OPEN LETTER TO THE U.S. AMBASSADOR IN ARMENIA Mr. RICHARD MILLS

THE LYDIAN AMULSAR GOLD MINE PROJECT IN ARMENIA

Dear Mr. Richard Mills,

Greetings,

This is in regards to your remarks made during your speech to the American Chamber of Commerce in Yerevan a few days ago, about the Lydian Amulsar Gold Mine Project in Armenia…

https://www.youtube.com/watch?v=eiqH5KOHBjI  US Ambassador talks about Amulsar at his farewell speech an annual AmCham event.

I would like to present my views regarding your concerns about this mining project.

First, you said that this is the single largest Anglo-American investment in Armenia. My question: Why Lydian came to Armenia as a UK registered offshore company, instead of a US company, following strict US rules, regulations and obligations? And why is a UK registered private company being supported by the US Ambassador?

The problem with this project is that Lydian and others involved did not evaluate all the environmental, technical and financial issues properly. Lydian, a newly formed company in 2005 with no track record came to Armenia and the Diaspora with a simplistic approach about this project and looked for investors, without serious technical evaluations.  This is not surprising.  Experience and lack of it counts in any project’s success.  Now that the truth is coming out about the real problems, uncertainties and consequences of this project, everyone is in a panic.  The responsibility lies on Lydian for its insufficient and unreliable evaluation of the project and its overly optimistic propagandas about it, to attract investors.  The same optimistic reports and political pressures were made and are continuing until now on the Armenian government for the continuation of this project, with little or no guarantees about its performance by Lydian.

My homeland’s most important water structures and water resources are of much greater value than the anticipated 10-year tax payments and 600-700 temporary jobs.

The so-called largest taxpayer in Armenia Lydian’s tax payments will amount to 500 million US dollars in 10 years. The cost of negative destructive consequences of the Amulsar project will be many times more and will continue for hundreds of years.

Small group of protestors Ambassador Mills? Please watch this video and listen to the people.

https://www.youtube.com/watch?v=p4A8a4yG1VY&t=1952s

For your information, the majority of the people in Armenia are against this project because of its possible negative impacts on the water resources, Jermuk and Lake Sevan. As indicated in the topography here https://goo.gl/rx1pi5 the mine is in the heart of water supplies in Armenia, in the middle of three main rivers, two reservoirs, one underground tunnel, that can also affect the Jermuk mineral water and even Lake Sevan. This figure from Lydian shows Groundwater Flow Pathlines during Operational Period https://goo.gl/FYwyRD indicating possible widespread contamination of groundwater and surface water due to acid mine drainage (AMD).  Popular opposition against this project started in 2010.  A popular referendum may be the best option to make a final decision about this project.

“Failure to accurately predict acid rock drainage (ARD) leads to long-term impacts on ecosystems and human health, in addition to substantial financial consequences and reputational damage to operators.” https://goo.gl/nNpC9a  Lydian failed in the accurate prediction of ARD in Amulsar.

It is interesting to see that you are using the Lydian Amulsar project as a precondition for future US investments in Armenia.  This does not make sense, because like any mining project, Amulsar is an environmentally destructive project and presents the worst case and riskiest scenario from the investment point of view,  compared for example with US investments in Coca Cola or say a pharmaceutical, agricultural, or IT business. Mr. Ambassador if you and others do not want to understand the serious negative environmental, economic and technical risks and consequences of this project for Armenia, and continue insisting for its execution, then maybe you can explain your reasons openly. It may be better for you to take this mining project and the inexperienced company Lydian that has no track record whatsoever, to a similar location to Amulsar in the United States, (check this site here http://twtd.wilderness.org/) and see what kind of opposition you will get.  Why are you using this Amulsar worst case scenario as a litmus test and precondition for all other investments that can be done in Armenia?  Did the Armenian government and people object to any other type of US investment on its territory?

Lydian and its consultants misinformed and misrepresented the true nature of the Amulsar project and its true consequences and risks to the investors, banks, US, UK and Armenian Governments and the Armenian public, for which Lydian is responsible.  And the investors, the banks (IFC, EBRD) took Lydian’s arguments at face value without evaluating them properly technically and economically by highly qualified independent mining consultants. Being an Armenian-American who cares about his homeland, I took upon myself the responsibility to seriously and meticulously evaluate the Lydian English documents. The 13 highly technical reports of my former highly experienced international independent consultants brought to light that this project, if executed, would have resulted into environmental disasters that could affect all the surrounding water resources for hundreds of years. 

An investment is considered a positive investment, if the benefits for the host country becomes more than the losses. In the case of the Lydian Amulsar gold mine project that is definitely not the case.

In any project, preventative measures against any negative consequences is very important.  For the Lydian Amulsar project, at this highly sensitive location, and since the project has not started yet, can Lydian guarantee in writing a 98% performance, with all the Insurance and Performance Bonds for 100 years? If not, then continuation of this project is definitely the wrong way to go. You have brought the wrong company to the wrong location and you are calling this an investment to be proud of? At what price Mr. Mills? The cancellation of this project for the good reasons mentioned in these two e-mails and our reports, will in fact be a catalyst to encourage international investments in Armenia and will serve the long term interests and needs of the people of Armenia as well and not the short term interests of the investors only. A good lesson for all countries and investors that all projects in Armenia must be evaluated carefully and in detail for the benefit of ALL the participants.

I hope that this and my previous e-mail below will assist you in your decision making process for the Amulsar project Mr. Mills. Now is the time.

Respectfully yours,

Harout Bronozian
Chemical / Environmental Engineer, MS
USA

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