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Mining Company Downplays End Of EBRD Investment In Amulsar Project


Armenia - Gold mining facilities constructed by Lydian International company at Amulsar deposit, 18 May 2018.

A company pursuing a gold mining project in Armenia amid protests by environmental activists says the news about the European Bank for Reconstruction and Development’s (EBRD) ending its investment in the project will not affect its activities.

The EBRD has told RFE/RL’s Armenian Service (Azatutyun) that Lydian International, which owns 100% of the shares of Lydian Armenia, the company that intends to develop the Amulsar gold mine, has been insolvent since 2019 and is currently being held in a Jersey court for the closing proceedings.

According to the EBRD, as of July 2020, the Amulsar gold mine belongs to the Canadian Lydian Ventures, in which the prestigious international financial institution is not a shareholder.

The Armenian government issued Lydian a license to develop a mine in Armenia’s central Vayots Dzor province in 2016. But the site has been blockaded by environmental activists and local residents since May 2018 when a new government was formed in Armenia following the ‘Velvet Revolution’.

Activists claim that mining at Amulsar poses a danger to the local eco-system. They demand that a new environmental impact study be conducted and that Lydian’s license be revoked. In March 2019, Lydian notified the Armenian government of a potential international arbitration.

According to Sustainable Development Director of Lydian Armenia Armen Stepanian, Lydian International had to get delisted on the Toronto Stock Exchange, and as a result of this restructuring the EBRD lost its shares.

Stepanian described it as a consequence of “long-term lawlessness in Armenia.”

“When we talk about lawlessness and inaction, in fact, we mean that roads leading to the mining site remain closed. A group of people has decided that these roads should be closed and have doomed the other side to idling, and it has lasted so long that a need for restructuring has emerged. Let’s call it a financial model. The structure of the organization needed to be changed so that activities could be continued. It is difficult to imagine a business that could wait for a decision for 26 months. It would be naive to think that financial problems would not arise as a result,” Lydian’s representative said.

At this moment the EBRD has no legal relations with the Amulsar mining project, but the project will be implemented regardless of this circumstance, Lydian Armenia stressed. “This, in fact, will not affect the activities of the company and the quality of its work,” the company said.

Environmental activist Tehmine Yenokian, who is a resident of the Gndevaz community adjacent to the Amulsar mine, said that she recently learned that the EBRD was no longer involved in the Amulsar mining project. She said that 23 residents of Jermuk, a resort town in the Vayots Dzor province, had filed a complaint with the EBRD Ombudsman’s Office, which, according to her, was accepted for consideration on June 12. Yenokian said it is from the reply to the complaint that they learned that the bank no longer had financial interests in the Amulsar project.

The activist claimed that the future of the company looks even more uncertain and risky for them now. “Our complaint only helped reveal this information, which for six months was hidden from different important circles in Armenia,” Yenokian said.

The activist believes that even if the existing obstacles are removed, at this moment Lydian Armenia has no financial ability to operate the mine. Lydian Armenia counters: “We will find it out when we start working again at our previous capacity. Lydian Armenia is not part of any bankruptcy proceedings today.”

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