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Lydian International response to ‘Armenia: before the goldrush’

Lydian International uses their right to reply to Peter Liakhov's article ‘Armenia: before the goldrush’

Lydian International is committed to constructive dialogue with our stakeholders and respects their right to scrutinise our environmental and social performance. This kind of interaction is essential to ensure that investors in major projects are held accountable for any impacts that they may have on people or the environment.

We also appreciate that the author Peter Liakhov asked us for comment as part of his research for the ‘Armenia: before the goldrush’ article (dated 31 January 2017). However, there are a number of inaccuracies and areas where evidence has been neglected in the article, and we believe it is important to correct these for the benefit of our stakeholders and oDR’s readers. These include:

- The article states that ‘many’ within the local community ‘fear that the mine will irreparably damage the little they do have’. We recognise that there are some concerned local residents, and we are engaged in constructive and continuing dialogue with them to seek to understand and address their concerns. However there is significant backing for the project among local people. For example, the IFC (the part of the World Bank which invests in private sector projects and sets the international standard for good practice on social and environmental performance) conducted a detailed Broad Community Support survey in 2016 and concluded that the Amulsar project has broad support from local communities.

  • - The article states that ‘the Amulsar mine abuts the Kechut reservoir, which feeds directly into Lake Sevan, and the sulfidic nature of the mine risks acidifying the water in the reservoir – and eventually Lake Sevan itself’. The water issues around the project have, rightly, been subject to close scrutiny. Armenia’s mining regulations were deliberately tightened by the Government of Armenia to ensure that there could be no threat to the waters of Lake Sevan. The government-appointed Lake Sevan Technical Committee has endorsed the project’s design, and Amulsar’s Environmental and Social Impact Assessment (ESIA), which was conducted by a respected global engineering firm and endorsed by international experts, demonstrates that Lake Sevan will not be impacted. A senior representative of the European Bank of Reconstruction and Development stated (in an article that Peter Liakhov referred to) that ‘no residual impacts to Lake Sevan are anticipated during the development or operation of the mine, or after the mine closure’.

  • - The article states that ‘Armenia does not have the legislative or social structure in place’ to ensure that the project will benefit Armenian citizens. That process ultimately must be led by the government but Lydian is committed to playing its part in maximising the chances of the revenues from the project being used for longer-term sustainable development. We believe that joint efforts need to be taken by all parties (including communities, civil society, the government and business) to ensure that mining revenues are efficiently and transparently managed. We are therefore taking an active role in the country’s Extractive Industries Transparency Initiative (EITI), and sit with civil society and government representatives on the Initiative’s oversight group.

  • - The article states that ‘Lydian’s response… rests on little more than the company’s word’. We believe that it is important to reiterate here the wide range of expert opinion and assurance that the Amulsar project has received. Our ESIA consists of six years’ worth of rigorous work by leading international scientists. We have also built partnerships with globally-respected bodies (e.g. the Cambridge University Botanical Garden), and engaged leading consultants on issues such as biodiversity and land issues to ensure that our commitments to international best practice are met.

  • - The article states that ‘some of the earlier risk assessments were technically in violation of Armenian law, as they did not designate Jermuk or the nearby village of Gndevaz as “affected communities” which needed to be consulted’. This is wrong – our risk assessments were not in violation of Armenian law. In Armenia, ‘affected communities’ are designated by the government and not by the mining company, and are determined based on the municipal lands occupied by the project. It is on this basis that our assessments have always included Gndevaz, and that Jermuk is included in the project’s ultimate ESIA.

  • - The article states that Lydian ‘reapplied several more times over the years, each time requesting permission for a larger and more intensive operation’. Lydian reapplied for permission after changing its project design twice in response to unexpected changes in government legislation in 2012 and 2013. The size of the pits requested in our applications did not change.

  • - Finally, the article states that ‘most villagers [in Gndevaz] received nothing’ as compensation for land use. We are strongly committed to mitigating our project impacts, and this includes through financial compensation for land use and through the creation of alternative livelihoods. In 2015-2016, Lydian paid US$2.8m to over 145 landowners in Gndevaz for land acquisition. Separately, Lydian has paid US$3.3m since 2008 to the municipal budgets of three local communities for land rent, of which Gndevaz alone received US$534,000. This money has been re-invested by the municipality in community infrastructure, schools, roads, water and gas pipes. Finally, since the start of exploration, we have spent over US$2.5m on community development projects in local communities including Gndevaz, which are focussed around sustainable livelihoods.   


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