Why the key to Armenia's development may lie in its subsurface։ Interview with Vardan Jhanyan

Armenia possesses enormous mining potential that is still far from being fully utilized. The development of the mining industry could bring the country substantial revenues, which could be channeled into funding strategic directions — from high technology to the defense industry. Thus, the mining sector could become one of the main drivers of the country's economic growth. This opinion was expressed to NEWS.am Tech by Vardan Jhanyan, First Deputy General Director of the Zangezur Copper-Molybdenum Combine and President of the Mining and Metallurgical Industry Association of Armenia.

According to him, the perception that Armenia is a small country with limited opportunities is mistaken.

He noted, drawing a comparison with Canada, that although Canada is significantly smaller than the United States, it is nevertheless one of the most developed economies in the world, and the foundation of that development was precisely the mining industry.

From copper to artificial intelligence

Jhanyan is convinced that the connection between mining and modern technologies is much deeper than commonly believed. Metals are the foundation of virtually all of humanity's technological achievements — from electronics to artificial intelligence. Without copper, molybdenum, and other metals, data centers, computing systems, and the entire infrastructure underpinning the modern digital economy cannot exist.

This is precisely why the Zangezur Copper-Molybdenum Combine served as the general sponsor of the RISE exhibition and forum — a major event dedicated to defense technologies and innovation. NEWS.am Tech was an information partner for the event.

Jhanyan noted that his company could not stand aside from areas strategically important to Armenia, such as the defense industry and high technologies.

He recalled that copper and molybdenum are critically important materials for high-tech and defense products. At the same time, the connection between metal extraction and the technology sector is mutual: technological development increases demand for metals, and increased extraction enables the creation of new technological solutions.

According to Jhanyan, the record-high prices for copper and molybdenum on global markets are largely driven precisely by the rapid development of artificial intelligence. The construction of computing centers requires enormous amounts of metals and electricity, which further stimulates demand for raw materials.

Why Armenian copper is not turned into wires in Armenia

Today, Armenia exports copper and molybdenum concentrate, which is then processed abroad into finished products — from wires to electronic system components.

Many people ask a perfectly reasonable question: why not establish deep processing within the country? Why export concentrate only to later import products made from that same concentrate?

According to Jhanyan, this issue is much more complex than it might seem.

He explained that a modern copper smelter requires significantly larger volumes of raw material to operate profitably. If Armenia currently produces about 80,000 tons of copper in concentrate per year, a competitive facility would need at least 200,000 tons.

Furthermore, the country's geographic location remains a serious limitation. Most large global metallurgical plants operate near seaports and use imported raw materials. For Armenia, far from sea routes, transportation costs significantly reduce the economic attractiveness of such a model.

Therefore, Jhanyan believes that before discussing the construction of large smelting facilities, it is necessary to increase extraction volumes at existing deposits.

Industry revenues as a source for developing other sectors

Even without deep processing within the country, the mining industry already plays an important role in economic development. According to the head of the Mining and Metallurgical Association, the sector generates significant tax revenues, which the state then allocates to fund various programs, including support for strategically important areas.

He cited China as an example, which was able to create one of the world's most powerful technological economies by using revenues from export industries to invest in science and technology.

Jhanyan stated that his industry provides the state with the ability to develop those sectors that have strategic importance.

Poor reputation

Jhanyan considers the industry's public image to be one of its main problems. In his opinion, the negative perception of the mining industry is a serious obstacle to realizing the sector's enormous potential.

Jhanyan acknowledges that environmental risks in this field do exist, but modern international standards can significantly reduce environmental impact.

He cites countries such as Canada, Australia, the United States, and European Union states as examples, where extremely strict environmental requirements are in place, yet the mining industry develops successfully.

He is convinced that if Canada, Australia, the United States, and the European Union can operate under these standards, then Armenia can as well.

According to Jhanyan, Armenian enterprises have already begun implementing international environmental and governance standards.

The Zangezur Copper-Molybdenum Combine has been publishing ESG reports on sustainable development and environmental impact for three years now. By his account, such examples are still rare among Armenian companies.

The ultimate goal, Jhanyan noted, is not simply to minimize negative impact but to achieve the so-called net positive principle — where the positive effect of an enterprise's operations outweighs the negative.

Digitalization, green energy, and electric haul trucks

Speaking about the industry's future, Jhanyan emphasized that development is not limited solely to increasing extraction volumes.

According to him, the Zangezur Copper-Molybdenum Combine is implementing the largest digital transformation program in Armenia, worth tens of millions of dollars. The project began about three years ago and is planned to continue for several more years.

This involves creating digital production management systems, automating reporting, and increasing the efficiency of all processes.

In parallel, projects are underway to build a solar power plant, modernize production facilities, and introduce electric haul trucks for transporting rock within the open-pit mine.

All these initiatives are aimed simultaneously at increasing productivity, reducing emissions, and improving the enterprise's environmental performance.

"The key to the country's development lies in our industry"

Concluding, Jhanyan stated that the mining industry remains the foundation for both the traditional economy and the development of modern technologies.

Without metals, as noted above, the development of artificial intelligence, renewable energy, digital infrastructure, and the defense industry is impossible. Moreover, increased metal extraction is necessary to address one of the world's main challenges — the energy transition and reduction of greenhouse gas emissions.

Therefore, the association head believes, Armenia should not restrict the industry's development but rather use its potential as a tool to fund a technological leap and economic modernization.

Jhanyan concluded that all the goals facing Armenia today, and all the tasks under discussion, are largely connected to his industry, and that the key to achieving them lies right there.