Legal and institutional challenges of State Inspection of Gold Mineral Resources’ use

Abstract

Mining is considered as one of the most vital industrial fields in many developing countries, and Armenia is not an exception. Mining is a risky business, fraught with hurdles. Exploration often comes up empty, investments are large, and commodities are volatile. Moreover, there are large environmental and social risks associated with tailings, dams, and resettlement policies. A risky business does not, however, mean that mining is or should be an irresponsible business. Many of these risks can be mitigated or eliminated. One of the key risks associated with mine operations is the proper evaluation of extracted resources through state inspection and tax authorities to ensure fair share of benefits both for the state and the company. This requires proper policies, laws, regulations, careful implementation, and planning for the whole life-cycle of the mine and when the mine closes – all of this even before the mine opens. Furthermore, it should be stated that for the resources rich countries mining is one of the top measures to fill the state budget, as the taxes and royalties particularly from gold mineral resources occupy a huge part in state budget, which in its turn may be allocated for countries’ other needs, as pension, allowance etc. In comparison with other countries, Armenia is considered as precious metal resources rich country. Among base metal and precious metal deposits located in Armenia, there are 8 copper-molybdenum mines, 3 copper mines, 13 gold and gold-polymetallic mines, 2 poly metal lie mines, 2 iron ore mines, 1 aluminum and 1 magnesium silicate and chromite rock mines. Therefore, it is obvious that inspection of gold mineral resources in Armenia is very crucial and the regulatory framework and oversight mechanisms should be properly designed and effectively enforced to ensure fair conditions and reasonable share of benefits between the state and the companies from resource use.