Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

14 Dec 2004



PSD disclosed:

10 Nov 2004

Project Description

The EBRD has extended a USD 15 million increase to the original USD 10 million loan provided to Chelopech Mining EAD, a joint stock company incorporated in Bulgaria, in April 2005. The original project and the increase consists of: The environmental remediation, resource definition, refurbishment, modernisation and expansion of the Chelopech Mine and processing plant (the "Facilities"). The Facilities are located in Chelopech, Bulgaria. The Facilities have been expanded and the output increased from a mining and processing rate of 500,000 tonnes of ore per annum (tpa) at the time of Dundee’s acquisition to approximately 906,000 tpa of ore in 2007 into gold/copper concentrates. This was part-financed with the Bank’s original loan of US$10 million signed in April 2005 (Original Loan). To support continued mine upgrade and development program through the exploration and expansion of ore mining and concentrate production capacity to approximately 1,500,000 tpa of ore into gold/copper concentrates, the Bank has increased the original loan by US$15million (Increase to the Original Loan).

Transition Impact

The mining sector in Bulgaria deteriorated markedly from the early 1990’s. A large number of mines, including, for a short time, Chelopech mine, were closed during this period due to environmental problems, poor operational and financial performance and decreased domestic demand. The lack until recently of a modern regulatory framework has deterred strategic investors.

This has been the Bank's first mining project in Bulgaria and the Original Loan was signed before the country joined the EU. The continued involvement of the Bank has contributed to increase mining investors’ interest in Bulgaria and the Balkans as a whole.

The Project has benefited from the introduction of modern mining/extraction technologies, thus contributing to technical and marketing know-how transfers. The Project also promotes the industry’s restructuring by introduction of the highest efficiency and environmental standards currently available through the upgrading of the existing mine, mill and tailings management facilities. Chelopech is situated in an established mining region and the ongoing improvements will help set new technological, environmental and health & safety standards that would be immediately relevant to other nearby operations. Since the inception of the original project, a more efficient underground mining method has been introduced, the mining fleet upgraded and a new surface decline for access to the underground mine was constructed. Implementation of a mining strategy has involved promoting safer work environment and ongoing training program. Chelopech Mining was awarded the International Green Apple Environmental Gold Award presented by The Green Organization in recognition of its ongoing mining rehabilitation program.

The Client

Chelopech Mining EAD, a joint stock company incorporated in Bulgaria (“Chelopech” or the “Company”) formerly “Navan Chelopech AD”. Chelopech holds the mining rights and operates the Chelopech copper/gold mine in Bulgaria. Dundee Precious Metals Inc (“Dundee”) owns, via its subsidiaries, 100 percent of the share capital of Chelopech.

EBRD Finance

1) Original USD 10 million loan signed in April 2005.
2) Extension USD 15 million increase to the Original Loan signed in July 2008.

Project Cost

Approximately USD 140 million (over 2004-2009).

Environmental Impact

The Original Project was screened B/1.

Background to Chelopech Mine Project

Since 1991 a range of environmental investigations were undertaken at Chelopech which confirm that historic mining operations have significantly impacted the surrounding environment since start up in 1954. Prior to 2004, waste products from mining and tailings, generated in large quantities, represented the most significant potential environmental liability.

Present status of the mine

Since Dundee (and the EBRD investment) the Chelopech project has benefited from the introduction of the highest environmental standards currently available through the upgrading of the existing mine and mill facility. However the implementation of one of the most significant issues, notably the safety and stability of the tailings facility and water quality, have been delayed significantly and in many cases unexpectedly, pending completion of the legal process and permitting of the expansion project (Phase 2 as referred to in below, which is beyond the scope of the current project).

Independent Environmental Investigations

The independent reviews, available data and all recent monitoring and appraisal studies indicated that the existing mine is operating properly, (except for the areas mentioned above), is managed appropriately and has improved significantly since the involvement of the Project's Sponsor (Dundee Precious Metals). The underground mine has no significant problems with regard to environmental liabilities and no significant contamination or liabilities have been noted by the Past Environmental Damage study or other recent environmental audits. The closure plans are well documented and meet internationally accepted standards and the operation is fully permitted to operate under the current Environmental Impact Assessment (EIA) conditions.

EBRD will continue to monitor ongoing compliance with EU environmental, health and safety standards, and good international mining practices during the lifetime of the project by evaluating reports submitted annually to EBRD by the Company and by conducting periodic supervision.
Phase 2 Chelopech Mining (beyond the scope of the project currently financed by the EBRD).

The Bank has been informed that the Company is planning a Phase 2 expansion to the operation. A full EIA has been undertaken under Bulgarian and EU legal requirements in respect of the possible production of copper metal, gold Dore and sulphuric acid through the installation of a Pressure Oxidation facility (POX) and related processing capacity. (Current processing at Chelopech does not involve the use of cyanide or release of arsenic). Should the Phase 2 project be presented to EBRD, the Bank will follow its own normal policy and procedures for this type of project in consideration of any proposed investment. This will include ensuring that the process is undertaken in accordance with both national and EU legal standards and in compliance with best international practice in particular, the International Cyanide Code of Practice (including ensuring that public consultation has been conducted appropriately and in accordance with both Bulgarian law and our own policies and procedures). The bank would therefore ensure, as a matter of normal practice, that any investment has appropriate conditionality attached to it to meet appropriate standards.

Technical Cooperation


Company Contact

Chelopech Mining EAD,
Village of Chelopech, Sofia District

For the attention of:
Alex Nestor Executive Director

Telephone: (+359 2) 0728 2266
Fax: (+359 2) 0728 3045

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

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Text of the PIP

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