August 13, 2020 - 10:46 AMT
EBRD terminates investment in $400m gold mine in Armenia

The European Bank for Reconstruction and Development investment in a controversial $400m gold mine in Armenia is to end, a new assessment by the bank’s complaint body states, according to openDemocracy.

For the past two years, Lydian International’s Amulsar gold mining project in southern Armenia has been under blockade by local people and environmental activists, who blocked access to the mine in the wake of the country’s 2018 "velvet revolution". News that the EBRD’s investment is due to end comes as protests have been renewed at the Amulsar site in recent weeks, after the Lydian group hired a new private security firm and removed a trailer belonging to activists.

The London-based development bank has funded exploration, drilling and feasibility studies and environmental and social mitigation measures by Lydian since 2009, and has been targeted with criticism by civil society groups over its support for the company.

“The EBRD owes the public a proper statement expressing its position on the project and current developments,” said Fidanka McGrath, EBRD policy officer at CEE Bankwatch Network. “The recent despicable provocation by Lydian’s security company [at Amulsar] is only a sign of the reputational damage that this investment will continue to inflict on the EBRD, even after its shareholdings in Lydian International are wound up.”

The Amulsar blockade has led to a complex standoff between Armenia’s government, headed by former protest leader Nikol Pashinyan, Anglo-Canadian mining company Lydian International and protest participants themselves. The standoff has also drawn in the mine’s international backers, including the EBRD, as well as the UK and U.S. governments.

“The EBRD can still redeem itself by speaking up in support of democracy and by working with the Armenian government to remedy the environmental harm and social conflicts caused by the project,” said McGrath. “Either way the bank will have to answer for its failure to ensure proper consultations with affected communities.”

In 2017, the International Finance Corporation, the World Bank’s development arm, withdrew its funding from Lydian International, stating that its investment was no longer necessary.