AzerGold, Azerbaijan’s state-owned mining company, has initiated drilling and blasting operations at the Soyudlu gold deposit located in the Kalbajar District, near the border with Armenia. This development marks a significant step in the complex legal and political history surrounding the deposit, which was under Armenian control until the Second Nagorno-Karabakh War in 2020. The Soyudlu deposit, discovered in 1951, contains a substantial portion of its gold reserves—75% or 17 out of 25 gold veins—within Azerbaijani territory. Commercial exploitation of the deposit began in 1976, but following the dissolution of the Soviet Union, it was operated by the Russian company GeoProMining Gold until Azerbaijan regained control in 2020.
The Azerbaijani government has made strides to restructure the legal framework surrounding the deposit, designating AzerGold as the representative under a production sharing agreement originally signed with the US company RV Investment Group Services in 1997. Following a series of geological surveys and planning operations that commenced in August 2025, the recoverable reserves at Soyudlu are estimated at 1 million ounces (approximately 28 tons) of gold.
Currently, 236 individuals, including contractor employees, are engaged in the Soyudlu project, with expectations to increase employment to over 1,300 once full-scale production is achieved. The initial development phase is projected to span from 2026 to 2029, during which approximately 700 jobs are anticipated to be created directly and indirectly.
However, the project has not been without controversy. AzerGold has faced allegations of corruption linked to President Ilham Aliyev’s family, particularly regarding the granting of mining rights to offshore companies owned by his daughters. An investigation by the Organized Crime and Corruption Reporting Project (OCCRP) in 2016 revealed that the mining operations under this consortium were largely unsuccessful, leading to a state buyout of the consortium in an effort to salvage the investment. The terms of this deal remain undisclosed, leaving questions about the financial implications for the Aliyev family.
As Azerbaijan moves forward with the Soyudlu gold deposit, the intersection of mining, politics, and allegations of corruption will continue to be closely scrutinised, reflecting the broader challenges and opportunities within the region’s mining sector.
