Lydian Amulsar Project Contracts: Engineering Armenia’s Gold Mine

June 23, 2026

BYMUFLIH HIDAYAT

Inside the Lydian Amulsar Project Contracts: Engineering a Gold Mine in the Caucasus

Greenfield gold mining in emerging markets rarely follows a straight line. Between geological complexity, community dynamics, financing structures, and the sheer logistical challenge of building industrial infrastructure in remote terrain, the gap between a definitive feasibility study and a producing mine is littered with failed procurement strategies and capital missteps. The Lydian Amulsar project contracts represent one of the most technically ambitious and financially layered attempts to bridge that gap in the modern history of the South Caucasus — and the story of how those contracts were structured, who won them, and what ultimately challenged their execution offers a masterclass in both mining development best practice and its inherent vulnerabilities.

Understanding the Amulsar Deposit’s Physical and Strategic Context

Situated approximately 10 kilometres from the spa resort town of Jermuk and roughly 170 kilometres southeast of Yerevan, the Amulsar gold deposit occupies a geographically and politically loaded position in Armenia’s landscape. It is widely regarded as the largest greenfield gold mining project in the country’s modern history, a distinction that amplified both its commercial appeal and the scrutiny it attracted from communities, environmental groups, and multilateral institutions alike.

The project’s operating entity, Lydian Armenia CJSC, sits beneath an ownership structure that evolved significantly over the project’s turbulent development history. As of January 2024, the Armenian government formalised a 12.5% equity stake in the project, with the remaining 87.5% held by United Gold. Toronto-based Lydian International served as the original parent company that drove the project through its early-stage development and, critically, through the contract award phase that unfolded in early 2017.

Understanding who holds equity in a mining project matters enormously when assessing long-term execution risk. Government co-ownership introduces a layer of political alignment that can accelerate the securing of mining permits and reduce sovereign risk, but it also introduces governance complexity that purely private structures avoid. At Amulsar, this tension between alignment and complexity has been a recurring theme throughout the project’s lifecycle.

The Major Lydian Amulsar Project Contracts: A Technical Breakdown

When Lydian International awarded the primary Amulsar contracts in early 2017, the procurement framework touched every critical operational system from earth movement to gold recovery. The selection of Tier-1 global suppliers was a deliberate bankability signal, communicating to project financiers that the development would be built to international standards.

Contract Category	Awarded To	Scope
Mobile Mining Fleet	Zeppelin International (Caterpillar)	Haul trucks, shovels, loaders, dozers, support equipment
Materials Handling and Crushing	Sandvik Mining and Construction	Crushing plant, screening, 5.6 km overland conveyor
Electrical Systems and Automation	ABB Automation	Substations, distribution grid, motors, process control, E-houses
Gold Recovery Plant	Azmet Technology and Projects	ADR plant design and supply
Worker Accommodations	Renco and Renco Armestate	680-bed camp facility
Contract Mining Services	MOTA-ENGIL Mining Caucasus LLC	Comprehensive industrial engineering (USD 700M, 72 months)

Each of these awards reflected specific technical requirements shaped by the project’s heap-leach processing model and its challenging mountainous terrain. The logic behind each selection deserves closer examination.

The Caterpillar Fleet: Scaling a 35 Million Tonne Per Year Open-Pit Operation

Zeppelin International, acting as the authorised Caterpillar dealer for the region, secured the contract for the complete mobile mining fleet at Amulsar. The equipment package encompasses the full spectrum of open-pit mining machinery: haul trucks, hydraulic shovels, wheel loaders, bulldozers, and ancillary support vehicles.

The production targets built into this contract are substantial:

• Year one mining throughput: 25 million total tonnes
• Steady-state average capacity: 35 million tonnes per year following phased fleet additions
• Equipment delivery schedule: Commencing Q3 2017

The phased approach to fleet commissioning is worth noting from an investment analysis perspective. Rather than deploying the full 35 Mtpa equipment complement from day one, the project was structured to add incremental fleet capacity as production ramped up. This approach reduces upfront capital exposure significantly, as each haul truck in a large open-pit fleet can represent an individual capital commitment of USD 3 to 5 million depending on payload class.

Phased fleet deployment in open-pit mining is a well-established capital efficiency strategy. Tying additional equipment tranches to measurable production milestones rather than upfront procurement orders means capital follows operational performance rather than preceding it.

Sandvik’s Materials Handling System: The 5.6 Kilometre Conveyor Solution

Sandvik Mining and Construction’s contract at Amulsar covers one of the project’s most technically distinctive infrastructure elements. The materials handling scope includes a complete crushing and screening plant alongside a 5.6-kilometre overland conveyor that connects the crushing facility directly to the heap-leach pad.

The crushing circuit architecture follows a conventional two-stage approach:

1. A vibrating feeder delivers run-of-mine ore to a primary jaw crusher for initial size reduction.
2. Three secondary cone crushers provide further comminution before the screening plant classifies the product by particle size.
3. The sized ore is then transported via the overland belt system to the leach pad, supplemented by a storage reclaim system and truck loadout feed configuration.

The practical significance of the overland conveyor is often underappreciated in project summaries. Eliminating truck haulage between the crusher and the leach pad reduces diesel consumption, lowers tyre costs, and cuts CO2 emissions across the mine’s operational life. For a project in a politically sensitive environment where environmental performance was already under scrutiny, this design choice carried both economic and reputational logic.

Furthermore, at 5.6 kilometres, the Amulsar conveyor sits at the longer end of the range for comparable heap-leach gold operations globally, where 2 to 4 kilometre systems are more typical. This length reflects the topographic separation between the processing area and the designated leach pad footprint.

ABB’s Electrical Infrastructure: Why Premanufactured E-Houses Matter

ABB Automation’s scope at Amulsar goes well beyond simple power supply. The contract covers the full electrical nervous system of the processing facility, including:

• High- and medium-voltage substation design and supply
• Complete distribution grid engineering across the plant footprint
• Automation and process control systems using SCADA and distributed control system (DCS) architecture
• Motors and variable frequency drives (VFDs) for process equipment
• Premanufactured electrical rooms, commonly referred to as E-houses

The deployment of premanufactured E-houses is a detail that often receives insufficient attention in project announcements but carries real execution value. E-houses are factory-assembled and pre-tested electrical enclosures that arrive on-site ready for connection. In a remote, mountainous location like Amulsar, where skilled electrical construction labour is scarce and Armenian winter conditions create substantial on-site construction risk, the ability to install a pre-tested electrical assembly rather than construct it in the field can translate into months of schedule compression and meaningful cost savings.

This procurement philosophy, favouring modular and premanufactured systems, has become increasingly standard in remote mining projects globally. Consequently, Amulsar’s adoption of it in 2017 positioned the project at the more sophisticated end of the emerging market development spectrum.