by Dani Azriel
Our author previously raised concerns about the environmental risks surrounding the development of the Amulsar gold mine in the context of the international climate agenda and the upcoming COP17 conference, which is scheduled to take place in Armenia this October. At the time, particular attention was drawn to the contradiction between the country’s declared environmental commitments and plans to launch one of the region’s most controversial mining projects.
Now, despite years of protests by environmentalists, local residents, and members of the journalistic community, the Armenian government has effectively moved forward with the exploitation phase of the deposit. Against this backdrop, Armenian journalist Marine Kharatyan has prepared an in-depth analytical report examining the environmental, economic, and political dimensions of the project. We publish it below.
After more than a decade of resistance from residents of Jermuk and environmental activists, Lydian Armenia has begun moving toward the exploitation of the Amulsar gold mine. Armenia’s Minister of Economy, Gevorg Papoyan, announced the development on October 10.
On February 27, 2025, the Armenian government approved a state budget guarantee of up to $150 million to help the company secure loans from Armenian banks. Lydian Armenia, the project operator, reports proven reserves of 73,733 kg of gold and 294,367 kg of silver. Total investment in the project is estimated at $750 million, including $250 million needed to complete construction and launch operations.
Although large-scale protests have subsided, local fears remain strong. For years, activists blocked access roads and maintained round-the-clock watch to prevent equipment from entering the site. The efforts delayed, but did not ultimately stop, the project.
Jermuk — Armenia’s leading spa town, famous for its mineral springs and pristine nature — now faces an uncertain future. The deposit lies just 10 km from the resort, between the Arpa and Vorotan rivers.
Nushik Vardanyan, a Jermuk resident, recalls the early blasting works in 2012:
“After the first explosions, a milky-gray dust settled on windows and plants. No one in Jermuk agrees with developing Amulsar. If the town becomes polluted, tourists will stop coming. Our city lives on tourism — and our health will suffer.”
Grisha Nersisyan, 76, adds:
“People stepped back because the struggle seemed hopeless, but they are still against it. We are against it — and we will remain against it.”
Another resident, Makedon Aleksanyan, notes:
“During the blasts, the snow turned gray. Politicians who once swore the mine would never open have now changed their position.”
Gndevaz: Fear of Catastrophe, Not Just Pollution
The mine borders Gndevaz, a village known for its late-harvest apricots. Orchards stretch for hectares directly beside the deposit.
Engineer and activist Mihrdat Nersisyan, who has opposed the project since 2011, warns:
“The cyanide leach facility is only one kilometer from the village and just meters from apricot orchards. According to company documents, they plan to use around 12,000 tons of explosives annually and drill 52,000 boreholes. They promise there will be no contamination — but this won’t be pollution. It will be a catastrophe.”
Legal Pressure on Critics
Lydian International has reportedly filed at least 15 lawsuits against journalists and civil society representatives, actions critics describe as SLAPP suits aimed at silencing opposition.
In August 2020, protesters who had blocked access to the mine for nearly two years were forcibly removed by newly hired security, triggering clashes and injuries.
The 2012 Environmental Impact Assessment approved heap leaching with cyanide. The company plans to use around 2,000 tons of sodium cyanide annually.
Experts warn of:
- Possible acid mine drainage into the Arpa River and Keçut Reservoir, which connects to Lake Sevan via a 49-km tunnel
- Presence of uranium (≈75 tons) and thorium (≈100 tons) in the area, raising concerns about radioactive contamination of mineral waters
- Long-term heavy metal pollution that could persist for centuries
Environmental lawyer Nazeli Vardanyan states:
“This mine will devastate Jermuk’s environment. Drinking water, tourism, and agriculture are all at risk. If waters are contaminated with heavy metals, they will not recover for hundreds of years.”
She also notes that metal mining employs only 0.9% of Armenia’s workforce, while tourism and agriculture support tens of thousands.
Tourism vs. Mining
Jermuk’s economy depends largely on spa tourism, including visitors from Russia and other countries. Residents fear pollution could cripple the town’s core industry. Lydian pledged $7 million annually in environmental and community support during construction.Financing Turbulence
• IFC withdrew funding in 2017
- EBRD exited after Lydian’s restructuring
- A $100 million EDB loan memorandum was signed in 2023 but later collapsed
- Financing now comes from five major Armenian banks under state guarantee
Under a memorandum, Lydian transferred 12.5% of its shares to the Armenian government free of charge — a move critics say shifts risk to the state.
On July 11, 2023, Amulsar Investor Ventures LLC filed an arbitration claim against Armenia at the Permanent Court of Arbitration (PCA Case No. 2023-66) under UNCITRAL rules. Media reports suggest potential compensation claims of $1.5–2 billion.
Security Concerns
Economist Suren Parsyan notes the mine lies about 15 km from the Azerbaijani border, raising geopolitical risk:
“The state is guaranteeing an investment project in a high-risk border zone. In a conflict scenario, these investments could turn to dust — and the government would bear responsibility.”
A government-commissioned international review found Lydian’s studies incomplete and unreliable. Experts from ELARD said the mine could not be considered fully safe.
Government’s Position
Authorities expect:
- Up to $100 million in annual tax revenue
- 1–1.5% GDP growth
- 700 jobs
- Long-term supply-chain development
Minister Papoyan called Amulsar a “megaproject” vital to Armenia’s economy.
First Consequences Already Recorded
Despite operations not being fully underway, contamination concerns have already surfaced. In November 2025, Armenia’s Environmental Inspectorate opened an administrative case after reports that drinking water in Keçut village had changed appearance following construction works.
Amulsar represents a classic dilemma: economic growth versus environmental safety. For Armenia, the project has become more than a mine — it is a test of governance, risk management, and the value placed on natural heritage.