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.
2) Extension USD 15 million increase to the Original Loan signed in July 2008.
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.
Village of Chelopech, Sofia District
For the attention of:
Alex Nestor Executive Director
Telephone: (+359 2) 0728 2266
Fax: (+359 2) 0728 3045
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