An economic dilemma is brewing in Armenia, where efforts to develop an open-pit gold mine may pose an ecological threat to a picturesque resort town.
Jermuk, a spa town nestled on a mountainside in southern Armenia, is widely known in the region for its sanatoriums and bottled mineral water. Officials in Yerevan are interested in developing the area's tourism potential, and four years ago, they unveiled a plan to turn Jermuk, which currently attracts about 5,000 tourists annually, into an international-standard winter health resort. If all goes well, the government hopes the make-over can generate about $100 million per year in tax revenue.
Whether Jermuk ever comes close to becoming a tourism cash cow may depend in part on what happens on a mountain about 13 kilometers away. In 2005, the government granted a free-of-charge, 25-year license to Geoteam, a subsidiary of Lydian International Ltd, a company in which the International Finance Corporation and the European Bank for Reconstruction and Development are major stakeholders. The company eventually hopes to extract the 2.5 million ounces of gold believed to lie in Amulsar Mountain, near Jermuk. Operations are slotted to begin in 2014.
Critics warn that an open-pit gold mine in the location will inevitably result in hazardous emissions that can create ecological hazards for Jermuk, as well as threats to Armenia’s second-largest reservoir, Spandarian, situated some two kilometers away. Also at risk are another reservoir (Kechut) and five nearby villages.
According to geologist Hrachya Avagian, a senior scientist at the National Academy of Sciences of Armenia, the area has abundant quantities of zinc, copper, selenium and tellurium. “[T]he dust from [extracting these elements and metals] can cause large explosions, which will pollute the environment,” Avagian said.
Citing Armenia’s high wind speeds (mountain sites can reach up to 47 meters per second, according to the State Hydrometeorology Center), ecologist Knarik Grigorian also sees the mine as a potential ecological threat. “Will people be going to that spectacular town to recuperate or to get poisoned from polluted air?” she asked, wryly, in reference to Jermuk.
“Dust from heavy metals can travel 30 kilometers, and it’s unpreventable,” added Grigorian, who works for the Armenian Women for Health and a Healthy Environment non-governmental organization. “It accumulates on plants, sinks into water, and reaches humans via the food chain.”
Authorities in Yerevan think both initiatives can proceed without one creating a risk for the other.
Economy Minister Tigran Davtian assured EurasiaNet.org that he, too, is concerned by the prospect of pollution in Jermuk. He added that he personally looked into the matter. His finding? “The potential damage to the environment will be equal to zero,” he declared at a January 24 news conference.
Geoteam has promised Armenia “100-percent environmental protection from any damage,” Davtian continued, and to operate “within the framework of strictly environmental and technological requirements.”
Armen Stepanian, Geoteam’s manager for environmental and social issues, asserted that a new blasting technique will be used to get at the gold. This new method will produce “much less dust and noise.”
“The dust will settle quickly and will not spread,” he maintained. Ecologists vigorously dispute Stepanian’s contention.
Estimates on how much money the Armenian government budget will receive from various taxes applied to the mine’s operations were not available. Stepanian, however, estimated that the project will turn Geoteam into the country’s third-largest corporate taxpayer.
One former environmental protection minister, scoffed at the government’s claim that a gold mine and mineral water spa can exist side-by-side, without any harm being done to the environment. “This project will simply destroy Jermuk,” argued Karine Danielian, an ecologist who now heads the For Stable Human Development association, an environmental advocacy group. “It’s “impossible to fully neutralize the harm from mining.”
The Ministry of Environmental Protection did not respond to EurasiaNet.org’s written request for comment.
The dilemma surrounding Jermuk is symptomatic of a much larger question concerning the direction of Armenia's economic development. With a land area of just 29,743 square kilometers (a bit bigger than the US state of Maryland), Armenia seems too small to support both 500 mines and tourism dependent on the country’s natural beauty, Danielian said.
“The contradiction between mining and tourism-agriculture keeps getting bigger every day,” he added.
Mining seems, on the surface, to be a dominant component of Armenia’s economy. But tourism has provided the economy with greater revenue over the past decade, contributing 6 percent of Gross Domestic Product compared with roughly 2-2.5 percent for mining, according to the National Statistical Service.
Economy Minister Davtian dismissed concerns that mining operations at Amulsar Mountain would dash Jermuk’s chances of realizing its potential. “Everything is possible,” he said, with a smile. “It’s not right to claim that Armenia can have either tourism or a mining industry. It’s simply absurd; with the right approach, they can co-exist just fine.”
What the “right approach” is remains open to debate. In 2010, an $18-million, 5.7-kilometer cable car line, one of the world’s longest, opened in southern Armenia to take tourists to the 9th century mountaintop monastery of Tatev. One year later, the Chinese-owned Fortune Oil Company bought an iron mine some four kilometers away, (as well as two others), for $24 million. Work at the iron mine is scheduled to begin in 2014.
Environmentalists are skeptical of governmental reassurances. Nazeli Vardanian, the director of the non-governmental organization Forests of Armenia, believes mining companies’ pledges to do no environmental harm are no more than “pretty promises.”
“With this strategy, we should forget about tourism,” Vardanian said in reference to the government’s attempt to develop both mining and tourism. “Diaspora Armenians might turn a blind eye, and still come simply to see their motherland, but tourism as an industry cannot have a future.”
Gayane Abrahamyan is a reporter for ArmeniaNow.com in Yerevan.