Year 2016 was a milestone year for Lydian Armenia. After almost 11 years of exploration we have started the construction of Amulsar project. Today as we are wrapping up an eventful year and entering a new phase, I want to talk about why I believe Amulsar is so significantly important.
For many in Yerevan it’s just a construction of a mine. For us in Lydian Armenia and for the Amulsar surrounding communities this is a long anticipated event that means significant change, change that hundreds of people have been waiting for more than 10 years, change that has the potential to reshape the economy of the region, the future of the people in this region and- with the right attitude and steps - the future of Armenia’s investment climate.
Years ago, when we, a small group of geologists had just started exploration at Amulsar with very limited resources and without yet a clear idea as to what the results will be, we announced a small tender in the community of Gndevaz for providing rock sample bags. Vahan Mkrtchyan a young resident of Gndevaz had only one sewing machine and offered his services. Today, after more than 7 years of working with Lydian, Vahan has a sewing shop with 8 workers in Gndevaz and a textile shop in Jermuk. He provides clothing for Amulsar project and has expanded the business to provide bed linen and curtains to hotels in Jermuk. Two years ago Vahan’s second child, little Shushanik was born in the village of Gndevaz.
In 2012 when we had delays in permits and as a result in the anticipated start of construction of the mine a young man, Artush from Gorayk approached me asking for job opportunities as he was planning to out-migrate if he doesn’t find a job. He just finished his graduate studies at the Chemical Faculty. I didn’t know when we would be able to continue the project but took the risk to tell this young man to stay. Today Artush works in Lydian Armenia geological laboratory together with 12 other young men and women in Gorayk and every time I see him in Gorayk, next to his family, I have a feeling of a bigger accomplishment than just a job that we do. We have dozens of stories like this during these 10 years. With every child born in these communities, with every young man returning from forced immigration, with every new starting business initiative we feel empowered and motivated. For us in Lydian Armenia, Amulsar is not just a mine being constructed, it is part of reinventing livelihoods for these communities.
People Behind the Numbers
When we talk about 1300 direct jobs during construction and 700 permanent jobs throughout the life of the mine, for many in Yerevan these may be just figures. When we say every direct job in Amulsar project will create 4-5 indirect jobs, it sounds like pure statistics. In reality, there are people, families, destinies behind these figures. We are talking about hundreds of young people like Artush from Gorayk and Vahan from Gndevaz, who will have opportunities for a better life in their Homeland.
In the period of 2008-2016 Lydian Armenia has paid over 3.3 million USD to the municipal budgets of the communities of Gorayk, Saravan and Gndevaz in land rent payments. These are not just figures. These figures mean new heating system in the school in the village, so that the children don’t have to wear coats in the classroom. This means renovation of drinking water system, so that people can have access to clean water, this means hundreds of other basic needs that Amulsar surrounding communities cover thanks to the fact that a group of geologists discovered Amulsar project 11 years ago and now it has grown into the largest investment in the country.
Along with people, who, understandably, have genuine concerns, there are often those who for personal reasons, such as greed, jealousy, personal business interests and other reasons, campaign against Amulsar project, either publicly or behind the scenes. I always wonder if these people feel responsibility for these communities. 370 million USD is not just another figure; it is the investment that Amulsar project represents. And it means life-changing opportunities for these communities, amidst economic decline and out-migration. We in Lydian Armenia feel personal responsibility to make sure that this investment benefits these communities to the maximum.
So just a brief message: there is no need to scare people with mining. Proper modern mining is not scary. Poverty and despair are.
Modern mining is not scary
I do not, by any means, underestimate genuine concerns of many who have little belief in any assurance of proper mining. That is understandable, considering overall lack of trust in the society and considering bad legacy of mining industry in many post-Soviet countries, including in Armenia. During these years we have brought hundreds of scientific arguments on why Amulsar will be a safe mine for people and water resources, including Jermuk and Sevan. I will skip technical explanations here, as those are available in dozens of our articles and interviews.
I want to use simple words and simple examples. Mining is the backbone of the economies of Canada and Sweden. It’s hard to believe that mining would even exist in Sweden if it would inevitably pollute water and soil, air and people’s homes and food. Modern mining can be just like a modern clothing factory - all process managed to ensure that no pollutants are discharged into the environment and the process is controlled by engineering solutions.
This requires a lot of work, capacity and resources.
Being the first in Armenia Lydian has produced an Environmental and Social Impact Assessment of more than 5500 pages and spent 6 million dollars and more than 6 years on this research. Again, this is not just another figure. This means years of work of the best international and local scientists. Every mine needs to be designed and built considering every little peculiarity of local environment to ensure maximum protection and that is how we worked long before the start of construction. With all responsibility I can state that this is the most comprehensive environmental work ever done in Armenia. Over the next 5 years we will be investing 5,7 million dollars into the creation of Jermuk National Park - the largest biodiversity preservation project ever done in Armenia and in the region. Interestingly, all this environmental work is done by a mining company.
Many ask, is it possible to do mining right in Armenia? Regardless of where a mine is built- the adherence to international standards is determined not by the geography of the project but by the nature and obligations of the company that builds it and the shareholders behind the company. That is the case with Lydian. If we keep sticking to the fatalistic line- it is not possible in Armenia- it will never become possible. My take is- if it is possible in Sweden, it is possible in Armenia. And we are doing it now in Amulsar.
Today Lydian employs some of the best environmental scientists in Armenia and works with the best environmental experts worldwide. I am not an environmentalist; I am a geologist. But I believe that just as I, as a citizen of Armenia, care about my Homeland and people who I have worked with for years in the communities, so does our very professional environmental team. They have the knowledge the capacity and the determination to do things right.
Another story about people. We had two young geologists in Lydian. Ruben and Gor. Both did graduate studies in Geology at Yerevan State University. In 2015 both of them asked me to move them to the environmental department. They explained that they have a passion towards environmental science and watching our environmental department’s work they became interested in environmental management. As a geologist with an innate love towards my profession I couldn’t understand this shift but people are our most valuable asset and we decided to give opportunity to these young men. After a year of intensive on-the-job training with the best local and international environmental experts, now former geologists Ruben and Gor have become invaluable members of our large environmental team and I feel pride when I see them work passionately under the supervision of our environmental management team.
One more story about people. I am sure some of the diasporan Armenians have very good reasons to be suspicious about some realities in Armenia. But there are things that Armenia does not need to be “saved” from. That includes mining, that some diasporans are so keen to fight against. Modern mining, if done properly, is not scary. It exists next to where many diasporans live all over Nevada and Colorado in the US and all over Alberta and British Columbia in Canada. I have personally been to a many of those. Poverty is the one thing that we all collectively need to fight against. And investments, not charity are the way to do it.
We in Lydian have our own diaspora engagement story. The experienced construction team that builds Amulsar mine comes from Canada. There are two young diasporan engineers that work for the construction team- Mher from the US and Alan from Canada. Today they are part of the team that builds a modern mining project in their homeland. It’s not just the Amulsar mine that they build. They participate in bringing real change into Armenia and I feel especially thankful to these young men that this is how they chose to help their homeland.
Investments don’t Fall from the Sky
I want to put it plain and simple: Armenia is not a country all mining companies in the world look forward to be in. That is a famous myth many NGOs like to reiterate. Canada based Fraser institute does annual survey of 600 mining companies, as to which countries are the easiest to work in. The list of the best countries for mining companies is topped by Sweden, Finland, Canada, Australia. Yes, mining companies and their investors want to work in countries with investment experience, with predictable jurisdictions and stable geo-political situations. Let’s face it- Armenia is not among those yet and it took enormous effort to bring this investment into the country.
When we started the project as any mining company we had to take it to international markets to raise money to continue exploration, and later on to find investment to build the project. In dozens of international conferences and road shows we had to tell the investors not only about Amulsar project but also about Armenia and to persuade that it is a safe country to invest into. Every single penny directed from investment markets to Armenia through Amulsar project was huge work and it still is. That work has continuously been carried out by our corporate management team that has promoted Armenia in hundreds of international forums. It hasn’t been easy money. Today I want to take pride for it on behalf of the company. Because every dollar we have attracted means jobs, social benefits and prosperity opportunities for the surrounding communities.
Today Amulsar is the largest investment project with major investment funds and banks participating from US, UK, Canada, Europe. Last year we have finally secured major financing package for the construction of the project from two large US based funds. The final approval for investment came in May 2016, after a very difficult month for Armenia.
Strong economies are created by investments. Countries need to ensure good investment climate and level business opportunities to attract those. That is how economies are built. We, as a society need to cherish investments, and those who bring them. Business needs to make profit to benefit the society and business and societal benefits, including environmental integrity, don’t need to be mutually excluding.
Amulsar is a very visible project in investment markets. Not only in mining industry. Armenia is known to potential investors in other areas because of major investors involved in Amulsar project. Markets are very sensitive to successes and failures. The success of Amulsar will be the success story of Armenia’s investment history and that is what I and our team want for our country.
Armenia is my country. It is the country of hundreds of people- geologists, topographers, engineers, economists, social and environmental specialists who work for Amulsar project. We are all more than sure that we are doing a great work for the country we love. We all are eager to see the change in the mining industry that Amulsar project brings with new standards and we are all eager to see the change that the project brings as a major international investment. The status quo we have today in the industry and in the economy is not the status quo we, as a society, want to maintain. Change is vital and it is the choice of each member of the society if they want to support change or the preservation of what we have today.
Hayk Aloyan is the Managing Director of Lydian Armenia
These views are his own.