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June 18, 2024

Armenia’s Mining Ascent: Bridging the Gap between Resources and Prosperity

Nestled in the heart of the Caucasus, Armenia is a treasure trove of mineral wealth, a hidden gem waiting to be unearthed and polished to its full potential. With a diverse array of resources including copper, molybdenum, gold, and a myriad of rare and precious metals, this landlocked nation is poised to become a mining powerhouse on the global stage. Serving as an anchor in the resource-rich region, Armenia’s mining sector is well-positioned to cater to the burgeoning demand for critical minerals essential for the global energy transition and battery growth.

The nation achieved an exceptional growth rate of 12.6% in 2022 and a robust 7% in 2023, driven by an influx of foreign exchange, migrants, and businesses. Within this growth, the tapestry of Armenia’s mining landscape is woven together by an astounding 670 mines of solid minerals, including 30 dedicated metal mines. This vast network comprises of seven copper-molybdenum mines, four copper mines, 14 gold and gold-polymetallic mines, two polymetallic mines, two iron ore mines, and one aluminum mine. While mining contributes modestly at 3.8% to GDP, it dominates exports at around 50% and employs around 11,000 people emphasizing the importance of this sector on the economy of Armenia.

The growth potential of Armenia’s mining sector is even more remarkable than it appears. Experts estimate that Armenia’s deposits hold a colossal 20 billion tons of mineral resources. Notably, at the forefront of Armenia’s mining might lies the Kajaran copper and molybdenum mine, the nation’s largest, which boasts a staggering 2.24 billion tonnes of ore reserves, accounting for an impressive 6% of global molybdenum reserves while clinching the 6th global production rank. Given these confirmed reserves and the current mining rate of 18 million tonnes per year, the Kajaran mine is expected to sustain operations for an incredible 100 to 120 years into the future. Recognizing the sector’s strategic importance, the Armenian government has unveiled an ambitious plan to modernize the mining industry by 2035, aiming to create a unified geological database, streamline decision-making processes, ensure compliance with international standards, and foster fair revenue distribution.

One of the key drivers fueling this expansion has been the foreign direct investment (FDI) in Armenia’s mining industry. During 2022, the sector attracted a considerable inflow of USD 146 million, accounting for a sizeable 15% of the total FDI received by the country that year. As Armenia predominantly exports raw minerals and metals, key opportunities for investors lie in developing facilities for processing copper, gold, molybdenum, and reprocessing metal-rich mining tailings. Amidst Armenia’s transformative journey, Delphos stands ready to lend its expertise and unwavering commitment to sustainable growth, aiding the mining sector towards a prosperous and environmentally conscious future.

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