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Stalled Mining Project Vital For Armenia, Says Minister


Armenia - The U.S.-based company Lydian International builds a gold mine at the Amulsar deposit, 9Dec2017. (Photo by Lydian Armenia)
Armenia - The U.S.-based company Lydian International builds a gold mine at the Amulsar deposit, 9Dec2017. (Photo by Lydian Armenia)

Economy Minister Gevorg Papoyan has described as “vital” a large-scale gold mining project which the Armenian government helped to disrupt six years ago but is now trying to revive.

Papoyan listed on Monday socioeconomic benefits of mining operations at the Amulsar gold deposit in Armenia’s southeastern Vayots Dzor province which a Canadian-based company could launch before the end of this year.

“If Amulsar operates on a full scale, our GDP will grow by an additional 1 percent annually and our state will receive an additional $120 million in taxes annually,” he told a news conference. “A large number of jobs will be created.”

“In this sense, the functioning of the Amulsar mine is of vital importance for Armenia,” added the minister.

The company now called Lydian Canada Ventures had planned to start open-pit operations at Amulsar and annually produce 210,000 ounces of gold, worth $550 million at current international prices, in late 2018, more than two years after obtaining the necessary licenses from Armenia’s former government. However, the planned operations were disrupted after several dozen environmental protesters blocked all roads leading to Amulsar following the “velvet revolution” of April-May 2018.

The protesters said that the project would wreak havoc on the environment. Lydian dismissed those claims, saying that it would use modern technology to prevent such damage.

The current government of Prime Minister Nikol Pashinian did not revoke Lydian’s mining licenses. But it refrained from using force to end the blockade. The company claimed to have invested $460 million by that time.

Armenia - Economy Minister Gevorg Papoyan (right) and Lydian Armenia CEO Hayk Aloyan sign an agreement in Yerevan, December 27, 2024.
Armenia - Economy Minister Gevorg Papoyan (right) and Lydian Armenia CEO Hayk Aloyan sign an agreement in Yerevan, December 27, 2024.

Following the disastrous 2020 war in Nagorno-Karabakh, the government began negotiating with Lydian in an effort to revive what would be one of the biggest ever foreign investment projects in Armenia’s history. A senior Lydian executive said late last month that the company is close to securing $150 million in loans from Armenian banks needed for finishing the construction of production facilities at Amulsar. It hopes to launch gold mining operations there in the fourth quarter of 2025, he said.

Finance Minister Vahe Hovannisian expressed hope on December 25 that those operations will start earlier. He said they have been factored into the government’s GDP growth forecasts.

In Papoyan’s words, the government’s latest growth target for 2025 is around 5.5 percent. “If the Amulsar mine does not operate, of course, economic growth will be slower,” he said.

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