Explainer | The controversy over the re-opening of Armenia’s Amulsar mine

The mine finally reopened in October, bringing both the promise of hundreds of millions of dollars in profits and the risk of environmental damage.

After a decade of protests, assessment reports, lawsuits, and a change in the state narrative, Armenia’s Amulsar mine produced its first piece of gold on 10 October.

Amulsar is a gold deposit on the border of the Vayots Dzor and Syunik provinces in southern Armenia. It is the country’s second-largest gold deposit, after Sotk in the east.

The mine’s re-opening is expected to provide 1,000 ‘well-paid’ jobs, according to experts, with production worth approximately $860-$900 million in subsequent years, depending on the global price of gold. Despite the economic benefits presented by both the government and the company, the mine’s environmental impact remains unresolved.

The project involves open-pit mining and cyanide heap leaching — a mining method used to extract precious metals like gold from low-grade crushed ore. The company claims they have an environmental and cyanide management plan to mitigate risks.

Yet, activists have long warned that cyanide could contaminate Armenia’s freshwater reserves, which would harm the tourism industry in Jermuk. The town, just 13 kilometres from the mine, is famous for its mineral springs and sanatoria, and relies heavily on tourism and the production of bottled water.

Environmental expert Ayser Ghazaryan says the government ignored the warnings and pushed the project forward, prioritising short-term economic gains over its long-term environmental and social effects, including damage to the water resources, public health, and the sustainability of tourism in the area.

A short history of Amulsar

Geological exploration of the site started in the 2000s, but construction did not begin until 2016 under Lydian International, a Jersey-registered company backed by Western investors. Work stopped in June 2018 when protesters from Jermuk and the surrounding towns blocked access to the site. The blockade lasted over two years and ended during the Second Nagorno-Karabakh War in 2020.

Meanwhile, Armenia’s 2018 Velvet Revolution brought now Prime Minister Nikol Pashinyan to power. Several leading anti-Amulsar activists won seats in parliament and government, and many expected the mine to be shut down.

At first, Pashinyan’s government seemed attentive to environmental concerns. In particular, distrusting Lydian’s own assessment, they commissioned a fresh one. The $450 million review by the Lebanese firm ELARD in 2019 found Lydian’s environmental assessment data-poor and its modelling too unreliable to predict the mine’s water impacts. It concluded that groundwater contamination was a real possibility and that treatment systems might fail.

Another investor was the European Bank for Reconstruction and Development (EBRD), which  invested €13 million ($14.6 million) in Lydian between 2009 and 2020. Central and Eastern European (CEE) Bankwatch Network, which monitors public money and the financing of projects by large European banks in Europe, the Caucasus, and Central Asia, argued that the the EBRD enabled a project marked by flawed public consultation, alleged corrupt land deals in Gndevaz — a village in Vayots Dzor, 1.2 kilometres from the mine — and defamation lawsuits against critics.

In 2020, Lydian went through insolvency proceedings in Jersey. According to Hetq, Lydian Armenia is now a 100% subsidiary of Lydian Canada Ventures, owned by the US firm Orion Mine Finance and the Canadian company Osisko Gold Royalties. As a result of the proceedings, the EBRD also exited the project.

The government changes course

In 2021, Pashinyan said there was a possibility the mine would open. Namely, in the event of a conflict, he explained, revenues from a mine would be more stable than often-flighty tourist income.

In February 2023, the government, Lydian Armenia, and the Kazakhstan-based Eurasian Development Bank (EDB) signed a memorandum envisaging a $100 million loan from the bank, but that framework later fell through. In 2024, the government accepted a 12.5% stake in Lydian Armenia and became a formal loan guarantor. Officials presented state co-ownership as a safeguard, alongside the economic opportunities that should not be missed.

The government’s promises include about 210,000 ounces of gold a year, roughly $130 million annually in taxes, duties and royalties, a GDP boost of 1.5% to 2%, and $7-9 million a year for the neighbouring towns of Jermuk, Vayk, and Sisian, plus $5 million toward the Jermuk National Park. The community payments depend on gold prices and are split by population and distance from the mine.

Beyond economics, however, environmental expert Ghazaryan highlights that the concerns raised in assessment reports, reviews, and by activists were never resolved. Instead, he argues, the government found ways around them, for instance, moving a plant listed in Armenia’s Red Book that was found in the area.

By becoming a shareholder in the mine and the guarantor of its main loan, Ghazaryan says, the government has created a conflict of interest. As a party with a financial stake, it can no longer be an impartial evaluator, which makes a fair assessment of the situation harder.

Prime Minister Nikol Pashinyan attending the opening of the Amlusar gold mine on 10 October 2026. Official photo.

While the government claims there is currently no major resistance against the mine, the backlash over the government’s change of course shows that opposition to the project has not completely disappeared.

The mine has also suffered legal setbacks. In December 2024, Armenia’s Administrative Court partly upheld a 2015 lawsuit by eleven residents and two NGOs challenging the legal acts approving the mine. Separately, the Bern Convention Secretariat, responding to a 2020 complaint from Armenian groups and CEE Bankwatch, recommended halting developments that could harm protected habitats and species, and in 2023, urged Armenia to revise the impact assessment. None of this stopped the mine from opening in October 2026.

Opening day

On launch day, 10 October, Pashinyan arrived by helicopter, accompanied by high ranking officials. Speaking at the opening ceremony, he described the event as a ‘success story’, pointing to the absence of protests. In turn, Lydian Armenia highlighted that it has applied strict international environmental safeguards, while Economy Minister Gevorg Papoyan called the project a story about mining standards, not just money.

Prime Minister Nikol Pashinyan attending the opening of the Amlusar gold mine on 10 October 2026. Official photo.

Pashinyan’s claim that the ceremony took place without protests prompted backlash from those who had campaigned against the opening. They argued that the government had ignored their warnings, and that they had been silenced through court cases. Others said the ceremony had not been publicly announced. According to one activist, the low turnout was due to the loss of public activists as a result of the COVID-19 pandemic and the war, as well as the overall pressure that Jermuk residents have been under for years.

Civil society groups also condemned the launch, demanding a halt to operations, a new environmental impact assessment, and a review of state support. The timing was hard to miss, as the mine opened less than two weeks before Yerevan hosted COP17, the UN biodiversity conference.

Ghazaryan says that by opening the mine around the time of COP17 and inviting mining companies to the conference’s Green Zone venue, the government was trying to send a message to both domestic and international audiences about ‘green mining’ and environmentally responsible mining.

The conference was accompanied by protests and other resistance initiatives, which police kept outside the main event venues, out of sight of international guests.

Pashinyan did not explain why this moment was chosen to open a mine that had been in the approval process for 10 years. One theory is that it was meant to signal confidence in the mine’s environmental safety.

What does the future hold?

In early 2025, the government approved a budget guarantee for up to $150 million in loans to Lydian Armenia from Armenian banks. A budget guarantee means the state would cover the debt if Lydian cannot repay. Hayk Aloyan, the CEO of Lydian Armenia, said the company would raise the sum from several local banks, but an amended government document later named Ameriabank as the lender. Environmental groups have challenged the guarantee in court. Officials say total investment is around $750 million, but they have not published a breakdown of what has been spent and what remains to be paid. Aloyan earlier said about $250 million was needed to finish construction.

Meanwhile, activists have submitted legislative proposals urging the government to adopt anti-SLAPP protections in line with EU and Council of Europe standards. SLAPP stands for ‘strategic lawsuit against public participation,’ a legal action meant to wear critics down through cost and delay. By 2020, Lydian had filed around 20 defamation suits against activists, independent experts, lawyers, media outlets, and MPs, and some cases are still running. In February 2026, Lydian Armenia filednew lawsuits against lawyer Nazeli Vardanyan and journalist Tehmine Yenokyan, each seeking ֏6 million ($17,000) and public retractions of their statements regarding the mine.

At the same time, the water risks identified in the 2019 review have yet to be put to the test. And while some of the activists who opposed the mine for years say they no longer have the energy to keep protesting, new initiative groups are forming to present the environmental concerns.

Having only been open for a month, it remains to be seen how the mine’s operations will affect Armenia’s finances and the environment in the long-run.