Mediamax’s interview with Geoteam CEO Hayk Aloyan

- In the recent period while talking about upcoming investments, the Government mentions Amulsar as an example. Considering the growing importance of investments when will the mine construction start?

- Early works have already started. We plan to enter into full scale construction activities in July.

In the coming 2 years project construction capital expenditures will amount to some US$‌370 million. Till the end of this year some 800 jobs will be generated around the construction. This means that we will see a tangible economic impact on that region already by the end of this year.

- What will be the impact outside of that particular region, on country scale?

- The impact will be tangible from many aspects. Primary issue in Armenia is of course job opportunities. There will be a significant financial inflow into the economy. This refers to the two years of construction.

During production several dozen million dollars of tax revenues will be generated annually. Additionally every direct job in mining creates several indirect jobs.

But I want to emphasize another important aspect. Amulsar is an opportunity to put Armenia on international investment map. Amulsar is a very visible project in international markets. Many potential investors in different spheres follow the success of the project implementation and that can be a positive signal that Armenia is open for investments. Especially in the recent period we all felt the urgency of the importance of attracting new investments and financial inflow into the country. 

- The importance of investments is probably vivid in the context of lack of job opportunities. How visible is this issue in Amulsar surrounding communities?

- It is no secret that the issue is urgent in almost all rural and urban communities in Armenia. Already today more than 500 people from surrounding villages and towns of Amulsar have signed up for possible job opportunities. Of course not all have the needed qualifications but I am more than certain that with the start of full-scale construction the out-migration in the nearby communities will reduce significantly.

I often hear expressions like “the government should give jobs” that probably come from Soviet clichés. Nowhere in the modern world is the government the main creator of jobs. The government encourages investments and that creates economic opportunities that offer jobs. This in turn, draws people’s income, guarantees tax revenues and economic development of the country. There is no other viable mechanism in the economy. 

- Many argue that the investments shouldn’t be made at the expense of nature and environment. Geoteam has talked repeatedly about Amulsar project implementation high standards. But is that enough for addressing peoples’ concerns?

- We have talked about Amulsar related environmental concerns repeatedly. Today I want to generalize: countries like Canada or Sweden, and I can name several dozen other developed countries, are generating huge revenues from mining. I think nobody has any doubt that in these countries mines are operated safely and in line with the highest environmental standards. If that is possible in Sweden, it is possible in Armenia too. 

- There is usually a counter-argument here, that we are not Sweden and we cannot be sure that we will have the due control. 

- Well, we are not Sweden, but it doesn’t mean that we should not strive to it. In fact we always need to aspire to become a strong and developed country and the number one precondition for that is strong economy and investments. Sure we will not get there if we don’t strive for it. As for guarantees for Amulsar project high environmental standards, they are multi-layered.

Lydian is Toronto Stock Exchange listed and is adherent to all rules and regulations of that institution. Lydian shareholders - IFC and EBRD have social and environmental stringent standards and requirements. Already now we are implementing environmental projects and activities unprecedented for Armenia. Several dozen top local and foreign environmental experts work on the project environmental aspect. So, not only it is possible but it is already being implemented at Amulsar. 

- Another common argument is that we should develop other sectors of economy instead of mining. 

- I don’t think that one sector of the economy can or should be developed instead of the other. If done right, mining can not only be safe but may even support other branches of the economy. An interesting fact: each year there are ratings of the world’s most livable cities published. In this year’s rating I came across, 4 out of 10 most livable cities were in Australia, 3 in Canada. Factors like healthcare and environment are taken into consideration.

Just a reminder: mining is the backbone of the economies of Canada and Australia and this wasn’t an obstacle to make sure that these countries are also leading in offering the best life conditions in their cities. In parallel other industry sectors- healthcare services, high tech, construction or tourism are being developed in these countries. Mining is one of those sectors that if managed right can generate tangible revenues that can be re-invested in other sectors.

I am certain that Armenia can have a competitive and strong economy. Attracting responsible investments into viable sectors of the economy, including mining is the best guarantee for that.

Ara Tadevosyan talked to Hayk Aloyan