GOVERNMENT LOAN TO HELP MAINTAIN DEVELOPMENT AND JOBS IN ZANGEZUR COPPER-MOLYBDENUM FACTORY

ARKA
Feb 20, 2009

YEREVAN, February 20. /ARKA/. The loan allocated by the Armenian
Government to Zangezur cooper-molybdenum factory will be used for
keeping the development of the enterprise on and for maintaining
the jobs, Director of the factory Maxim Hakobyan said at Novosti
International Press Center.

Armenian Government made a decision to extend a $10mln worth
loan to Zangezur copper and molybdenum factory at its sitting
yesterday. Armenian Minister of Finance Tigran Davtyan said that
these investments are part of government efforts to overcome the
world crisis effects.

Director of the factory said that four years ago the government
and the stockholders signed an agreement on development of the
field. According to him, implementation of the first stage of the
program made production output grow by 50% over four years and helped
create 400 new jobs.

"The amount allocated will be directed to implementation of the
second part of the program, i.e. ensuring development, output growth,
maintaining jobs and salaries," Hakobyan said.

Investments in enterprise totaled about $330mln over the last four
years, he said.

"We used these amounts mainly to purchase modern and high-efficiency
equipment," director of the company said.

Hakobyan also said that the government-provided funds will help to
keep about 2,000 employees of 30 satellite enterprises. Besides, the
program will ensure a 35% growth of molybdenum production and a 75%
increase in cooper production. Permanent work will be provided to
10,000 people and another 200-300 new jobs will be opened by the end
of this year or the beginning of the next year.

Under the agreement of privatization of a major Armenian mining
enterprise, Zangezur cooper-molybdenum factory in Kajaran, the control
stock (60%) of the company’s shares were transferred to the German
"Cronimet", 15% to "Pure Iron Plant" open joint stock company, 12.5%
to "Armenian molybdenum production" CJSC and the remaining 12.5% to
"Zangezur Mining" LLC.

The investment program of Zangezur cooper-molybdenum factory for
2005-2020 totals $240mln and is to be implemented in two stages –
in 2005-2008 and in 2008-2020. The first stage investments are to
total $157mln. The program anticipates modernization of open-cut mine,
processing plant, tailing dump, outer networks and buildings, as well
as protection of environment and labor safety measures.