MAGADI SODA COMPANY LTD.

completed

- 3 - May 25, 1995INTERNATIONAL FINANCE CORPORATIONA Member of the World Bank GroupINTERNATIONAL FINANCE CORPORATIONA Member of the World Bank Group May 25, 1995 KENYA: Magadi Soda Company LimitedEnvironmental Review Summary1. Magadi Soda Company Limited (MSC) is one of Kenya''s oldest companies. It has been operating for about 80 years, utilizing Lake Magadi''s trona to produce sodium carbonate (soda ash). The proposed project, sponsored by MSC''s new owners, Brunner Mond Holdings Limited (BMH) a UK based private company, involves the debottlenecking and expansion of MSC''s existing soda ash operations at Lake Magadi, 120 km South West of Nairobi, rehabilitating the railway link from Magadi to the Nairobi-Mombasa main railway, and upgrading of the warehouse and ship loading facilities at Mombasa. The environmental component will involve implementation of a comprehensive environmental management plans.2. 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 covered information submitted by the project sponsor, and the technical appraisal and site review completed by IFC''s Chemicals, Petrochemicals and Fertilizers Department staff. The following potential environmental, health and safety impacts of this project were analyzed: • the current environmental status of MSC; • air emissions; • liquid effluents; • solid waste disposal; • general housekeeping; • rail operation and safety; and • general health and safety.The information provided about how these potential impacts would be addressed in the MSC project is summarized in the paragraphs that follow.3. An independent consultant has, on behalf of BMH, prepared an environmental audit for MSC''s facilities. The environmental audit recommends actions on technical and housekeeping issues to be undertaken to bring the operations in compliance with local regulations and World Bank environmental policies and guidelines. A corrective action plan covering these recommendations will be implemented as part of the project.4. MSC''s air emissions are related to operation of calciners and screening and handling equipment for the raw materials and products. The calciners act as highly efficient alkaline scrubbers for sulfur dioxide removal. Air emission problems at MSC are therefore limited to dust control.5. Dust emissions control at MSC''s facilities in Magadi and at the handling facility in Mombasa need significant upgrading. The project includes dust control within the factory and provision for upgrading or renewal of handling equipment in both Magadi and Mombasa. MSC''s operation will as a result of the project be brought into compliance with both local requirements and World Bank guidelines.6. Liquid effluents from MSC''s operations and the nearby Magadi township are limited to water from the trona transport from Lake Magadi and domestic wastewater from the Magadi township. The trona slurry and wash water is discharged directly back to the Lake Magadi whereas the domestic wastewater is treated in septic tanks before discharge. Lake Magadi is a trona lake saturated with soda brine. No biological life has been found in the lake and no environmental impact of the wastewater outlet is foreseen.7. Solid waste is disposed of in a minor landfill close to the Magadi township. The production facility is only producing limited amounts of non-hazardous solid waste and the remaining waste entering the landfill is domestic solid waste from Magadi township.8. General housekeeping is ruled by written environmental policies setup by the management of MSC. In the past the implementation has not always been consistent and significant improvements are planned by BMH. MSC has started improvements in housekeeping practices including removal of soil contaminated by previous oil spills. The improvements will be monitored closely by MSC''s new owners and IFC.9. MSC''s product is transported from Magadi to Mombasa by rail. The railroad and trains are today operated by Kenya Railways. As part of the project, MSC will take over maintenance of the railroad from Magadi to the tie in on the Nairobi-Mombasa line and operation of all freight trains transporting MSC''s products. The project will help finance the overhaul of the existing rail equipment and establish of proper maintenance standards. Significant improvements in the safety and reliability of the rail system are foreseen. Oil spill from the daily operation of train engines, and the risk of accidental releases from derailing of fuel transports to MSC will hereby be lowered.10. As a result of regular health and safety education, MSC has in recent years had an excellent record of safety with no accidents since January 1993. By introducing better implementation of existing environmental and housekeeping standards employees'' health and working conditions will be improved. The installation of new factory equipment and provision for upgrading of handling equipment will further lower the ambient dust levels to the benefit of both employees and the nearby environment.11. The sponsor will use all reasonable and practicable efforts, based on the presented plans and the Company environmental plan, to ensure that the existing facilities will be upgraded to meet appropriate World Bank guidelines.12. IFC will ensure ongoing compliance with World Bank environmental, health and safety policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by MSC and by conducting periodic supervision.13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that MSC''s proposed project is designed to meet World Bank environmental, health and safety policies and guidelines, and host country requirements.niels\kenya\magadi\ers