Amulsar: a “golden” threat to Armenia and beyond Analysis/VIDEO

The government of Armenia has found itself on a hot seat after its decision to revive the controversial Amulsar gold deposit project in a bid to inject fresh blood into the country’s lagging economy.

In February 2023, Armenia’s Ministry of Economy, the Eurasian Development Bank (EDB), and Lydian Armenia, a licensed operator of the Amulsar field and a subsidiary of the US-British Lydian International, signed a memorandum for $250 million to complete construction work at the mine. Lydian will reportedly borrow $100 million from the EDB and another $50 million from an unnamed Armenian bank.

Armenia’s Economy Minister Vahan Kerobian touted the regeneration of the troubled gold mine as a “very important” project for the country, adding that Yerevan will get a 12.5 per cent share in return for taking over the risk management at the deposit.

“It is estimated that operations at Amulsar will increase Armenia’s GDP by approximately 1 per cent … and we just cannot miss such an opportunity,” he said, adding that Lydian will be channelling about $75-$100 million into Armenia’s budget in taxes to each year.

Jeffrey Coach, a Lydian board member and a senior executive of the Kazakhstan-based Eurasian Development Bank (EDB), for his part, praised the Amulsar project as “an incredibly dynamic project” for the Armenian economy, pledging to establish one of the world’s “most sophisticated operating mines”.

Lydian International's corporate sign at the entrance to the Amulsar gold mine

The Armenian authorities paved the way for Lydian International into the Amulsar gold deposit in southeastern Armenia near the resort town of Jermukh in 2016. After a lengthy licensing process administered by the rulers of the country, the US-British multinational corporation in gold mining started building mining facilities at Amulsar.

Amulsar, which translates to “impotent mountain”, is the second-largest gold deposit after the Zangezur Copper-Molybdenum field in Armenia with its reserves estimated at 31 million tonnes of ore and 40 tonnes of pure gold.

According to preliminary plans, Lydian was to kick off mining operations at the deposit by late 2018 and produce 210,000 ounces of gold, worth $385 million at current international prices, per annum.

However, two years later the Western miners realized that the prolific “California Gold Rush” was not going to repeat in the South Caucasus.

SOS – save our sources …

The plans of the Armenian government and Lydian for Amulsar were put on hold in 2018 when the environmentalists and locals at Jermukh blocked the roads leading to the mine due to their concerns that the mine could wreak havoc on the environment and human activities in Jermukh and beyond. They have long worried that the operation of the mine could pollute the groundwater of Jermukh and its famous springs, as well as have its toll on Lake Sevan, the largest drinking water source of Armenia.

Residents of two villages in Jermukh blocked the road to Amulsar in 2018

Moreover, surveys conducted in 2018 revealed that 85.7% of the inhabitants of Jermukh reported the impacts of the Amulsar mine on their health with the symptoms of asthma attacks, lung diseases, headaches, and insomnia.

Gagik Melikian, a chemistry professor at the California State University, spoke about Amulsar’s possible negative effect on health that was confirmed in a Soviet-era report of findings during exploration conducted in 1952-54 and classified as top secret at the time. According to him, the researchers discovered 100 tonnes of uranium at Amulsar, along with radium and thorium.

“The latter two are definitely radioactive and uranium can also be, depending on which isotope is present. These elements are radioactive because they decay. That is the atom’s nucleus breaks down naturally and emits alpha particles (helium nuclei) which can cause cancers of various types. In addition, arsenic, lead and mercury are found in the ground at Amulsar, which are toxic to humans in their own right,” Melikian explained.

Meanwhile, the environmental protesters are convinced that the basins of the Arpa and Vorotan rivers, Spandaryan and Kechut water reservoirs, as well as the surficial and underground waters in Jermukh and a wider surrounding area could also be exposed to long-term pollution caused by acid and metalliferous drainage from the Amulsar mine.

Environmentalists call for action to prevent the exploitation of the Amulsar gold mine's reserves

According to the environmental reports, the mine could, too, lead to losing Jermukh as a resort and spa town by turning it into an extensive worker settlement and harming its biodiversity.

Following the disruption of its activities at Amulsar, Lydian threatened international arbitration over the government’s failure to clear the protesters’ blockade at the deposit. In 2018, according to the International Federation for Human Rights, the company launched at least 20 SLAPP (Strategic Lawsuit Against Public Participation) suits against those opposing the Amulsar project, including human rights and environmental defenders, journalists, and even a member of parliament. The silencing or intimidation of critical voices came in smear campaigns against them. However, with the smear campaigns and repression, the neighbouring populations set up a blockade at the entrance of the mine that lasted over two years, from 2018 to 2020.

To calm down the protesters, the Armenian government administered an independent study from the Lebanon-based company ELARD (Earth Link & Advanced Resources Development) to assess the potential environmental risks of the Amulsar project. ELARD received $400 million from the Armenian budget for its year-long research which summarized that "the exploitation of the Amulsar deposit does not assume unmanageable risks to the environment."

However, independent studies into the Lebanese company’s work revealed that during its research it has used the data and materials provided by the Armenian institutes, and preferred existing research and monitoring methods over the deployment of its own expertise.

In the same year, Prime Minister Nikol Pashinyan alleged that Lydian’s rivals in Armenia have funded the campaign of the environmentalists to derail the Amulsar project. He also urged the protesters to unblock the entrance to the gold mine since, according to him, there were no legal grounds to veto the mining activities there.

Meanwhile, in 2022, the mayor of the Gndevaz village in the Jermukh municipality, Hayrapet Mkrtchyan, and his son were brought under court trial for corrupt land sales to Lydian.

Despite the protests and scandalous court trials, in June 2022, amendments to Armenia's mining code ultimately removed the legal obstacles to reviving the mine.

Amulsar beyond Armenia

While the dire environmental and humanitarian consequences of the Amulsar have been making the headlines in Armenia, there are reports that it can have an impact also on a greater region reaching the Caspian Sea coasts.

Peter Tase, the international expert on Transatlantic Relations and Azerbaijan's Foreign Policy, said the Amulsar god mine is a serious threat to the Caspian Sea Basin and to the soil quality in the Caucasus region.

Tase claims that as the rivers traversing Armenia flows into the major rivers in Azerbaijan and finally pour into the Caspian Sea, it rings serious pollution alarm bells.

Caspian Sea shores

Arpachay in Armenia, which is said to be endangered by the Amulsar mine toxic substances, flows into the second-largest Araz River in Azerbaijan, which in its turn flows into the Caspian Sea. More than 20 million people live on the shores of the Caspian Sea, inhabiting five countries - Azerbaijan, Russia, Kazakhstan, Turkmenistan, and Iran. When the Armenian toxic acids, metals, sulphates and nitrates flow into the Caspian Sea, the scale of a possible humanitarian disaster is not difficult to imagine.

With all that happening around the controversial gold deposit in Armenia, it could be said that Yerevan is pushing for a “Pyrrhic victory” in Amulsar. Winners can boast about their achievements despite the path they covered until it, but what about others who are destined to protect their people and nature against evil spilling from overseas? …