Lydian International's Resposne to International Prestigious Experts' Assessment of Amulsar Project Risks

Lydian International's Resposne to International Prestigious Experts' Assessment of Amulsar Project Risks

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Lydian International Company has responded to the assessments of international prestigious experts on Amulsar gold mining project.

Reminder: in late July 2017 the All-Armenian Environmental Front Civic Initiative published the assessments of the international experts on Amulsar project risks, which say Amulsar gold mine can't be launched.

Below is Lydian's response.

''These reports commissioned by Mr. H. Bronozian raise concerns about the adequacy of plans to mitigate any adverse impacts of mining at the Amulsar project in relation to Acid Rock Drainage (ARD) and other groundwater and surface water issues. These studies are based on an incomplete review of Lydian’s environmental management documentation. Independent studies show that ARD risks at Amulsar are very low and manageable. A full review of publicly available studies and management plans would have shown that plans either already exist to manage the risk identified or that further work is already planned and budgeted for. The management of environmental and social impacts at the site are subject both to regulation by the Government of Armenia and to audit by Independent Environmental and Social Consultants (IESC, Knight Piesold) to inform the oversight of the Project by international investors who require on the application of international good practice.   

Background 

On July 19 Lydian came into possession of several reports prepared by Blue Minerals Consultancy, Clear Coast Consulting and Buka Environmental, which address the potential risk of acid rock drainage (ARD) and groundwater and surface water issues at the Amulsar project and Lydian’s proposed mitigation measures. These reports draw on material selected from publicly available reports by Mr. Bronozian and are referred to collectively in this summary as ‘the Reports’. 
Lydian welcomes scrutiny and rigorous scientific assessment of the Amulsar project and is committed to ensuring that our stakeholders get satisfactory responses to all their questions or points of concern. Lydian has therefore commissioned detailed independent reviews by the leading international environmental consultancies that have worked on the Amulsar ESIA Wardell Armstrong InternationalGlobal Resource Engineering (GRE) and Golder Associates. The reviews, as well as a summary of them, can be found here.

Key points of response to the ‘Reports’:
  • The Reports’ evaluations and conclusions are based on only a selection of Lydian’s work to manage environmental impacts, and in some cases, misrepresent, neglect or take out of context points that are fully addressed in the Environmental and Social Impact Assessment (‘ESIA’) and other studies.  
  • The Reports failed to acknowledge that on-going optimization of the environmental mitigation measures is in-progress, although it is clear from Lydian documentation. Most of their comments are to be addressed in pending or ongoing studies that are detailed in our documents.  
  • Although they do not explicitly challenge the possibility of ARD control, the Reports fail to acknowledge the growing role of passive treatment as an industry-standard method for controlling ARD.  Numerous examples worldwide are highlighted in the technical report here.
  • The Reports fail to acknowledge that the Amulsar ESIA process is overseen by independent technical experts from around the world. Every aspect of the ARD control, water impacts, and closure plan have been intensively evaluated by independent experts. 
We are confident that the Reports do not identify risks not previously disclosed by Lydian or accounted for in our management plans. We believe it is important for readers of the Reports to be aware of the following:
 
The Reports do not take full account of Lydian’s extensive, documented mitigation planning

Although the Reports contain a critique of the ESIA (June 2016) and the recommendations chapter of NI 43-101 technical report (March 2017), they do not reflect a comprehensive understanding of the overall ESIA process together with the management plan programmes that have been developed for the construction, operation, closure and post-closure stages of the mine lifecycle. These programmes, set out in the Environmental and Social Management Plan (‘ESMP’), address the project’s environmental and social risks and impacts, and include the:
  • ARD management plan
  • Surface water management plan, and
  • Preliminary mine reclamation, closure and rehabilitation plan
The original plans are available here and have been subject to development, required by the ESMP. The consultants failed to contact or correspond with the Environmental and Social team at Lydian and gain a contemporary understanding of the management systems in place. Their failure to do so is a serious omission and has led them to have only a partial understanding of the project and resulted in some erroneous conclusions that could clearly have been avoided through appropriate consultation.

Lydian’s existing studies and mitigation plans have been conducted and scrutinised by independent experts to international standards.

The Reports recommend that “mining should not start until further investigations have been completed by independent bodies / consultants”. This recommendation fails to recognise the existing independent oversight of Amulsar project, and the programme of ongoing environmental monitoring, analysis and assessment during operations.

Lydian’s ESMP fully conforms to Armenian law and regulation and the rigorous standards of international multilateral agencies, including the Performance Requirements of the European Bank for Reconstruction and Development (EBRD) and the Performance Standards of the International Finance Corporation (IFC). Lydian’s ESMP has been subject to a detailed and independent audit in April 2017 by internationally qualified environmental and social consultants (IESC). This audit verified that the environment risks and impacts associated with surface water and groundwater management and ARD management are integrated into the overall management system, and that the project was in compliance with the its commitments.

The Reports note further work is required to assess and mitigate impacts, but do not acknowledge that this work is already planned and budgeted and will be conducted at the appropriate stage of the project.
 
In a number of areas, the Reports discuss the need for further detailed studies and analysis, and note that this has not yet been undertaken for Amulsar. International good industry guidance for the development of mines involves a staged approach to project design, with increasingly detailed work conducted over time as the project progresses. Much of the further work identified in the Reports is planned and budgeted and will be undertaken at the appropriate time. This is reflected in our documents.

For example, the Reports state that “Significantly more mineralogical, geochemical and acid-base accounting testing is required for prediction of acid rock drainage rates and their evolution with time”. This is also a requirement of our ESMP (publicly available), which notes that further studies are required to develop the detailed strategy for ARD treatment; the NI 43-101 technical report clearly states the budget for ongoing work on this aspect.

The further studies that are required to prove the feasibility of passive treatment methods and to mitigate ARD post-closure are also budgeted and planned. In the unlikely case that these studies conclude that the proposed plans are insufficient, then alternative treatment methods can be applied. Importantly the timing of these additional studies is planned to ensure that there is sufficient time for alternative studies to be identified, evaluated and implemented in case required.

At times the reports misrepresent, neglect or take out of context points that are fully addressed in the ESIA and other studies.

There is a broad range of concerns raised in the Reports which have in fact been discussed, evaluated and accounted for in our management planning. These include for example:

Claim: The ESIA assumes no groundwater will flow into the pits.
Fact: This is inaccurate: the ESIA models and assesses groundwater inflow and its management (for example in Appendix 6.9.1).
Claim: Mercury emissions are to be expected, including from the proposed mercury retort.
Fact: Analysis indicates that mercury will not be present in spent ore, and the retort is in fact a precautionary environmental protection measure.   No emissions will be released.
Claim: The plans do not account for the impact on ARD of jarosite and alunite.
Fact: The acid-generating potential of these minerals has been assessed and considered non-existent that is reported in several places in both the Feasibility Study and ESIA.

Detailed responses to a broad range of technical points raised in the reports can be found in the response report prepared by Wardell Armstrong that includes Annexes prepared by GRE and Golder Associates. Lydian welcomes further discussions with the authors of the Reports and is committed to ongoing transparent dialogue with all of our stakeholders to answer questions and address concerns.

Mining involves a significant level of investment to bring mineral resources to account on behalf of each project’s stakeholders. It is appropriate, therefore that this process also involves scrutiny and accountability. Lydian aims to conduct its operations in a transparent and respectful manner. We are confident that Amulsar will be an exemplary operation with full control of all possible risks to best international standards as practiced in well-established mining jurisdictions such as Canada, Australia or the USA.

We would also want to emphasize that a significant proportion of our management team are Armenians who are highly skilled professionals and patriots of their country. They joined the company to build a project that is environmentally responsible, leaves a sound legacy and benefits Armenia. Their devotion to their country is just as strong as that of all stakeholders''.

16:31 August 23, 2017


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