Finance Minister: Amulsar mine launch may have positive impact on Armenia’s GDP growth within 0.5%

YEREVAN, May 2. /ARKA/. The launch of the Amulsar mine this year may have a positive impact on Armenia’s GDP growth in 2025 within 0.5%, said Armenian Finance Minister Vahe Hovhannisyan.

He also answered the question of whether the Armenian government’s GDP forecasts would be realistic if the mine is not launched.

“Armenia’s economic growth is returning to its potential, which, in our opinion, is 5%-5.5%,” Hovhannisyan said at a press conference on Friday, adding that the high figures of previous years may cause disappointment.

According to him, everything that was budgeted as an indicator of economic growth for 2025 is planned to be achieved.

"Since the launch of the Amulsar mine is scheduled for the end of the year, its impact will be marginal. Everything depends on when the result is recorded," Hovhannisyan said.

He also said that he was not aware of the discussions between the government and banks of Armenia regarding the financing of the project.

At a meeting on February 27, 2025, the Armenian government approved a decision according to which Lydian Armenia will be assisted in obtaining credit funds. In particular, the project states that in order to start operating the Amulsar gold mine, the government will provide a budget guarantee that will allow the company to attract credit funds from the Armenian banking sector in the amount of up to $150 million and a repayment period of up to 5 years.

Figures and forecasts for the Armenian economy

The economic growth of Armenia in the state budget for 2025 is envisaged at 5.1%. According to the Central Bank's monetary policy report for the first quarter of this year, Armenia's GDP growth is expected to be within 7-4.5% by the end of 2025, 4.7-4.1% in 2026, and 4.7-6.1% in 2027.

The EDB forecasts Armenia's GDP growth at 5.5% in 2025. The WB expects Armenia's economy to grow by 4% in 2025, the IMF by 4.5%, the EBRD by 4.8%, and the ADB by 6%. According to the forecast of Fitch Ratings, Armenia's economy will grow by 4.9% in 2025, and the UN expects the Armenian economy to grow by 5.2% in 2025 and by 4.7% in 2026.

On financing of mine

Earlier, Lydian Armenia CEO Hayk Aloyan stated that 70-80% of the work to start the operation of the mine has already been completed, and about $250 million is needed for completion. According to him, $100 million of this has already been raised, and the remaining $150 million is planned to be received from several local banks.

The launch of the mine is scheduled for October 2025. According to Aloyan, Lydian Armenia plans to produce approximately 210 thousand ounces of gold per year, which at current world prices implies revenue of $500 million and taxes of $120 million.

On December 27, 2024, an agreement was signed at the Ministry of Economy of the Republic of Armenia on the transfer of 12.5% ​​of its shares by Lydian Armenia to the government of Armenia as a gift.

About the Amulsar deposit

The Amulsar gold deposit is the second largest pure gold deposit in Armenia, containing about 31 million tons of ore and 40 tons of pure gold. It is located in the southeast of the country, 13 km from the resort town of Jermuk, between the Arpa and Vorotan rivers.

Lydian Armenia (founded in 2005, a 100% subsidiary of Lydian Canada Ventures, owned by the American Orion Mine Finance and the Canadian Osisko Gold Royalties) has not been able to fully exploit the Amulsar mine in recent years due to protests from environmentalists and residents of the areas adjacent to the deposit. They are concerned that the exploitation of the mine may lead to contamination of the groundwater of Jermuk and Lake Sevan, causing an environmental disaster.

In 2018-2019, and then in 2020, protests were regularly held there demanding that work be stopped.

In August 2021, the Investigative Committee of Armenia presented the final expert opinion of Earth link & Advanced Resources Development (ELARD) in the framework of the criminal case initiated on July 20, 2018. According to the Investigative Committee, there are no environmental threats from the operation of the mine, and the possible risks can be controlled if appropriate measures are taken.