Some enterprises of the Trotsenko-Ershova business tandem associated with ZCMC are included in the US sanctions list: what will happen to the Zangezur plant?

Yesterday Tert.am wrote that the Zangezur Copper-Molybdenum Combine (ZCMC) may be under threat of US sanctions. The fact is that Gleb Trotsenko, who was the real beneficiary of ZCMC and on October 27, 2023, alienated his entire indirect stake in the company, fell under American sanctions.

Gleb Trotsenko is the son of Russian billionaire Roman Trotsenko. He owns many companies both in Russia and abroad. The real beneficiary of the company, instead of Trotsenko with 47.6% of indirect participation, became Russian citizen Svetlana Ershova.

According to the penultimate declaration of real beneficiaries (07/08/2023), Gleb Trotsenko owned 72.6% of indirect shares in Geopromining Gold LLC. Already in the new declaration (11.21.2023) Gleb Trotsenko is not among the real beneficiaries. Instead, Svetlana Ershova, who is associated with the business of the Trotsenkos, appeared with the same 72.6% participation. According to the Russian publication Vedomosti, as of 2012 she was vice president of the AEON corporation, owned by Roman Trotsenko.

Svetlana Ershova replaced Gleb Trotsenko at the mining company Geopromining Gold LLC, which operates the Sotk gold deposit.

The business relationship between Ershova and the Trotsenkos is not limited to this. It turns out that Svetlana Ershova, together with Ilya Bransky, is a co-owner of another company called Profi, which is associated with Trotsenko. Ilya Bransky, in turn, together with Roman Trotsenko, is a co-owner in a company that manages airports.



By the way, Svetlana Ershova's name also appears on the Ukrainian list of candidates for sanctions. From here it turns out that in 2021, Svetlana Ershova was on the board of the Moscow River Shipping Company. And 66 percent of the shares of this company belonged to Roman Trotsenko.




In the Russian media there were regular publications that this company is connected with the so-called “raider takeover,” cases of actual takeover of enterprises.



In response to a request from Tert.am, the ZCMC stated that they do not think that they will fall under US sanctions. However, the above represented chain of facts points to the possibility of the opposite. And in this case, not only the plant as a business, but also a significant part of the state budget of the Republic of Armenia will be under direct threat.

Firstly, as a result of the sanctions, the export of the plant’s products to the West will be prohibited, as a result, the influx of dollars to Armenia will sharply decrease, therefore, the dollar exchange rate against the dram will record an unpredictably sharp jump.

There is also another danger threatening the state. The mining industry is the engine of the RA economy, and ZCMC is always in the top three on the list of thousand of large taxpayers in the country. Sanctions will lead to a multiple reduction in income and, consequently, taxes paid. This, in turn, will lead to severe social problems, from basic pension obligations to reductions in public capital, including reductions in defense sector spending.

By the way, on October 24, 2022, during the Tert.am program “At the epicenter with Arkady Grigoryan” («Կիզակետում Արկադի Գրիգորյանի հետ»), First Deputy General Director of ZCMC Vardan Janyan said that ZCMC provides more than half of defense spending from the state budget. For example, in 2021, defense spending from the state budget amounted to 319 billion drams, ZCMC actually provided more than half of this amount in the form of taxes.

Tert.am also contacted the ministries of territorial administration, infrastructure and economy to get an answer to the question of whether ZCMC would fall under US sanctions. We have been asked to submit a written request and will publish a response as soon as we receive it.

In a conversation with Tert.am, energy expert Armen Manvelyan expressed confidence that there is a very high probability that ZCMC is trying to bypass US sanctions with this option. According to the expert, this method has recently been used by many Russian companies.

“This process is happening on a massive scale. Today, in many cases, Russian enterprises are renamed and registered in the names of other owners in order to avoid sanctions. The case with the Zangezur plant is also very similar to this trend, which has recently been deliberately used to bypass US sanctions,” the expert noted.

According to Armen Manvelyan, this method will work until the new shareholder of the plant, associated with the previous management, is not personally subject to sanctions.

Manvelyan noted that when the West decides to impose sanctions against the new shareholder, the plant will again be able to bypass them by finding another shareholder.

Let us recall that Gleb Trotsenko alienated his stake in ZCMC at the same time he was included in the US sanctions list.