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Amulsar gold mine, Armenia


Description

"Mining is the largest industry in Armenia, and likely its most corrupt. Currently, 460 mines operate in Armenia (roughly one mine per 5,600 citizens) and in recent years, mining has provided over 50% of Armenia’s exports. But Armenian citizens have seen little material benefit from these activities, as mining employs only one percent of the workforce and contributes only three percent to national GDP." [1]  Lydian International Limited company is an offshore zone company (Jersey, Channel Islands). Amulsar gold deposit is its key asset.  Lydian expects to extract annually some 10 million tons of ore containing 7.8 tons of gold from Amulsar gold deposit for the rather short period of eleven years.   The gold will be extracted from the ore with cyanide and the heap leach facility will be located in Gndevaz village one kilometer away from the residential area. According to legal experts, the permission to construct the cyanide heap leaching facility in such proximity to the residential area is one of the factors in need of legal assessment together with the impact of the method itself on the surrounding environment. Also the mining area is considered too close to Jermuk resort, which is an international resort complex famous for its sanative waters. The pool where sanative waters are located has the status of hydrological reserve and is included in the list of Armenia’s specially protected areas. Armenia’s law on water prohibits activities such as blasts that release toxic waste in the areas with underground waters. Open pit mining in Amulsar will be accompanied with blasts as well as heap leaching, thus it will negatively affect the environment in Jermuk and its waters. This project is also close to Armenia’s biggest potable water reservoirs -Spandaryan and Kechut reservoir, which feed lake Sevan through Arpa-Sevan tunnel. Streams that feed Vorotan, Arpa and Darb rivers are as well located in the vicinity of mountain Amulsar. This is a potential risk for all water resources of the region and Armenia. Another concern is related to flora and fauna of the area. There are around 248 species of plants, 6 of which are registered in the Red Book of Armenia (i.e. at the verge of extinction).  Final approval was granted in 2016, the groundbreaking ceremony took place in August, and the Amulsar Mine will begin operating in 2018. Each year, 10m tonnes of ore, containing 7.8 tonnes of gold would be removed from the earth. The mine is to remain operational for 11 years, closing in 2029.

According to the journalist Peter Liakhov, "The Armenian government charges some of the lowest fees for exploiting natural resources in the world, and after a 2012 legislative change promoted by the World Bank, doesn’t even charge companies for cleaning up after mining operations cease. This means that dealing with rocks, tailings and other hazardous waste becomes a burden for Armenian taxpayers. Waste is often left untouched, polluting the environment, destroying arable land and poisoning Armenian citizens. [...]  Armenia has signed several treaties on mining with the EU, most notably the Aarhus Convention, which, theoretically speaking, prohibits the kind of criminal behaviours seen in the industry. Yet the EU has done little to ensure that Armenia’s government abides by the stipulations of the treaties it has signed. And why would it? Armenia’s lax regulations and corrupt government have been a boon for European mining companies, providing relatively easy profits with the cost often little more than the occasional bribe to the right person."[1]

Basic Data

NameAmulsar gold mine, Armenia
CountryArmenia
ProvinceVayots Dzor
SiteJermuk
Accuracy of LocationHIGH local level

Source of Conflict

Type of Conflict (1st level)Mineral Ores and Building Materials Extraction
Type of Conflict (2nd level)Mineral ore exploration
Specific CommoditiesGold
Silver

Project Details and Actors

Project DetailsLydian International Limited company is an offshore zone company (registered in Jersey, Channel Islands). The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) have bought major stakes in Lydian but there are other shareholders too, among these the U.S., Canadian and European investment funds. IFC is a 7.9 percent shareholder and has invested over 13 million USD in multiple stages since 2007. The EBRD in its turn planned to invest up to 8 million USD to purchase shares of the company as part of its capital increase.

Through its 100 percent owned subsidiary in Armenia – Geoteam CJSC (now Lydian Armenia), Lydian expects to extract annually some 10 million tons of ore containing 7.8 tons of gold from Amulsar gold deposit for the rather short period of eleven years. Amulsar license covers a total of 65 km2.

From Lydian’s perspective, the Amulsar mine is a win-win project. According to their calculations, over the 11 years that the mine operates it will contribute roughly $488 million USD to the state budget through taxes and royalties. The total contribution to Armenia’s GDP each year will be around $185m USD, or 1.4% of Armenia’s total GDP.

The Amulsar mine will deliver one of Armenia’s rarest resources: jobs. Lydian estimates it will employ roughly 1,300 people during the two years of construction (2016-2018) and 770 permanent workers while it remains operational.
Project Area (in hectares)4,442
Type of PopulationSemi-urban
Company Names or State EnterprisesLydian International from United Kingdom - Mine operator
Lydian Armenia from Armenia
Relevant government actorsMinistry of Nature Protection, Government of Armenia
International and Financial InstitutionsInternational Finance Corporation (IFC)
European Bank for Reconstruction and Development (ERBD)

The Conflict and the Mobilization

Intensity of Conflict (at highest level)MEDIUM (street protests, visible mobilization)
When did the mobilization beginPREVENTIVE resistance (precautionary phase)
Groups MobilizingFarmers
Social movements
Women
Recreational users
Local scientists/professionals

Impacts

Environmental ImpactsPotential: Large-scale disturbance of hydro and geological systems, Reduced ecological / hydrological connectivity, Air pollution, Biodiversity loss (wildlife, agro-diversity), Desertification/Drought, Food insecurity (crop damage), Loss of landscape/aesthetic degradation, Noise pollution, Soil contamination, Soil erosion, Waste overflow, Groundwater pollution or depletion
OtherAs for the dust, Lydian claim that the dust produced during the mining process would travel a maximum of 1,000 metres — not far enough to affect agriculture or cause any health issues for nearby residents.
Health ImpactsPotential: Exposure to unknown or uncertain complex risks (radiation, etc…), Violence related health impacts (homicides, rape, etc..) , Health problems related to alcoholism, prostitution, Occupational disease and accidents, Infectious diseases, Other environmental related diseases
Other"In its Social Impact Assessment, Lydian International recognises the consequences of the inflow of construction workers, and later, miners, for the social fabric of Jermuk. The company cites the “four m’s” (“men, money, mobility and mixing”) as having the largest impact. That is, the influx of single men with disposable income could lead to the development of the sex trade and adjacent “vice” industries in Jermuk, as well as an increase in sexually-transmitted diseases and HIV." [1]
Socio-economic ImpactsPotential: Violations of human rights, Land dispossession, Loss of landscape/sense of place, Other socio-economic impacts, Increase in Corruption/Co-optation of different actors, Displacement, Lack of work security, labour absenteeism, firings, unemployment, Loss of livelihood, Militarization and increased police presence, Social problems (alcoholism, prostitution, etc..), Specific impacts on women

Outcome

Project StatusUnder construction
Pathways for conflict outcome / responseCorruption
Court decision (undecided)
Migration/displacement
Development of Alternativessupport Jermuk health resort's further development, and boost ecologically clean agriculture in the area

Sources and Materials

Links

A detailed description of the project and the laws that have been violated
http://www.armecofront.net/en/news/case-of-amulsar-gold-mining-by-lydian-international/

A Petition has Started on Change.org against the Gold Mine Exploitation in Amulsar (with updates)



Together with local and international organizations Pan-Armenian Environmental Front (PAEF) civil initiative has started a petition on change.org with the demand to stop gold mine exploitation in Amulsar and cease funding “Lydian International” offshore company.
http://bit.ly/2dnNKIr

[1] Armenia: before the goldrush

PETER LIAKHOV 31 January 2017
https://www.opendemocracy.net/od-russia/peter-liakhov/armenia-before-goldrush

Armenian Environmental Front - everything regarding the protests, court cases, articles on this case
http://www.armecofront.net/en/category/amulsar-2/

Media Links

A petition in three languages against the mine operation
http://bit.ly/2dnNKIr

If you always wanted to figure out how and why the whole thing started regarding the project in Amulsar and opposition to this project, here is a short film covering the issue. It is available in Armenian, Russian, English
http://bit.ly/2wlPoVp

Other Documents

no mining in Amulsar protest against gold mine by Lydian in front of Armenia's Government
https://file.ejatlas.org/docs/32-1024x683.jpg

Water is life: no mining is worth our waters
https://file.ejatlas.org/docs/2.jpg

A poster by Armenian Environmental Front Dig Armenia dry: a poster by the Armenian Environmental Front. Image via ArmEcoFront / Facebook. Some rights reserved.
https://file.ejatlas.org/docs/17360877_1374756862547710_1513494659_n.jpg

Other CommentsThere are many more problems with this mine that can be read here: http://bit.ly/2kk9GVR Public opposition: http://bit.ly/2eYk0Pl http://bit.ly/2n1eErG Petition started online: http://bit.ly/2mve9FJ

Meta Information

ContributorArmenian Environmental Front: email armecofront@gmail.com
Last update19/09/2017

Images

 

no mining in Amulsar

protest against gold mine by Lydian in front of Armenia's Government

Water is life: no mining is worth our waters

 

poster by the Armenian Ecological Front

Dig Armenia dry: a poster by the Armenian Ecological Front. Image via ArmEcoFront / Facebook. Some rights reserved.

A poster by Armenian Environmental Front

Dig Armenia dry: a poster by the Armenian Environmental Front. Image via ArmEcoFront / Facebook. Some rights reserved.