The Armenian government today approved a deal to restart the controversial Amulsar gold mine project that has faced several legal and environmental challenges over the years.

The deal, first announced in February 2023, specifies that Armenia will partner with Lydian Armenia in implementing the Amulsar project and, in return, will receive 12.5% of the company’s authorized capital free of charge.

Lydian, in turn, will pay US $7 million a year in financial assistance to communities in the Amulsar region during the construction period. The Eurasian Development Bank (EDB) will extend a loan of up to US$100 million in addition to US150 million mobilized by Lydian. to finance the completion of construction.

Armenian Deputy Economy Minister Ani Ispiryan, at today’s government cabinet session, touted the deal as a win-win for Armenia and Lydian.

Ispiryan claimed the Amulsar project will introduce new mining standards in Armenia and that the government, as a shareholder, has a vested interest to ensure that the mine operates effectively and safely. 

The mine, which straddles the Vayots Dzor-Syunik provincial border in southern Armenia, has stood idle for years because of conflicting environmental impact studies and public protests opposing it.

The Pashinyan administration, which originally opposed mining at Amulsar, now supports it, pointing to the country’s post-war economic needs.

In April 2022, then U.S. Ambassador to Armenia Lynne Tracy said, “the stalled Amulsar gold mining project in Armenia has the potential to boost the country’s economy and has called for “an expeditious and transparent resolution of outstanding disputes around the project.”

Lydian Armenia is a 100% subsidiary of Lydian Canada Ventures, owned by the U.S. firm Orion Mine Finance, and the Canadian company Osisko Gold Royalties.    

Further Reading: Stay Away from Amulsar: Open Letter to Big Capital Owners and Businessmen in the Armenian Diaspora; Armenian Economy Minister Says Controversial Amulsar Mine to Reopen; A Bubble Worth US$250 Million: Amulsar Gold Project Memorandum.

Photo credit: Hetq