Potential investors are concerned about Amulsar gold mine issue22.May 2019.
Mining is being much discussed in Armenia today. What kind of role has mining in our economy? Seems it is inevitable that it should remain one of the driving powers of Armenia’s economic development.
Mining should have a serious role in the current economic situation. Is it so or not, we can discuss. I believe it has and must continue to have, as it is the wealth of the country and when we look through the list of largest tax-payers of Armenia, we can see the names of mining giants.
Armenia without mining is a bit alien to me. There is no country in the world which has natural resources and does not use it. Why Armenia, being a small country, should not become leading responsible mining country?
The Prime Minister talked about mining recently and said that mainly raw materials are exported from Armenia and we should try to export ready products with surplus value. Is it realistic to make such changes in coming years?
It can be realistic, but there is a need for serious work. We raised this issue with the president Serzh Sargsyan about 7 years ago and suggested to build a smelter and instead of exporting copper concentrate produced here to smelt it in Armenia and produce copper.
Our company Dundee Precious Metals brought specialists from Africa where we had a smelter. They visited Alaverdi, had meetings with the local specialists. Building a workshop in Armenian requires about $600 million investment. We expressed our willingness to provide professional assistance for free.
But the question is not just money. The toxic materials produced by the workshop is much more than the mine’s. That is. If we build the smelter in Armenia, we will have a secondary product, which is toxic, and we have no place to shed or sell it.
The other issue is that according to preliminary calculations Armenia does not have enough copper concentrate production today to make the smelter economically justified.
Today our society’s attitude towards mining is dubious, and in some cases highlighted negative. One of the reasons is that the sector hasn’t been transparent for decades. Unidentified people were unintentionally buying, selling and exploiting mines without paying attention to the environmental norms. As a result, we have a stereotype that mining can only be such. What do you think, what should do mining representatives to change the perception of the society?
Unfortunately, what you describe is right. For a quite long time exploration, providing export and production licenses were regulated by “friendly” relations. Former minister of Energy, Armen Movsisyan, was the first to raise this issue and said the practice should be eradicated when friends or proteges of this or that official got exploration licenses when they didn’t understand the mining industry as well as didn’t have money for that work.
Of course, this all has also had a negative impact on such companies which work in line with law. When Dundee Precious Metals became the owner of Kapan’s mine, people simply refused to believe that we didn’t have an Armenian partner. They were constantly asking “Who has share in it?”
On the other hand, it is wrong to regard responsible mining companies the same way, because they are bringing international standards to Armenia and want to work in line with those.
For example, Lydian is actually suffering just because it has been transparent.
I am aware of Lydian’s project, I know their former and current management, I have personally checked their documentation. I am sure that there is no mining company in Armenia today that is the same level as Lydian. I am not a beneficiary, never been paid by Lydian. As an objective specialist of mining industry, I can assert that the level that Lydian brought to Armenia is exceptional for today.
With every passing day, Lydian accumulates extra debts. 1,000 people have lost their jobs. Armenia’s economy suffers losses, Lydian could become the largest taxpayer in 2019. It’s been several months that Lydian hasn’t paid taxes. There can be different reasons, but as a result people suffer.
If today’s government ascribes some mistakes to the former government, it is not Lydian’s fault. I think that construction works should be continued and if the new governments thinks there is a need to re-inspect that all, it is their right, let them invite new specialists. But blockading illegally the roads and allowing this illegal situation to be continued is a serious concern for the investor.
One of my activities right now is to bring investments to Armenia, to persuade Diaspora and foreigners to invest money. Recently I met people in Europe, North and South Americas, Middle East who has serious capacity to invest, but they all are concerned with Amulsar destiny. They say, we may come, make investments of millions of dollars, but today Armenia’s government doesn’t give a guarantee, that they will stop illegalities. Of course, as Armenians we are defending our country, we are trying to justify the current situation, but to say the truth, this is really an alarming situation.
How do you see the resolution of the Amulsar Problem?
The solution of this problem should have been much more earlier. If such illegal road blockades by so-called “environmentalists” (I don’t want to offend anyone, but I don’t believe these people are concerned about the environment) happened in Canada, Lydian would get the permission to open the roads by the court decision. I wonder why this is not happening. I also wonder why the government allows illegal blockage of the roads. If I were one of the investors of Lydian I wouldn’t be so tolerant, I would have already made an appeal to international arbitration.
If after the elections they say, “we inspected, everything was ok”, they start working, it will be clear that it was a political issue. If this situation continues, it will turn out that there are other things behind it. Anyway, I am sorry for the situation when people have invested 400 million in our country and they face such problems. This is not acceptable.