The upgrading and expansion of two existing gold mines in the Republic of Buryatia. Project objectives are to finance the expansion and upgrading of two existing gold mines, which will make the company operationally self-sufficient, thereby significantly reducing operating costs. Environmental improvements will be introduced.
The investment will facilitate the company's corporate, technical and environmental development towards a Western-style private sector mining company.
Buryatzoloto is a fully privatised joint-stock company incorporated in the Russian Federation. It owns and operates two gold mines in the autonomous Republic of Buryatia.
US$ 10 million loan (ECU 7.71 million); US$ 7.5 million equity investment (ECU 5.78 million).
Co-financing of US$ 5 million (ECU 3.86 million) through private placement of new equity.
US$ 59.5 million (ECU 45.77 million).
This project was screened A/1, requiring an environmental audit and an environmental impact assessment (EIA).
The project comprises financing the upgrading and expansion of two existing, fully operational and permitted mine sites, with associated ancillary facilities. These are located in separate and remote areas in the south-western and north-eastern regions of the Republic of Buryatia. The Zun Holba operation will include flotation, cyanide leaching and carbon-in-pulp (CIP) gold recovery, and incorporates discharge of CIP residues to an engineered new CIP residue impoundment allowing for recycling rather than discharging of effluents. Discharges from CIP residue impoundments would be subject to cyanide detoxification prior to discharge to the existing tailings impoundment. At the Irokinda site, ore production, milling facilities and infrastructure will be expanded and remedial actions taken to address the existing mercury contamination. The project has been reviewed and approved by the environmental authorities, and has also been evaluated by two Canadian independent technical and environmental consultants selected by the Bank.
The environmental studies revealed historically inefficient environmental management and a low priority assigned to environmental and health and safety issues. The use of a mercury-amalgamation process at the Irokinda site, which was terminated in 1989, has resulted in localised mercury contamination. The company, in cooperation with the environmental and health and safety authorities and with the involvement of NGOs and the scientific community, completed an environmental and medical survey at the Irokinda site and has developed a remedial action programme for the old mill and tailings area to be implemented as part of the project. Some of the other key issues identified and mitigation measures incorporated in an Environmental Action Plan (EAP), covering both sites, include:
adoption of Environmental and Health and Safety Policies;
implementation of an Environmental Management System;
spill prevention and containment measures for the tailings pipeline, fuel and chemical storage areas;
a formalised waste management system to include acid mine drainage;
a waste-water treatment plant will be completed at Zun Holba;
a Health and Safety Manager will be appointed to address health and safety issues;
on-going monitoring, including the mercury contamination at the Irokinda site;
establishing a funded mine closure and reclamation plan; and
implementation of an on-going public information and consultation programme.
The planning and environmental review process for the project has been under way since 1992. Following the Bank's involvement, scoping meetings were held in Ulan Ude and at the mine sites in July 1995. The scoping meeting initiated a public participation programme which was implemented by the company between November and December 1995, including the 'Sayuts', the local indigenous population of the Oka District, near the Zun Holba mine. As part of this process, environmental studies and information were disclosed and a summary of key components of the project, such as the conclusions of the environmental assessment and audit, and the EAP were provided during three public meetings held at the two mining areas. Information was also distributed via television and radio interviews and press publications. The meetings were attended by representatives of the mining community, the population of the Oka region at Zun Holba, the NGOs and the authorities. The Chairman of the Green Party of the Republic of Buryatia stated that this has been the first time that a dialogue between the industry and the Green movement has been established in the Republic of Buryatia. Their concerns were considered in the EIA, the EAP and the monitoring programme. The company is now developing an ongoing public information programme on the implementation of the EAP and progress made on issues that were raised in the EIA process.
ECU 183,000 to assist in implementing corporate restructuring, appropriate financial management and accounting systems.
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