The construction site in Yeraskh, a border village 55 kilometers south of Yerevan, came under fire from nearby Azerbaijani army positions on a virtually daily basis in June.
The automatic gunfire, which left two Indian workers seriously wounded, began one week after the Azerbaijani government protested against the $70 million project. It claimed that building the industrial facility without its permission is a violation of international environmental norms. The Armenian Foreign Ministry brushed aside Baku’s “false” environmental concerns, saying that they are a smokescreen for impeding economic growth and foreign investment in Armenia.
Despite making defiant statements, Armenian and U.S. investors behind the project suspended work on the plant and started moving construction and industrial equipment from the site later in the summer.
In a statement issued after its weekly meeting in Yerevan, Prime Minister Nikol Pashinian’s cabinet confirmed that the facility is now being constructed just outside the town of Ararat, several kilometers from Yeraskh.
It said that the investors wasted 2 billion drams on the construction work in Yeraskh and now need additional funding. The low-interest government loan, repayable in four years, will be channeled into the project through a state investment fund, added the statement.
The plant is to process scrap metal, employ up to 500 people and have an annual turnover of at least $200 million. Its owners plan to finish the construction by the end of this year.
Areg Kochinian, a political analyst, believes that the plant’s relocation set a dangerous precedent for Armenia, meaning that Azerbaijan is in a position to disrupt economic activity in Armenian border regions by force.
“This situation could and should have been avoided. It’s a classic example of irresponsible administration which we have seen many times,” Kochinian said, commenting on the initial site of the plant located just a few hundred meters from an Azerbaijani army post.
Armenia’s largest gold mine also located on the border with Azerbaijan was likewise targeted by systematic Azerbaijani gunfire last spring. The Russian owner of the Sotk gold mine announced in June that it has no choice but to end open-pit mining operations there and put many of its 700 workers on unpaid leave.