Ministry of Economy Anticipates More Investments, Exports in Mining Sector

Last week, the now-former Minister of Economy and Sustainable Development, Giorgi Kobulia, held a meeting with representatives of the Georgian mining sector. The meeting was also attended by Maia Zavrashvili, Head of the LEPL National Agency of Mines, who gave a presentation on the activities and the plans of the Agency for the next year.

Investments in the mining sector in the first quarter of 2019 amounted to 30,250,000 GEL ($11.2 million), which the ministry expects will lead to the generation of some 350 new jobs.

“The mining sector is one of the most important sectors for our economy, not only in terms of employment but also for exporting and attracting investments,” said Kobulia.

Kobulia explained that meetings with sector representatives are useful and productive, allowing the government a chance to hear a variety of recommendations and perspectives directly from business people.

At the close of the meeting, Kobulia responded to the participants’ concerns, saying, “We will take into consideration these recommendations in the near future. We will work on the licensing rules as well as on the simplification of various regulatory and legislative provisions to make this sector more attractive to foreign and Georgian companies.”

The ministry plans to take steps that will drive investments up in the next year. Such meetings, Kobulia insists, help make the Georgian mining sector more attractive for foreign investors, both by creating a platform to introduce potential regulatory and policy change, and by signaling to investors that the Georgian government is sympathetic to the interests of big companies and willing to negotiate with them. “The meeting with the representatives of the sector caused great interest. We shared our visions and talked about the challenges. We are planning to attract about $200 million in foreign investments this year, while exports should reach $600-700 million. This is a very large sum for Georgia so we are paying special attention to the development of this sector,” Kobulia noted.

During the meeting, there was no discussion of a topic that has garnered particular interest among the public lately: industrial safety. Following a series of deadly accidents on construction sites, many have expressed concern that safety in the mining sector is poorly regulated and even more poorly enforced. On March 31, a man was killed in Chiatura while working on the cable car system that services that town’s mines. On April 5, 2018, six miners died and three were injured in Mindeli mine in Tkibuli after the ceiling collapsed. On June 2, 2018, two more miners died at a private coal mine in Tkibuli. On July 16, 2018, another incident in the Mindeli mine left four miners dead and six severely injured, after which Prime Minister Bakhtadze promised the government would no longer put its citizens lives at risk and declared the mine would be closed. Dozens of other deaths and injuries have occurred in Georgia’s mines in recent years.

There has also been concern about the environmental and health impacts of Georgian mines. Earlier this month, the United Nations Working Group on Business and Human Rights visited Georgia to assess the impacts of business operations on human rights. At a closing press conference that announced preliminary observations, the team expressed concern that in the mining and construction sector specifically, labor rights are systemically violated. Experts also visited the Chiatura mines and concluded that they create significant environmental pollution, and that measures taken by the Georgian government are not adequate and do not prevent irremediable damage to the environment.

Kobulia stepped down in the evening of April 18, and was immediately replaced by his First Deputy, Natia Turnava. It is not yet clear whether Turnava will keep Kobulia’s policies in place, including his pledges to the mining sector.

By Samantha Guthrie

Image source: Ministry of Economy and Sustainable Development