The company now called Lydian Canada Ventures had planned to start open-pit operations at the Amulsar gold deposit 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 Armenian government 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.
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. In 2023, two U.S. and Canadian equity firms that currently own Lydian agreed to give the government a 12.5 percent stake in the Amulsar operation in return for its pledge to manage their risks.
A senior Lydian executive said in December that the company is close to securing $150 million in loans from Armenian banks needed for finishing the construction of production facilities at Amulsar. Pashinian’s cabinet guaranteed their repayment during a weekly meeting in Yerevan.
A government statement on the decision said the Amulsar project will add an estimated 1-1.5 percentage points to Armenia’s annual growth rate and is therefore of “vital importance” to the domestic economy. It said Lydian has pledged to adhere to the “best international standards” for environmental safety.
Under Armenian law, a loan guarantee cannot be equivalent to more than 20 percent of a company’s net assets. Lydian will have to undergo an independent audit and certify its compliance with this requirement within the next six months.
The company headquartered in Canada hopes to launch gold mining operations at Amulsar in the fourth quarter of this year. It is expected to create at least 700 jobs and pay up to $100 million in taxes annually. This would make it one of the country’s leading taxpayers.
No other large-scale Western investment projects are known to have been implemented in Armenia during Pashinian’s seven-year rule. Furthermore, his government is now facing massive lawsuits by a number of foreign investors who have done business in the country. They include some of Lydian’s current or former American shareholders.