Expansion and downstream value-added integration of the UHG high quality coking coal deposit.
The project transition impact potential is expected to arise from:
(1) Continued support to a private sector player in Mongolia's largely state dominated mining sector and an increase in competition. This will be the first coal washing plant in Mongolia, allowing an independent mining company like ER to move up the product value chain, and compete with international coke producers;
(2) Institutions, laws and policies that promote market functioning and efficiency. In coordination with assistance from other IFIs, the Bank is providing technical cooperation funds to support commencement of digitisation of the Mining Cadastre of MRAM (Mineral Resources Authority of Mongolia. This is expected to reduce the entry cost for mining companies in acquiring prospects’ information, thus leading to increased expenditures in exploration for mineral deposits - the first step to sustainable mining investments.
Energy Resources LLC (“ER” or the “Company), an independent Mongolian mining company.
Up to USD 180 million term loan.
USD 414 million.
The Project has been categorised as A in accordance with the Bank’s Environmental and Social Policy (2008).
The Bank’s due diligence has confirmed that Energy Resources has robust EHSS management systems and comprehensive environmental and social management plans to address impacts related to its UHG Project in the South Gobi, Mongolia. For the proposed project, an Environmental and Social Impact Assessment (ESIA), Non Technical Summary, Public Consultation and Disclosure Plan and various Environmental and Social Management Plans were prepared in accordance with the Bank's Performance Requirements, relevant Mongolian law, EU Directives and international best practice.
The ESIA and related management plans build upon the existing documents that were developed for the previous project (OPID39820) and have been revised to include specific impacts, mitigation and monitoring measures for the new project. These documents have been disclosed on Energy Resource’s website, and locally, since September 2009 and the Bank's website on 15 October 2009.
A time bound Environmental and Social Action Plan (ESAP) has also been developed for the project to address issues that require additional follow actions. The ESAP remains to be agreed with the Company but will include the following measures:
•The Company will complete additional groundwater modelling as part of future road works;
•Continued acid rock drainage testing of mine waste related to the ongoing mine development plan is required;
•Development of an influx management plan for Tsogsetti soum
•Annual security audits in accordance with the Voluntary Principles on Human Rights and Security;
•Completion of the detailed design for the tailings storage facility, and
•Revisions to existing dust management, erosion and sediment control and water management plans.
The project will be monitored by means of annual environmental and social reporting to the Bank as well as monitoring visits by ESD specialists.
See the Transition Impact section.
Gotov Battsengel, CEO
Energy Resources LLC
Tel: (976) 7012 2279
Fax: (976 ) 7012 2280
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