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The Teghout copper mine project in northern Armenia faces criticism in Armenia, because it poses a range of social and environmental dangers. Environmentalists say there is a risk of spread from a toxic tailing dump into Georgia, in case of an earthquake. Yet it received 62 million dollars from pension Danmark, guaranteed by EKF, Denmark’s export credit agency.
According to the NGO Civilnet, there are large gaps in Armenia´s environmental laws, violations of international standards and minimal economic spillover effect from industrial development to the Armenian people. This puts Armenia in a similar situation as fragile and post conflict countries (PCC): they need help from international partners. Yet, despite a good reputation on environmental matters, the Danish investment appears to have fallen short in terms of environmental and social protections.
The Teghout preliminary licensing process, in 2011, did not include any public consultation, and only limited consultation took place when the license was confirmed after an Environmental Impact Assessment (EIA) in 2006. The EIA was undertaken by Lernametallurgical Institute, an entity owned by the Vallex group - the beneficiary of the investment - calling into question its objectivity. EKF agrees that this EIA failed to meet international standards. So, EKF acknowledges that the license was granted in violation with international standards. EKF described the Teghout mine as having "significant adverse environmental and social impacts". Yet, EKF´s guarantee assured 62 million dollars from Pension Danmark to the mine. Civilnet gained access to a gap analysis by Moscow-based consultancy agency ERM, which found that "there had never been a social impact assessment of the Teghout project".
The United Nations have repeatedly condemned the Vallex Group´s failure to comply with the Aarhus Convention. This has taken place during EKF´s four year engagement in the Armenian copper mining project.
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