Dirty Zod

Dirty Zod

That triple-A rogue (the Appalling Anil Agarwal) seems to have done it again. Not content with brushing aside the allegations of fraud made against his company, Sterlite Gold, by the Armenian government last year, he's allegedly committed fresh violations at his Zod gold operations.

In a report issued last week, the country's ministry of Natural Resources accused Sterlite Gold of mining more gold than permitted (essentially "high grading" the ore), deliberately under-valuing the reserves, and - critically - of failing to contain the appropriate amount of mine wastes.

Sterlite Gold has been running at a loss for some time, despite Agarwal's attempts to circumvent the company's problems. His promise to raise a minimum of US$80 million for a new mill close to the minesite has gone nowhere. That's hardly surprising considering that investors would not be enamoured about pouring new money into a failing venture close to the fractious Azerbaijan border. Or that Agarwal has made it clear he needs to site a refinery on the ecologically protected Lake Sevan, in the lea of Mount Ararat .

It now seems considerably more likely than it did a year ago, that Agarwal will face criminal charges in Armenia, but we doubt he will lose much sleep over the prospect.

When he "backwarded" Sterlite Gold into Vedanta Resources plc in 2006, it was he and his family who pocketed more than half the US$60 million that his UK company shelled out to purchase the Armenian enterprise. That was a scandalous piece of quasi-insider trading which merited not a single adverse comment from the UK financial press. Worse, the deal received the approval of that "responsible" accountancy firm, Ernst & Young.

One possible option for the Indian mining magnate is simply to cut and run from Armenia. After all, his initial partner in the Zod mine venture was none other than Robert Friedland who did precisely that in 1992 after his notorious Summitville Gold mine in Colorado began spewing masses of toxic wastes from its leaking cyanide heap leach pads.

Friedland was indicted for his criminal negligence, but never served a day in court, let alone in jail.