Armenia: Strategic Mineral Sector Sustainability Assessment Public Disclosure Authorized
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THE WORLD BANK 106237 Public Disclosure Authorized Armenia: Strategic Mineral Sector Sustainability Assessment Public Disclosure Authorized Swedish Geological AB in association with SLR Consultants Ltd. AVAG Solutions Ltd. AUA Center for Responsible Mining AUA Turpanjian Center for Policy Analysis Public Disclosure Authorized April, 2016 Public Disclosure Authorized Energy & Extractives Disclaimer: The findings, interpretations, and conclusions expressed herein are those of the author(s). The findings, interpre- tations and conclusions expressed in this paper do not necessarily reflect the views of the International Bank for Reconstruction and Development/ The World Bank and its affiliated organizations or the Executive Directors of the World Bank or the governments they represent. The World Bank, and the donors of the Extractive Industries Technical Advisory Facility (EI-TAF) Multi-Donor Trust Fund do not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations and other information shown on any map in this work do not imply any judgement on part of the World Bank Group concerning the legal status of any territory or the en- dorsement or acceptance of such boundaries. © Тhe World Bank, 2016 ISBN 978-9939-831-95-4 Armenia: Strategic Mineral Sector Sustainability Assessment iii Contents ACRONYMS AND ABBREVIATIONS .......................................................................................................V EXECUTIVE SUMMARY ...........................................................................................................................VI 1. INTRODUCTION........................................................................................................................... 1 ...................................................................1 ...................................4 1.1. Introduction to mining sector development 2. 1.2. GEOLOGY, The Armenian MINING geopoliticalAND EXPLORATION setting ACTIVITIES and political ........................................................ overview 6 ........................................................................................6 .............................................................................................8 2.1. Regional geology and metallogeny ..................................................................................8 2.2. Geological data and information .................................................................................................................15 2.3. Mining and mine prospects .............................................................................................................. in Armenia 16 2.4. Exploration activities ...........................................................................................................................17 2.5. Outlook for the future 3. 2.6. STAKEHOLDER Recommendations REVIEW .........................................................................................................19 ..................................................................19 .....................................................................................................19 3.1. Government (national/regional.......................................................................................................... and local) 20 3.2. Civil society, NGOs and CSOs .................................................................................................21 3.3. Environmental .............................................................................................................................................. movement 22 3.4. Bi- and multilateral ............................................................................................................................................... agencies 22 3.5. Academia .......................................................................................22 3.6. Diaspora ......................................................................................................................................................23 3.7. Mining and exploration ................................................................................................................................... companies 23 3.8. Media ...........................................................................................................................24 3.9. Transparency 4. 3.10. POLICY Recommendations AND LEGISLATION ....................................................................................................25 .....................................................................................................................................................25 ..............................................................................26 4.1. Policy .......................................................................................................................27 4.2. Introduction to the legal framework ...........................................................................................31 4.3. Mineral regulation .............................................................................33 4.4. Land access and eminent ................................................................................................................ domain 37 4.5. Environmental and social regulations ............................................................................38 4.6. Mine waste regulation ...........................................................................................................................40 4.7. Public participation and access to data 5. 4.8. INSTITUTIONS Recommendations AND REGULATORY PROCESSES ..............................................................42 ....................42 ..................................................................45 5.1. Overview of institutions, ........................................................................................................................... responsibilities and regulatory work 48 5.2. Mineral rights and EIA application process 5.3. Recommendations iv Armenia: Strategic Mineral Sector Sustainability Assessment 6. ECONOMIC ANALYSIS ...............................................................................................................49 .....................................................................................................................................49 ..........................................................................................49 6.1. Introduction .....................................................................................52 6.2. The mineral sectors importance .............................................................................................................. 56 6.3. Fiscal regime (taxes and royalties) ..............60 6.4. Assessment of revenues ..........................................................................................61 6.5. Assessment of revenue and job creation potential ................................................................... of new projects 63 6.6. Potential for economic ........................................................................................................................... linkages 64 6.7. Financial data and transparency concerns 7. 6.8. ENVIRONMENTAL Recommendations AND SOCIOECONOMIC MANAGEMENT ...........................................66 ..............................................................................................66 ............................................................................67 7.1. Human and physical geography .....................................................................................70 7.2. Potential impacts from ongoing mining .....................................................................................76 7.3. Key environmental considerations ............................................................................................................79 7.4. Key socio-economic ........................................................................................................................... considerations 82 7.5. Mining legacy liabilities 8. 7.6. MINE Recommendations WASTE MANAGEMENT .................................................................................................84 ....................................................................................................................................84 ......................................................................................................................87 8.1. Introduction .....................................90 8.2. Mine waste baseline .......99 8.3. Management and rehabilitation of mine waste facilities 9. 8.4. SUMMARY Recommendations SUSTAINABILITY and road ASSESSMENT map for approach AND RECOMMENDATIONS to tailings management ................101 ................................................................................. 101 ........................................................................................................... 102 9.1 Basis for sustainability assessment ............................................................................................. 103 9.2. Economic sustainability ................................................................................................................. 103 9.3. Environmental sustainability .................................................................................................................. 104 9.4