Loma de Niquel Nickel Project

completed

Summary Of Project Information (SPI)Project NameVenezuela - Loma de NiquelRegionLatin America and CaribbeanSectorProject No007343Projected Board DateMarch 15, 1997Company NameMinera Loma de Niquel CATechnical Partner and/or Major Shareholders Amsa Ltd, (Amsa), a wholly owned subsidiary of Minorco SA (85%); Corporacion Caracas (7.5%); and Jordex Resources Inc. (7.5%). It is proposed that IFC acquire a 3.5% equity interest which would reduce Amsa’s shareholding to 81.5%. Amsa is also the project technical partner.Project Cost Including proposed IFC investment Project cost is US$430.0 million including all associated infrastructure and capitalized interest. IFC’s proposed investment is - (i) “A” loan - US$65 million, (ii) “B” loan - US$50 million and (iii) Equity - US$9.455 million.Location of project and Description of site The Project is located in Venezuela’s Miranda and Aragua States, some 80 kms south-west of Caracas, close to electric power, natural gas and paved roads and within 200 kms of the ocean port of Puerto Cabello.Description of Company and Purpose of Project The Project involves the commercial development of the Loma de Niquel lateritic nickel deposit 80 km southwest of Caracas, the installation of an on-site ferro nickel smelter to process ores from the mine, and the construction of associated infrastructure facilities including an access road, a water reservoir and a 17 km gas pipeline. The Project is based on proven and probable ore reserves of 34 million tonnes, which is sufficient for a mine life of 27 years with an average production of nickel in ferro nickel of around 16,000 tonnes per year over the life of the Project with a peak production of 18,800 tonnes in 2001. The Project will help Venezuela to diversify from its reliance on the oil industry and will enable the private sector to extend its reach into the mining business. The Project is expected to contribute substantial returns to Venezuela in terms of tax revenues, foreign exchange earnings and employment (direct employment will be 600 Venezuelans). IFC’s role is to provide, and attract, through the “B” loan mechanism, long term financing which may otherwise be unavailable to this viable, long term project. Environmental Category and Issues This a category A project under IFC’s environmental review procedure because potentially diverse and significant adverse impacts on the environment may occur. The ore body is grassland on the south crest of a long ridge. There is no reported use of the project site for grazing or agricultural purposes because of the poor soils and grass growth. Reclamation plans include backfilling, which will begin about 3-4 years after mining begins. At the end of the project, overburden from the first 3-4 years will be deposited in the last pit area. The mine is designed to be a zero discharge facility. The nickel refinery will not generate tailings, but will generate a slag that is neither toxic nor acid-generating. Drainage from the slag heap, as well as cooling water from the refinery and drainage from the waste dump and low-grade ore stockpile, will be collected and reclaimed for process water. Emissions (particulates and dust from stacks or stockpiles) will be tightly controlled, and all particulates will be collected and pelletized for reprocessing as ore material. Under Venezuelan law, an Environmental Impact Assessment (EIA) was prepared on the project. The EIA was prepared as part of the feasibility study, and played a role in project concept and design. The EIA consultants worked with local people as information sources, and held meetings with local community groups during EIA preparation. Following preparation of the EIA, local meetings were held in the nearby community municipal offices. Availability of the EIA was also announced in local newspapers with opportunities for comment.     The Environmental Assessment is from the Public Information Center.Host country location of environmental documentsMinisterio del Ambiente y de las Recursos Naturales Renovables, Piso 10, Centro Simon Bolivar, El Silencio, Caracas Date SPI sent to PIC December 27, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).