Zarafshan Newmont Joint Venture- Third facility

complete

An EBRD loan will facilitate the expansion of Zarafshan-Newmont (ZN), a heap leaching facility that processes ore from the Muruntau gold mine near Zarafshan in Uzbekistan. Muruntau is the largest gold mine in the former Soviet Union. An EBRD loan would facilitate the construction of a leach pad required to process additional ore. The expansion would extend the life of the project by nine years, until 2014, thereby continuing to generate significant hard currency revenues and by demonstrating continued access to Western financial markets for Uzbekistan. The Bank’s original investment in ZN was the first major foreign investment in Uzbekistan and as a result it has had a significant demonstration effect. It is anticipated that this third loan facility will have the same effect. (ZN) is a joint venture between Newmont Mining Corporation (who operate the project) and two Uzbek entities. The company is a crushing and leaching operation that processes existing stockpiles of ore. Construction began in 1993 and production in 1995. Over 55 tonnes of gold has been produced to date. A US$ 30 million (€33.3 million) loan. In 1993, the Bank extended a US$105 million A/B loan that has been repaid in full. In 1995, the Bank extended a further US$ 30 million loan. US$ 276million (€306.4 million). The project was screened B/1 requiring an audit of the existing facility and an analysis of the impacts associated with the expansion. A full Environmental Impact Assessment (EIA) was undertaken on the original project, which reviewed the adequacy of proposed mitigation measures included in the project design. There is no habitation in the immediate vicinity of the project site and the nearest watercourse is 250 km from the site. Most of the workforce at the mine travels from Zarafshan, some 30 km away. ZN has been operating the project since July 1995 in compliance with all applicable environmental legal requirements set out in the Bank's Loan Agreement and by the Republic of Uzbekistan. This has been confirmed by regular monitoring reports received by the Bank and independent reports from the Bank's engineers who also confirm that ground water monitoring data show no indications of ground water contamination from the heap leach activities. An EAU representative undertook a monitoring visit in June 2000. The planned expansion facilities have been designed to produce zero discharge to surface and ground water, using practices and design standards applied in the United States. Impacts to air and water quality are expected to be minimal if not negligible. The design presented in the preliminary engineering study and report is similar to that used at heap projects in the United States and the State of Nevada by Newmont Mining Corporation. It will meet the level of protection defined by the State of Nevada’s Regulations for the Design, Operations, Construction and Closure of Mined Facilities. ZN has constructed and is operating this heap leach facility in a manner, which would comply with the Nevada State Regulations and all applicable Uzbek Regulations. None.