Interfax, Russia
Dec 17 2004
Armenia sells Zangezur combine for $132 mln
Yerevan. (Interfax) – Armenia has sold the Zangezur Copper-
Molybdenum Combine to four companies for $132 million.
The sales contract was signed December 14 in Yerevan, Trade and
Economic Development Minister Karen Chshmaritian said at a news
conference.
He said 60% of ZMMK shares went to Germany’s Cronimet Mining, 15% to
Yerevan’s Pure Iron, 12.5% to Armenian Molybdenum Production (AMP)
and 12.5% to Zangezur Mining.
The new ZMMK shareholders will create a unified management company,
the minister said.
The first $45 million will be paid by January 1, and the remainder by
the end of 2005. The deal will be financed by a consortium of Germany
banks that includes Deutsche Bank, Chshmaritian said.
According to a preliminary agreement, $250 million to $350 million
will be invested in ZMMK by 2012. The final figure will become clear
after a feasibility study is prepared in 2005 for the company’s
modernization.
The investment is expected to boost ore production by 50% to 100%.
The project is expected to pay for itself in 6-7 years.
Armenia will stop exporting molybdenum concentrate as of January 1,
as it will all be processed inside the country, the minister said.
Given the current high world prices for molybdenum, even high
shipping costs are not expected to cause problems. The company
exports to Europe through Iran and Georgia.
Zangezur decreased production by 2.1% year-on-year to $24.8 billion
dram in the first half of 2004.
ZMMK mined 8.1 million tonnes of ore in 2003, and produced 6,300
tonnes of molybdenum and 11,000 tonnes of copper in copper
concentrate. The Kadzharan copper and molybdenum mine, which ZMMK
works, has the largest reserves of any in the former Soviet Union.