THE MINERAL INDUSTRIES OF THE COMMONWEALTH OF INDEPENDENT STATES ARMENIA, AZERBAIJAN, BELARUS, GEORGIA, KAZAKHSTAN, KYRGYZSTAN, MOLDOVA, RUSSIA, TAJIKISTAN, TURKMENISTAN, UKRAINE, AND UZBEKISTAN By Richard M. Levine and Glenn J. Wallace The Commonwealth of Independent States (CIS) was created The Zangezur complex was established in 1951. About in December 1991 by some of the republics of the former 1 million metric tons (Mt) of ore was extracted by 1957. By Soviet Union (FSU) and then included all the former republics 1989, 9 Mt of ore was being extracted. Work, however, was except the Baltic States (Estonia, Latvia, and Lithuania). In more or less suspended in 1992-93. Since 1994, production at the adopted Declaration, the participants of the CIS promised the plant has increased regularly. In Soviet times, the complex that their interaction would be based on the principle of the had 1,600 employees. By 2004, it employed 2,800 people (Hetq sovereign equality of all its members and that the member states Online, 2005§). were independent and equal subjects under international law. In December 2004, a contract was signed for the sale of The CIS is not a state and does not have supranational powers. Zangezur. The complex was sold for $132 million; 60% of In 2004, the members of the CIS were Armenia, Azerbaijan, the shares was sold to a German company (Cronimet Mining Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, GmbH); 15% went to Pure Iron OJSC, which operated a factory Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. in Yerevan; 12.5% each went to Armenian Molybdenum This report focuses on the major mineral-producing industries Production enterprise and Zangezur Mining Ltd. of Armenia in the CIS that were in the process of significantly expanding (Hetq Online, 2005§). production in 2004. Information on expansion plans provided The fourth stage in the development of the complex, which in this report form the basis for the projected increases in was to be initiated in 2005, would increase production volume production in the CIS in historic and projected output tables by 15%. The percentage of molybdenum and copper extracted for mineral commodities found in the Minerals Yearbook, vol. from the ores will be increased. In coming years, production III, Area Reports, International 2004—Europe and Central volume was expected to almost double (Hetq Online, 2005§). Eurasia. Given the increasing global demand for fuel and nonfuel minerals, this report provides information on planned Internet Reference Cited or projected increases in mineral production in the CIS, which was the largest mineral-producing region in the world and a key Hetq Online, 2005 (June 15), Ecology, accessed December 12, 2005, at URL supplier of minerals to world markets. http://www.hetq.am/eng/ecology/0506-qaj.html. ARMENIA AZERBAIJAN One-third of the Soviet Union’s mine output of molybdenum For the past decade, Azerbaijan’s offshore oil deposits in the came from the Republic of Armenia, and Armenia is estimated Caspian Sea have been a major focus of global oil development. to produce an even greater share of CIS molybdenum output. Since 1997, increases in the country’s oil production have The major producer of molybdenum in Armenia was the mainly been produced by the international consortium Zangezur copper and molybdenum mining complex, which is Azerbaijan International Operating Company (AIOC), which located near the town of Kadzharan 346 kilometers (km) from accounted for more than 70% of Azerbaijan’s total oil exports. Yerevan. Kadzharan is known for its molybdenum mines and AIOC’s partners were State Oil Company of Azerbaijan its copper and molybdenum plant (the Zangezur Copper and (SOCAR); Inpex Corp. and Itochu Corp. of Japan; Statoil ASA Molybdenum Plant). Armenia has 7.6% of the molybdenum of Norway; Türkiye Petrolleri A.O. of Turkey; BP p.l.c. (BP) reserves of the world, 90% of which belong to Zangezur. of the United Kingdom; Devon Energy Corp., Exxon Mobil The mines at Kadzharan are known for their size and for the Corp. (ExxonMobil), and Unocal Corp. of the United States; percentage of molybdenum contained in their ores (Hetq Online, and the joint venture of Delta Oil Com. Ltd. of Saudi Arabia and 2005§1). Amerada Hess Corp. of the United States. Company activity included operations on the offshore ACG megastructure, which included the Azeri, the Chirag, and the deepwater Gunashli 1References that include a section mark (§) are found in the Internet fields. The ACG was estimated to contain 5.4 billion barrels Reference(s) Cited sections. (Gbbl) (756 Mt) of proven crude oil reserves according to BP, COMMONWEALTH OF INDEPENDENT STATES—2004 7.1 which was the fields’ operator and AIOC’s largest stakeholder. refining complexes, auxiliary shops, and servicing units and SOCAR recently raised its assessment of the field’s recoverable employed about 20,000 people. Each of the four mining and reserves from 5.4 Gbbl (756 Mt) to 6.9 Gbbl (966 Mt). During refining complexes comprised a mine and a beneficiation plant 2004, the AIOC reported that the fields’ oil production averaged to process ore and to produce potash fertilizers in the form of 132,000 barrels per day (bbl/d) [18,480 metric tons per day fine, fine crystallized, and granulated concentrate of potassium (t/d)], which was produced mostly from the Chirag-1 stationary chloride and mixed potash salt. In addition, Belaruskali platform. This production, which has been termed “early oil,” produced a variety of other salts (Production Amalgamation was exported through the “Western Early Oil Pipeline,” which Belaruskali, undated§). extends to the Georgian port of Supsa on the Black Sea (U.S. Belaruskali not only maintained its production capacity but Energy Information Administration, 2005§). consistently increased potash fertilizer production, which was In the next decade, the main production development possible because of its sufficient raw material base. In accord in Azerbaijan was expected to come from the three-phase with a development program for Belaruskali for the period development of the ACG megastructure. First oil flowed from 2002-10, a number of investment projects were prepared and the Central Azeri development of the ACG on February 12, were underway. The goals of the program were to maintain the 2005, and exports began in March 2005. During 2005, the new raw material base of Belaruskali, to improve technologies used field was expected to produce an average of approximately for processing potassium ore through technical retrofitting and 93,000 bbl/d (13,020 t/d). According to BP, the combined implementation of new beneficiation methods, to construct mine production from the Chirag and the Central Azeri fields was No. 5 “Krasnoslobodski,” and to reduce environmental impacts expected to average approximately 240,000 bbl/d (33,600 t/d) (Production Amalgamation Belaruskali, undated§). by the end of 2005. By 2007, total oil production from the ACG was projected to reach approximately 500,000 bbl/d (70,000 Reference Cited t/d) with the full implementation of Phase 1. If AIOC’s Phase 2 plans are achieved, then production from the East Azeri and Searls, J.P., 2005, Potash: U.S. Geological Survey Mineral Commodity the West Azeri fields were expected to add more than 800,000 Summaries 2005, p. 126-127. bbl/d (112,000 t/d). Production was expected to peak at about 1 million barrels per day (Mbbl/d) [140,000 t/d] ) by 2009 Internet Reference Cited following the completion of Phase 3, which included production Production Amalgamation Belaruskali, [undated], Our history, accessed from the deepwater Gunashli field, and will complete full ACG December 17, 2005, at URL http://www.belarus.net/kali/kali_1.htm. development (U.S. Energy Information Administration, 2005§). Azerbaijan produced a number of mineral products besides GEORGIA oil. Azerbaijan’s Government expected output in 2006 to total 30,000 metric tons (t) of primary aluminum, 1,230 t of During the Soviet period, a range of minerals, which steel pipes, and 1,117 t of cast iron. By 2010, production was included arsenic, barite, bentonite, coal, copper, diatomite, lead, expected to reach 110,000 t of primary aluminum, 1,325 t of manganese, zeolite, and zinc, were mined in Georgia. The steel pipe, and 1,203 t of cast iron (Interfax Central Asia & country had been a major producer of high-grade manganese ore Caucasus Business Report, 2005§). for about a century, although ore reserves were being depleted. Part of the manganese was used within Georgia for ferroalloys Internet References Cited production. Following the dissolution of the Soviet Union, mineral production declined steeply. Although production in Interfax Central Asia & Caucasus Business Report, 2005 (November 15-21), Azerbaijan’s metals output expected to grow by quarter in 2006, accessed the mineral industry was reviving, Georgia was not producing December 16, 2005, at URL http://www.fbis.fedworld.gov. or planning to produce any mineral products in quantities that U.S. Energy Information Administration, 2005 (June), Azerbaijan, accessed would be of more than regional significance. December 13, 2005, at URL http://www.eia.doe.gov/emeu/cabs/ Georgia’s main role in world mineral supply was serving as azerbjan.html. a transport route for oil and gas shipments out of the Caspian region to world markets. Three of the new large oil and gas BELARUS export pipelines that have been or are being constructed in the Caspian region pass through Georgia—the Baku-Supsa Belarus had a number of significant mineral production (“Western Early Oil Route”), the Baku-Tbilisi-Ceyhan (BTC), enterprises, which included a steel minimill, a nitrogen and the Baku-Tbilisi-Erzurum (BTE) pipelines. No routes production enterprise, and two oil refineries. The only mineral were scheduled to cross Armenia owing to Azerbaijan’s production enterprise that played a major role in world troubled relationship with Armenia (U.S.