ArmInfo. A group of public organizations and residents of the city of Jermuk opposed the possible development of the Amulsar gold mine.
The joint statement issued by them emphasizes that by accepting the gift of 12.5% shares of the Lydian Armenia company, which is developing the mine, the Armenian government ignored democratic values and the rights of local communities.
The authors of the statement recall that the decision to take ownership of the shares was made on January 18 at a government meeting chaired by Prime Minister Nikol Pashinyan. Then it was announced that this "gift" "belongs to the people of Armenia" and that "the development of the Amulsar mine according to this model dispels many fears."
"With this statement we express our outrage at the irresponsible actions of the government, since besides the fact that these fears did not disappear, they intensified. The best international and national experts and scientists have confirmed the environmental, social, economic risks and dangers that the Amulsar project poses, casting doubt on the conclusion of the EIA for the mine development project presented by the RA Ministry of Nature Protection. A full environmental assessment was not ensured, and the results of 2019 were not taken into account. The results and conclusions of a study conducted by international companies as ELARD and TRC are presented, for the preparation of which 454 thousand US dollars were allocated from the state budget", the statement notes.
Moreover, according to its authors, the negative impact of the mine on water resources was not taken into account - Lake Sevan, the Arpa and Vorotan river basins, the Spandaryan and Kechut reservoirs. The risks associated with the presence of radioactive elements at the Amulsar mine - uranium, thorium, as well as radon, and the problem of environmental pollution with dust containing a huge amount of toxic elements that could arise as a result of the development of the mine were ignored. The risks associated with the use of cyanide technology, which is banned in several countries around the world, were ignored.
A statement from a number of NGOs emphasizes that the risk of losing the city of Jermuk as a resort of international importance was also not taken into account. If the mine is developed, Jermuk will turn into a working city, the city's residents will emigrate, and the mine workers will leave Jermuk after its development is completed.
The EIA conducted by Lydian and the state environmental assessment process did not include the city of Jermuk among the affected communities as a whole, nor did it take into account the destructive impact of mining operations on it. The risks to the health of residents were not taken into account, and the appropriate examination and medium- and long-term assessment of this risk were not carried out. The possible negative impact on Jermuk mineral water and on the international obligations undertaken by Armenia under the Berne Convention for the Protection of Wildlife and the Natural Environment were not considered at all. The opinion and resistance of the population of the affected settlements and the public against the Amulsar project were not taken into account. In particular, in the fall of 2018, about 3 thousand residents of the enlarged Jermuk community expressed their disagreement with the use of a gold mine.
"Due diligence was ignored or insufficient effort was made to assess the previous operating style of Lydian Armenia CJSC, its pattern of illegal actions, the use of violence against citizens and the prosecution of local residents. Once again, state resources were transferred to a company registered in an offshore zone , with unknown owners and in financial crisis. This phenomenon of prosecution of citizens in the world has been called "strategic lawsuit against public participation", which does not bring honor to any state, especially to a state that declares itself democratic. Meanwhile, the state bodies of the Republic of Armenia have never made any attempt to prevent this evil practice, to protect citizens who support local democracy, environmental protection and human rights defenders," the statement said.
The document also emphasizes that the decision did not take into account the aggressive actions of Azerbaijan on September 13, 2022, when the armed forces of this country invaded the territory of Armenia, bombing the city of Jermuk. "According to Amulsar's plan, tens of thousands of tons of toxic and dangerous chemicals and explosives with a shelf life of hundreds of years should be stored and used in the vicinity of Jermuk, which in the event of hostilities will become a danger not only for Jermuk itself, but also for Lake Sevan , Vayots Dzor, Syunik and Ararat regions, the Vorotan River, the waters of which, as a result of pollution of the catchment basins through the Arpa-Sevan tunnel, will begin to flow into the Gegharkunik region," public activists warn.
They also recalled that in 2014, by decision of the RA government, it became possible to relocate plant species listed in the Red Book from their natural habitat, which contradicts Article 17 of the RA Law "On Flora". This decision made it possible to obtain permission to develop a mine in the Amulsar area. In 2015, by decision of the RA government, the permissible slope of mine roads was changed. Thanks to this solution, security requirements were relaxed and Lydian saved approximately US$100 million. In 2016, in a memorandum signed between the Ministry of Nature Protection and the Lydian company, the company promised to invest 5 million US dollars and establish Jermuk National Park within 5 years, which has not been done so far. In 2022, amendments were made to the Subsoil Code, thanks to which the Lydian company was retroactively allowed to extend the right to use subsoil without conducting a new EIA, despite public resistance over the previous 4 years. Only Lydian benefited from this change, which suggests that the legislation was changed specifically for this company. This decision of the RA government creates new financial and legal risks for the Republic of Armenia.
The statement also notes that Lydian went bankrupt several years ago, reorganized and transferred ownership to its main shareholders. The two largest financial institutions - the International Finance Corporation (IFC) of the World Bank Group and the European Bank for Reconstruction and Development (EBRD), which were initially the guarantors of the "high international standards" of the Amulsar project, are no longer shareholders and investors of this company. "Lydian Armenia" is the same company that several years ago filed two lawsuits against the RA government, announcing the start of an arbitration process. "Then representatives of the RA government expressed concern that if Amulsar was not developed, they would extort a lot of money from the state, ignoring the fact that a company registered in an offshore zone does not have the right to apply to an arbitration court. Now, it seems, the company has managed to obtain such an opportunity from the RA government. "We have repeatedly warned that if Lydian begins to operate after registration in Canada, and is then forced to stop this operation for some reason, it will already be able to use the mechanism of arbitration courts, which was created to protect the interests of private individuals. What will Armenia do if the company starts construction and then is unable to continue work due to some force majeure? The Azerbaijani troops already control Jermuk on the outskirts of the city. In the past, they bombed the Yeraskh plant and forced investors to move it away from the border. What guarantee does the RA government have that the planned cyanide platform in Amulsar will not become a target of an aggressive neighboring state? The Government of the Republic of Armenia and the Prime Minister are obliged to ensure the security of the Republic of Armenia and its people, but, unfortunately, we do not see reasonable decisions and actions regarding the Amulsar mine. RA Prime Minister Pashinyan declared the Republic of Armenia "a bastion of democracy", but he acts on anti- democratic principles, regardless of the opinion of the people themselves", stated the authors of the statement, which was signed by over 130 public organizations and individuals.
On February 21, 2023, the Government of the Republic of Armenia, Lydian Armenia CJSC and the Eurasian Development Bank (EDB) signed a memorandum of understanding, which marked the possibility of restarting the program for the development of the Amulsar mine. As part of the memorandum, it was said that $150 million would be raised, of which $100 million would be loan funds from the EDB, $50 million would be provided by a local bank, and an additional $100 million would be invested outside the agreement by shareholders. As part of the deal, the Armenian government will receive 12.5% of the company's shares, for which it will not pay anything, but instead will insure the deal against certain risks.
Since the end of 2018, the Amulsar gold mine has been blockaded by environmental activists. The government was unable to decide on the resumption of construction of the mine and work on it had to be suspended. In March 2022, Armenian Minister of Economy Vahan Kerobyan noted that if nothing interferes, the work of the Amulsar gold mine will be resumed, referring to the department's program of activities, which contains a provision on solving the Amulsar problem.
Previously, before the change of beneficiaries, Lydian Armenia was a subsidiary of the British offshore Lydian International, which placed shares on the Toronto Stock Exchange. The company then had to undergo a delisting procedure. As a result of the restructuring, the full stake in the company passed to the newly established Canadian-American Lydian Canada Ventures, the beneficiaries of which are the American company Orion Mine Finance and the Canadian Osisko Gold Royalties.
The total cost of the Amulsar project is $370 million. The period of operation of the mine is about 11 years, and it is planned to produce an average of 200 thousand ounces of gold annually. The mine is the second largest in reserves in Armenia. According to the company, the mine contains approximately 73,733 kg of gold with an average grade of 0.78 g per ton, as well as 294,367 tons of silver with an average grade of 9.29 g per ton. It is located in the southeast of the country, 13 km from the resort town of Jermuk, between the Arpa and Vorotan rivers.