PM Pashinyan Approves Amulsar Mining

Photo: Lydian Armenia Facebook



YEREVAN—Prime Minister Nikol Pashinyan has announced his government’s intention to approve the resumption of excavation activities at the controversial Amulsar mine. In a late-night Facebook-live session on Monday, the Prime Minister explained that the decision resulted from carefully analyzing the results of the latest independent environmental impact assessment published last week.

Pashinyan reminded his 6500 live viewers of a statement he made in September laying out his government’s conditions for authorizing the resumption of construction on the mine. These requirements included three criteria:

  1. That there would be no danger of contamination to Lake Sevan
  2. No adverse effects to the hot-water springs of the alpine spa town of Jermuk
  3. That there be no risk of leakage from the mine into the neighboring Darb, Vorotan and Arpa rivers

“Jermuk and Lake Sevan are part of our national heritage,” he declared Monday. “I am not prepared to risk losing either of them at any cost.”

Pashinyan said he was satisfied with the results of the latest Environmental Impact Assessment (EIA) drafted by the Beirut-based environmental and water management consultancy group ELARD. According to the firm’s findings, the mine poses no risk to Lake Sevan or Jermuk, with minimal risk of contamination to local rivers. The document restricts its conclusions to the ecological impact of the mine. It does not offer any judgement on the legality of the mining contract. While it largely concurs with previously conducted EIAs on the matter, this report highlights critical areas for improvement, recommending 16 measures to mitigate any risk of water contamination and better comply with regulatory standards. Lydian confirmed that it is already implementing 10 of the suggestions and will work to comply with the remaining six.

Environmental groups, which have campaigned against the mining project since its launch, remained unconvinced by the latest findings. Around 100 protesters gathered in front of the National Assembly on Monday, chanting “We are the masters of our mountain” and “Save Amulsar.” “The mine will benefit a few for a short time, but its environmental impact will hurt many for a long time,” said a protester during an interview with the Weekly. Police cleared an attempt to block the adjacent Baghramyan Avenue. The Prosperous Armenia Party (PAP), which ironically formed part of the previous government that approved the Amulsar concession in the first place, voiced its support for the anti-mining activists. Joining protesters in front of the National Assembly, PAP leader Naira Zorhabyan declared, “Our party will oppose the launch of the Amulsar gold mine if the people of Armenia are against it.”

Amulsar mining protest, Yerevan, August 19, 2019 (Photo: Raffi Elliott)

Meanwhile, critics have been scrutinizing the 190-page report in the hopes of uncovering some potentially serious deficiencies in the assessment process. The lack of sufficient data at ELARD’s disposal to effectively analyze environmental risk beyond the immediate area surrounding the mining site has caused some concern over the validity of the assessment. Additionally, the ELARD report suggested that earlier EIAs may not have thoroughly tested the effects of acidity on adjacent mineral formations. Other troubling findings in the document deal with inaccuracies with the projection models used by Lydian to determine seepage of polluted liquids from the mine into waterways.

Addressing those concerns in his broadcast, the Prime Minister explained that the choice of ELARD to conduct the study followed a recommendation from the New York-based non-profit Natural Resource Governance Institute. “I took it upon myself to read all the correspondence and all the concerns which you sent me at the expense of many sleepless nights,” said Pashinyan. “I can assure you that the investigation which I authorized took every aspect of the case into careful consideration.”

Not all members of Pashinyan’s cabinet shared in his satisfaction with the findings. Deputy Speaker of Parliament and senior member of the governing Civil Contract Party Lena Nazaryan expressed her apprehension on Facebook: “It’s hard for me to believe that I read the same report as the Investigative Committee and came to the conclusion that the risks were manageable.”

Amulsar has been embroiled in controversy since the Anglo-Canadian mining consortium Lydian International LTD won the rights to extract gold deposits from the site in Armenia’s Vayots Dzor province in 2012. Given the previous Republican-led government’s notoriety for corrupt dealings, environmental activists have long suspected the presence of foul play in the contract negotiation process. Lydian International, which trades on the Toronto Stock Exchange, has repeatedly dismissed this accusation as frivolous. As a publicly-traded company, Lydian says it is subject to Canadian mining regulations as well as corporate criminal law.

For historical reasons, many Armenians remain deeply distrustful of the government’s dealings with big business. Previous environmental regulators have allowed government-connected mining projects to wreak havoc on the country’s ecosystem due to poor ecological protection implementation, inadequate regulatory oversight and rampant corruption. Cases like the bankrupt Teghut open-pit mine and the high rates of health complications caused by the Alaverdi Copper Smelter highlight the sort of ecological devastation caused by the government’s inability or unwillingness to enforce environmental regulations.

But Lydian insists that it’s different. The mining giant routinely presents itself as an example of environmentally safe, socially responsible and economically beneficial mining practices. The company points to the publicly available environmental impact studies, projected tax revenues, labor practices and investor lists on its corporate website as evidence of its commitment to transparency. The Amulsar mine is also the only one in the country to meet international standards for ecological and employee safety. Lydian has also touted its track record in community engagement. The company has allocated hundreds of thousands of dollars for infrastructure projects and has provided one-thousand well-paying, medium and long-term jobs in a region suffering from chronic poverty. The firm says it is committed to minimizing its footprint on the area, having earmarked $25 million to decommission the mine and restore the site to its original state once operations conclude.

The primary ecological concern over Lydian’s mining operation is its location. Amulsar sits atop a seismically active area, inducing fears that acid rock seepage from the site could contaminate Lake Sevan’s underground drainage basin, Jermuk as well as other river systems in the area.

Lydian has repeatedly downplayed these concerns, insisting that it employs a state of the art contamination prevention technique known as “encapsulation” to eliminate acidity during the gold extraction process. However, as a gesture of goodwill, the company also agreed to use traditional mitigation methods as a fail-safe.

This concession has not been sufficient to sway opposition. In June of last year, a group of environmental activists blocked access to the mining site which was weeks away from launch, sending Lydian stock into a nosedive and forcing the firm to lay off hundreds of mostly-local workers. The company eventually won an injunction to remove trespassing protesters from its property.

More radical activist groups, such as the Armenian Environmental Front (AEF), have attempted to romanticize the standoff by framing it as resistance by locals against the colonial ambitions of greedy foreign multinationals backed by “corporate courts.” However, this portrayal has been disputed by some of the locals themselves. In an open letter to the Prime Minister, several villagers contended that they welcomed the economic prospects offered by the mine. They also depicted the protesters as but a “small group of people who have taken it upon themselves to speak for the entire community.”

Pressured by company executives, environmental activists as well as foreign diplomats, the Armenian Investigative Committee launched an inquiry in July 2018 to examine claims of willful concealment of environmental pollution data regarding the mine. The Lebanese consulting firm ELARD was contracted as part of this investigation to review the results of the previous two environmental assessment studies on the mining site.

In a dramatic escalation, Lydian International’s subsidiaries in the United Kingdom and Canada filed arbitration requests with their respective governments under bilateral agreements with Armenia earlier this year, stopping short of launching litigation procedures. Despite the threats, the mining consortium has closely cooperated with the investigation. An official communiqué published online invites authorities “to continue amicable discussions with Lydian with a view to the prompt settlement of the disputes.”

The Prime Minister’s permission to resume mining on Monday helped settle the matter before it reached the courts. Pashinyan stressed that his decision does not let Lydian off the hook. “I explained, in no uncertain terms that we will subject their operation to the strictest environmental monitoring standards ever implemented in Armenia,” he announced.  “If the mine so much as leaks a drop into the surrounding rivers, they will be given 90 days to clean up or face immediate termination of their contract,” he asserted.

The Amulsar affair will likely mark a watershed moment in Pashinyan’s premiership. Months earlier, he had touted his country to investors, declaring Armenia “open for business.” As the largest single foreign investor in Armenian history, Lydian International is expected to invest over $400 million into the Amulsar project over its lifetime. Had this case gone to litigation, experts speculate that Armenia would almost certainly have been forced to provide compensation of up to $1 billion (roughly eight percent of the country’s entire GDP). Such an eventuality would have likely caused irreparable damage to Armenia’s reputation as an investment-friendly country at a crucial time when foreign capital inflows are most desperately needed. The weight of this predicament was not lost on Pashinyan, who ended his Facebook Live broadcast with a parting remark: “As a country, we must stand by our commitments, or we will never be taken seriously.”

The controversy over the Amulsar mine project has erupted into one of the most polarizing issues facing Armenian society since last year’s Velvet Revolution. The cause has also reverberated in Diaspora circles, many of whom provided financial assistance to the protesters. Last month, members of the Boston-based progressive activist collective Zoravik handed a petition to visiting Parliamentary Speaker Ararat Mirzoyan calling for the Amulsar mine’s closure. “We stand with the communities of Jermuk and Gndevaz. We stand against mining in Amulsar,” read their communiqué.

In Armenia, public debate has been centered on seemingly antithetical obligations: respecting due process and encouraging economic development at the risk of ecological degradation. How Armenians decide to apply these concepts may have far-reaching consequences for the roughly 400 mines of various sizes and environmental conditions currently operating in Armenia. Arshak Tovmasyan, who publishes the Yerevan-based magazine Regional Post – Caucasus summed up the broader existential implications in a Facebook post: “Amulsar should push us to contemplate who we are as a people. The decision will reflect what sort of values and what kind of State we want to build.”


Source: Armenian weekly