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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.
Project number 26209
Country
Congo, Democratic Republic of
RegionSub-Saharan Africa
SectorCopper
Department
Company nameAfrico Resources Limited
Environmental category:B
StatusCompleted
Date ESRS disclosedJuly 23, 2007
Previous EventsInvested: November 28, 2007
Signed: November 19, 2007
Approved: October 26, 2007
View Summary of Proposed Investment (SPI), click here

OverviewCategory &

Applicable Standards
Key Issues

& Mitigation
Community/

Engagements
Client's

Documentation

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.
Project description
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.

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