Amulsar mine

YEREVAN (Azatutyun.am)—Prime Minister Nikol Pashinyan on Monday called on protesters to unblock roads leading to a massive gold deposit in southeastern Armenia, saying that his government has no “legal grounds” to ban its development by a Western mining company.

Pashinyan said that failure to allow the company, Lydian International, to mine gold at the Amulsar deposit would have severe consequences for Armenia’s economy and even national security. He also argued that Lydian has given the Armenian government more guarantees that mining operations there would not contaminate water, soil and air.

“As it stands, we have no legal grounds to prohibit the exploitation of the Amulsar mine,” Pashinyan declared in a 40-minute video message aired on Facebook and primarily addressed to residents of Jermuk, a resort town close to the would-be gold mine.

“I am asking residents of Jermuk to unblock all roads leading to Amulsar because you don’t need to block the roads, because if your government sees a legitimate need to block those roads it will do that with its levers, legal powers vested in it,” he said.

“I am convinced that on this issue we will adopt a common position and will not make mistakes that will create complications for our country,” he added.

Pashinyan appealed to the protesters, who disrupted the construction of a gold mine and smelter at Amulsar more than a year ago, after a series of emergency meetings with government and law-enforcement officials, Lydian’s top executives and environmental activists held in recent days.

The meetings followed the release of ambiguous findings of an independent environmental audit of the Amulsar project conducted by ELARD, a Lebanese consulting firm hired by the Armenian government.

ELARD sent a 200-page written report to Armenia’s Investigative Committee a month ago. According to the law-enforcement body, the report concluded that Lydian’s operations would pose only “manageable” risks to the environment. It said that toxic waste from the Amulsar mine is extremely unlikely to contaminate mineral water sources in Jermuk or rivers and canals flowing into Lake Sevan.

But at an August 24 video conference with Armenian officials moderated by Pashinyan, ELARD experts said they cannot definitively evaluate environmental dangers of the project. They claimed that Lydian had submitted flawed and incomplete information to regulatory authorities before obtaining its mining license in April 2016. The British-American company responded by accusing the Lebanese consultants of misleading the government.

Lydian’s interim chairman, Edward Sellers, and top Armenian executive, Hayk Aloyan, met with Pashinyan on Friday. They also attended on Saturday a meeting with senior government officials chaired by Pashinyan.

The prime minister said on Monday that they made fresh assurances to the effect that “not a single liter of toxic water” would be leaked during gold production at Amulsar. He said his government will not hesitate to stop mining operations and even revoke Lydian’s license if the company fails to honor these commitments.

Pashinyan also stressed in that context that he has instructed the Investigative Committee and the government’s Inspectorate Body on Environment Protection and Natural Resources to look into the “questions” raised by the ELARD experts.

A government decision to pull the plug on the multi-million project now, he went on, would seriously undermine Armenia’s credibility with foreign investors and broader “economic security.” He specifically warned of downward revisions of the country’s international credit ratings, saying that this would push up the cost of borrowing in the country. The Amulsar blockade is already “creating very serious problems” for Armenia,” he added.

Pashinyan also implicitly mentioned Lydian’s threats to take international legal action against Yerevan. The company headquartered in Colorado and listed on the Toronto Stock Exchange claims to have invested $400 million in Amulsar.

Lydian planned to produce 210,000 ounces of gold, worth over $315 million at current international prices, annually. It pledged to create about 800 permanent jobs and pay $50 million in annual taxes.

The company was due to start mining gold at Amulsar in late 2018. The blockade, which began in June 2018, delayed those plans indefinitely.

Pashinyan cited Lydian’s top executives as telling him that their company will not be able to launch the mining operations before the beginning of 2021 if it regains access to Amulsar now. He said Lydian will also need several months of preparation to resume the construction of its gold mining and smelting facilities, which began in August 2016.