Azerbaijan begins mining in gold reserves formerly controlled by Armenia

Wed Sep 09 2026

Azerbaijan’s state-owned mining company AzerGold has begun drilling and blasting at the Soyudlu (Zod) gold deposit in the Kalbajar District, on the border with Armenia. The project has a complicated legal and political history. The site was under Armenian control until the Second Nagorno-Karabakh War in 2020, after which it was handed back to Azerbaijan.

According to RFE/RL, the deposit was discovered in 1951 on the border between Azerbaijan’s Kalbajar District and Armenia’s Gegharkunik Province. It has been reported that the majority of the deposit — 75% of its gold reserves, or 17 of its 25 gold-bearing shafts — was located on Azerbaijani territory.

However, by order of the Soviet Ministry of Geology, management of the deposit was transferred to Armenia’s geological administration. Industrial exploitation of the deposit reportedly began in 1976, and 27.6 tonnes of gold were extracted from it by the early 1990s. Following the collapse of the Soviet Union, the deposit was operated on the Armenian side for many years by the Russian company GeoProMining Gold. After Azerbaijan gained control of the territories after the 2020 war, GeoProMining withdrew.

In 1997, Azerbaijan signed a production sharing agreement with the US-based RV Investment Group Services to develop mines in the area. Anglo Asian Mining later took over from RV Investment Group Services as the legal successor to the development rights.

However, because the Soyudlu deposit was under Armenian control at the time, the company was unable to carry out actual operations in Azerbaijani-controlled areas. In 2022, the Azerbaijani government restructured the legal framework of the development agreement, listing the Ecology and Natural Resources Ministry as a party in 2022.

Subsequently, the state designated AzerGold as its representative under the agreement in June 2024. Since August 2025, large-scale geological studies, topographic planning, and drilling operations with a total depth of 18,000 metres have been conducted at the deposit. Based on the results of geological research and exploration, the recoverable remaining reserves of the Soyudlu gold deposit have been estimated at 1 million ounces (28 tonnes).

At the current stage of the Soyudlu project, a total of 236 people, including employees of contractor companies, are employed. Of these, 55 reside in the Kalbajar District. During the initial development and construction phase of the project covering 2026–2029, approximately 700 people are expected to be employed directly and indirectly. Once the Soyudlu mine reaches full-scale production, the project is expected to employ over 1,300 people.

Aliyev ‘bails out’ his daughters

AzerGold has been linked to reports of corruption associated with President Ilham Aliyev’s family. In 2016, the Organised Crime and Corruption Reporting Project (OCCRP) published an investigation based on the Panama Paper leaks, which suggested that President Ilham Aliyev granted the mining rights to six gold deposits, worth billions of dollars, to a consortium allegedly owned by his daughters through offshore companies.

As part of the undisclosed arrangement, the daughters were to receive 70% of the future mining profits, while the state would receive the remaining 30%.

The investigation suggested the mining operations were largely unsuccessful and unprofitable, citing an official working in a company under the consortium as saying its managers ‘clearly did not understand the mining business and were making costly mistakes’. Aliyev ordered the state-run AzerGold to buy out the consortium in 2016. The OCCRP has framed this takeover as something that would ‘likely rescue the daughters’ investment’.

‘It is not clear how much money the family will recoup from the failed venture because the terms of the deal are not yet finalised’, the OCCRP wrote in May 2016. At the time, the OCCRP said that Azerbaijan has not responded to its requests for comment.

OC Media has reached out to the Presidential Administration for comments on the OCCRP’s investigations.

Source: https://oc-media.org/