What has Lydian hidden and what has the Armenian government been “unaware” of?

For years Armenian scientists, specialists and environmentalists presented from their field of expertise the dangers of gold project in Amulsar planned by Lydian International. They insisted that this project should not be realized.  Many times it was mentioned that researches and assessments presented by this inexperienced offshore company stating that all possible risks are manageable not only pose doubts, but also they do not correspond to the reality. It was also mentioned that Armenia’s government did not carry out its own expertise and instead it relied on Lydian’s assumptions written in the documents neglecting all other objections and justifications brought by independent experts.

Now international acclaimed experts in the field have also joined Armenian experts and based on the proposal of the US-based Harout Bronozian, they presented results of three different expertises on this gold project. The results of these researches once again confirm the statement voiced for many years that gold project in Amulsar should not be launched since the assessment carried out by Lydian are extremely incomplete, while the government is basically uninformed about the unmanageable risks posed to our water resources.

The first one of these researches is by “Blue Minerals Consultancy” company about “Evaluation of Lydian Amulsar Gold Mining Project: Assessment of Acid Rock Drainage Potential and Effects on Surface Water and Groundwater”. It was prepared by the principals of the company Dr. Andrea Gerson and Dr. Roger Smart based on the study of more than dozen of documents found on Lydian International’s official website. These experts have combined experience of 45 years in minerals processing and acid rock drainage scientific research and development. The abovementioned research is 125 pages and its English version can be found here, while the summary is here.

We would like to draw attention particularly of the decision makers in Armenia, as well as the shareholders and creditors of offshore Lydian to the main conclusions of the research.

In the foreword, the Australian scientists mention that acid rock drainage (ARD) is internationally the biggest environmental issue facing closed and abandoned mines and mine site rehabilitation. It presents an impending liability to current and future mining operations worldwide and also poses a challenge to the environmental and social acceptance of mining activities. Total cost estimates for remediating ARD-impacted sites in the USA and Canada combined runs into tens of billions of dollars.

Besides, ARD can continue for hundreds of years after a mine is closed and so has potentially long-term and serious environmental impact on downstream water quality, agriculture, fauna and flora. Acidic drainage with associated dissolved metal species some damaging to human health and toxic to biota (e.g. Cd, Cu, Pb, Zn, As, Hg, Se) can result from the weathering of sulfide minerals in mine waste rock and process tailings. The iron sulfide mineral pyrite (FeS2), found throughout the Amulsar deposit, is the main generator of acid drainage.

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For effective ARD control and mitigation the rates of release of acid must be understood in advance. But it is only through understanding the evolution of the rate of acid release that an effective and long-lasting environmental management plan can be put in place. This has not been done adequately in the Amulsar ARD planning.

The main questions and conclusions of the experts are as follows:

  1. Area of Amulsar is part of the catchment basin of Armenia’s largest water resources. In the project area the underground waters feed springs and fill the rivers, such as Vorotan, Arpa and Darb, as well as Kechut and Spandaryan water reservoirs and Vorotan-Arpa-Sevan tunnel, which transfers water to Sevan lake.
  1. Lydian acknowledges that the mine will produce ARD but lack sufficient, credible testing of the sources, amounts, rates of release or mitigation measures. There are significant contradictions with missing and inadequate information on the mineralogy, geochemical testing and modeling of surface and groundwater impacts. The geochemical assessment and modeling contains inadequate data on which to base planning for control of acid generation. No details on the geochemical modeling methodology are provided.
  1. Humidity cell tests for measurement of rates of acid release were conducted on only 5 Lower Volcanic (greater risk) and 3 Upper Volcanic samples (lesser risk) coinciding with 8 samples on which mineralogy had been carried out. This number of samples is manifestly insufficient to be acceptable in international practice.
  1. There are scientific inaccuracies. There is no evidence for the recurring statement justifying an incorrect conclusion of “mild” ARD. The samples chosen to justify this conclusion simply had low sulfide content whereas other samples produced strong acid (pH <3) in a few
  1. Jarosite and alunite are found in the Lower Volcanic (LV) and Upper Volcanic (UV) mineralogy. Acid generation from alunite leaching is discounted by Lydian as not being significant, while acid generation from jarosite leaching is not recognized at all. On-going lime treatment will be required to neutralize acid release from jarosite and alunite in the barren rock storage facility until they are exhausted, as recognized by major international companies. This process is likely to take more than 20 years at Amulsar site.
  1. The ARD from Soviet era waste rock piles is incorrectly interpreted and there are discrepancies in assessments. ARD with pH 3.5 is found after 65 years of storage and weathering. This is strong ARD that contains dissolved toxic heavy metals under in situ conditions confirming the requirement for proper management as set out in the International Network for Acid Prevention Global ARD Guide (http://www.gardguide.com) and international practice.
  1. The only treatment proposed for seepage and runoff is a Passive Treatment Water System (PWTS) to be constructed in 2019. There are major concerns that this PWTS will not be able to neutralize and treat the release, particularly as this has been inadequately characterized, with consequent ARD and metal release to the streams, rivers and water storage below the mine.
  1. On closure of the major mining pits, ARD is recognized in runoff but no treatment or mitigation is proposed before release to local streams or drainage to springs. This is unacceptable.
  1. In the Lydian Environmental and Social Management Plan (ESMP) to “operationalize” the commitments to environmental and social (as well as occupational health and safety) management and mitigation, there is no mention of direct responsibility for ARD control in the document. This fault is common in poor ARD control in many mines where the Mine Manager, with primary focus on production, can and does override the Environmental Manager in correct dumping, encapsulation and dump management. This is a serious omission requiring correction.
  1. The Armenian government’s Environmental Impact Report on this project does not mention ARD in any form, the need to prevent or control ARD, the potential long-term pollution of streams, rivers and water supplies or the environmental or health consequences found downstream of ARD release. It appears that there is no expertise within the Armenian Government to recognize, assess, monitor the Amulsar ARD mitigation or control this potential release for the Armenian people.
  1. Given that acid seepage is likely to peak after this 5 year interval and may continue for decades or centuries, this duration of monitoring is insufficient. As pit seepage will make its way into spring waters these also should be monitored both off and on-site. Moreover, it is not stated what will be done and by whom if these waters fall to below acceptable standard.
  1. this cost of treatment after the mine closure is likely to fall to the Armenian Government. In closure phase, the risk from hundreds of examples internationally is that the company profits decline to below debt level and the local (Armenian) company declares bankruptcy leaving the ARD control for many decades to the government. The major issue shown by these examples is that the on-going cost to the Government of Armenia after life of mine may exceed income to the State during operation. Fifty to sixty tonnes of acid per kT of barren waste will require on-going neutralization. Estimates of acid generation and neutralization rates, not just amounts based on sulfide assays, as assessed in these reports, are required to quantify treatment costs.
  1. The reports on the geochemical testing suggest that Lydian lacks the experience and expertise to adequately define the ARD risk, and to construct and operate the geochemical and engineering required to control the ARD that will result from the Amulsar mine. In this combination of inadequate testing, planning and operation by Lydian with absence of government oversight and control, a primary risk is not only extensive pollution of streams, rivers and agricultural practice but also class actions by groups of stakeholders who have been misled (as in the action against BHP Billiton at Ok Tedi).
  1. The potential impacts of improperly-controlled ARD on streams, agriculture, fish, other biota and, in some cases, human health are well known. Based on international examples, the scale of cost to the Armenian Government from post-closure control of ARD release could be in the hundreds of millions of dollars. In the assessments made of ground and surface water impact it has been assumed that leachate from the barren rock storage facility (BRSF) will be effectively treated to acceptable standards for release by the passive treatment system (PTS). The acceptability of such an assumption is questioned as the pH and dissolved solids content of the in-flow to the PTS is based on in-correct and in-complete analyses. Failure of the PTS would have very significant detrimental impacts on down-steam catchment (edit. – in closure phase Lydian plans to clean the emerging water-flows and release them into environment and Arpa river’s stream).
  1. Significant impact to water quality at springs located around the pits is predicted with respect to beryllium, cobalt, nickel and nitrate as a result of leakage from the pits. These elements are present in the minerals but are released by the acid reactions in the pits and BRSF. These major additions to apparently already high levels should not be acceptable. Design mitigation measures are proposed, i.e. encapsulation, to limit the leakage from the pits but no further groundwater mitigation options are presented. Given the inadequate characterization of ARD potential and rate there is potential for these impacts to be greater than stated in the Lydian assessments.Amulsar position

Later the Australian scientists enumerate researches that are absent from Lydian’s documents.

 

  1. The mineralogy is not complete. Mineralogy is required on both low and high sulfide S samples with corresponding acid base accounting and standard kinetic leach column tests over at least 1 year for international acceptance of ARD potential.

 

  1. The leach studies should be in the form of kinetic leach columns (not humidity cells as has been undertaken to date). This would provide a reasonable measure of net acid generation rate since it is this (not net acid generating potential) that will determine requirements for initial and on-going treatment. This is not measured or discussed. In addition on-site drum tests should be initiated immediately to definitely ascertain the effect of local climatic conditions on rates of acid and species release.

 

  1. Timing is also problematic since 12-20 week long testing is insufficient. Lydian states that it will start this testing as soon as bulk samples of materials are available from the mine. This testing will be too late to modify waste rock dumping practice and needs to be done now using the more relevant conditions of kinetic leach columns rather than the humidity cell test procedure, most particularly on the Lower Volcanic wastes.

 

  1. Abovementioned requirement also refers to Upper Volcanics, which also requires much more complete information on mineralogy and kinetic leach column testing on higher sulfide S containing samples (>0.5 wt.%S).

 

  1. Further examination of the leach rate of alunite and jarosite and their impact on pH are necessary. The percentages of alunite and jarosite in both Upper Volcanic and Lower Volcanic samples need to be properly analysed and incorporated into ARD control estimation.

Later it is mentioned that “there is a lack of understanding of the rates and amounts of ARD release from this mine site with potentially serious downstream consequences. Without proper definition it is not possible to ensure that adequate mitigation is in place to ensure minimal impact on the environment and human endeavors including potable water, agriculture and tourism. All of the missing tests and data specified [in the abovementioned 5 points] should be obtained before proceeding with ARD planning.”

Additionally the independent experts studied “Resources and Reserves of Armenia” section of Amulsar NI 43-101 refined technical report by Samuels Engineering prepared on March 30, 2017 on the order of Lydian company. These sections are about ARD description, mitigation and management. The recommendations in Chapter 26 show the incompleteness of this characterization and detailed planning.

  • Thirteen tasks are identified to be required to advance the heap leaching facility (HLF) to detailed design level.
  • Fourteen tasks, several major and long-term, are identified for the detailed BRSF design in Section 26.5
  • Three tasks, two of which are long-term, will be required to advance the geochemical characterization and ARD management to the detailed design level. These and our recommendations show that the geochemical characterization and ARD management are not acceptable in present testing and documentation.
  • In Section 26.6 Water Treatment part, it says,

“Unlike active treatment systems, a Passive Treatment System (PTS) must be designed to function under site-specific conditions. To date, no studies have been performed to ascertain the performance of PTS methods on Amulsar ARD. A process verification study must be performed. This study includes bench scale and pilot-scale tests. The process verification studies are long-duration tests that will start during final design and continue into production.” This is not acceptable. This should be complete before production. Changes after production have carry-over consequences for ARD control.

  • In Section 26.7 Water Balance part, it states:

“Additional studies are required to verify predictive models that were used within the water balance. Site runoff, evaporation, seep and spring flow, surface water flow, and pit dewatering models all require additional model verification against field data.”

The mine should not have been approved until these tasks and verification were complete. The detailed ARD assessment and control design has not been done. Finding out after starting the mine that very high cost on-going treatments are required may seriously alter the value to shareholders and the Armenian Government.

Blue Minerals Consultancy suggests as a result of their research not to start the mining before these omissions are not properly studied by independent bodies/advisors, and after the omissions will be inserted in the ARD management plan, which will also include the government’s and company’s responsibilities and liabilities (the full summary of the research can be found here).

 

Responsibility for this concealment lies on dividend holders or financiers of the project (especially Armenians), Armenian scientific community, acting according to Lydian’s request, international organizations, that pressures local authorities (World Bank, EBRD etc.), also foreign embassies, namely US and UK. Also, a huge responsibility lies on press, that again, forgot its own mission and acts according to Lydian’s orders, and most importantly – Armenian government, that subordinates environmental safety, public interest and its accountability towards the community to private interests.

 Therefore mine exploitation in Amulsar is impossible in current strategic needs of Armenia, particularly from the perspective of priorities such as protection of water resources and the livelihoods of the population. If informed about real danger of Amulsar, the most of the population, including people living in the immediate affected regions, will start a powerful resistance.

 Armenian Environmental Front (AEF) civic initiative