority
and will save no effort to facilitate Cronimet’s operations in Armenia.