Nippon Denro Expansion

completed

- 3 - May 13, 1996International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name India-Nippon Denro Ispat LtdRegion AsiaSector Iron and SteelProject No. 0075851. Nippon Denro Ispat Ltd (NDIL) is an integrated steel plant controlled by the Mittal family. The proposed project involves expansion of the NDIL facility for flat steel production near Bombay. The project also include construction and operation of a 250 MW power plant to supply the necessary power for the expansion. A full environmental assessment has been developed for the expansion project.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 consisted of information submitted by the project sponsor and the technical appraisal and site review completed by IFC''s Technical and Environment Department staff. The following potential environmental, health and safety impacts of this project were analyzed:· site location;· infrastructure and traffic load;· air emissions from existing operations;· air emissions from expansion project;· wastewater treatment and recycling;· noise emissions;· public consultation;· marine impact of jetty expansion; and· ISO 14001 (environmental) certification.Information provided on how these potential impacts would be addressed in the NDIL expansion project is summarized in the paragraphs that follow.3. The expansion project will be located within NDIL’s existing site in the Raigad District, Maharashtra. The site is located in an area designated for industrial development. Prior to conversion to industrial zone, the land was used for rice production. Rice production is still ongoing in areas not yet utilized for industrial development.4. The road infrastructure for heavy vehicle traffic from Mumbai to the industrial area is under development. However, the main import of raw material and export of products is by sea. It is planned that sea transport will continue to be the most important means of transportation to avoid contributing to congestion on a road system, which has long been overloaded in this area.5. The NDIL is expanding the steel plant which is still under construction. Air emission modeling is therefore mainly based on design data supplemented with actual data for the operating sponge iron plant on the same site. The sponge iron process, with a capacity of over 1,000,000 tpa, is based on ferric oxide reduction by carbon monoxide and hydrogen gas. The carbon monoxide and hydrogen gas is produced by a natural gas reformer. Suspended particulate matter in the off gas of the sponge iron plant has been measured at 50 mg/Ncm, sulfur dioxide and nitrogen oxides are below the detection limit due to the reducing conditions and the clean reformer gas. Storage areas for the sponge iron plant are using water spraying to control fugitive dust emissions. Air emissions from the existing facilities are found to be well within local regulations and World Bank guidelines.6. Air emissions from the expansion project will be controlled by the use of dry or wet scrubbing systems for particulate matter, wet scrubber where necessary for SO2 control, and water injection and use of low NOx burners to reduce NOx emissions. By these means NOx emissions will be below 35 mg/Ncm from all emission sources, and SO2 will be reduced to 20 mg/Ncm from the power plant, which is the main emission source. The plant wide SO2 emissions from the expansion project will have an average of 25 mg/Ncm. The plant expansion is found to be in compliance with all applicable local regulations and World Bank guidelines.7. Water used at the facility will be treated in settling tanks and used as irrigation water for green belts to be established around the site. There will be no discharge of processing water.8. Noise levels inside the plant will be kept at 75 dBA during day time and below 70 dBA during night time. Noise levels at the plant boundary will in the operational phase be kept below 65 dBA during day time and below 55 dBA during night time.9. An indirect public consultation has taken place during the land acquisition in the past. The complete area was converted for industrial use by the central land planning authority. Hereafter, NDIL approached the local farmers and negotiated land prices for acquiring the individual lots. None of these negotiations needed to be arbitrated by the local authority regarding agreement on a reasonable prices. After finalizing the land price negotiations with the local title holder the total package of land acquisition agreements was taken for title registration. Both the Gram Panchayet (an autonomous village community body) and the Jilla Paruchad (an autonomous district community body) have the right, on behalf of the local villages and the local district, to oppose this registration and hereby object the project. None of these organizations opposed the new development plans. NDIL is further planning to conduct “open house” arrangements, to allow local citizens to familiarize themselves with the operations after the steel plant has been brought on-line.10. To accommodate the additional throughput the import/export jetty will be expanded. The existing jetty is constructed as a concrete pile structure, which allow free water flow around the jetty constructions. The expansion of the jetty will be a simple lengthening of the existing structure and will not result in new impact on the marine environment. There are no sensitive habitats on the river bank occupied by NDIL. The opposite river bank is rich in mangrove growth, but will not be affected by the jetty construction or the import/export activities.11. The existing operating units have obtained ISO 9002 (production quality) certification, and NDIL intends to apply for both ISO 9002 and ISO 14001 (environmental) certification for the complete integrated steel complex after finalizing the construction.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 Nippon Denro Ispat Limited and by conducting periodic supervision.13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Nippon Denro Ispat Ltd’s proposed expansion project will meet World Bank environmental, health and safety policies and guidelines, and host country requirements.