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Community before and after Amulsar Project

Capital expenditures of Amulsar Project’s construction phase to be completed this year will total about 370 million USD, which is the largest international investment in Armenia. Lydian Armenia is already ranked the 19th in the list of the country’s largest taxpayers, which speaks of significant economic effect of Amulsar Project’s construction. There is more to come with the operations phase. What have these investments brought to Amulsar adjacent communities? We have talked about this and other issues with Nara Ghazaryan, Social Sustainability Manager at Lydian Armenia.

– Lydian Armenia became a large taxpayer in 2017. Company says it will be paying 40-50 million USD taxes per year when production starts. What will the communities gain from this?

– I think it is not quite correct to assess investments in terms of taxes only. Of course, taxes are important, but it is not the only important indicator of economic impact. The number of jobs created due to these investments, indirect jobs, economic impact caused by these investments are important as well. In this sense, mining is perhaps one of the sectors with major impact on economy.

Here are some examples: more than 1,400 people were hired in the Project construction activities last year, 40% of which from local communities. More than 700 people will have permanent jobs during the operations phase. Every direct job in mining generates 5-6 indirect jobs. Namely, small businesses are set up to provide services to the mine, such as supply of food, goods & services: cleaning, transportation, maintenance and other services. Last year, local procurement by Lydian contractors from adjacent communities (goods and services) was a serious economic indicator as well. For instance, in November, local procurement totaled more than 326,000 USD. Both local jobs and procurement have already had a tangible impact on economies of the local communities.

– Lydian Armenia implements social programs in addition to direct economic investments. What is the goal of your programs?

– Lydian Armenia has invested about 3.4 million USD in social development or livelihood programs in Jermuk, Kechut, Gndevaz, Saravan, Gorayk communities during all these years. Although there are many issues in communities, especially in villages, quite big number of those issues have been resolved step-by-step over time. Compared to previous years, there is tangible progress in these communities, resulting from not only construction activities at Amulsar and business activities in local communities, mentioned earlier, but also livelihood & development programs supported by Lydian.

For instance, last year alone (2017), 31 new business plans have been approved and these businesses gradually start operating. Positive impact of these businesses will hardly remain unnoticed in the communities, I think. With the same initiative, Lydian supported additional 24 small businesses last year and they keep developing.

– It is widely perceived that Lydian is supporting  these programs as charity to favor the local communities.

– We are neither charity nor government. We have specific reasons to finance community investment programs, and charity is not within our goals or functions. Here are the reasons of our community investment. First, what we do is called “mitigation or minimization.” For instance, if we have bought land from Gndevaz for implementation of Amulsar Project, we believe that the land owner has lost his livelihood source/land, despite generous compensation by the Company.  In such situation, we are committed to promote additional or alternative livelihood opportunities for them. This is required by the international standards we have adopted.

Second, it is in Project interest to be surrounded by dynamically developing communities that often turn into efficient partners. We seek cooperation with our communities, we want to be good partners and hire people from these communities, and procure locally. The more social and economic progress these communities have, the more efficient our cooperation will be.

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