Armenia’s mining sector is one of the cornerstones of the national economy. In 2015, the mineral industry grew by 50.4 per cent and made up to 16.7 per cent of total industrial production of Armenia. Over half of the exports from Armenia are ore concentrates and metals. In the state register of mineral resources of the Republic of Armenia (RA) there are 670 mines of solid minerals (including 30 metal mines) as of November 2020 registered. 

Since 2011 Concern Dialog law firm has specialised in mining law. Since then the firm has represented and provided legal services to major mining companies in Armenia, as well as was assisted clients with numerous significant transactions in this field. Our extensive experience varies from representing mining companies in employment, tax and administrative disputes to day-to-day support of the activities of the company. An essential part of our portfolio is the due diligence of Mining companies, usually before the takeover of such companies, as well as representing clients in regards to the regulatory matters, including appeals of relevant acts of the subsoil inspection of Armenia and issues related to the environment within the mining industry. 

We offer the following services in the Mining Sector:

  • Legal consultancy to entities willing to enter the Armenian Mining Market․ Particularly, We provide consultancy on
    • procedures,  requirements and limitations for obtaining subsoil use permits, construction and other permits, as well as support with applying for such permits,
    • procedures and requirements for Environmental Impact Assessment and Expertise, as well as assist with undergoing Environmental impact assessment and expertise (including through engaging relevant experts and professionals) if necessary,
    • on the available mechanisms for obtaining land for carrying out the mining projects,
    • choosing the efficient corporate structure and establishing the special purpose vehicle for the project.
  • Besides, we:
    • walk clients through the critical aspects of the taxation of mining activities in Armenia and advice on implementing efficient tax strategies,
    • assist with negotiation of the project agreements with state and private entities,
    • support with indicating available procurement sources.
  • We support the clients who wish to conclude transactions with Mining companies (usually before and during the takeover of such companies or their assets).
    • We carry out due diligence of the target company, including its licenses, permits, underlying documents, assets, transactions, tax and other liabilities, employment relations, etc.,
    • We support the clients with negotiations of the transaction and drafting of underlying contracts (including as a local counsel to the international legal consultant). Most importantly, we support clients with forming necessary warranties and representations sections in the relevant contracts to mitigate the risks associated with the transaction,
    • At the conclusion stage, we provide support with compliance with applicable administrative regulations (usually State Commission for the Protection of Economic Competition and regulatory bodies) if applicable for the relevant transaction.
  • We provide day-to-day support to mining companies carrying out activities in the mining sector, including:
    • General consultancy on regulatory matters (mining and environmental), including during the inspections as well as within the procedures of the appeal of such decisions,
    • General consultancy on employment law matters and issues specific to the sector, 
    • Consultancy on tax law matters, including on royalties and other issues specific to the sector, 
    • Consultancy regarding the compliance with their obligations, including obligations related to the protection of environment and subsoil regulation,
    • Representation in relations with administrative bodies, within administrative proceedings.
  • Finally, representation in disputes arising out of mining relations (within both Conventional and Alternative Dispute Resolution mechanisms) has been one of the significant parts of our experience. We represent the clients (notably, we have extensive experience of representing both the Mining Companies and employees) in Employment disputes, taxation disputes, issues arising out of Environmental audit and other disputes with administrative and state entities.

The notable cases of the Firm in this sector include: 

  • The Firm has conducted comprehensive due diligence of three companies (two of them within largest ones in the country) holding licenses for extraction of metal minerals within a procedure of an acquisition of the companies indirectly holding shares in the rightsholder companies in 2020: the advice has included full due diligence of the mining licenses, compliance of the rights holders with the mining and environmental laws and regulations, due diligence of the real estate, corporate matters, contractual matters, tax law issues, judicial issues and other matters relating to the target companies. The consultancy has also included assistance with compliance issues, including anti-monopoly regulation implications, as well as applicable regulations for declaration of the UBO.
  • The Firm has provided full consultancy to the client aiming to take over a company holding a license for extraction of minerals in 2019: this case included A to Z consultancy for the acquisition, including assistance of the client during the negotiations of the transaction, comprehensive due diligence of the target company, structuring the Risk Matrix based on the results of the Due Diligence and the respective transaction structure. This case as well has included Consultancy on compliance issues, including anti-monopoly regulation implications, tax implications and UBO declaration regulations.
  • The firm has conducted full due diligence (including due diligence of mining licenses) of a yet non-operational company holding a license for extraction of gold from a mine before the acquisition of the shares thereof in 2019. Based on the results of the DD conducted by the firm, the transaction was not closed due to the number of critical risks and issues discovered during the Due Diligence.
  • During 2011-2016, the firm provided full legal consultancy to the rightsholder of one of the largest metal mines in Armenia. The Consultancy included representing of the client in large scale judicial disputes such as challenging several environmental administrative acts for alleged breaches of applicable mining and environmental regulations (including challenges before the administrative bodies), challenges of administrative acts for alleged violations of mining-related tax regulations (incl. Royalties), as well as representing in about 100 other “ordinary” administrative procedures and court cases (labour, criminal etc.). 
  • The firm represents interests of a client in a dispute with regards to challenging an act for alleged breaches of mining and environmental laws. The significance of the case is the fact that the challenge is based exclusively on the procedural violations of inspection based on which the act was adopted and is likely to have a critical impact on the future implementation and interpretation of applicable laws.