Kyzyl Project



Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

04 May 2017



PSD disclosed:

17 Feb 2017

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

In 2017, the Bank provided a USD140 million loan to Bakyrchik Mining Venture LLP (the "Borrower", "Company"), an entity 100% controlled by Polymetal International Plc (the "Sponsor"), to finance development of the Kyzyl (Bakyrchik) gold deposit (the "Project"). The loan is fully guaranteed by the Sponsor.

The Bank is providing an additional USD60 million financing to the Borrower to ensure achievement of the original Project objectives.

Project Objectives

The facility supports the Borrower's efforts in developing the Kyzyl gold deposit located in the north-eastern Kazakhstan. Kyzyl is a world class deposit with estimated JORC reserves of 7.3 Moz of gold at an average grade of 7.7 g/t. The Project is expected to produce up to 1.8 mtpa of ore by open pit mining during the first 10 years. The ore will be processed by sulphide flotation followed by concentrate offtake and/or pressure oxidation (POX).

Transition Impact

The proposed financing has the potential to generate a positive transition impact by promoting youth and gender inclusion, as well as demonstrating the use of efficient mining technologies. The Project is expected to improve the linkages between the industry and training/educational institutions, and address skill mismatches through developments of standardised training for youth and increased workforce diversity.

Client Information


The Borrower is a Kazakh company that is indirectly 100% controlled by the Sponsor. The Borrower's key asset is the Kyzyl gold deposit located in the north-eastern Kazakhstan. The Sponsor is the world's 15th largest gold producer and 3rd largest silver producer. The Sponsor has a public listing on the premium segment of the London Stock Exchange and the Moscow Exchange.  

EBRD Finance Summary

USD 200,000,000.00

Total Project Cost

USD 500,000,000.00


Environmental and Social Summary

Categorised A (ESP 2014): 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 Project will be developed in two phases in an area already partly disturbed by historic mining activities. Phase 1 is an open pit mine for a period of 10 years followed by an underground development phase for a further 13 years.  The EBRD's financing relates to Phase 1 but an ESIA has been undertaken that considers both phases.  The ESIA, and associated Environmental and Social Action Plan (ESAP), are available in English, Russian and Kazakh and are now disclosed for a minimum of 60 days before consideration by the EBRD's Board of Directors. 

An initial ESIA, building upon an already approved local EIA/OVOS, was developed for the Project and was disclosed in the Project area in late 2015. This ESIA has been supplemented with various studies and documentation to align it with the EBRD's E&S requirements.  Key impacts and risks considered in the ESIA include impacts to biodiversity and surface and groundwater; water use; emissions including dust; land acquisition and impacts on land users and livelihoods; noise; worker and community health and safety risks; and site closure and rehabilitation planning.  

Development of the mine will directly impact a large area through mine infrastructure such as the open pit, waste rock dump, tailings and production facilities.  Biodiversity studies have confirmed that impacts are limited primarily due to the already disturbed nature of the site. No critical habitat or priority biodiversity features are present. The open pit necessitates directing an existing stream away from the Project area but not outside the wider catchment area.  This is expected to result in a local impact on water availability downstream of the open pit but will not impact the catchment area.  The Project will be supplied with water dewatered from the open pit with excess water treated and discharged into existing streams.  Process water will be recycled. Dewatering of the open pit will lower groundwater levels around the site as shown by a geo-hydrological study. This, however, is not expected to significantly impact local stream flow or affect local groundwater supplies.  Prior to phase two, the Company will undertake a study on the effects of underground mine dewatering.  An Acid Rock Drainage (ARD) potential has been identified but measures implemented as part of the mine design are expected to avoid and reduce this risk.  These measures and ongoing management will be informed by monitoring. The Project will produce a concentrate with elevated levels of arsenic due to the characteristics of the deposit.  Concentrate will be exported by train to the Company's POX plant in Russia and to other third party smelting facilities.  The Company will review off-takers to ensure that E&S risks are appropriately managed. A conceptual mine closure plan has been developed and will be maintained and updated during the life of mine.

The Project will involve the replacement of existing coal boilers to supply heating to the town and to the Project.  These boilers are small (l15MW) and have been considered in the air quality impact assessment.  The use of coal has been subject to an alternatives analysis and considering the location of the Project and available energy sources, is the preferred fuel type.  The ESIA has not identified an impact to local air quality as a result of boiler operation.  Dust is more of an issue and measures will be put in place to control and monitor dust levels.  A bypass road will be constructed to redirect traffic around the town significantly reduce noise and dust related impacts.  A GHG assessment considering both direct and indirect (from electricity) emissions indicates CO2 equivalent emissions of 208,160t and 185,183t per year during Phase 1 and 2 respectively.

The Project has resulted in some voluntary resettlement of people from the adjacent town of Auezov.  This resettlement was as a result of the expansion of the existing sanitary protection zone (SPZ) around mine to accommodate a larger open pit.  This resettlement was undertaken in line with the Bank's requirements and will be monitored by the Company. Some land users may be affected through the location of project infrastructure on pasture land but measures have been put in place to reduce this impact and maintain access to alternative pasture land.  The Project will employ approximately 600 people during Phase 1 and over 1000 during Phase 2. Local recruitment from the adjacent town will be a priority but it is also expected that many people who left the area after the previous mining activities ceased will return.  Local procurement of services and goods is also a priority. Existing facilities and services are generally under-used due to previous out migration but nonetheless an influx of people and salaried workers may result in some local challenges.

Key impacts to people are associated with dust generation, noise and traffic issues.  Traffic risks will be minimised through a bypass road and implementation of a traffic management plan.  Dust generation will be addressed through standard measures.  Previous mining activities resulted in an increase in background levels of arsenic in soils and dust from a previous, and now decommissioned, roasting facility.  Ongoing air quality and dust monitoring will determine whether a risk exists and if further mitigation is required.  Noise levels will be highest during construction and in the first few years of mining.  Standards have been projected to be exceeded in some areas and provision has been made for further monitoring and mitigation measures. The Company has in place a robust community development and support programme which will continue during the life of mine. Company HR policies and practices are in line with PR2 and together with the Company's robust approach of environment and health and safety, will also apply to contractors. 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 will include a series of meetings with stakeholders and the public.

An ESAP has been developed to structure the Project in line with the Bank's requirements and is disclosed with the ESIA.  Key actions in the ESAP are described above and also includes the need to develop the existing E&S framework management plans into detailed management plans prior to construction; audits of worker accommodation, ongoing geochemical test work,  developing a final closure plan two years prior to closure and managing contractor E&S performance.


2020 update

The Kyzyl project entered the operations phase in late Q2 2018. In 2020 it produced 382 Koz gold equivalent (GE). All facilities such as tailings storage facilities, camp and other infrastructure are now complete. The deposit is being developed by open pit mining methods and after ~15 years will move to underground mining. Mine ore is being processed by conventional floatation to produce a concentrate. Concentrate is sold to third party off takers or is processed further by Polymetal's POX facility in Amursk in Russia. An EBRD consultant conducted a monitoring visit in July 2018. The visit showed that Polymetal maintains a high level of E&S performance in line with EBRD's Performance Requirements.  This has been confirmed by Company reporting to the EBRD for the year 2020.  Milestone ESAP actions have been completed and ongoing ESAP actions continue as required.  Select actions are due in the future (e.g. relating to the future underground mining phase, detail mine closure plans, etc.).  The mine has achieved ISO 45001 certification for its health and safety management system and ISO 14001 certification for its environmental management system. Polymetal routinely engages with the local community and maintains an effective grievance mechanism.  Key indicators for 2020 are: workforce - 2011 average; female workers - 21%; Kyzyl staff/contractors - 66%/43%; Kazakh nationals i 97.3%; Lost Time Incident Frequency Rate - -0.16; freshwater intensity - 386 m3 per Kt ore processed; carbon footprint GHG emissions (tonnes of CO2 equivalent-  Scope 1 and 2) were: 192,771 t CO2e and 505 t CO2e per Koz of GE. 

Full details will be available in Polymetal's 2020 Sustainability report (

Company Contact Information

Galina Chudina
+7 (723) 249 26 00
Auezov village, Zharma area, East Kazakhstan region, 070605, Republic of Kazakhstan

Implementation summary

Bakyrchik Mining Venture LLP has successfully completed and launched the Project at Kyzyl gold deposit in Kazakhstan in June 2018, on time and within budget, with support of EBRD financing. Project specific benchmarks focus on the physical completion and commercial success of the Project are met successfully. The Transition Impact objectives of skills transfer and gender inclusion are achieved with the support of a Technical Cooperation consultant and policy dialogues conducted together with EBRD team. The key achievements were the introduction of two national occupational skills standards and removal of 75 jobs banned to women in mining sector in Kazakhstan, as well as a series of teacher-training sessions, career guidance events and training for students from colleges and the partner educational institutions, course for young employees of the Kyzyl Project (including women). A positive progress made in demonstration of new replicable behaviour through the completed reconstruction of Kyzyl mine brining new technologies and the other mining facility of the Polymetal Group benefits from replicating these practice. Kyzyl performs strongly since it became operational.

PSD last updated

07 Jun 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

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 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 to get guidance and more information on IPAM and how to submit a request.


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