After more than a decade of resistance from the residents of Jermuk and environmental activists, Lydian Armenia is moving ahead with the launch of the Amulsar gold mine. The announcement was made on October 10 by Armenia’s Minister of Economy, Gevorg Papoyan.

In February 2025, the government provided a state guarantee of up to $150 million to help secure loans from Armenian banks. Lydian Armenia, a subsidiary company, is responsible for developing the Amulsar deposit. According to the company’s official data, the approved reserves include 73 733 kilograms of gold and 294 367 kilograms of silver.

The total investment volume is estimated at $750 million, of which $250 million is allocated for completing construction and starting operations.

Voices of Jermuk: “We are against this to the very end”

Despite the project’s launch, the concerns of local residents and environmental defenders have not dissipated. Years of resistance—road blockades, round-the-clock watch posts, and large-scale protests—slowed the project but did not stop it.

Jermuk, Armenia’s largest spa town known for its mineral waters and pristine nature, lies just 10 km from the mine, between the Arpa and Vorotan rivers. Residents insist that no one in Jermuk supports the mine’s opening.

Jermuk resident Nushik Vardanyan recalls that as early as 2012, a milky gray dust settled on windows and plants after the first explosions:

“If Jermuk becomes polluted, tourists won’t come. We live off tourism. And then health problems will follow”.

Seventy-six-year-old Grisha Nersisyan adds:

“The struggle has weakened because people no longer see results. But we were and remain against this — to the very end”.

Another resident, Makedon Aleksanyan, says:

“During the explosions, the snow would turn gray. The MPs who once swore they would never allow the mine to operate are now in favor”.

Gndevaz: fear of not just pollution, but catastrophe

The village of Gndevaz, part of the Jermuk community, is located directly next to the deposit, and its renowned late-ripening apricot orchards are potentially at risk.

Mihrdat Nersisyan, an electronics engineer and activist who has opposed the project since 2011, says:

“The cyanide heap-leaching pad is just one kilometer from the village and only tens of meters from the orchards. They plan to use around 12,000 tons of explosives each year. Imagine the amount of dust this will create. Their documentation mentions 52,000 drilling blasts. Pollution is inevitable. This isn’t simply pollution — it is a catastrophe”.

Legal pressure on critics

Lydian International has twice resorted to SLAPP tactics—strategic lawsuits aimed at silencing public participation. In total, at least 15 lawsuits were filed against journalists and activists critical of Amulsar, mostly due to Facebook posts.

In August 2020, a new security team at the mine forcibly removed protesters who had blocked access to the site for two years. Clashes broke out, and several activists were injured or detained.

Environmental risks

The 2012 Environmental Impact Assessment (EIA) approved extraction using heap-leaching technology. The company plans to use 2,000 tons of sodium cyanide annually. The project includes three-stage ore crushing, transportation, sorting, leaching, and metal extraction using carbon adsorption, desorption, and regeneration facilities.

Amulsar also contains roughly 75 tons of uranium and 100 tons of thorium. Open-pit mining could disturb nearby uranium deposits, creating the risk of radioactive contamination of Jermuk’s mineral waters and surrounding villages.

The most serious threat is the potential for acid drainage into the Arpa River and the Kechut reservoir, which is connected to Lake Sevan via a 49-kilometer tunnel.

Environmental expert and lawyer Nazeli Vardanyan warns:

“This mine will completely destroy the natural environment of Jermuk. Contamination with heavy metals can remain for hundreds of years. Agriculture and tourism will be devastated”.

She also notes that metallic mines account for only 0.9% of employment in Armenia, whereas agriculture and tourism support tens of thousands of jobs.

Tourism vs. mining: Jermuk’s dilemma

Jermuk attracts tourists each year, primarily from Russia. The town is home to many spa hotels and health resorts. Residents fear that pollution will reduce tourist flows, and therefore the income of the entire community.

Lydian Armenia has pledged to provide nearby communities with $7 million annually for environmental projects.

Project financing: withdrawal from the EDB and state guarantees

The International Finance Corporation (IFC) once held a 7.9% stake in Lydian and invested $13 million but withdrew from the project in 2017. The EBRD also exited after the company’s restructuring in 2020.

In 2023, Lydian signed an MoU with the Eurasian Development Bank (EDB) for a $100 million loan, but in November 2024 the company withdrew its application despite the bank having already launched an environmental review.

The project is now financed by five major Armenian banks, with the government covering their risks.

Environmental expert Vardanyan calls the transfer of a 12.5% stake in Lydian Armenia to the government a “gift-trap”:

“In the end, all obligations will fall on the state, while the company will leave. Debts will have to be covered by the budget. Armenia’s water is our real gold, but it is being sold out of fear of an international lawsuit”.

Lawsuit against the Armenian government

On July 11, 2023, Amulsar Investor Ventures LLC, associated with the former Lydian International, filed a claim against Armenia at the Permanent Court of Arbitration (PCA).

PCA Case No. 2023-66 concerns alleged violations of investor rights. Media reports say the claims may amount to $1.5–2 billion. Experts believe this explains the government’s haste.

Security concerns: only 15 km from the Azerbaijani border

Economist Suren Parsyan notes that the deposit lies only 15 km from the border with Azerbaijan, creating the risk of a military strike:

“The government is guaranteeing a project that could be wiped out by war. The government will bear the consequences”.

International experts vs. government audit

ELARD, a consultancy hired by the government, concluded that Lydian’s studies were incomplete and unreliable. International experts could not confirm the project’s safety.

However, both Lydian and the government maintain that the risks are manageable.

Government’s arguments

According to officials, the mine will provide:

• up to $100 million in annual tax revenue;
• a 1–1.5% increase in GDP;
• around 700 jobs;
• stable supply chains and sectoral development.

The projected operational period is 12–25 years.

Minister Papoyan states:

“If Amulsar becomes operational, the economy will grow by an additional 1% annually solely due to the exploitation of this mine, and the government will receive an extra 120 million dollars in taxes”.

First consequences: pollution already detected

Even though the mine has not yet begun full-scale extraction, pollution has already occurred. Due to construction works, drinking water in the village of Kechut (Vayots Dzor region) has changed in quality. On November 10, 2025, the Environmental Protection Inspectorate opened an administrative case after a video of the contaminated water appeared online.

Amulsar — a test for Armenia

The Amulsar project has become a symbol of the conflict between economic development and environmental safety. On one side lie major investments, jobs, and economic growth; on the other—risks to water, nature, public health, tourism, and the national budget.

Journalist,

Marine Kharatyan

#ARMENIA

15.11.2025 12:14