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Africo Resources Limited
Environmental & Social Review Summary
This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Congo, Democratic Republic of
Africo Resources Limited
Date ESRS disclosed
July 23, 2007
Invested: November 28, 2007
Signed: November 19, 2007
Approved: October 26, 2007
View Summary of Proposed Investment (SPI),
Category & Applicable Standards
Key Issues& Mitigation
Overview of IFC's scope of review
IFC has conducted an E&S due diligence for the proposed equity investment in Africo Resources Ltd (ARL). A team of environmental and social specialists undertook a week’s appraisal including site visits to inspect important features and planned infrastructure locations on the Kalukundi Concession in Katanga Province, Democratic Republic of Congo (DRC) and held discussions on key issues with the Sponsors management team in Johannesburg, Lubumbashi and Kalukundi and reviewed of key environmental and social documents. These included the approved Environmental Adjustment Plan (EAP, African Mining Consultants, 2006) required by DRC mining legislation, the updated Resettlement Action Plan (Synergy 2007), ARL policies and site maps/plans; and meetings with a set of key project stakeholders. These stakeholders included the Chief and elders of Kisankala Village, the Chef de Groupement (senior traditional leader) of the area, the Mayor of Kolwezi District, the Kolwezi leadership of an artisanal mining organization (EMAK) and local artisanal mining leaders at Kalukundi.
The appraisal team reviewed the technical, environmental and social documentation available for the Kalukundi property. The focus was on the preliminary environmental and social data (in the form of the EAP and Resettlement Action Plan), the need for documenting legal requirements as well as the initial results of exploration works such as trenching and drilling. Most of this information had been prepared in the EAP of 2006. During appraisal, the IFC team highlighted the future challenges on community relations as the project progresses to potential mine development. In particular the IFC team completed a gap analysis on the 2006 EAP which identified additional work which will be required for production of a full Environmental and Social Impact Assessment prior to the mine development stage. Africo has committed to addressing these gaps in the attached Environmental and Social Action Plan (ESAP).
ARL’s Health, Safety, Environment, Community and Labour management, organization and systems for the Kalukundi project were discussed extensively during the appraisal. These discussions included staffing requirements for ARL’s HSEC functions and the development of adequate environmental, safety and social management capacity. ARL have already started developing this capacity by engaging the services of an experienced Environmental Manager, a Community Relations Manager and a Site Medical Doctor.
ARL have committed to develop an ISO 14001 systems-based approach to environmental, labour/social and community management as well as on relations with stakeholders.
The IFC PEP-AFRICA (Private Enterprise Partnership) Technical Assistance team are currently undertaking an initial scoping exercise in the Katanga province of the DRC, mainly for projects involving IFC (including ARL), to determine potential assistance to these projects to broaden the developmental impacts.
The Kalukundi Cobalt-Copper Project (or Kalukundi) involves the construction of a greenfield open pit mining operation and cobalt-copper solvent extraction and electro-winning plant to produce cobalt and copper metal. The project is located in the Kolwezi District of the Katanga Province in the South East of the DRC. The total project cost is estimated at $235 million after including capital costs, contingencies, working capital costs and interest during construction. The Kalukundi Concession is held by a JV, Swanmines sprl, owned 75% by ARL (a Canadian junior mining company) and Gecamines – the state-owned mining company – holds the remaining 25% interest. The Concession contains a number of ore ‘fragments’, several of which have been found to be mineralized and will be mined initially by open pit methods. IFC intends to take an equity interest in ARL, in order to support the conversion of resources to reserves through further exploration (drilling), on-going feasibility study work, including supporting the upgrading of environmental and social planning and documentation to meet international standards.
Identified applicable performance standards
IFC’s environmental and social due diligence indicates that this transaction will have impacts which must be managed in a manner consistent with the following Performance Standards (PSs):
PS 1 – Social & Environmental Assessment & Management Systems
PS 2 – Labour & Working Conditions
PS 3 – Pollution Prevention & Abatement
PS 4 – Community Health, Safety & Security
Should the project proceed in future to the construction phase, additional Performance Standards may become applicable. A separate consultation and disclosure process will apply to any future construction / development phase.
Environmental and social categorization and rationale
The key driver for this IFC equity investment is support for ARL’s development of the Kalukundi exploration property project, as a basis for setting benchmarks on sustainability in resource development in DRC. IFC’s equity investment will be used solely to fund the continued exploration of the property, including feasibility studies, environmental and social impact assessments and other preparatory activities. Health, safety, Environmental and Community / labor issues, both positive and negative, will be assessed if and when the proposed project moves into development.
This investment is expected to have beneficial results for local employment, livelihoods of surrounding communities and in promoting HSEC best practice in DRC. Initial material has already been publicly disclosed (see links within this document) including locally.
The key environmental, social and occupational health & safety and community aspects and issues associated with this project include;
- Exploration activities: dust and noise control, water management including extraction from local streams and drainage, solid and liquid waste management including sanitation associated with the exploration and drillers camps, drilling pads and access track rehabilitation, use of forested and agriculture land for exploration and development, occupational health & safety, visual impacts and community safety, use and disposal of hazardous materials (mainly fuels); and
- Surrounding communities: traffic, emergency preparedness and response, educative and preventative measures involving the exploration phase workforce with respect to communicable diseases and negotiation of key mitigation measures relating to future mine development with affected community members, traditional leaders and government agencies
Future development of the project may have impacts on biodiversity, human populations or cultural property – these will be assessed as baseline work is undertaken. Documentation relating to social and environmental baseline, social and environmental assessment and community engagement and consultation will build on that already completed (2006 EAP) and will be fully in accordance with PS requirements.
In this context, IFC’s due diligence findings and application of IFC’s Policy and the Environmental & Social Review Procedures to this suite of issues resulted in this project being classified as Category B.
Any future mine development would be appraised by IFC as a separate investment, with a new environmental classification based upon the project’s risks and impacts. Based upon review of existing environmental documentation, it is considered likely that IFC support for future planned mine development at Kalukundi would be classified as a Category A project according to IFC’s Environmental & Social Review Procedure.
Key environmental and social issues and mitigation
ARL has developed a set of documents that address HSEC management and potential key environmental and social impacts during exploration. ARL aims to develop best practice and will demonstrate that during both the exploration and development phases, this Greenfield project will be in compliance with the environmental, labor, health and safety regulations of DRC as well as international good practice under the guidance of the IFC Performance Standards. ARL aims to address these potential impacts as follows:
- Social & Environmental Assessment and Management Systems:
Environmental Management within ARL is the responsibility of the Environmental Manager whilst Community Relations are the responsibility of the Community Relations Manager, both managers are based on site at Kalukundi.
An Environmental Adjustment Plan (EAP) - the DRC legislative equivalent of a mining ESIA - was completed in 2006 for the next (mine development) phase. The EAP was recently approved by the environmental division of the DRC Ministry of Mines. Although the EAP (attached) conforms to the requirements of the DRC Mining Code (which was drafted with substantial World Bank input), as noted above, IFC completed a gap analysis on the EAP and identified that it does not fully cover all the provisions of the IFC Performance Standards on Environmental and Social Sustainability. Therefore, ARL has commissioned a suitably experienced independent environmental consultancy to update the existing EAP into a comprehensive, IFC / PS - compliant ESIA and to undertake further necessary public disclosure and consultation on the ESIA before project development proceeds. Specific areas requiring further attention are listed in the attached Environmental Action Plan, which also outlines Sponsor commitments and agreed timelines in this regard.
A draft Resettlement Action Plan (RAP) covering the proposed relocation of Kisankala Village (est. pop. 1500–2500) was compiled in early 2006. Additional resettlement-related work was conducted by Lubumbashi University in late 2006. At IFC request, a more comprehensive RAP has been compiled (June 2007) which includes ARL commitments required to comply with IFC Performance Standard 5 on Land Acquisition & Involuntary Resettlement. This updated RAP (attached) will be finalized and again publicly disclosed with a full consultation process together with the updated ESIA before project development proceeds and specifically before any physical movement of affected people takes place.
ARL is committed to developing an internationally recognized and certified ISO 14001 based Environmental & Social Management System (ESMS) within one year of the commencement of operations at Kalukundi should project development proceed.
- Labor and Working Conditions
The exploration team comprises approximately 24 persons; in addition, there are several third party drill teams on site and an unarmed private security firm contingent, each with their own camp. Human Resources policies are currently under development; ARL complies with DRC Labor Law and is committed to meeting all IFC Performance Standard 2 requirements in relation to Labor & Working Conditions. ARL has undertaken to develop a local hiring strategy so as to maximize the use of local labor subject to skill-based requirements, health checks and the like. ARL has employed a medical doctor with previous African mining experience as an Occupational Health & Safety (OHS) Manager. The OHS Manager is currently in the process of establishing basic health screening systems, providing site-based medical assistance, ensuring that Personal Protective Equipment is provided to workers, inducting workers on OHS issues, developing driver / vehicle safety protocols and engaging with the small workforce and local community members on issues relating to communicable and preventable diseases.
- Pollution Prevention & Abatement
ARL has employed an Environmental Manager who is currently responsible for minimizing the environmental footprint of ongoing exploration activities, ensuring that the small volume of water abstracted from local springs for project purposes has no negative impact, making sure that solid and liquid wastes (including sewage) are disposed of responsibly and preparing assessment and management plans for the proposed future mining operations. Her current role includes inter alia the development of environmental policies and procedures (e.g. site clearance procedures for drilling teams), induction of staff with respect to environmentally responsible behavior, collaboration with the tailings impoundment design engineers on future pollution control strategies and discussion with the affected community in relation to key future impacts and proposed mitigation strategies.
- Community Health, Safety & Security
Anecdotal evidence suggests that the main diseases in the Kalukundi Concession area are malaria, tuberculosis (TB), diarrhoea, anaemia and sexually transmitted diseases (STDs, including HIV-AIDS), although no official statistics are available. There is a small clinic at the village of Kisanfu, some 6 km from the Kalukundi Concession. The company intends to establish a site clinic for employees and a new community clinic at the proposed new Kisankala Village site. The presence of large numbers of young male artisanal miners currently residing within Kalukundi Concession poses specific risks in relation to STDs, due to the associated presence of commercial sex workers. The company is aware of these risks and has begun to investigate the best methods of mitigating them, in collaboration with IFC including IFCagainstAIDS.
Vehicular traffic associated with exploration activities is relatively insignificant, although vehicle and driver safety procedures are currently being developed by the OHS Manager. The issue of traffic safety will be addressed more comprehensively with local people before project development proceeds, in order that the risk of injuries to members of the public is minimized.
ARL has hired a DRC private security firm, namely BRAS Security, to provide security at the various camps and at each ore outcrop (to prevent unlicensed artisanal mining activities). There are currently no Government security forces on site. ARL is committed to meeting the requirements of IFC Performance Standard 4 governing the use of security personnel for asset and staff protection.
- Possible future issues
There are likely to be a significant number of additional environmental, health & safety and social impacts associated with the development / construction phase of this project should it proceed. The most significant future social impacts are likely to be the proposed relocation of Kisankala Village - currently located in the centre of Kalukundi Concession within a proposed blasting zone - to an alternative site on the border of the concession, and loss of continuous access to an adjacent cemetery. Other social issues are likely to include ongoing community engagement, community development planning, management of security forces, human resources management including development of a local employment strategy and influx control. Key environmental impacts are likely to include the visual impact of open cast mining and associated rock dumps, noise and vibration linked to blasting activities, temporary lowering of the local ground water table due to dewatering, clearance of miombo forest areas for mining purposes and effluent disposal from the treatment plant. Further details pertaining to this and other potential future impacts and planned mitigation measures are contained in the attached EAP and RAP documentation, whilst additional issues for investigation prior to project development are listed in the attached Environmental Action Plan. Should the project proceed to the next phase, ARL will prepare, consult on and publicly disclose a full set of ESIA documentation which complies with all applicable IFC Performance Standards. IFC will prepare a second Environmental & Social Review Summary document, including a new project classification, and will at the same time publicly disclose this revised documentation at least 60 days before any construction activities commence.
Client's community engagement
Since the area of the Kalukundi exploration project has historically seen significant Gecamines exploration as well as artisanal mining activity, the host community already has first hand experience of exploration and mining operations and their potential impacts (though this project might eventually represent the first industrial mining operation in the immediate vicinity). There is a lack of social amenities (clinics, school etc) in the area as well as of infrastructure (paved roads, safe water supply, drainage). ARL has a Sustainability Policy and is committed to delivering community benefits in the areas of healthcare, local employment, education and income-generation. ARL has committed to take measures to safeguard community health, safety and security.
There is only one village (Kisankala) within the Kalukundi Concession. Key stakeholders identified to date include village representatives, artisanal miners operating on nearby concessions but residing in Kisankala village, local and provincial authorities, national mining authorities, NGOs, artisanal mining organizations, police and intelligence services active in the area and several tiers of traditional authorities responsible for village and broader area.
ARL has completed the first phase of a comprehensive local disclosure and consultation process and has demonstrated a strong commitment to develop early on the social license to operate and interact with key stakeholder groupings. ARL is committed to long-term stakeholder engagement and has developed a Stakeholder Engagement Strategy; the engagement process will include regular meetings and ongoing presentations on its project and its various initiatives to local communities, authorities and community organizations in the project area.
Contact details and locations where the attached documentation is available for public viewing:
Vancouver Office address:
1108, 1030 West Georgia Street, Vancouver, BC, V6E 2Y3, Canada
Contact Person: Michael Obrien
Fax : +1 604 646 3226
Site address (DRC):
Kalukundi Project, Kolwezi District, Katanga Province, Democratic Republic of Congo
Contact Person; Jacqui Raynes, Manager Environment
Tel : +243 99 541 1404
Lubumbashi Office address (DRC):
39 Lofoi Avenue, Golf, Lubumbashi, Katanga Province, DRC
Contact Person: Grant Pierce, Managing Director
Tel: +243 99 534 5240
Attached documentation (PDF format):
Environmental Adjustment Plan (African Mining Consultants, 2006)
Resettlement Action Plan (RAP, Synergy, 2007)
Environmental & Social Action Plan (agreed between IFC and ARL, 2007)
IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.
In addition, Affected Communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC. The CAO is mandated to address complaints from people affected by IFC-supported business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of IFC.
Independent of IFC management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of IFC’s environmental and social performance through its compliance arm.
Complaints may relate to any aspect of IFC-supported business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC-financed business activity. Complaints can be submitted to the CAO in writing to the address below:
Compliance Advisor Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
The CAO receives and addresses complaints in accordance with the criteria set out in its Operational Guidelines which are available at: www.cao-ombudsman.org
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