Those Responsible for Funding and Equipping mining in Amulsar

In February 2017, Armenian Environmental Front published information on philanthropists of Armenian origin who support opening a mine in Amulsar Mountain next to Jermuk.

We are now presenting the key entities responsible for funding and equipping the Amulsar gold mine project.

Swedish State Financial Institutions and Private Equipment Companies

  • SEK (Svensk Exportkredit) –Sweden’s Export Credit Corporation. A state export credit corporation under the control of Sweden’s Ministry for Enterprise and Innovation the aim of which is to promote Swedish exports. With the mediation of the Dutch ING Bank N.V SEK has credited Lydian Armenia with a loan worth more than 50mln USD in order for Lydian to purchase mining equipment from the Swedish mining equipment producers.
  • EKN (Exportkreditnämnden) – Swedish Export Credit Agency. A state agency in charge of promoting Swedish exports by guaranteeing (insuring) their sales. In other words, if the Swedish exporter and/or creditor are concerned that their foreign buyer will be insolvent, the state agency guarantees the transaction for the sake of promoting the sales of Swedish products. For Amular gold project, EKN has guaranteed 85% (around 50mln USD) of the credit and its interest provided by the Swedish Export Credit Corporation (SEK). The insurance risk is estimated to be high (6 out of 7). The scheme of the transaction is the same as with the financing of VTB for Teghut mine by the Danish PensionDanmark private pension fund guaranteed by the Danish Export Credit Fund (EKF). -ից 6 միավոր)։
  • Sandvik SRP AB – Mining Equipment company in Sweden, member of Sandvik Group global corporation. With the loan of Sweden’s state SEK corporation and guarantee of the state Export Credit Agency (EKN) Sandvik has pledged to provide mining equipment to Lydian. In the case of Teghut, the Danish FlSmidth company had a similar role. The director of FLSmidth was received by Armenia’s president Serj Sargsyan in Decmber 2016 and received a presidential medal of honor.
  • Sandvik Mining and Construction Oy – mining drilling equipment company in Sweden, a subsidiary of Sandvik SRP AB mining company, member of the Sandvik Group global corporation. Has pledged to supply Lydian as part of the above-mentioned transaction.
  • ABB Switzerland Ltd – member of the Swiss-Swedish ABB Group multinational corporation. As part of the above-mentioned transaction has pledged to supply high-voltage electricity equipment.
  • ABB AB – high-voltage equipment and automation systems producing company in Sweden. Member of the ABB Group multinational corporation, part of the above-mentioned transaction of supplying equipment.

International Financial Institutions and Local Banks

  • IFC (International Finance Corporation, the World Bank Group). Was established in 1956 as the business arm of the World Bank. IFC believes that one of its key areas of work in Armenia is promotion of the mining business and given this motivation it invested and acquired shares amounting to around 16.4mln USD in Lydian since 2007. It sold its shares as of May 2017 and officially left the project with the justification that Lydian was already able to attract funds from other institutions and no longer needed IFC support. In 2016 IFC provided a subordinated loan worth 50mln USD to Ameria Bank for the purpose of crediting private business in Armenia. IFC’s performance standards Compliance Adviser’s/Ombudsman’s office has received complaints regarding the Amulsar project several times from Armenian citizens. As a result the CAO reviewed the complaints for over 2 years and in August, 2017, in its final report, it concluded that the Amulsar project fails to comply with the performance standard on social impact assessment and will keep its review open until May 2018 even after the withdrawal of IFC.
  • European Bank for Reconstruction and Development (EBRD) was established in 1991 by the governments of the United States and European states with a clear mission of promoting privatization and supporting private business in the post-Soviet states. It is an equity shareholder and a major creditor of Lydian International. The Bank continues to support the Amulsar gold project and basically refuses to respond to the grounded arguments of Armenian ecological organizations concerning social and ecological risks of the project presented to them through various letters and the EBRD complaint mechanism.
  • Ameriabank. An Armenian bank which strives to create an image of a “green and socially responsible” bank, however, it signed a $24 million loan agreement with Lydian Armenia for buying mining equipment for Amulsar gold mining. In 2007, 96% of the bank’s shares were acquired by TDA Holdings Limited Russian major investment company which was renamed to AMERIA GROUP (CY) LIMITED in 2011. Between 2007-2013 AMERIA GROUP (CY) LIMITED registered offshore in Cyprus gradually increased its authorized capital and obtained 100% of the bank’s shares. In 2016 EBRD invested $40 million in the acquisition of equity shares of Ameriabank and acquired a stake of 20%; note that thereby EBRD not only finances the Amulsar project directly, but also indirectly participates in the additional lending mechanism of the mining project. Moreover, in 2016 Ameriabank received a $50 million subordinated loan from International Finance Corporation to boost its capacity to lend to local enterprises.

Large Shareholders of Lydian International

We plead with all concerned people to exert public pressure on the above-state institutions to withdraw their financing of this disastrous mining project by all possible means, including by writing emails and calling their headoffices, presenting the true dangers of this project, organizing actions of protests, involving international media etc.

The Amulsar gold mining project planned in close proximity to Jermuk resort is in violation of the national legislation of Armenia; the environmental and social impact assessments are substantially incomplete and incorrect; the project is subject to immediate closure.

Armenian Environmental Front (AEF) civil initiative

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