Project Description
An up to US$ 75 million senior secured project finance loan with up to 6-7 years maturity to Oksut Madencilik Sanayi ve Ticaret A.S. ('OMAS'), a 100% subsidiary of Centerra Gold Inc ('Centerra').
Project Objectives
The Loan will be used to partially finance the design, development and construction of the Oksut open-pit gold mine in Turkey owned by OMAS.
Transition Impact
ETI score: 80
The transition impact of the project will derive from the Bank's requirements that OMAS applies disclosure standards in line with Publish What You Pay (PWYP) principles and bringing Oksut in line with international standards for the management of environmental, health and safety issues and performance. Equal opportunities initiatives will be explored going forward.
Client Information
OKSUT MADENCILIK SANAYI VE TICARET AS
OMAS is the license holder and developer of the Oksut open-pit gold mine in Turkey. OMAS is a 100%-owned subsidiary of Centerra Gold Inc. Centerra is an international gold mining company engaged in the operation, exploration, development and acquisition of gold properties in emerging markets. Centerra is listed in the Toronto Stock Exchange.
EBRD Finance Summary
USD 75,000,000.00
Total Project Cost
USD 230,000,000.00
Environmental and Social Summary
Categorised A (ESP 2014): Greenfield mining projects may be associated with various, potentially significant, environmental and social (E&S) impacts, which at the time of categorisation, cannot readily be identified or assessed, and which, therefore, require a formalised and participatory environmental and social impact assessment (ESIA) process. The Company has developed a fit for purpose ESIA for the Project in line with EBRD requirements and which was disclosed on 8 April 2016 for a minimum period of 60 days. The Project was subsequently approved by the EBRD's Board of Directors.
The ESIA builds upon an already approved local EIA and includes a suite of management and monitoring plans. Key impacts and risks considered include land acquisition and impacts on land users and livelihoods, impacts to biodiversity, water use, cyanide risks, impacts on surface and groundwater, emissions including dust, noise, worker and community health and safety risks, labour and contractor issues and site closure and rehabilitation planning.
The Project will not result in any physical displacement but will impact users of the Project site such as seasonal herders at the mine site and farmers along the associated power line. The Project has developed a livelihood restoration framework which will be developed into a full plan to address livelihood issues for the mine and its associated facilities such as access road and power line. A Livelihood Restoration Plan will be prepared in consultation with herders, community representatives and farmer associations and disclosed prior to construction works.
Development of the mine will also directly impact critical habitat for two plant species and the project's power line, which runs parallel to an existing power line, is adjacent to a protected wetland and Ramsar site. The Project has undertaken detailed surveys and an assessment of the potential impacts to biodiversity. Impacts will be mitigated through implementation of a biodiversity action plan (BAP) and offset strategy, which will ensure a net gain of species and habitats of conservation importance. Specific actions include, among others: the salvage and translocation of flora species of conservation importance from the mine site; conservation of on-site vegetation; seed collection and flora cultivation; and the installation of bird diverters on the power line together with additional bird surveys along the power line route.
The Project will adopt specific measures to manage and avoid cyanide related risks including implementation of a cyanide management plan, a closed loop system with no discharges and compliance with the International Cyanide Management Code (ICMC). The ICMC is regarded as best practice for the transport, storage and handling of cyanide in mining operations. A Transport Management Plan has been developed and will be integrated into the Contractor's implementation plans to ensure safe transportation of cyanide from the selected port to the mine site. The necessary dust control measures will be put in place to minimise impacts on air quality. Studies conducted as part of the ESIA have not identified a significant impact to water resources. Community and worker health and safety impacts will be avoided and managed through specific management plans and internal procedures. A new access road will be built to avoid traffic impacts to the surrounding communities. An initial project closure plan has already been developed for the Project.
The Company has committed to recruiting most of its work force from the neighbouring communities and the wider area and will also develop and implement skills development and vocational training projects as part of the Community Development Plan to ensure maximisation of the sustainable Project benefits for the local communities. In addition to the local hiring, the Company developed a Local Procurement Management Plan and are willing to support development of a local supply chain (focusing on catering, transportation and cleaning services), which will help to create long term business opportunities for local people. The Company will develop and implement an equal opportunities action plan to promote best practice HR policies and practices with respect to gender and equal opportunities in the Company's operations and supply chain. Labour and contractor issues will be managed through internal procedures which are in line with PR2 requirements and national labour laws.
In order to meet the Bank's stakeholder engagement and disclosure requirements the Company has developed a Stakeholder Engagement Plan (SEP), complaint procedure as well as a Non-Technical Summary of the ESIA. ESIA disclosure included a series of meetings with stakeholder and the public in early May 2016. ESD attended some of these meetings and confirmed general stakeholder support for the Project. Various issues, including cyanide risks, impacts to water, air quality, impacts to pasture land, employment and Project benefits, were raised by stakeholders during these meetings but the Company was in a position to respond to these issues. The ESIA and management plans adequately address the issues raised.
An ESAP has been agreed with the Company. Key actions are described above and also include the need to develop the existing Environmental, Health and Safety and Social (EHSS) framework management plans into detailed management plans prior to construction; allocation of adequate EHSSS resources at site, acquire ICMC certification; undertake further cyanide risk modelling; implementation of the BAP and implementation of measures to manage EHSS risks. The Project will be monitored by an independent environmental and social consultant with semi-annual reporting to the Bank during construction and annual reporting during operations.
December 2019 update.
The project is in advanced construction with operations due to commence in Q1 2020. An independent environmental and social consultant has been monitoring the Project since construction commenced. The last monitoring visit conducted in September 2019 together with the EBRD confirmed that the Project maintains a robust approach to E&S management and its implementation, and progress against, the ESAP is satisfactory. E&S performance is high and the Project maintains appropriate resources to maintain this. The consultant presented some recommendations on biodiversity and on livelihood restoration related ESAP actions which are being addressed by the Company.
Technical Cooperation and Grant Financing
The Company has committed to recruiting most of its work force from the neighbouring communities and the wider area and will also develop and implement skills development and vocational training projects as part of the Community Development Plan to ensure maximisation of the sustainable Project benefits for the local communities. In addition to the local hiring, the Company developed a Local Procurement Management Plan and are willing to support development of a local supply chain (focusing on catering, transportation and cleaning services), which will help to create long term business opportunities for local people. The Company will develop and implement an equal opportunities action plan to promote best practice HR policies and practices with respect to gender and equal opportunities in the Company's operations and supply chain. Labour and contractor issues will be managed through internal procedures which are in line with PR2 requirements and national labour laws.
In order to meet the Bank's stakeholder engagement and disclosure requirements the Company has developed a Stakeholder Engagement Plan (SEP), complaint procedure as well as a Non-Technical Summary of the ESIA. ESIA disclosure included a series of meetings with stakeholder and the public in early May 2016. ESD attended some of these meetings and confirmed general stakeholder support for the Project. Various issues, including cyanide risks, impacts to water, air quality, impacts to pasture land, employment and Project benefits, were raised by stakeholders during these meetings but the Company was in a position to respond to these issues. The ESIA and management plans adequately address the issues raised.
A draft ESAP has been agreed with the Company. Key actions are described above and also include the need to develop the existing Environmental, Health and Safety and Social (EHSS) framework management plans into detailed management plans prior to construction; allocation of adequate EHSSS resources at site, acquire ICMC certification; undertake further cyanide risk modelling; implementation of the BAP and implementation of measures to manage EHSS risks. The ESAP will be finalised prior to Board. The Project will be monitored by an independent environmental and social consultant with semi-annual reporting to the Bank during construction and annual reporting during operations.
Company Contact Information
John W. Pearson
info@centerragold.com
+1 (416) 204 1241
+1 (416) 204-1954
www.centerragold.com
1 University Avenue, Suite 1500
Toronto, Ontario
M5J 2P1
Canada
PSD last updated
16 Dec 2019
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.
