Ghanaian Australian Goldfields Ltd No. III

completed

Environmental Review Summary (ERS)Project Name Ghana-Gold Hedging Facility and Expansion ProjectRegion Sub-Saharan AfricaSector Mining & Other ExtractiveProject No 004896Introduction1. The project involves the expansion of the annual productive capacity of the Iduapriem gold mine in Western Region of Ghana, from 2.1 mtpa to 2.8mpta to produce in the region of 150,000oz gold per annum. This will require replacement of mining equipment and the upgrading/expansion of the treatment plant. In addition a consortium of commercial banks and IFC will provide gold hedging facilities.2. Ghanaian Australian Goldfields (GAG) commenced operations at the Iduapriem Gold Mine in 1992. The area is currently being mined as three long open pits corresponding to Blocks, 1,2, and 3. The existing operation is well run, and is in compliance with World Bank guidelines. The company also has an excellent safety record. GAG retains a full time Environment and Safety Officer at the mine to coordinate and implement various environmental programs and annual audits are carried out by an independent consultancy firm.3. This is a category B project according the IFC’s environmental review procedure because a limited number of impacts may occur, for which there are generally recognized performance standards and design criteria for minimizing or avoiding these impacts. The environmental review comprised a site visit by several staff members from the IFC’s Technical and Environment Department, a review of the most recent environmental audit of the operation (1995) and further information supplied by the sponsor. The key issues that have been addressed as part of the environmental review include the implementation of the 1995 Environmental Audit recommendations, treatment of tailings discharge and habitat loss.4. The Environmental Audit and Action Plan (February 1995), did not find any matters of significant environmental concern; however, a number of recommendations were proposed to improve the mine’s environmental and safety performance. The company is in the process of implementing these recommendations. The role of the Environmental and Safety Officer is also to be expanded to include a more regular inspection of the concession and to provide greater liaison with other mine departments.- 2 - May 30, 1995Existing operation5. There are no substantive gaseous and particulate emissions at the plant site. Potential sources of emissions include drilling, blasting, truck movements, waste dumps and other vehicle movements. Water haulage trucks with attached spray bars are considered effective in minimizing dust migration from the site. The company also undertakes occupational health and safety precautions with the provision of dust masks for personnel when appropriate. 6. The company is monitoring surface and groundwater flows and water quality. Further groundwater data will be collected to enable a comprehensive assessment of possible changes to groundwater levels and flow caused by the mining operation. Process water is contained within a closed circuit, and currently there is no discharge to surface water courses. Comparison between the water quality baseline established in January 1990 prior to the development and the results of water analysis from surface and ground water in 1994, indicates that the mining operation has not adversely affected existing physical, chemical or microbial water quality.8. With respect to site run-off, a series of two oil absorbent booms will be installed in the surface drainage system where the drainage discharges below the mine to entrap traces of oil from the maintenance and other work areas. In addition a primary settling pond will be installed to accept run-off and return water from the process plant before water is returned to the raw water pond.9. Sewage effluent is disposed of to a series of cess pits, and sludge is disposed of to the tailings dam. Discharge from the cess pits will be improved through the provision of soakaways or wetland systems where appropriate. 10. The current handling and storage procedures for chemicals and bulk storage of diesel fuel are satisfactory. The storage facilities for fresh lubricating oils will be improved through the provision of a bund. 11. The company has begun an experimental reclamation program. However broad scale revegetation is needed, and further resourcing will be allocated to this, including the development of a nursery, and regrading of waste dumps. A five year master plan is currently being drawn up. The Agroforestry Demonstration Farm project established by GAG to demonstrate to local farmers new crop production methods is being continued with some modifications.12. The company has provided a number of facilities to the Iduapriem community including modern housing, wells, market place, clinic, school workshop, ventilated latrines and donated building material for other projects. The company is also assisting - 3 - May 30, 1995with the extension of electricity to Iduapriem and Adieyie. The wells in the area are to be improved to provide greater sufficiency in the water supply. Expansion program13. Although process water is currently contained within a closed circuit, the dam is being operated with a positive water balance; and therefore it will be necessary to discharge to the surface water system in the near future. The company is considering various options for treatment. It is likely that a three stage treatment system will be implemented comprising a gold recovery system using an activated carbon column, pH adjustment and addition of coagulants to reduce suspended solids and hydrogen peroxide destruction of any residual cyanide in the discharge. The quality of discharge will meet World Bank guidelines and Ghanaian regulations.14. The current reserve estimate and mining plan includes the utilization of Blocks 4 and 5. These blocks overlap an area known as the Northern Hills. These are two hills covering a small area of between one half to one square kilometer. The area was covered in primary rainforest, but has been degraded as a result of logging, charcoaling, agriculture, and road construction for mine prospecting activities. The area is separated from other areas of habitat and form two isolated islands. There are no rare or threatened species in the area. IFC is requiring GAG to re tain an experienced local tropical ecologist to undertake an assessment of the Northern Hills. The ecologist, together with a major UK based consulting group, will define the significance of the habitat loss in a local, regional and national context. A number of mitigation plans have been discussed with GAG, including provision of an area of nearby forest (of equal or greater value) for inclusion in a forest reserve, or provision of resources to the Government to assist in forest reserve management. GAG has agreed that they will not mine in this area until the ecological assessment is complete and mitigation measures acceptable to IFC have been agreed and implemented. The current mining plan forecasts the start of mining in this area in 1997, however mining of the existing resources from Blocks 1, 2 & 3 alone can support the proposed expansion should further analysis of the ecological effects of future expansion of mining in the Northern Hills be required beyond 1997.Summary15. The Environment Division is satisfied that the relevant key issues are being adequately addressed, and will monitor the Sponsor’s ongoing compliance with World Bank environmental, health and safety guidelines during the life of the project by the evaluation of annual audits, and by conducting periodic site visits.L:\WPEU\SALLY\GHANA\GAGERS.DOCMay 31, 1995 12:02 PM