ALL THAT GLITTERS…

For years now there has been a nervous situation concerning Azerbaijan's "golden contract" signed with the US company R. V. Investment Group Services Llc. The company won't start to honour its commitments, now citing as the reason low prices for gold and now the commercial unprofitability of the reserves in the deposits and now something else. As a result, things haven't changed.

True, R.V. Investment has one more valid cause not to fulfil the contract - a certain part of the deposits entrusted to it is located in Nagornyy Karabakh occupied by Armenians, which, judging by reports the latter  issue, are being quite successfully exploited by the separatists, or, to be exact, by their "partners" among which representatives of Russian business circles have started appearing again, as has been the case on more than one occasion.

And again the Azerbaijani side warns, expresses outrage, protests but… it seems that the time has come for more resolute and practical actions.

Daylight robbery

According to official figures, Azerbaijan has over 155 various deposits of useful minerals in Nagornyy Karabakh, including five gold-bearing ones, six mercuric, two copper, etc, 12 of which are classified as "rich ore deposits". Also here, are the areas Zod, Soyudlu, Qizilbulaq and Vacnali, which are some of the republic's mines that have abundant gold reserves. A total of 75 per cent of all of Azerbaijan's gold-bearing rocks are concentrated in Soyudlu alone.

In May this year, the Ecology Ministry published data on the plundering of natural resources in the occupied lands. In the past few years, over 30 companies have been set up in Nagornyy Karabakh to develop Azerbaijan's underground resources. The companies include Sterlite Gold Ltd, Sirkap Armenian, Base Metals, Manex and Valex, and Armenian Copper Programme. According to reports issued by various sources, in the past few years investment in the exploitation of natural resources here… has increased. In 2001-03 alone, 35m dollars were channelled into the economy of the separatist "Nagornyy Karabakh Republic", of which 25m dollars came from abroad, 5m dollars from Armenia and the rest from local entrepreneurs. According to forecasts, another 15m dollars will be attracted to this effect in the next few years. Armenians living in the USA, Canada, France, Australia, Switzerland, Lebanon, Russia, Ar-menia and other countries are currently investing in Nagornyy Karabakh.

Research conducted shows that precisely mining industry is considered a promising area in the unrecognized republic. In particular, the company Base Metals, established in 2002, is developing gold and copper fields on the territory of the occupied village of Qizilbulaq in Agcabadi District. Twelve tonnes of ore a month are processed there. The concentrate is re-processed in Armenia and then is exported to Europe.

In 1997, Armenia's Industry and Trade Ministry concluded a contract with the Canadian company First Dynasty Mines (FDM) to develop the Soyudlu deposit in Kalbacar District. In 1998, FDM acquired 50 per cent of the shares of the Armenian Ararat Gold Recovery Company and started to extract gold. The contract with the company which has been the full owner of the shares of the Ararat Gold Recovery Company since 2002 is worth 63.3m dollars. If before 2002 the volume of gold extraction in Armenia did not exceed 2 t, then in 2002 alone 3.2 t of gold and 5.5 t of silver were extracted. Two tonnes of precious metals were extracted at the Soyudlu deposit in 2003 alone, and 2.5 t in 2004. It is planned to channel 12m dollars into the development of gold-bearing deposits on the territory of Karabakh in 2007. Last year, this figure was 22.1m dollars. "As a result of the open development of the deposit, damage was inflicted on 50 ha of land in Kalbacar District," the Ecology Ministry states.

Armenia is successfully continuing to plunder copper deposits too. Thus, the Armenian company Armenian Copper Programme has processed 40,000 t of concentrate in the Qizilbulaq field and obtained 9.5 t of black copper. A total of 53.7 per cent of the shares of the company belongs to Vallex FM Establishment which is registered in Liechtenstein and 46.3 per cent belongs to the Swiss Elecom. But, it seems, the list of Armenia's collaborators in Azerbaijan's occupied territories is not limited to this.

Is Alrosa deliberately violating laws?

Russian investors in the shape of the known company Alrosa have expressed their wish to extract gold in a part of the deposit Zod - this is how Armenians have renamed the Soyudlu deposit. Russian companies' involvement in gold extraction in Armenia was recently discussed by these countries' presidents, Vladimir Putin and Robert Kocharyan. We should note that the talk was about gold extraction on the territory of Armenia. But no-one can guarantee that the Armenian side will not tell the investors that the fields in Azerbaijan's occupied territory are theirs. A little more than a month ago, the same Alrosa and the Armenian government signed an agreement on cooperation in the area of jewellery and manufacture of gold items.

True, it is not known yet whether the contract also covers the Soyudlu field in Azerbaijan's occupied territories. The press secretary of the Azerbaijani Foreign Ministry, Xazar Ibrahim, has said that this report is being verified currently, and the Azerbaijani ambassador to Russia is taking relevant measures.

Xazar Ibrahim noted that Azerbaijan had always appropriately reacted to attempts by foreign companies to operate in the country's occupied territories. He said that some companies come to the region to operate because they are not aware of the situation and then find out what is actually happening. "It may seem that Russia is deliberately going to establish business in Azerbaijan's occupied territories but perhaps Russia does not even known that part of the Zod field is in Azerbaijan's Armenian-occupied territory. There have repeatedly been cases when foreign companies wanted to establish business in the Armenian-occupied territory of Azerbaijan but then found out all the details about the occupied territories, apologized to the Azerbaijani government and left," Ibrahim noted. Earlier, companies with Georgian and Chinese capital had similar plans and they gave up on them in time. The latter even apologized to the Azerbaijani government.

Incidentally, the Georgian company Madneuli, which also lays claims to Karabakh's gold mines, just recently was purchased by the Russian financial-industrial group Industrial Investors. Georgian experts viewed this even as a political provocation. "I very much hope that we are not dealing with a multi-move combination by the Russian special services aiming to spoil Georgian-Azerbaijani relations," known economic expert Gia Khukhashvili said.

"However it may be, talks on this topic are under way at the moment and if Russia deliberately extracts gold in Azerbaijan's territory, measures required to prevent this incident will be taken," Ibrahim said. He recalled that companies that want to establish their business in occupied territories deprive themselves of the opportunity to have their economic interests in Azerbaijan in the future.

While documents are being collected…

Azerbaijan has more than once made complaints to Armenia about gold deposits being used in the occupied territories. In December 2005, the ecology minister even said that Azerbaijan would file a suit against Armenia with an international court "for plundering its national riches". In turn, R.V. Investment repeatedly tried to familiarize itself with the situation in the occupied territories. "However, Armenians fired on us. As an international company we are again trying to look into the situation on the territory entrusted to it on the basis of a contract," head of the Azerbaijani International Mining Operating Company Rza Vaziri said. The company has already appealed via lawyers to the Armenian government, as well as the UN, USA, Canada and the UK with the demand that work be stopped in the occupied territories. But the appeals were left unanswered and for this reason it is planned to send a petition to the US Department of State.

R.V. Investment does not have specific documents to file a suit against companies exploiting the gold fields. Anyway, company specialists take satellite pictures every two to three weeks. Domestic experts believe that there are quite big chances to win the case. At least because the cooperation of international organizations and financial institutions with separatist agencies is categorically unacceptable.

We dare to hope that after the necessary documents are collected, this issue will be tackled at the level of international court. True, no-one can guarantee that this issue will be resolved before Armenians plunder all the gold there is in Karabakh and there is nothing left to sue them for…