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New Details Surrounding Georgian Manganese – Fight for Company Control

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Tuesday, 20 June 2023 20:01 hits 1894 times

Miners are on strike for the 12th day in Chiatura. Their primary demands are to increase salary by 40% and leave the work schedule unchanged. At yesterday’s rally, the miners demanded that Barabakh leave Chiatura.

- “This is not Ukraine, this is Georgia.”

- “46 Georgians have died for Ukraine and still counting. We sheltered so many refugees, support them with our finances, and sent so much humanitarian aid. A traitorous Ukrainian arrives in Georgia, not fighting for his country, abandons it, and wants to do business and make money in Georgia. He wants us to work as slaves. That’s how we’re thanked for our sacrifice. We are a nation known for hospitality, but everything has a limit. So, while we are asking peacefully, pack up and leave Chiatura.”.

- “Whoever stands by this traitorous Ukrainian can go with him.”

- “From tomorrow, the Ukrainian won’t set foot in this building.”

- “A Georgian miner will never wear shackles put on by Barabakh.”

As Mountain Stories found out, this is about a Ukrainian citizen Andriy Barabakh, who was appointed as the director of Magharoeli LLC on June 1, 2023.

This information was not known to the miners. Even the organizers of the strike have only heard about Barabakh that he was invited from Ukraine by Georgian Manganese to get them out of a crisis, he sets the Manganese mining plans and employee schedules. Miners have linked his appearance in the company with the stoppage of mining works on February 1, 2023. The company was paying employees 60% of their salary during this period.

 

Intermediary companies and full transparency

Magharoeli LLC is a contractor of Georgian Manganese. The contract signed between the parties is not available to interested persons. Documents like this should be submitted to the Mineral Resources Agency and the Ministry of Environmental Protection and Agriculture, however, no such document can be obtained from these agencies. The environmental organization Green Alternative is still in an active legal dispute with the Mineral Resources Agency, which is not providing data related to Georgian Manganese.

Magharoeli LLC was registered on May 20, 2020, and was originally called Shukruti +. Nodar Mikaberidze (nicknamed Bashkira) and Jemal Kharaishvili share 50-50% of the company shares.

We asked miners employed in different mines of Chiatura which company they signed labor contracts for – Georgian Manganese or Magharoeli. They told us that the employer did not give a collective labor contract to any of them, but remember that the signatory party to the contracts was Magharoeli.

- Who invited Andriy Barabakh to Chiatura and for what reason?

- Since when has he been in Georgia?

- Was he sent by Georgian Manganese’s billionaire owner to manage the mine factory and make decisions?

- In that was the case then why was he appointed as the director of Magharoeli LLC and not Georgian Manganese?

To clarify these details, Mountain Stories contacted Nodar Mikaberidze and Andriy Barabakh by phone. Neither answered our questions. Another shareholder of Magharoeli, Jemal Kharaishvili, and the administrative director of Georgian Manganese, Teimuraz Khonelia, did not answer our phone calls.

Nodar Mikaberidze's company not only oversees a part of the mines but also manages open-pit mining of manganese in the villages of Chiatura municipality. Mikaberidze is a shareholder and director of 23 companies, some of them (Manganum Logistics LLC, MN Logistics LLC 2023, Magharoeli LLC, Imersilicate LLC, Metal Solutions LLC, Manganum Technologies LLC, JNT + LLC) were registered in 2017-2023 after a special state management regime was introduced in Georgian Manganese.

One of these companies - JNT + LLC, was founded by Nodar Mikaberidze, Jemal Khariashvili, and Tamaz Sakhvadze a few days ago on May 29, 2023.

In Chiatura, Tamaz Sakhvadze is known as an influential figure of the Georgian Manganese security service. In an interview with Mountain Stories, local civil activist Giorgi Neparidze, who was illegally arrested a number of times for organizing protest rallies against Georgian Manganese, names Tamaz Sakhvadze as one of the spearheads of systematic oppression of unruly individuals in Chiatura.

The only information about Tamaz Sakhvadze that can be found in public sources is that he donated 95 thousand to GEL to Georgian Dream before the elections. Nodar Mikaberidze is also a major donor to Georgian Dream – he officially donated 230 thousand GEL to the ruling party in 2018-2021. Nodar Mikaberidze enters the manganese industry in 2017, after the appointment of a special manager to Georgian Manganese by the state. His companies serve as intermediaries – they coordinate the so-called small cooperators, which extract manganese in Chiatura villages under the mining license issued to Georgian Manganese. Mikaberidze buys the ore from them on the cheap – about 70-100 dollars per ton, washes it, and only then brings it to Georgian Manganese. Ultimately, Georgian Manganese processes the mineral in the Zestafoni ferroalloy plant and exports it. The intermediary company makes a handsome profit.

- Three such companies existed before the appointment of a special manager in Georgian Manganese.

- Special management regime was instituted in the factory in 2017 by Tbilisi City Court’s May 11 decision.

- Nodar Mikaberidze registered Manganum Logistics LLC on May 1 and became a monopolist intermediary after the appointment of the special manager.

In 2018 only, Manganum Logistics received 91,761,775 GEL from their partnership with Georgian Manganese, of which 11,854,274 was net profit.

6 years after the introduction of the state management regime, Georgian Manganese has over 20 intermediary organizations, although Mikaberidze’s company still holds a monopoly.

“It was expected that the special manager would make the goings-on at the factory more transparent. But in fact, the opposite happened. Many such companies have emerged. Today, we are in a situation where neither the employees, the affected people, nor the interested parties know who has what liabilities before the law and who has what responsibility,” says the executive director of Green Alternative, Nino Gujaraidze.

 

Limitation of ownership and distribution of influence

Since Georgian Dream came to power, state agencies have been fining Georgian Manganese LLC one after another. Throughout 2013-2017, the company has been fined 416 million GEL for environmental damage. The Prosecutor’s Office initiated a criminal case against the then director of Georgian Manganese, Ukrainian citizen Volodymyr Lozinsky, on the charge of crime against the environment. The security service also launched an investigation.

Georgian Manganese (GM) has a 40-year mining license over 16 430 hectares of land in Chiatura and Sachkhere. GM is the largest and one of the richest companies in Georgia with a turnover of hundreds of millions and an annual profit of 96 million.

The owner of 100% of the company is Georgian American Alloys, Inc., registered in the Grand Duchy of Luxembourg. The majority share of the company belongs to Ukrainian billionaire Igor Kolomoisky, and approximately 4% is owned by a group of Georgian shareholders, among which the dominant one is the businessman associated with Georgian Dream, Giorgi Kapanadze, nicknamed “Rizha”, who was the primary witness in the criminal case against the former mayor of Tbilisi, Gigi Ugulava.

The Ministry of Environment and Natural Resources Protection requested the appointment of a special manager in Georgian Manganese on May 10, 2017, on the grounds of avoiding an ecological disaster in Chiatura. The ministry's mediation and case materials are 1200 pages long. Judge Nino Buachidze issued a 32-page ruling the very next day, May 11, on granting the request and assigning a special manager, and appointed Nikoloz Chikovani, who has been suggested for the role by the Ministry. Chikovani was closely affiliated with ‘’Rizha.’’ From 2003-2007, he was the head of the Zestafoni Ferroalloy Plant. During this period, Giorgi Kapanadze and Ilia Kokaia supervised the factory. After the assignment of Chikovani to Georgian Manganese, the fine of almost half a billion dollars was written off.

In 2021, the Supervisory Board of Georgian Manganese was also changed. All three previous board members were US citizens. Aleksandre Meladze, Giorgi Kapanadze (chairman of the council), and Mariam Lashkhi became new members of the board. 

After the appointment of a special manager, the company activities are no longer inspected by the Department of Environmental Supervision. According to the estimates of independent experts, the damage to the environment has at least doubled and the situation is critical.

See the journalist investigation by Mountain Stories

Chiatura – Zone of a Disaster

The 3-year term of Chikovani was extended by another three years, as he failed to fulfill his obligations. On May 16, 2023, on the order of Judge Nino Buachidze, the special management regime in Georgian Manganese was extended by 2 years, until May 2025, and Besik Kirtadze was appointed as the new special manager. According to company data, Kirtadze worked in Georgian Manganese from 2019 to May 2023 as the deputy director of the Economic Security Department. From 1997-2004 he held various positions in the Ministry of Internal Affairs, and from 2004-2019 in the investigative service of the Ministry of Finance. The salary of the special manager is 8000 GEL.

It is worth noting that in 2019-2020, the advisor of the special manager of Georgian Manganese LLC in matters of economic security was the current member of the parliament from Georgian Dream, Aleksandre Dalakishvili.

From 2004-2019, when Besik Kirtadze worked in the investigative service (financial police), Aleksandre Dalakishvili held leading positions in the same agency - in 2014-2017 he was the deputy head of the investigative service, from 2011-2013, the head of the Kvemo Kartli division of the investigative service, and since 2005, the Deputy head of the same department.

According to the information provided by several sources related to Georgian Manganese, the newly appointed special manager Besik Kirtadze and the owner of the monopolistic intermediary company Nodar Mikaberidze (“Bashkira”) are closely linked with Alexandre Dalakishvili. Mikaberidze is a businessman from Rustavi. Aleksandre Dalakishvili worked in Rustavi for years, and in the 2020 parliamentary elections, he was assigned to Rustavi city and Kvemo Kartli by the party.

According to the information provided by several sources related to Georgian Manganese, the newly appointed special manager Besik Kirtadze and the owner of the monopolistic intermediary company Nodar Mikaberidze (‘’Bashkira’’) are trusted persons of Alexandre Dalakishvili. Mikaberidze is a businessman from Rustavi. Aleksandre Dalakishvili worked in Rustavi for years, and in the 2020 parliamentary elections, he was assigned to the city of Rustavi and the Kvemo Kartli region by the party. In an interview given to Radio Liberty in 2021, Aleksandre Dalakishvili confirms that Mikaberidze is his friend. Deputy Dalakishvili is a member of the Environmental Protection and Natural Resources Committee in Parliament. The duties of this committee include parliamentary supervision of the activities of the state agencies for environmental protection, as well as responding to the extremely difficult ecological situation caused by Georgian Manganese in Chiatura. Aleksadre Dalakishvili did not respond to the phone calls and messages of Mountain Stories.

Vladimer Kutateladze, a lawyer of the Center for Civil Activities, believes that the two articles of the Code of Administrative Procedure and the Law on Licenses and Permits, which the judge used when appointing a special manager, are unconstitutional. According to the lawyer, the said articles provide for the indefinite extension of the term for the manager by the judge in the conditions when there are no grounds for appeal: “This court ruling violates the right to a healthy environment because the population (interested persons) are not given the opportunity to limit the term of a special manager or to appeal the decisions of the manager and the extension of his term.”

 

Unauthorized selling of the new enrichment plant

Among the 14 conditions given to the special manager, one of the most important was the construction and commissioning of a new enrichment plant, after which the existing, old, out-of-order factories, which were severely polluting rivers Chruchula and Kvirila, were to be dismantled.

In 2020, Nikoloz Chikovani’s term as a special manager was extended for further three years precisely for the unconditional fulfillment of this obligation. 

On July 14, 2021, Georgian Manganese indeed founded JSC New Enrichment Plant. By the decision of the shareholders’ meeting on May 19 and 20, 2022, Georgian Manganese LLC made monetary contributions to the capital of JSC New Enrichment Plant as well as provided movable and immovable assets, including All Mineral’s new enrichment plant and the area of the Ghurghumela sludge facility for waste storage and treatment.

Before the expiration of his term, Nikoloz Chikovani sold 100% of JSC New Enrichment Plant to Seprol LLC on the condition that Seprol arranges a new sludge pipeline, Ghurghumela sludge facility, raises the necessary funds for the re-equipment of All Mineral’s factory, and agrees to fully reimburse Georgian Manganese for the costs of construction of the new plant.

“Chikovani informed the supervising state bodies and the court of the selling of the New Enrichment Plant only after the deal had already been concluded. This is an unacceptable move. One of the main conditions of the special management regime was to put this factory into operation, and Chikovani decided by himself to evade responsibility and alienate the property. Unfortunately, the court also didn’t take appropriate action and he was not held responsible,” says Nino Gujaraidze, executive director of Green Alternative.

Seprol LLC was registered on November 11, 2020. The sole owner and director of the company is Giorgi Turkadze.

The head of the environmental organization sees the solution in canceling the license issued to Georgian Manganese and selling it anew in compliance with important terms:

We are seeing that people in state agencies and influential persons are linked with Georgian Manganese. It is important to them to have the right to extract minerals with as few obligations and as much freedom as possible. Currently, the license is valid without any environmental impact assessment. The company can start mining the designated area without any restrictions.

We, the public, are interested in the license being revoked and resold because according to the current legislation, it is already mandatory to conduct a preliminary environmental impact assessment and plan operations in such a way that is not deadly to people.

On June 16, Green Alternative, Center for Civil Activities, and public movement Chiatura of the Future appealed to Tbilisi City Court Judge Nino Buachidze with a statement, where they argue that the temporary management regime in Georgian Manganese failed, and exacerbated an already difficult situation in Chiatura to the point of an environmental disaster. The non-governmental organizations are asking the judge to assess the situation on the spot.

 

12th day of protest and an action plan

The striking miners are planning to set up roadblocks in Chiatura from June 18, so that the companies working with Georgian Manganese cannot transport manganese until their demands are met. 10 miners are on a hunger strike for the 6th day, and one of the protesters sewed his lips shut yesterday after mediation with the company yielded no results. Hunger striker Merab Saralidze announced today that the strikers will start holding protest rallies in Tbilisi from Monday.

“Until today, we completely distanced ourselves from politics and expressed trust toward our government. We hoped they would help us and our fair demands would be met. We avoided people with political interest, but can no longer promise to do so in Tbilisi.

I confirm that we have no political agenda, we will focus only on our matter at hand, our sole interest is the fulfillment of our demands, but we cannot fight off people who do have political interests,” said Malkhaz Saralidze.

Until now, organizers of the rally did not allow political groups and civil activists associated with them to come to join the rally and make speeches. The miners thanked the Mayor of Chiatura Municipality, Givi Modebadze from Georgian Dream for his support, who, during his five years as mayor, never once raised his voice against the crimes committed by Georgian Manganese and related companies. 

Gela Mtivlishvili

Editor at mtisambebi.ge, a lawyer by education. Gela works on topics related to human rights, ethnic minorities, conflict zones and terrorism. E-mail: [email protected]

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