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ARMENIAN GOVERNMENT IMPOSES $50 MLN PENALTY ON AGRC
Arminfo Agency
2007-05-04 19:39:00
Having inspected the activity of the Ararat Gold Recovery Company
(AGRC) owned by the Vedanta Resources corporation (India), the Armenian
Ministry of Finances and Economy has drawn up an act worth about $50
mln, a copy of the document sent to ArmInfo says.
In accordance with the act, the largest penalty worth about $30
mln was imposed on the company as a result of inspection held in
2004-2005-2006 and in the first quarter of 2007. It turned out that
the AGRC has been implementing its gold recovery activity without
the required documents. Particularly, the company turned out to lack
a licence agreement, a document on reaffirmed reserves, as well as a
project on developing the Sotk gold deposit. Besides, to deliberately
conceal the profit earned during 1999-2006 by means of overrating
the amortization of tangible and intangible assets, the company
increased the production costs by about $20 mln. In this connection,
about $4,5 mln penalty has been imposed on the enterprise. Smaller
penalties have also been imposed on the company for a number of other
financial violations disclosed by the inspectors.
To note, the Armenian Government which is discontent with the AGRC
activity forces the company to leave Armenia. The well-informed
source told ArmInfo that the AGRC may be sold to a Russian company for
$80-90 mln. This issue is currently being discussed in London. Four
Russian investors are claiming to the company. The Vedanta Resources
corporation, the owner of AGRC, is controlled by the family of Anil
Agarwal, a large Indian entrepreneur. The AGRC has suspended gold
mining in Armenia because of the serious reprimands of the Armenian
Government which considers the investor to fail implementing its
obligations. The leadership of the company denies all the complaints
of the Government and considers them unsubstantiated. Most part of
the AGRC Indian personnel have already left Armenia.
According to the latest explorations, the gold reserves in the Sotk
deposit exploited by the AGRC made up 80 tons (2,6 mln ounces), in
Meghradzor - less than 1 ton. The ARGC was going to increase the ore
output to 4 tons per year (130 thsd ounces) by the end of 2008.
Arminfo Agency
2007-05-04 19:39:00
Having inspected the activity of the Ararat Gold Recovery Company
(AGRC) owned by the Vedanta Resources corporation (India), the Armenian
Ministry of Finances and Economy has drawn up an act worth about $50
mln, a copy of the document sent to ArmInfo says.
In accordance with the act, the largest penalty worth about $30
mln was imposed on the company as a result of inspection held in
2004-2005-2006 and in the first quarter of 2007. It turned out that
the AGRC has been implementing its gold recovery activity without
the required documents. Particularly, the company turned out to lack
a licence agreement, a document on reaffirmed reserves, as well as a
project on developing the Sotk gold deposit. Besides, to deliberately
conceal the profit earned during 1999-2006 by means of overrating
the amortization of tangible and intangible assets, the company
increased the production costs by about $20 mln. In this connection,
about $4,5 mln penalty has been imposed on the enterprise. Smaller
penalties have also been imposed on the company for a number of other
financial violations disclosed by the inspectors.
To note, the Armenian Government which is discontent with the AGRC
activity forces the company to leave Armenia. The well-informed
source told ArmInfo that the AGRC may be sold to a Russian company for
$80-90 mln. This issue is currently being discussed in London. Four
Russian investors are claiming to the company. The Vedanta Resources
corporation, the owner of AGRC, is controlled by the family of Anil
Agarwal, a large Indian entrepreneur. The AGRC has suspended gold
mining in Armenia because of the serious reprimands of the Armenian
Government which considers the investor to fail implementing its
obligations. The leadership of the company denies all the complaints
of the Government and considers them unsubstantiated. Most part of
the AGRC Indian personnel have already left Armenia.
According to the latest explorations, the gold reserves in the Sotk
deposit exploited by the AGRC made up 80 tons (2,6 mln ounces), in
Meghradzor - less than 1 ton. The ARGC was going to increase the ore
output to 4 tons per year (130 thsd ounces) by the end of 2008.