(IMI) ARMENIA, COMMERCIAL NEWS SUMMARY:

UNCLAS SECTION 01 OF 02 YEREVAN 002802

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SUBJECT: (IMI) ARMENIA, COMMERCIAL NEWS SUMMARY:
DECEMBER 2004

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SUMMARY
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1. This cable summarizes press reporting on commercial
developments in Armenia for December 2004. Major
headlines include:

-- Armenia sells Zangezur Copper Molybdenum Plant for
USD 132 million;

-- EBRD buys shares in Armenian commercial bank;

-- IMF approves USD 13.7 million for Armenia;

-- Slovakian company to launch the Vanadzor Chemical
Plant in Armenia; and

-- Armenia reports 10 percent GDP growth January -
November, 2004. End Summary.

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ARMENIA SELLS ZANGEZUR COPPER MOLYBDENUM PLANT FOR USD
132 MILLION
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2. Armenia's largest mining complex, the Zangezur
Copper Molybdenum Plant, has been sold to a group of
private investors led by the German company Chronimet.
According to the Armenian Ministry of Trade and
Economic Development, Chronimet acquired a 60 percent
stake in the plant for USD 132 million and would
control another 15 percent through the Yerevan-based
smelter Pure Iron where it holds a controlling stake.
Two other shareholders, each getting 12.5 percent, are
Armenian companies Armenian Molybdenum Production and
Zangezur Mining. The new owners, supported by Western
banks, including Deutsche Bank, plan to invest USD 150
million in modernization of the plant within the next
four years.

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EBRD BUYS SHARES IN ARMENIAN COMMERCIAL BANK
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3. The European Bank for Reconstruction and
Development (EBRD) and Armeconombank signed a deal in
which EBRD would pay USD 1.2 million for a "25 percent
plus one" share in Yerevan-based Armeconombank. This
is the first time the EBRD would become a shareholder
of an Armenian commercial bank. According to the local
EBRD representative the bank would assist in the
strategic management of Armeconombank and would provide
technical assistance of 500,000 Euros to make the bank
more reliable and introduce risk management systems.

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IMF APPROVES USD 13.7 MILLION FOR ARMENIA
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4. The International Monetary Fund (IMF) has approved
a USD 13.7 million disbursement to Armenia completing a
three-year lending program designed to sustain
macroeconomic stability in Armenia. It was the sixth
tranche of the USD 105.3 million Poverty Reduction and
Growth Facility (PRDF) arrangement. PRDF funds have
been used since May 2001 by the Armenian Central Bank
to maintain a stable exchange rate of the national
currency and to alleviate the country's negative
balance of payments. IMF officials said the program
has served its purpose. According to Armenia's
Minister of Finance and Economy Armenia will implement
another three-year program with the IMF.

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SLOVAKIAN COMPANY TO LAUNCH THE VANADZOR CHEMICAL
PLANT IN ARMENIA
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5. The Slovakian company, SLZ, part of Sweden's
Dividend Group, is planning to invest USD 1.5 million
in the Vanadzor Chemical Plant in Armenia. The
Armenian Ministry of Trade and Economic Development
announced that SLZ would launch the plant by February
15, 2005. Within the upcoming 6-8 months SLZ would
sign an agreement with the owner of the plant for trust
management or lease of the facility. The current owner
of the plant is Russia's Zakneftegazstroy-Prometey.
The Russian company privatized the plant in 1999 and
has invested up to USD 20 million in the enterprise,
which has stood idle since 2002. The Slovakian company
was reportedly seeking at least a 51 percent stake in
the Vanadzor Chemical Plant.

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ARMENIA REPORTS 10 PERCENT GDP GROWTH IN JANUARY -
NOVEMBER, 2004
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6. Armenia's National Statistical Service reported 10
percent GDP growth for January to November, 2004. By
the end of November, 2004 the GDP totaled 1,672 billion
dram (USD 3.1 billion). From January to November, 2004
the volume of industrial production increased by 1.6
percent compared with the same period in 2003, or 473.9
billion dram (USD 881.4 million). The volume of
agricultural output totaled 412.5 billion dram (USD
767.1 million) from January to November, 2004,
increasing by 14.3 percent as compared to the same
period in 2003.
RICHTER