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CHTPZ Group is one of the largest steel tube manufacturer in Russian
Federation providing high quality pipes for a number of sectors of the Russian
economy, namely the oil and gas sector.
The planned modernization of the Chelyabinsk and Pervouralsk steel tube
manufacturing plants is aimed at improving the technology as well as
addressing environmental investment needs.
Environmental classification and rationale
The project was screened B/1, requiring an Environmental Audit and
Environmental Analysis in line with the Bank’s Environmental Policy and Public
Information Policy. The planned modernization of existing steel tube
manufacturing plants is associated with a number of environmental issues,
which were readily identified, assessed and mitigated as part of an
Environmental Analysis and Environmental Audit.
As part of the environmental due diligence an Environmental Audit and Analysis
was undertaken by an international environmental consultant. Members of the
Bank’s Environment Department visited the Company in the summer of 2006. The
due diligence also utilized past environmental studies undertaken by the Bank
of Chelyabinsk and Pervouralsk plants in 2002 and 2004 respectively as part of
past financing. CHTPZ acquired the Percourlask plant (PNTZ) in 2004.
Key environmental issues and mitigation
The Company operates two large tube manufacturing plants located in
Chelyabinsk and Pervouralsk. Both plants are significant employers in the
region and have environmental management system in place. The main
environmental issue is associated with air emissions, notably at Chelyabinsk
which operates Open Hearth Furnaces (OHF). Water use, wastewater and waste
management have also significant environmental impacts at both plants. It
should be noted that in Chelyabinsk the local air quality is significantly
affected by the concentration of heavy industry, and CHTPZ operations are not
a major point source emitter in the City. Nevertheless, the planned closure of
the OHF at Chelyabinsk and construction of a new state-of-the-art mini mill at
Pervouralsk will help to improve the ambient air quality in Chelyabinsk. The
proposed mini mill project is subject to separate Bank financing and a full
Environmental Impact Assessment (EIA) is to be undertaken of this project
prior to Bank financing. Initial review of the designs undertaken as part of
the environmental due diligence, indicates that the new plant is structured to
meet both Russian and EU environmental standards, and will not be associated
with significant environmental or social impacts.
The Group is currently implementing a significant investment programme aimed
at replacing old machinery with state-of-the-art technology. This will
significantly reduce the environmental footprint at both plants as well as
improve the overall working conditions and therefore reduce the risk of
occupational disease. Elevated noise and lack of protective equipment has been
identified as an issue requiring attention and this has been addressed through
the environmental action plan.
Environmental opportunities
The Project is expected to bring significant environmental health and safety
benefits and reduce the risk of occupational disease and accidents. The
replacement of old and energy intensive Open Hearth Furnaces with a modern
Electric Arc Furnace (EAF) will also help the Group to reduce significantly
its carbon emissions.
Summary of environmental action plan
An Environmental Action Plan (“EAP”) has been developed for the Company and
this includes specific investment and upgrade requirement to ensure ongoing
and future compliance with Russian and EU environmental standards, notably EU
IPPC requirements for the sector. The EAP is being negotiated with the Company
and includes specific actions aimed at strengthening corporate environmental
management as well as improving the waste and wastewater management.
Although, the financing of the mini mill project is to be covered by a
separate Bank project the EAP addresses the minimal environmental performance
of the planned mini mill and includes a commitment to close the old and
inefficient OHF at Chelyabinsk.
Disclosure of information and consultation
In the context of the EBRD’s participation in the project, the Company will
release locally a summary of relevant environmental issues associated with the
project and summarise mitigation measures, action plans and other initiatives
agreed, as in accordance with the provisions of the EBRD’s Environmental
Policy.
Monitoring and reporting
The Company will monitor the environmental impact of its operations in
accordance with national law and regulations. The Bank will evaluate the
project's compliance with the applicable environmental and social requirements
during the lifetime of the project by reviewing annual environmental reports
prepared for the project covering:
(i) ongoing performance of project-specific environmental, health and safety
activities as reflected in the results of periodic and quantitative sampling
and measuring programmes, and
(ii) the status of implementation of environmental mitigation and improvement
measures. The Bank’s representatives will also conduct periodic site
supervision visits when deemed appropriate.
The Bank will undertake monitoring of the Project, inclusive of site visits by
Bank staff.
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