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The International Environmental and Social Impact Assessment (ESIA) of the Amulsar project

By Didier Fohlen

Senior Vice President, Lydian International

The Amulsar Gold Project is located in the central part of the Republic of Armenia. The license for this project is 100 percent owned by Geoteam CJSC (“Geoteam”), a fully owned subsidiary of Lydian International Limited (“Lydian”). Geoteam will develop and operate the Project. Lydian is listed on the Toronto Stock Exchange (“TSX”) and its major shareholders are the International Finance Corporation (IFC – part of the World Bank Group), the Royal Bank of Canada, Amber Capital and the European Bank of Reconstruction and Development (EBRD). Prior to developing the Amulsar project, Lydian is preparing a comprehensive Environmental and Social Impact Assessment (“ESIA”). An ESIA is an assessment of the possible positive and negative impacts that a proposed project may have on the environment and communities, together consisting of the environmental, biodiversity, cultural heritage, and socio-economic aspects. The purpose of an ESIA is to ensure that decision makers consider the resulting environmental and social impacts, both negative and positive, when deciding whether to proceed with a project. ESIAs do not re- quire adherence to a predetermined outcome. Instead, they require decision makers to account for environmental values in decisions and to justify those decisions in the light of detailed environmental and socio-economic studies and stake- holders comments on the potential environmental and social impacts of a particular proposal.

The ESIA for Amulsar Project covers the proposed mining of the gold deposits, together with all associated mine infra- structure. The development of Amulsar will use conventional open pit mining methods, over a minimum period of 12 years. The mine will be developed in phases, with selective mining of ore bodies. There is the potential for future expansion to other deposits, if exploration indicates there is a viable resource. The ESIA is being prepared in line with the Equator Principles (EP), which is a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions. Project Finance is often used to fund the development and construction of major industrial projects, such as the mining and processing of gold. The EPs are based on the International Finance Corporation (IFC) Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines (EHS Guidelines). Bsed on the scope of the project and the requirements of the EPs, the ESIA broadly covers the following:

• Summarizing and presenting the applicable national and international policy, legal and administrative framework under which the assessment was carried out.

• The Project description, covering geographical, ecological, environmental, social and temporal aspects, influences and effects.

• Analyzing baseline data, describing the environmental,socioeconomic and human interest conditions which have been assessed against the project plans given in the Feasibility Study.

• Review of alternatives for siting various Project facilities, taking into account regulatory, environmental, biodiversity, cultural heritage, social, and community health and safety issues.

• Defining the environmental and social impacts associated with Project construction, operation, mine closure and reclamation.

• Incorporating mitigation measures into detailed design to eliminate or minimize impacts to an acceptable level and identify appropriate alternatives.

• Development of key management plans with input to the site-specific Environmental and Social Action Plan (ESAP) for the delivery of the Project. These are all included in the Implementation Plan that will become a living document throughout construction and operation.

• Development of a preliminary Mine Closure Plan and measures for post-mining management. 

The overall aim of the ESIA is to identify and assess poten- tial environmental and social impacts that may be a consequence of the project. As such, potential adverse impacts can be avoided, reduced or offset, to the feasible extent, as part of the project design. The ESIA process is typically broken down into screening, scoping, baseline data collection, impact assessment and management plan development. The Screening stage iden- tifies the key areas and environmental receptors in a location. The information is used to inform the scoping stage, where baseline data collection and impact assessment require- ments are identified. The collection of environmental and social baseline data commenced during the early exploration period started in 2006. The programme was specifically tailored and refined in 2008 to concentrate information gathering on the areas identified during the screening exercise as important for the development of the project. The scoping study for Amulsar was published in February 2011, followed by the preparation of the draft impact assessment between mid-2011 and mid-2012. The process of data gathering will continue into operations to monitor the effects of mitigation measures and ensure environmental and social compliance. During this 5-year period, Lydian and Geoteam have worked closely with a number of international consultants. To strengthen its multi-disciplinary work, Lydian has also contracted various in-country specialists and internationally recognised experts for both impact assessment and stakeholder engagement activities. All parties have been integrally involved in the development of the ESIA, with a target date for finalizing in August 2013.

The ESIA will be publicly disclosed, available in English and Armenian at various locations (Amulsar Information Center, surrounding villages and Yerevan). Adequate public con- sultation and stakeholder engagement will take place in the coming month, prior and before disclosure