Didier Fohlen: It’s time for Armenia to change the way it looks at mining

Shake Avoyan
Public Radio of Armenia

The Amulsar project is a gold mine which is going to operate at the border of Vayots Dzor and SyunikMarzes, approximately 12 km south of Jermuk. The process for extracting gold from the rocks is going to be heap leaching which has never been seen in Armenia. The advantage of the heap leach facility is that it is a fully enclosed process in terms of water and process effluent and it also doesn’t generate any tailings. In the end of the mine life the heap leach will be fully reclaimed.

“We are also going to have an important programme of reforestation in order to have as less as possible visual impacts. In terms of investments, we are initially planning to invest of about $ 320 million, plus $ 60 million for all the vehicles and fleet. Totally, the initially planned investment will be around$ 380 million,” Didier Fohlen, Executive Vice President (EVP) at Lydian International Limited, said in an interview with Public Radio of Armenia.

“Throughout the 11 year of mine life we are planning to have operational expenses of about $ 950 million. We estimate employment during the construction will peak at 1500 jobs, and during  operation 780 permanent jobs.  We will pay taxes which will be in the range of $ tens of millions annually. We are going to have a significant impact on local economy employing a number of people in the surrounding villages,” he added.

Despite this, NGOs in Armenia are clearly negative about the mining industry. “ It’s easy to understand why, given the legacy of the existing mines most of which are the heritage of the Soviet Union. In many countries, such as the USA, Canada, Australia, Chile, Russia, China, companies like Lydian operate mines in line with international best practice. They operate the mines in a responsible way favoring full transparency of their operation, monitoring closely the environmental and social impact. They care for public health and safety of their workers.

The key question to NGOs would be “why not to doing it in Armenia?” We want to see change in Armenia by bringing new players who are committed to do things differently. We have seen recently a number of NGOs complaining against the company.  If they don’t want to engage directly with us, we have proposed them mediation. So far we haven’t had a positive response.  We are open, transparent and ready for constructive dialogue around facts and we believe that’s the only way to move forward,” the Vice President said.

Evaluating the Company’s investment considering the fluctuations in the metal commodity markets, Mr. Fohlen said: “All mining executives wish to have higher metal prices. The gold price at this stage is on a good growing curve. We, of course, expect that it is going to be higher. If you are committed to international best practice, if you want to be seen as a responsible company operating in a country like Armenia, you build environmental and social issues in the design of the project, from construction into operation and for final closure. These are the right activities that are going to allow you to protect the environment and local communities; and it is exactly what we are doing for Amulsar. As an example, we are doing the rehabilitation of the exploration areas that we don’t need anymore for the purpose of operation. We are finalizing this month a very detailed Environmental and Social Impact Assessment (ESIA) project which will lead to a number of management plans to be implemented throughout the construction and the operation of the mine. Finally, we have developed with the support of international experts a very detailed closure plan to show our commitment to close the mine properly, including ongoing reclamation and final rehabilitation.”

Lydian International is now waiting for permits to start production and mine operations and hopes to get it by the end of the year. “We can start the construction in the beginning of the next year, and the production will commence at the end of 2016 as we have planned in various presentations and discussions with the Government and our shareholders,” Didier Fohlen said.

He said the communities will get jobs and additional revenues from the project, the Vice-President said. “But that’s not the only key priority for us. Our priority is to develop the local economy. At the same time, we will not start employing a significant number of people without providing them with training. We have an extremely ambitious plan which we are probably going to conduct in the coming months. We intend to have a training center around the mine which will be a place where people will learn. Since we came to Armenia, we have provided people with the opportunity to study geology, mining, environment and these people are from the adjacent villages. Education and training for villagers and the development of the local economy together with mining will be a key priority. A mine basically employing around 780 people will probably generate an overall indirect employment of several thousand people.  We also started carrying out a number of social and community development projects. At least in two adjacent villages we have developed agricultural projects with local institutions, NGOs, and foundation. This project allowed bringing new skills, new technologies in the field of agriculture and promoting a culture of creating new business,” he concluded.

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