Legal challenges mount for Armenia gold mine as complaint filed to EU development lender

Yerevan – The beleaguered Amulsar gold mine in Armenia broke rules attached to two loans totalling EUR 11 million it received in 2017 and 2009 from the European Bank for Reconstruction and Development, alleges a new complaint from 23 people living near the project and Armenian and international civil society groups including CEE Bankwatch Network.

The complaint details how the planning and construction of the gold mine near Jermuk in southern Armenia excluded public opinion during consultations over the project, damaged the town’s tourism potential and reputation as a spa destination, and polluted nature and precious water resources in the pristine area.

Locals fear that pollution caused by the ongoing works on the mine and planned extraction of gold with cyanide leaching will damage subsistence agriculture that many rely on for their livelihoods and potentially flow into Lake Sevan, the largest freshwater reserve in the Caucasus.

The complainants are asking the bank’s accountability mechanism to assess whether the project complied with EBRD policy requirements to protect environmental and social rights and if not, recommend that the bank withdraw from the project.

This latest complaint adds to the woes of Amulsar’s owner Lydian International. In January 2020, the company was delisted from the Toronto Stock Exchange and subsequently filed for bankruptcy protection.

Lydian has also been the focus of previous complaints to development lenders and international bodies, including 2014 complaints to both the EBRD and the International Finance Corporation and to the Bern Convention on the Conservation of European Wildlife and Natural Habitats this year.

Fidanka McGrath, Bankwatch EBRD policy officer said, “The bank missed the opportunity to act when the first complaints were raised in 2014. Even though construction work has begun and irreversible damage has been done, the bank should take action to stop any more destruction. The bottom line is that there is no support for this project among those who will be most greatly affected by the mine as demonstrated by a 3000 strong petition for a mine-free Jermuk by local people.”

For more information

Fidanka McGrath
EBRD policy officer, CEE Bankwatch Network
Email: fidankab@bankwatch.org
Mobile: +359 87 730 3097

The full complaint is available at https://www.ebrd.com/work-with-us/project-finance/project-complaint-mechanism/pcm-register.html.

More background about the Amulsar mine is available at https://bankwatch.org/project/amulsar-gold-mine-armenia