Azerbaijan to purchase shares of foreign contractors in ore mine agreements

/By Azernews/

By Fatma Babayeva

The Azerbaijani government will purchase stakes of foreign contractors in a number of agreements on ore mine development carried out in the country.

President Ilham Aliyev signed a relevant decree on May 25, which stipulates taking definite measures for study, research, exploration and development of Garadagh, Chovdar, Geydag, Dagkesemen ore mines, Kohnemadan field and deposits of Kurekcay Basin.

The Ministry of Ecology and Natural Resources, the Ministry of Economy and AzerGold CJSC were instructed to take the necessary steps on the purchase of the shares of the contractors by AzerGold CJSC and inform Azerbaijan’s President about the results of the implemented measure.

In the meantime, the Ministry of Economy, the Ministry of Finance, the Central Bank of Azerbaijan (CBA) and AzerGold CJSC were entrusted to submit proposals on financing the purchase of the contract’s shares by the Company to the President of Azerbaijan within two months.

After the realization of the purchase, the Ministry of Ecology and Natural Resources will take the necessary steps to annul the agreement on the basis of the mutual agreement in accordance with Article 26.6 of the agreement.

In addition, AzerGold CJSC was instructed to ensure efficient management and study, research, exploration and development of Garadagh, Chovdar, Geydag, Dagkesemen mines, Kohnemadan field and deposits of Kurekchay Basin after making a purchase.

The agreement covering 30 years was ratified by the Azerbaijani Parliament (Milli Majlis) on June 5, 2007.

Investments in the exploitation of the subsoil resources were expected to amount from $1 billion to $3.5 billion after implementation of successful exploration works.

Azerbaijan's share in the agreement is 30 percent of total revenue. Foreign contractors that have shares in the agreement are Londex Resources S.A. (45 percent), Will and Meyris S.A. (29 per cent), Fargate Mining Corporation (15 percent) and Globex International LLP (11 percent).

Azerbaijan is rich with ore minerals which are mainly spread mostly in mountainous territories (Major and Minor Caucasus) of Azerbaijan. Therefore the ore industry of the country is mostly developed in the western part of the country.