Scana Leshan

completed

SUMMARY OF PROJECT INFORMATION (SPI)Project Name China-Scana Leshan Metallurgical Joint Venture Co., Ltd.Region AsiaSector Iron and Steel ManufacturingProject No. 007071Projected Board Date November 14, 1997Company Name Scana Leshan Metallurgical Joint Venture Co., Ltd.Technical Partner and/orMajor Shareholders The majority (60%) shareholder will be Scana Industrier, asa, of Norway. Leshan Metallurgical Machinery and Roll Works (Leshan Works) will hold a 30% share. IFC is considering taking up the remaining 10% share.Project Cost About US$ 29.9 million. IFC financing being considered: US$ 6.1 million “A” Loan; US$ 1.35 million in equity.Location of Project and Description ofSite Shawan District, Leshan City, Sichuan Province, China. The site is the existing production facility of Leshan Works, located on the Chengdu-Kunming Railway and on the Dadu River.Description of Companyand Purpose of Project The project company will be a limited liability sino-foreign joint venture company incorporated in China. The project is to restructure the ownership of Leshan Works, a state-owned enterprise, update its technological base, and introduce new management principles. The company will have the capacity to produce 30,000 tons per year of iron and steel rolls, components and parts for heavy industrial use.Environment Categoryand Issues This is an environmental review category B project, with special issues. The special issues are related to its significant social impacts, which include labor redundancies and a separation of Leshan Works’ productive operations from its social services obligations. A “Social Agreement” has been negotiated to mitigate these issues. Other environmental issues associated with this project include potential site contamination, air emissions, liquid effluents, and solid waste management. Occupational health and safety issues include fire safety and emergency response, equipment guarding and employee exposure to noise, chemical substances, heat and dust. An environmental audit has been carried out for the production plants. A detailed environmental action plan for mitigating these issues and bringing the facilities in compliance with both local regulations and the World Bank guidelines will be part of the Investment Agreement. The Environmental Review Summary is available from the Public Information Center.Date SPI sent to PIC October 14, 1997.Environmental 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).