David Tovmasyan’s Interview with “Syunyats Yerkir” Regional Newspaper

Mr. Tovmasyan, first of all, thank you for accepting the interview invitation.
From our meetings we got the impression that you are a straightforward person and do not have self-consciousness when communicating with journalists.
So we are in for a frank talk.

Thank you for expressing an interest towards our company.

Since it is our first public talk, therefore we would like to know first of all who is (who are the owners) of the Kapan mine.

The company is one of the assets of the British “Chaarat Gold International Limited” company, a fast-growing mining company tending to become one of the world’s largest gold producing companies. The head office of the company is located in London. Besides Armenia, it also has assets in the Kyrgyz Republic.

About a phenomenon that may even astonish (sometimes even bewilder): over the last 20 years the owners of the company have been changing every now and then. How is this explained? According to the observers either the industry is not profitable or there are shadow barriers that eventually disappoint the owner…

It is a common occurrence, there is nothing extraordinary. This is a business first and foremost; you may constantly have or may not have at all purchase and sale in business. It just happened that the owners of the Kapan mine changed several times, but I can assure you that there are no obstacles. I would also like to note that the company works both with the government and local authorities within the law and we have not encountered any obstacles by them either.

What is “Chaarat Kapan” CJSC today; the key production figures…

The company operates Shahumyan gold-polymetallic deposit by underground method. It produces copper and zinc concentrate with gold and silver grade. Compared to previous years, we have increased production figures, in particular in 2019 the ore production is 7% more than the previous year, ore processing is 16% more, gold equivalent production has been increased by 3%, and drilling by 15%.

A little more detailed about job opportunities, because the company solves a major social problem in the region by providing about 1,000 jobs.
And, of course, about salaries. A year ago that was the reason for the strikes.

Chaarat Kapan is the largest employer in the community; our company has more than 1100 employees today, as well as about 250 that work for our contractors that provide services to the company. The majority of employees are from Kapan and the surrounding areas. As concerns the salaries of the employees, there were increases in some departments. We are also implementing a program that encourages employees to fulfill monthly plans in addition to their base salaries, with a bonus of 15-20% of salary depending on the production figures for the month. We also hold a competition each month between the company’s core underground professions. The best employees of the month are selected as per the terms stipulated by the competition procedure, who, in addition to the above bonuses given to all employees of the company, are further encouraged.

Concerning the engineers of the company.
Does the company have relevant professional employees?
Are they locals or expats? What is being done to train the local specialists?

Kapan mine has a rich work history; dozens of honored veterans have gained professional growth and experience here, with whose heritage we continue to work today. Our employees, almost everyone, is local, and I must say with gratitude that we have a skilled and intelligent team, of course, keeping up with the times and having the best international experience, improving working conditions, regularly inviting leading professionals in our field to further develop the professional skills of employees.

Although you are relatively young, you have a reputation of experienced and positive leader in the mining industry.
In your opinion, what are the main criteria of any mining enterprise operating in Syunik?

I believe that transparent work style, honesty, human resources, respect, as well as accountability for the wealth of nature and the environment, should be the key standards of a mining company.

We have noticed an important factor in your work style that is appreciated.
In the last 20 years, let’s be honest, the company executives have often turned the mine into a political stick or a tool in the hands of the regional or community authorities.
As we can see you did not choose that path.
Is our observation correct?

We are not here to be engaged in politics or advertising, but with the mission to do good through our work to improve the quality of life of the community, provide them with jobs, and why not provide income for shareholders.

We do not want to touch upon the heritage received from the previous owner, though it is also a very important issue.
One question, however, we cannot sidestep.
The press regularly points to the imminent danger to the environmental situation of Kapan from former Lenhanker or Kavart mines.
One of the previous owners was able to waiver the deposit by failing to freeze (to reclaim) the mine under the current law.
Your attitude to the situation like in Lenhanker, ways to solve the problem.

The problem of Lenhanker is a global one that must be resolved jointly by the government, the community and the interested mining industry. To address the issue, exploration works must first be implemented to understand whether the mine is likely to be further operated or not. Great resources are needed to accomplish these activities.

Which deposit is your company operating now?
Back in the day a huge exploration and geological works were carried out at Shahumyan deopsit (by the previous owner), then it was halted. What is the state of the deposit now?

We are operating Shahumyan gold-polymetallic deposit. A plan is being developed for 2020 to conduct exploration in the western and eastern wings of the Shahumyan deposit, which is intended to increase the estimated reserves, which will lead to the extension of the life of the mine.

As a matter of curiosity, did you have a chance to interact with previous owners or previous directors?
If so, what impressions do they have from the Kapan mine or what advice do they try to give you, although we think you don’t need their advice?

Yes, I had, and we still have a good relationship today, which is more friendship wise than business related.

Concerning the environmental policy of the company.
And, of course, how do you evaluate the impact of the company on the environmental condition of the surrounding neighborhoods and the environment itself?
Several years ago projects were put up for public discussion regarding the expansion of the Geghanush tailing dump, which were rejected, what was the windup of the expansion of the tailing dump problem?

Environmental protection is one of our top priorities, and from the very first day of its operation, Chaarat Kapan has been implementing various projects to minimize the impact. As for the expansion of Geghanush tailing dump, I would like to inform you that this kind of project has not been implemented and we are not going to do it either.

We only implement an additional tailings dam reinforcement project. Based on international practice, we are implementing this program to ensure that it is safe and secure for future tailings operation. The company has involved a reputable international organization in the reinforcement work of dam.

Which are the affected communities, what projects are you implementing in those communities or settlements?

Kapan enlarged community is the affected community by the company and we are working closely with the municipality to participate in the community projects. Back in June, the company and the Kapan community signed a social and economic cooperation program, within the framework of which the company provided 100 million AMD for the construction works of the pre-school educational facility at 16 Lernagortsneri Street of Kapan.

This year the main focus of the company social programs were the children, which we implemented with great pleasure and responsibility. Recently we cut the red ribbon of the newly renovated women health consulting department of Kapan clinic, which also solved a big problem for the community. In addition to renovating the department, our construction team continues to work on that floor of the clinic, creating clean and well-off conditions for our residents. Soon another initiative will be completed: the renovation of Kapan N2 Music and Art School building. There are many projects that I think cannot be mentioned one by one, and Geghanush, affected by the company; we have more activities going on here. In Geghanush there is never lack of projects and initiatives. One of the important projects I will mention here is the renovation of Geghanush preschool. As you know, there was no kindergarten here for years, but there was a need.

Concerning partnership relations.
Years ago, one of the top priorities of Syunik mining companies was the relationship with local businesses.
That is, if any auxiliary material could be purchased from a local manufacturer or business, and if any service could be provided through the locals, then it was done with them.
Then the approaches changed.
Do you consider it important and what is your vision in this regard at present?

Partnership relationships with local businesses are still a priority for the company today, which we consider important as the company operates here, and we tend to engage both our employees and service delivery through the locals.

The mining industry is constantly being modernized worldwide; we get that impression when we follow the publications that cover the industry.
What is happening at Kapan Mine in this regard?
We realize, of course, that it requires a huge investment.

Our company keeps pace with the times, and we are improving day by day. We develop projects to improve the working conditions of our employees and to acquire new equipment; some technical equipment has already been purchased, old ones updated. We tend to perform basic work automated to minimize manual work.

What important question would you like to address that was not touched upon during our conversation?

Using your audience and the opportunity, I would like to congratulate all the residents of the region on holidays, thank our partners, local authorities for their cooperation and wish that the coming year is a year of implementation of new projects and successes for Syunik.

Mr. Tovmasyan, thank you for the interview. Good luck to you and to your company.

Thank you.