Wednesday, April 10 2019 17:52
Naira Badalian

Former head of the Ministry of Finance: with Lydian may cost much to Armenia

Former head of the Ministry of Finance: <Confrontation> with Lydian may cost much to Armenia

ArmInfo. with the Lydian mining company, which operates the Amulsarskoye field, may adversely affect the overall investment image of Armenia and the plans for issuing new Eurobonds in 2020. In an interview with ArmInfo, former Minister of Finance of Armenia Vardan Aramyan stated this opinion

According to Aramyan, it is very important for any investor to understand what economic policy is being conducted in the country and how reasonable it is. "If we think that external investors will step on each other's heels to invest in Armenia, we are mistaken," the expert says. International authoritative experts urge developing countries to "take care of the domestic investors, as in the case of first failures, external players are unlikely to want to tempt fate.

In this context, Aramyan urges the authorities to be more restrained in their statements regarding Lydian and not to succumb to the temptation to show muscles, since the "power" of the authorities is indisputable.  Environmental protection, as noted by the former head of the Ministry of Finance, is extremely important for any society, but it must be balanced with economic growth. From this point of view, according to the expert, the government's position of force is fraught with consequences, since the investor in the face of Lydian is, in fact, good or bad, but already in a contractual relationship with the government. The company has already made significant investments and if today for some reason problems are created for the implementation of the project, which is why the company will suffer substantial financial damage, then it will require compensation for the losses. "Thus, leaving aside the answer to the question of who is right, who is to blame, we can say that a potential foreign investor will receive a bad negative signal on the Lydian case," explains Aramyan.

Meanwhile, according to Aramyan, the negative consequences for Armenia may not stop there. A precedent in the form of a company's appeal to the London Court of International Arbitration  (Lydian has already informed the authorities about the beginning of the process of applying to international arbitration, - Ed. note) May play a trick on Armenia if by that time the country decides to enter the international borrowing market. Then it will have to raise funds from the open market, say not 5%, but much more expensive.

In addition, according to the expert, according to GFS (government finance statistics) international standards in the field of state statistics, if the probability increases (possible becomes probable) that a country may lose a trial in prospect, the state will have to recognize the amount of loss as a quasi-fiscal debt.  And if this "perspective" is possible in principle, then the players in the global capital market will not fail to respond to this opportunity in the most serious way, because when they lend to developing countries, they examine them under a magnifying glass. "Any signal can affect their behavior," Aramyan says.

According to the former head of the Ministry of Finance, it is possible that the risks will be undone if the Ministry of Finance succeeds in refinancing the debt on a previously issued $ 500 million tranche in 2020, without recourse to the international capital market, but due to of other sources - international donors and as budget assistance. "Nevertheless, do not think, that if Lydian quoted on the stock market of the capital tells about its relationship with the government, this fact will be ignored by international institutional and portfolio investors," Aramyan said.

Earlier, the company, Lydian International Limited, which operates Amulsar gold mine in the close to the area of the famous Jermuk balneological resort, has sought to prosecute the international arbitration process with the construction of a blockbuster block, the top of the coal mine and the offshore company activists.  Lydian has the right to file an official declaration after the expiration of 3 months in international arbitration.

At the same time, the message says that the company is open for discussion and the search for urgent solutions with the state.

"I hope that we will be able to resolve issues with this company without arbitration," Armenian Deputy Prime Minister Tigran Avinyan told reporters. "If the results of the environmental assessment at the mine site correspond to Lydian data regarding the controllability of environmental risks, there will be no need for legal proceedings and the company will continue construction work. If the answer indicates the presence of risks that the company has not previously reported, then Lydian then it would not make sense to go to court, "- said Deputy Prime Minister.

The Amulsar project is the largest industrial project in Armenia today for the development of the Amulsar gold mine with a total value of $ 370 million. The Amulsar deposit is the second largest reserves in Armenia.

In August 2016, started the mineral assets construction and development project. Preparatory work has been going on since 2006.  The terms of the Amulsar gold mine project will be 10 years and 4 months, with an average of 200 thousand ounces of gold (about 10 million tons of ore) planned annually.  The company is listed on the Toronto Stock Exchange.

To note, since June 2018 the roads leading to the Amulsar mine are blocked by a group of people opposing the mine. The government of Armenia believes that the field operation project requires additional independent environmental impact assessment, which is now being conducted by one of the most reputable global companies. However, Lydian Armenia, due to the actual inaction of law enforcement agencies, continues to incur losses, construction of the mine is suspended. 

Input digits     


Exchange rates

Search by date

Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price


Maximum yield


Мinimum yield


Weighted average yield


Number of participants


The maturity date of T-bills




СПРОС (Покупка)


Средневзв. Цена




Средневзв. Цена




Цена откр.


Цена закр.


Мин. Цена


Макс. Цена


Ср/взв. Цена



Кол-во сделок


Объем (инвал.)

200 000

0бъем (драм)

96 400 000