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US concerned over downtime of Lydian Amulsar project

10.Dec 2018.

US Ambassador to Armenia Richard Mills expressed Tuesday concern over the downtime of the Amulsar gold deposit in Vayots Dzor region.

Speaking at a meeting of the American Chamber of Commerce in Armenia (Armcham) he said the US-based investor invested about $500 million in this project and significant economic benefits for the neighboring communities are obvious. He said when the mine starts to function fully the company will become the largest taxpayer in Armenia.

He said there were no violation of the local nature protection law and there are no grounds to suspect corruption. He said hundreds of Amulsar workers will soon be deprived of work.

The ambassador noted that investors would understand if the halt was prompted by violations of the law, but they would not understand if the mine would be closed because of a small group of protesters.

He added if this issue is not resolved quickly, then a shadow will fall on Armenia in terms of attractiveness for business.

Armenia’s Inspectorate for Nature Protection and Mineral Resources suggested August 27 that Lydian Armenia stop mining operations at the Amulsar gold deposit until a repeat environmental audit of the project was over.

Based on the findings of a previous audit of the project the Inspectorate suggested that the Ministry of Nature Protection recognize the expertise conclusion of the project, approved by the nature protection minister on April 29, 2016 as invalid. The head of the Inspectorate asked the Office of Prosecutor General to find out whether extraction of ore by the company without the right to use the subsoil contains elements of crime.

In a subsequent development Armenian prosecutors launched a criminal case against Lydian Armenia company for illegal mining that caused 18 million drams of damage (about $37,200).

Lydian Armenia was founded in 2005, and all 100% shares in it are owned by Lydian International. The Amulsar mine program is the first project of the company in Armenia. The Amulsar gold deposit is the second largest deposit in Armenia in terms of gold reserves and is said to contain about 31 million tons of ore and 40 tons of pure gold.

Armenian local environmentalists and residents of nearby villagers have been protesting against the development of the mine for years, claiming that the mining activities would endanger the region’s water resources and the local population’s health.

Prime Minister Pashinyan promised that an ad-hoc expert group would examine whether Amulsar gold mine and all other mining operations in the country comply with Armenian law and environmental protection norms.

Source: arka.am