Hayk Aloyan: The Amulsar program will contribute to having strong borders

26.02.2023 | 22:20 Home / News / Interviews /
On February 22, it became known that the Amulsar mine will be exploited. Banks.am spoke with Hayk Aloyan, Executive Director of Lydian Armenia company.

- Mr. Aloyan, on February 22 the restart of the Amulsar gold mine project was announced. Before coming to it, I think it is important to record what results the project would have achieved today if it had not been suspended in 2018 for reasons beyond the control of the company.

- If in 2018 the Amulsar project had not been suspended, we would have had the first company in Armenia to be listed on the Toronto Stock Exchange, and Amulsar would have been one of the largest gold mines operated in the region, setting a high bar in environmental and social management. The project would have contributed to the boost of Armenia’s reputation as an investment-friendly country.

About 6,000 people would have been directly or indirectly engaged in the project, and residents of the surrounding communities would not have been forced to look for work outside their communities. Many people would have high-paid jobs with ample opportunity for professional development. Lydian Armenia would have been among the top three taxpayers.

I am sorry to record that Armenia lost at least 350 million US dollars during this period, which our country definitely needed.

- The Minister of Economy said that the Government of Armenia “will receive a 12.5% share of the new company without paying anything. Instead, it will secure against certain risks of the transaction.” There is an ambiguous attitude in the public to the fact that large mining companies have started to voluntary transfer part of their shares to the Government. What is the economic point of it and attractiveness for the company?

- First of all, I would like to note that the Amulsar project will be implemented by Lydian Armenia company. The company’s shareholders are American Orion Mine Finance and Canadian Osisko Gold Royalties companies. Today, the state has become their partner too.

There are many examples in the world, when miners partner with the state. It ensures more effective interaction between the parties.

The proposal was made by our shareholders. Following the 2018 developments, in order to attract new investments, we offered the Government to become a partner in the Amulsar project. After discussions, a mutually acceptable decision was made, which was summarized in the Memorandum of Mutual Understanding. Under this document, we donated 12.5% of the company’s share capital to the Government which, in its turn, within the framework of its authorities and the law, assumed a commitment to provide certain guarantees to Lydian Armenia for the smooth implementation of its economic activities.

I think this is a mutually beneficial partnership that will contribute to the further economic development of Armenia.

- In fact, it will be a unique case in the history of Armenia, when funds from the ex-Soviet states (on behalf of the Eurasian Development Bank) and the West will be invested in a major project. Don’t you see any risks here given the tension in the relations between Russia and the West?

- The Eurasian Development Bank is an international financial institution, and, yes, a number of post-Soviet countries, including Armenia, are its members. It was Armenia’s membership that was decisive for our shareholders to attract a loan from the bank.

- Sometimes concerns are being voiced that the territory of Amulsar is too close to the positions occupied by Azerbaijan following its attack on Armenia in 2022. Are there conditions for safe exploitation of the mine?

- The Amulsar mine is 12 km away from Jermuk in a straight line, and it is approximately 12-14 km away from the closest sections of the eastern and western border lines. Given the geographical position of Armenia, almost all its mines and strategic facilities are located in almost the same or closer border areas. In this regard, Amulsar is not the only one.

To be able to exploit the mine safely, we need to have strong borders, and a prerequisite for having strong borders is a developed, competitive economy. The Amulsar mine will undoubtedly contribute to the economic development of Armenia. I, therefore, consider this issue in this logic.

- What infrastructures have been preserved after 5 years of inactivity? Are there infrastructures and equipment that have been irretrievably lost?

- The main infrastructures are in place, the construction of part of them remained unfinished after 2018. Now we need to carry out restoration works and complete them to prepare all infrastructures for operation. As for the mining equipment, due to non-use over the years, last year we made a decision to sell it and acquire a more modern one before the start of the operation.

- How long will it take to fully implement the project?

- To start operation, we first need to complete the construction works. We expect them to last 18 months.
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