The mining sector is one of the main driving forces of the national economy of the Republic of Armenia. The country is rich in iron, copper, molybdenum, lead, zinc, gold, silver, antimony, and aluminum. According to the state registry, 670 mineral deposits (including more than 25 metal mines) are currently recorded in the country.

In 2019, the mining industry accounted for 2.8% of Armenia’s GDP. In addition, this sector represents a significant share of the country’s exports. Armenia’s total exports in 2019 amounted to USD 2.6 billion, of which 16%—approximately USD 415 million—came from precious and semi-precious stones, precious metals, and related products. The main export categories included gold under HS code 710813 in semi-processed forms such as bars, wires, profiles, plates, and sheets.

In the same year, exports of copper and related products declined, while aluminum and its products accounted for around USD 100 million. Exports of ferrous metals amounted to approximately USD 150 million.

Precious and semi-precious metals and related products account for more than one quarter of Armenia’s total exports. Over the past five years, the mining sector has generated an average annual foreign currency inflow exceeding USD 500 million, highlighting its strategic importance for the country’s economy. This also explains why Switzerland, after Russia, has become one of Armenia’s key export partners. Production of metal ores and concentrates accounts for approximately 98% of the sector’s total output value.

Following Armenia’s military aggression against Azerbaijan on 27 September, the counteroffensive launched by the Azerbaijani Armed Forces has accelerated the decline of Armenia’s mining industry. In particular, the complete suspension of operations at the Sotk gold mine, located on the border with Azerbaijan, is expected to significantly impact overall mining output in the country.

It should be noted that Sotk is Armenia’s largest gold mine and is located near the border with Azerbaijan. The Armenian side has also been illegally exploiting the Zod gold deposit located in Azerbaijani territory. Following the liberation of the Murovdag highlands by the Azerbaijani Armed Forces, Armenia immediately announced the suspension of operations at the Sotk mine. In addition, the start of military mobilization has slowed operations in other mining sites, as the workforce in this sector is predominantly male and has been called up for military service.

Preliminary estimates suggest that over the course of three weeks of ongoing conflict, Armenia’s economy has incurred losses exceeding USD 20 million solely due to disruptions in the mining sector. This decline is also expected to significantly reduce export revenues from the industry. Furthermore, mining companies are among the country’s largest taxpayers, meaning that reduced production will also negatively affect Armenia’s state budget revenues.