Energy Resources Phase II

Location:

Mongolia

Project number:

39957

Business sector:

Natural resources

Notice type:

Private

Environmental category:

A

Approval date:

23 Mar 2010

Status:

Complete

PSD disclosed:

19 Feb 2010


Project Description

Expansion and downstream value-added integration of the UHG high quality coking coal deposit.

Transition Impact

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.

The Client

Energy Resources LLC (“ER” or the “Company), an independent Mongolian mining company.

EBRD Finance

Up to USD 180 million term loan.

Project Cost

USD 414 million.

Environmental Impact

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.

Technical Cooperation

See the Transition Impact section.

Company Contact

Gotov Battsengel, CEO
Energy Resources LLC
Ulaanbaatar, Mongolia
Tel: (976) 7012 2279
Fax: (976 ) 7012 2280

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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 how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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