London Calling

London Calling

20th April 2007

Turning over the Zod

Last month, in reporting renewed criminal charges made against Anil Agarwal's perfidious Zod gold venture in Armenia, we commented: "One possible option for the Indian mining magnate is simply to cut and run from Armenia."

Agarwal didn't need to read this website to consider that an attractive proposition, but he was obviously not going to pull out "sans everything". And so it seems to be. Last week, the Armenian government accused him of trying to sell off the rights to the mine and other prospects in the obvious expectation that his permit to operate may soon be officially revoked.

The redoutable John Helmer of Mineweb reports that the Armenian government is "furious" at the Vedanta group in London "after it obtained evidence of the attempt in Yerevan, the Armenian capital, where a ministerial recommendation is pending at the presidential office to revoke the Zod licences, and oust Agarwal."

Of course Agarwal's hapless dogsbody (sorry, spokesperson) in London claims the sale attempt is no more than a "rumour", and senior Armenian government officials admit they don't yet know to whom Agarwal has been offering the assets.

But, says Helmer, "they suspect Vedanta has not disclosed to potential buyers the full extent of the sanctions already imposed on Sterlite. These include a freeze on the bank accounts of the mine operating company, Ararat Gold Recovery Company (ARGC), and a refusal to re-register and confirm the licences, on which mining operations depend. For practical purposes, ARGC, Sterlite and Vedanta can no longer operate in Armenia."

For its own part, the government has apparently invited Russian state and commercial interest in acquiring the licences, and redeveloping the project. with the huge Russian diamond-gold company, Alrosa a likely bidder

Says Helmer: "[T]he Armenians believe that Agarwal made a sizeable personal profit selling his personally held stake in Sterlite back to Vedanta." He reminds us that environmental problems, particularly water pollution, have resulted from Sterlite's management of ARGC operations. "The mine sites at Zod and Meghradzor are at opposite ends, northwest and southeast, of Lake Sevan, which is the largest body of water in Armenia, and accounts for more than half the potable water supply."

[Source: John Helmer "Armenian government to oust Vedanta from Zod gold mine" Mineweb , 20 April 2007]

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