Lydian and PM at the Crossroads of Old and New Armenias

Lydian and PM at the Crossroads of Old and New Armenias

At a meeting at Carnegie Europe Research Center in Brussels on July 11, Prime Minister of Armenia Nikol Pashinyan came up with a statement saying the creation of favorable environment for economic development is the key component of national security. 


According to him, implementation of Comprehensive and Enhanced Partnership Agreement with European Union will help improve the investment climate and increase business stability.  


During his meeting with French President Emmanuel Macron on the same day, the Prime Minister said La Francophonie Summit to be held in Yerevan this October will have an increased focus on business component. 


It is very encouraging that Prime Minister personally promotes foreign investment issue, being well-aware that it is the main precondition to reforming monopolized and clan-based economy.       


Whereas, it is discouraging that both PM and the Government fail to address the situation the country’s current largest investor Lydian Armenia Company is facing these days. 


Some 50 people have been blocking roads leading to Amulsar gold mine for over a month, which has paralyzed the company’s activities. Those people, most of whom are not even environmentalists and lack elementary knowledge of mining, have decided that mining at Amulsar must be stopped. The PM addressed them twice urging to open roads and not to obstruct audits and inspections to be launched by the government. This did not help. Lydian Armenia has repeatedly applied to Police suggesting them to take appropriate legal measures.  This did not help either. Afterwards, the PM travelled to Amulsar and Jermuk and met with activists, however, it did not help resolve the situation.    


All this is happening despite the fact that Hayk Aloyan, Managing Director of the company that has already invested over USD 300 million in Armenia, said yet on June 5 that Lydian Armenia is ready for any inspections on environmental, social management, financial flows, shareholders, tax transparency and any other standards.       


Since we have covered the Amulsar Project for many years, I insist that if mining is possible in Armenia, Lydian Armenia is the best company in that sector.  


Yet, that’s not the question today. If government-initiated inspections reveal any violations by Lydian Armenia, either environmental, financial or taxation, relevant measures must be taken, up to revoking the company’s license. But as long as no violations have been revealed, Government should ensure that roads are opened and the country’s investor No.1 is able to resume its activities instead of being guided by assumptions of activists about possible violations. Furthermore, the government must act promptly, since current events result in financial losses not only for Lydian and Armenia’s budget (company suffers about USD 500,000 daily loss), but also negatively impacts Armenia’s investment attractiveness.  


Recently, Deputy Prime Minister Ararat Mirzoyan said in a televised interview that events around Lydian are more complicated than they are presented. Actually, he hinted that the issue can be politically motivated as well. 


I am not a government official and I can afford more open statements: “major fault” of Lydian and Hayk Aloyan is that he avoided corrupt deals with previous government and oligarchs backing it during the last 10 years and did not give them “a piece of pie.” 


It was Hayk Aloyan’s “fault” to “dare” to launch activity in an area “belonging” to MP Ashot Arsenyan and not to bow to that almighty oligarch. 


One of Hayk Aloyan’s “faults” was to persuade the company to spend USD 500,000 on relocation and preservation of red-listed “Potentilla porphyrantha” species found at Amulsar, instead of bribing government officials.  


Another “fault” of his was to face out the campaign against Lydian consistently waged by mass media sponsored by Zangezour Copper and Molybdenum Combine and tied to former governor of Syunik marz. Incidentally, unlike Lydian’s story, the story of that company’s shareholder base is very murky. 


It is nonsense that Lydian is actually suffering for 10 years of its absolutely transparent activities. To make sure of this, one just needs to visit websites of other mining companies operating in Armenia and learn how much and what quality information they publish.    


It is nonsense that Lydian went through long years of trials in “old Armenia” and has appeared on the verge of collapse in New Armenia. Here is an excerpt from my interview with Hayk Aloyan dating back to December 2017:


 “Once, I was going to meet an official – we requested documents and I was to find out if they were ready. Tim Coughlin (the former CEO) was in Armenia and decided to join me to meet that official. I warned him that the official was not an easy-going person and that he could not enjoy the communication. Tim insisted, and we entered the official’s office together. He was playing solitaire on his computer and when we entered, he did not even look at us. Tim approached him, smiled widely, extended his hand and introduced himself. The official stopped playing for a moment, examined Tim, then extended his hand unwillingly. Tim extended his business card as well, but the official did not take it and resumed his game. Tim had to put his business card on the table. Afterwards, the official looked at me and briefed: ‘Your papers are ready.’ And he continued to play the solitaire. We went out, took our documents from secretary. Tim was astonished and could not come to senses until evening.”


Government and the Prime Minister need to comprehend that this issue is a litmus paper for them in their relations with business and big institutional investors and not only. After all, who makes decisions in Armenia? Is it the PM and the government or several dozens of people with dubious agenda?  


Ara Tadevosyan is Director of Mediamax. 


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