Grupo Calidra, S.A. de C.V.

completed

October 30, 1997Page 2Environmental Review Summary (ERS)Project Name MEXICO-GRUPO CALIDRA S.A. DE C.V.Region LATIN AMERICASector CEMENT AND CONSTRUCTION MATERIALSProject No. 008437 October 30, 19971. Grupo Calidra S.A. de C.V. (Calidra) is the largest lime producer in Mexico, with 11 lime plants, totaling 27 shaft kilns and one rotary kiln, located central to the various lime markets. Quick lime (calcium oxide) is produced by heating limestone to a high temperature in a kiln, a process known as calcining. Quick lime is either used directly from the calciner as an industrial chemical, or is converted to hydrated lime (calcium hydroxide) by the addition of controlled water to quick lime. This project involves construction of a new integrated lime production facility (Calidra de Oriente) in Puebla, including a limestone calcining plant with a production capacity of 288,000 tons/year of quick lime and a hydrating plant with production capacity of 150,00 tons/year; and capacity expansions and improvements at Calidra’s existing facilities, aggregating 322,800 tons/year of quick lime and 225,000 tons/year of hydrated lime. Upon completion of the investment program, Calidra will have a rated annual production capacity of 1,557,600 tons of quick lime and 1,375,000 tons of hydrated lime.2. The Calidra de Oriente plant will be a greenfield project next to the limestone deposit. A total land area of 96 ha will be required, including 83 ha for the limestone quarry. The limestone deposit is projected to have reserves of a minimum of 20 million tons needed for 30 years production. Limestone crushing and screening will occur at the main plant. Calcining facilities will include two 400 tons/day capacity kilns with computerized, automatic controls. For hydrated lime production a 25 tons/hour slaking machine, high efficiency separators and a ball mill will be used. In addition to bulk shipments, packing and loading equipment will produce bagged products. Employment at the plant and quarry is expected to be about 80 people. Infrastructure requirements include a 15 km natural gas pipeline connection (gas will be the primary fuel for the plant), 7 km access road and electric transmission line, underground wells for water supply, and an onsite sewage treatment system. Construction is scheduled to be completed in two years.3. Calidra’s existing facilities consist of the following: PlantImprovements and upgrading of these existing plants have already started. Environmental upgrades are underway at several plants. These activities and other commitments by Calidra have been incorporated into a Corrective Action Plan (CAP) and schedule to bring the existing operations into compliance with World Bank guidelines.4. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor and the technical appraisal and site review completed by an IFC consultant. The following potential environmental, health and safety impacts of the project were analyzed:· air emissions;· liquid effluents;· solid waste disposal;· land use and habitat modification;· quarry reclamation; and· employee exposure to noise and dust.The sponsor has presented plans to address these issues and demonstrate the proposed project will comply with applicable governmental and World Bank requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.5. The new plant in Puebla will be located in a rural area, 5 km from Acajete, the nearest town. The plant will be designed to meet the World Bank guideline of 50 mg/Nm3 for dust emissions. The sponsor will provide kiln manufacturer’s performance guarantee ensuring the kiln will operate at a 50 mg/Nm3 for dust emissions. Natural gas will be used as fuel. The sponsor is currently preparing an Environmental Impact Statement (EIS) for this plant as required by the Mexican regulations and will be completed in January 1998. Calidra will submit a copy of this document to IFC for review and approval and will commit to implement the recommendations as indicated in the EIS.6. Modernization and capacity upgrading at Calidra’s existing plants will not require additional land acquisition. The existing kilns with bag filters and the hydrators with wet scrubbers comply with the Mexican requirements for dust emissions. As part of the CAP, Calidra will install bag filters on 22 of its existing kilns to fully comply with the World Bank guideline for dust emissions. Fugitive dust emissions result from limestone crushing, storage and transfer operations will be also controlled at all plants by installing bag filters and conducting improvements and maintenance programs. The CAP will be completed by year 2000.7. Calidra plants currently use either natural gas or heavy fuel oil for kiln firing. As of 1998, only Cal Quimica Plant 1 will continue to use fuel oil. The remaining plants will use natural gas exclusively. Testing for SO2 emissions from this kiln will be undertaken in January 1998. All new kilns will have low NOX burners. NOX emissions testing will be conducted for all plants by January 1998. The results of the SO2 and NOX stack monitoring tests will be submitted to IFC soon after the tests are completed. The sponsor will submit corrective actions to IFC if the SO2 and/or NOX emissions are above the World Bank guidelines. Compliance with these guidelines will have to be ensured by the end of year 2000.8. The quick lime and hydrated lime manufacturing processes do not generate wastewater. Sanitary sewage from the new plant will be disposed in a manner that meets World Bank guidelines. Sewage is handled at all existing plants either by discharge to the municipal sewer or via septic tanks. Sewage from Abastecedora Plant 1 and Cal de Apasco facilities is discharged to an open canal in accordance with local permits. While the government plans to include treatment of the sewage effluent in its environmental program, a timetable has not been established. Calidra has agreed, as part of the CAP, to install effluent disposal systems to meet World Bank guidelines at these two plants by the year 2000 if the government program has not been implemented.9. The quarry site for the new plant at Puebla is not an area of biological sensitivity and the nearest human settlement is about 5 miles distant. Quarry reclamation measures will ensure that topsoil and overburden are conserved for reclamation, slopes will be recontoured to prevent storm water accumulation and minimize erosion and runoff, and native vegetation will be planted to prevent erosion.10. Calidra is currently extracting limestone at three plants - Cal Quimica Plant 2, La Laguna Plant 1 and Cal de Apasco. The company has established a reclamation plan for the Cal Quimica quarry, as required by Mexican environmental authorities. Topsoil and overburden are being set aside for future reuse during reclamation. Native plant vegetation is also being preserved for reuse. The authorities have not required reclamation plans for the other two sites, which are barren and have limited potential for other uses. However, Calidra will prepare reclamation plans for the La Laguna Plant 1 and Cal de Apasco quarries. These plans will be submitted to IFC prior to first disbursement11. Personal protective equipment are provided to and required to be used by the employees. Hard hats are provided for all personnel, and dust masks and hearing protection are provided for personnel working in areas with high dust and noise levels, respectively. The company’s moving machinery is well protected by shield guards and guard railings. There have been no major accidents in recent years. Calidra has qualified personnel at the corporate and plant levels to implement health and safety programs; this is supplemented by a commission of workers and supervisors at each plant. The company’s health and safety performance is reviewed annually by the government authorities. Calidra will train the employees in occupational health and industrial safety issues and will continue implementing occupational health and industrial safety programs to comply with World Bank guidelines.12. Calidra will present an environmental management plan including maintenance, monitoring and training programs satisfactory to IFC prior to first disbursement.13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that, with the implementation of the CAP, the proposed project is being designed to meet Government of Mexico requirements, and World Bank policies, and environmental, health and safety guidelines.14. IFC will monitor Calidra’s progress of implementing the CAP. Thus, Calidra will provide a biannual CAP progress report until the CAP is fully implemented at the end of the year 2000. IFC will also monitor Calidra’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating environmental performance reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.L:\WPEU\JOSEFINA\MEXICO\CALIDRA.ERSOctober 30, 1997 3:11 PM