Deputy Prime Minister Tigran Avinian expressed “deep concern” on Friday over allegations by a U.S.-based mining company that a former senior Armenian official is involved in the continuing disruption of its operations in Armenia.
The company, Lydian International, released on Thursday a short video that purportedly shows the driver of an expensive car delivering food to several dozen protesters blockading the Amulsar gold deposit developed by it.
Lydian claimed that the car formally belongs to another mining company, the Zangezur Copper-Molybdenum Combine (ZCMC), but is used by Vahe Hakobian, the former governor of the country’s southeastern Syunik province adjacent to Amulsar.
“The attached footage is vivid proof of the fact that those who illegally block the roads [leading to Amulsar] are financed by interested persons, rather than guided by environmental concerns,” it said in a statement.
Hakobian, who has also headed the Syunik chapter of former President Serzh Sarkisian’s Republican Party (HHK) until now, denied any links to the protesters. In a statement cited by the Armenpress news agency, his spokesman, Vazgen Saghatelian, said that the videotaped SUV was driven by a ZCMC employee, Vahan Grigorian. He claimed that Grigorian did not hand out any food and on the contrary received several packets of apricots from one of his relatives whom he accidentally met on a highway near Amulsar.
Lydian’s claims were taken seriously by Avinian. In a statement posted on the Armenian government’s website, the vice-premier’s office said relevant state bodies must look into “new facts causing deep concern.”
“The latest report by the Lydian Armenia company requires an objective and consistent examination,” said the statement.
“We have to make sure that individuals pursuing parochial interests do not try to take advantage of the struggle waged by honest environmentalists concerned about Amulsar and Armenia’s nature in general,” it added.
The statement insisted that the government is committed to an “impartial and legal solution” to the Amulsar dispute.
The blockage of the mining site located about 160 kilometers southeast of Yerevan began on June 23 and is still continuing despite repeated appeals from Prime Minister Nikol Pashinian. Pashinian said later in June that Lydian must be allowed to resume its operations pending the findings of an ad hoc working group that will soon inspect the company and assess its compliance with environmental standards.
The inspection was due to start early this month. However, the working group was formed by Pashinian only on July 20. It comprises representatives of various government agencies, mining experts and civil society representatives.
Environment protection groups say that the Amulsar project, if implemented, will contaminate air, water and soil in the area. Lydian maintains that it will use advanced technology to prevent any damage to the local ecosystem.
The company, which is registered in the British Channel Islands but headquartered in Colorado, said it has “well-founded suspicions” that the ongoing protests against gold mining at Amulsar are incited by other mining firms. It seemed to point the finger at ZCMC.
ZCMC is located in Syunik and currently employs 3,600 people, making it one of the country’s leading corporate taxpayers. It was privatized in 2004 at a modest price of $132 million. A German metals group, Cronimet, gained a 75 percent stake in the industrial giant.
The rest of ZCMC is controlled by two obscure Armenian firms. Ownership of those firms has long been a subject of speculation in Armenia, with some local commentators and opposition politicians linking them to former President Sarkisian or his predecessor Robert Kocharian.
Hakobian was a senior ZCMC executive before Sarkisian appointed him as Syunik governor in 2016. He became the head of the ruling HHK’s regional branch in early 2017. Pashinian sacked Hakobian shortly after coming to power in May.
According to the Hetq.am investigative publication, Hakobian holds a 10 percent stake in Cronimet Metal Trading CIS, an apparent subsidiary of ZCMC’s German parent company.
Lydian, which claims to have already invested more than $300 million in Amulsar, has around 1,400 workers, many of them residents of towns and villages close to the gold deposit. The company planned to start producing gold there before the end of this year. It has reported at least $14 million in financial losses resulting from the month-long disruption.
Lydian executives have repeatedly demanded that the Armenian authorities unblock the Amulsar roads. They have not ruled out the possibility of costly legal action against the Armenian state.
The Amulsar project has been strongly supported by the U.S. and British embassies in Yerevan. U.S. Ambassador Richard Mills warned on July 18 that greater U.S. investment in the Armenian economy depends, among other things, on the new authorities’ treatment of Lydian. He expressed hope earlier that the upcoming audit of the Amulsar operation will be conducted “in strict accordance with the law.”
Mills similarly stressed on Wednesday that potential U.S. investors need to be certain that “anyone who did invest here in good faith is not mistreated or has their investment wounded as a result of this kind of investigations.”