Pashinian confirmed that the government wants to revive the project that would create hundreds of jobs and generate tens of millions of dollars in annual tax revenue.
The country’s former leadership had granted a formerly U.S.-based company now called Lydian Canada Ventures a license to develop a massive gold deposit at Amulsar in 2016. Lydian planned to start mining operations there in late 2018 and produce 210,000 ounces of gold, worth $420 million at current international prices, annually.
However, those plans were put on hold after several dozen environmental protesters started blocking all roads leading to Amulsar shortly after the “velvet revolution” that brought Pashinian to power in May 2018. They said that the project would wreak havoc on the environment. Lydian dismissed those claims, saying that it would use modern technology that would prevent such damage.
Pashinian made conflicting statements about the Amulsar project at the time. His administration did not revoke Lydian’s mining licenses. But it also refrained from using force to end the blockade.
The company, which claimed to have invested $370 million in the project before the blockade, filed for bankruptcy protection in Canada in 2019 before being restructured. It is now owned by two U.S. and Canadian equity firms specializing in mining.
Armenia - Economy Minister Vahan Kerobian (center) shakes hands with representatives of Lydian Canada Ventures and Eurasian Development Bank, February 22, 2023.
Following the disastrous 2020 war in Nagorno-Karabakh, Pashinian’s government signaled plans to revive the Amulsar project and started negotiating with Lydian for that purpose. The two sides reached an agreement to that effect in February 2023. Economy Minister Vahan Kerobian announced that the U.S. and Canadian investors will give the government a 12.5 percent stake in the project in return for its pledge to manage their risks.
Pashinian’s cabinet formally accepted the lavish donation during a weekly meeting in Yerevan.
“I think that this model of exploiting the Amulsar mine will dispel many concerns,” the premier told the meeting. “It will also give additional impetus to Armenia’s economic growth and development. And we hope that the Amulsar mine will be a platform for introducing new standards in our mining sector.”
Lydian’s Armenian subsidiary told RFE/RL’s Armenian Service that the transfer of the minority stake will allow the company to “share both successes and responsibility” with the government. It gave no precise date for the start of mining operations at the deposit located in southeastern Vayots Dzor province.
Kerobian said last February that Lydian needs $250 million to finish the construction of mining and smelting facilities and installing other equipment there. In particular, he said, Lydian will borrow $100 million from the Kazakhstan-based Eurasian Development Bank (EDB) and another $50 million from an unnamed Armenian bank. It is not clear whether the company has raised the rest of the sum.