By Mark Dovich
Clashes continue at the controversial Amulsar Gold Mine in Armenia’s Vayots Dzor region between environmental activists and security guards hired by Lydian Armenia, the company that operates the mine. The most recent incident took place on August 4.
Tensions grew after Lydian security guards used cranes to replace the cabins used to house security staff with new facilities. Lydian has repeatedly stated that the cabins are located on its property, a claim disputed not only by activists, but also by Vardan Hovhannisyan, the mayor of the nearby town of Jermuk, representatives of the Jermuk police department, and the Center of Geodesy and Cartography NGO in Yerevan.
The protest escalated into pushing, yelling and rock throwing. Police were dispatched to the scene, resulting in the arrest of 10 protesters and two security guards. The activists have accused the police of using excessive force in detaining protesters.
Daily protests have continued at the Amulsar site since August 4 and have largely remained peaceful.
Lydian has threatened to initiate legal action against the activists over their blockading of the mine entrance.
Activists Raise Environmental Concerns
The entrance to the Amulsar Gold Mine has been continuously blockaded by environmental activists and residents of nearby towns since the summer of 2018. The activists and their supporters believe that the mining project, if put into full operation, will cause serious environmental damage.
The protesters have raised concerns that acid drainage from the project will likely leak into two major rivers nearby, the Vorotan and the Arpa, the latter of which flows into Lake Sevan, Armenia’s largest single source of freshwater. Sevan also plays a key role in Armenian agricultural and energy production, irrigating about 70 percent of the country’s agricultural lands and generating about 15 percent of the country’s total electricity via a complex of hydroelectric power plants located along the Sevan-Hrazdan Cascade.
The activists have also expressed apprehension about the planned use of cyanide at the mine, which is located only one kilometer (about half a mile) away from the nearest village of Gndevaz and less than 15 kilometers (about 9 miles) away from the town of Jermuk, a major tourist attraction known for its clean air and natural mineral water. Cyanide, which is highly toxic, is commonly used in gold mining in a mineral extraction process called heap leaching, and exposure to the chemical can cause serious health problems and even death.
Finally, activists have opposed the project due to the mine’s proximity to the natural habitat of several endangered animal species, including the Caucasian Leopard, of which fewer than 15 are believed to remain in the area.
Amulsar’s Long and Controversial History
The roughly $500-million Amulsar Gold Mine project has a long and controversial history in Armenia. Construction at the site began in 2016 during the administration of President Serzh Sargsyan, despite local and environmental protests. Emboldened by the change of government following the Velvet Revolution in the spring of 2018, residents of nearby towns and environmental activists set up a blockade at the entrance of the mine in the summer of 2018, which remains in place.
The company with the rights to operate the mine, Lydian Armenia, functions as a subsidiary of Lydian International, a multinational mining company registered in the British tax haven of Jersey, one of the Channel Islands located between the UK and France.
Amulsar is Lydian’s only active project. The mine covers an area of roughly 65 square kilometers (about 25 square miles), and Lydian forecasts that the mine will produce about 2.1 million ounces of gold (roughly 66 tons) over an initial 11-year period of operations. The company claims that the Amulsar mine will provide employment for about 1,300 workers during the construction phase and nearly 800 workers during the operational phase. Additionally, Lydian expects to pay at least $50 million in taxes to the Armenian government annually throughout the operational period, which would represent roughly two percent of total taxes collected in the country each year.
Lydian has been unable to access the mining site and finish construction since the blockade began in 2018, reportedly losing up to $100,000 a day. In February 2020, the company was delisted from the Toronto Stock Exchange and filed for court-protected restructuring, which was later approved.
A June investigation by the London-based media platform openDemocracy revealed that the UK and U.S. governments have lobbied extensively on Lydian’s behalf and have repeatedly pressured the Armenian government to greenlight the project since 2018.
Armenian Government’s Position Remains Unclear
The Amulsar question has emerged as a highly contentious issue in Armenian domestic politics, with the government caught between the need to attract international investment and encourage economic development, on the one hand, and the need to answer to its citizens, who overwhelmingly oppose the Amulsar project, on the other hand. A poll conducted by the Caucasus Research Resource Centers think tank network in February and March of this year found that only 19 percent of Armenians were in favor of the Amulsar mine going into operation.
Following his election as prime minister in May 2018, Nikol Pashinyan ordered inspections of Armenia’s mines. As part of those audits, the government arranged for an environmental impact assessment on Amulsar to be conducted by ELARD, a Beirut-based environmental consultancy group. ELARD’s report, published in August 2019, proved inconclusive, finding the design concepts put forward in Lydian’s own environmental and safety impact assessment “reasonable and appropriate,” but also pointing out that “a number of the measures and plans are partial, not sufficiently protective, and/or unreliable with a high degree of uncertainty.”
Citing ELARD’s assessment, Pashinyan announced in August 2019 that Lydian may restart construction at Amulsar, though he also urged the company to comply with “unprecedentedly high environmental standards that have not been applied in Armenia until now.” In a Facebook Live video the following month, Pashinyan clarified that “there is simply no legal basis to block construction and excavation of the Amulsar mine.”
Nonetheless, environmental activists continue to block the mine’s entrance, and the Armenian government has so far shown no willingness to forcefully disperse them, effectively leaving Amulsar at a stalemate.
In similar fashion, Lydian has repeatedly threatened to bring the case to an international arbitrage if the blockade continues, but so far has not taken any steps to do so.
The recently-appointed Minister of Environment, Romanos Petrosyan, has gone on the record stating that he needs time to fully assess the situation at Amulsar, since he has not been involved with the issue prior to his appointment late last month. Petrosyan also refused to comment on the recent clashes at the site, saying that the incident does not fall under the Environment Ministry’s jurisdiction.
Armenia has considerable deposits of copper, gold, and molybdenum, and the mining industry forms a major sector of the country’s economy, employing roughly 9,000 people. Upwards of 60 percent of Armenia’s total annual exports are in ore concentrates, metals, and gems. However, much of the benefit from mineral exploitation leaves the country, since Armenia only exports ores, and does not process or refine them in-country. Social science research on multinational mining companies operating in developing countries has found that mining’s “greatest social and environmental costs fall on the local population…while economic and political benefits are concentrated at the…international scale.”