Zeravshan: Jilau Gold Expansion Project

completed

Environmental Review Summary (ERS)Project Name TAJIKISTAN: Zeravshan GoldRegion Central Asia, Middle East and North AfricaSector MiningProject No. 008579 1. The Zeravshan Gold Company (ZGC) is a joint venture between the Tajik Government and Commonwealth and British Minerals Ltd, a 100 percent subsidiary of Nelson Gold corporation. ZGC was established to develop the Jilau, Taror and Chore mineral deposits and to operate the existing facilities in the Zeravshan Valley area, northwest Tajikistan. In 1996 IFC invested into ZGC equity and shareholders loan. ZGC is developing Jilau, Taror, and Chore deposits in multiple phases. Phase 1 A comprised the modification of the existing processing facility with the installation of a conventional carbon- in- leach (CIL) to treat 750,000 tonnes of oxide ore per year from the existing Jilau Pit. ZGC now proposes proceeding with the second stage of the Phase 1 development, the Phase 1B Jilau and metallurgical plant expansion. The expansion will comprise an increase in production from the Jilau open pit and an expansion of the mill circuit and the construction of a new tailings dam. The estimated total capital and ongoing cost of the expansion over a four year period 1997-2000 is US$ 19.6 million. 2. Environmental baseline studies were undertaken in 1995 through 1996 and an environmental assessment report was completed in 1996 in support of the Phase 1 project. This has subsequently been revised to take account of the Phase 1 B expansion. 3. The expansion of the existing operation (Phase 1B) is a category B project according to the IFC’s environmental review procedure because a limited number of impacts may occur, for which there are recognised performance standards and design criteria for minimising or avoiding impacts. The environmental review comprised a site visit by Technical and Environment Department staff, a review of supplementary information provided by an international environmental consultancy and the sponsor. 4. The key issues that have been addressed as part of the environmental review include the following:· Nelson''s corporate social/environment policy;· land use modifications;· tailings treatment and disposal;· waste disposal;· liquid effluent and solid waste;· water resources;· general worker safety /cyanide handling; and· monitoring.Corporate policy5. Nelson Gold has prepared a comprehensive environment and social policy as a demonstration of senior management commitment to these areas.Land use modifications6. Comprehensive baseline studies have been undertaken of the whole concession. No parks or ecologically protected or sensitive areas or historic sites are located within the areas that could be affected by the proposed development. Project development to date has had minimal impact on land usage, which consists mostly of occasional grazing by livestock in the project area. 7 The construction of the new tailings facility will result in the loss of approximately 82ha. 70ha is classified as potential agricultural land belonging to the Bobojon Gafurov collective farm, although only a portion of this is used for seasonal grazing and farming. The remaining 12ha consists of the existing tailings facility. ZGC has developed a mutually acceptable compensation package with the collective farm and has also provided additional irrigation facilities. Comparable quality land surrounds the affected area, decreasing the significance of the land use change.8. The expansion of the CIL plant is occurring on previously disturbed land and does not impact any habitat. Tailings treatment and disposal9. A new tailings facility is required for the expansion. Knight Peisold has designed this facility, which incorporates a number of elements to ensure environmentally sound tailings management. Like the existing dam, it will be a closed system whereby supernatant is returned to the mill for re-use. As before, the basin area will be lined with a low permeability soil liner under 300 mm of drainage material. Approximately 3.4ha of the basin (the area beneath the supernatant pond) will also be lined with a geosynthetic liner to minimise leakage of tailings solution. 10 The design of the new facility also incorporates embankment foundation and basin foundation underdrains to reduce the potential uplift from groundwater. There will also be embankment phreatic surface control, which reduces the internal water level within the embankment face, improving the overall stability. Drains sited above the dam liner will reduce the hydraulic head thereby reducing tailings solution excursion. Solution collected through or around soil liners will be directed to sumps. There will be another sump located at the downstream toe of the main embankment. Groundwater passing through the sumps will be monitored on a regular basis as part of ZGC''s environmental monitoring program.11. As part of the initial expansion phase of the project, ZGC decided to opt for the ozonation process to destroy cyanide. Pilot testing performed by US metallurgical laboratories indicated that the resulting cyanide concentration in the supernatant may be as low as 10ppm or less. However only two of the five ozone generators are currently operational due to faulty sensors and ZGC are adding hyperchloride to the solution in order to reduce cyanide concentrations in the Tailings dam to acceptable levels. Marginally elevated levels of cyanide were reported in the downstream lake during the autumn. This is likely to be due to the ongoing expansion of the Tailings dam and the encroachment of supernatant liquid into a newly prepared containment area. This area is currently being sealed. The ozonation plant will be brought back into operation in early 1998.Waste rock disposal12. As more sulphide ore is extracted, geochemical characterisation will be undertaken to determine its acid generating potential. Depending on the results, sulphide ore may be located away from the current oxide dump, due to the proximity of an ephemeral watercourse. Liquid effluent and solid waste13. Liquid effluent from the mine site, camp and hospital are treated and discharged to surface waters. Daily samples are collected and analysed. The effluent complies with World Bank and Tajik guidelines. Solid waste is placed in a designated dumping area and regularly covered with an earth layer. Water resources14. The site receives water from the Kosatarosh well field. The operation and maintenance of this well has been taken over by ZGC by mutual agreement with the local authority. The Territorial Committee on Mineral Reserves has confirmed a sustainable pumping capacity of 7170 cubic metres per day, which will sustain both the mine and local users with no significant adverse effects on supply.Socio-economic impacts15. Significant favourable socio-economic impacts have resulted from the expansion of the mine, including increased employment of local workers in a region of very high unemployment, low income and small industrial base. Increased secondary development has also emanated from the payroll. ZGC has already made contributions to the Sogdiana hospital, school system and municipal water supply and road improvements.Reclamation16. The company will implement an appropriate decommissioning and land reclamation program for the site.General safety/cyanide handling17. ZGC employs several health and safety officers who implement a comprehensive safety policy and procedures. There is a Safety Working Party who regularly review safety issues with Heads of Departments and Supervisors. Any violations or accidents are followed up in emergency meetings of the working party. All employees are provided with appropriate safety equipment and clothing. Safety statistics for this year demonstrate a low level of incidents.Monitoring18. Monthly surface water sampling were instituted at 23 sites within the project area to develop a baseline database for surface and groundwater quality. Ongoing monitoring has shown that there has been minimal impact on the ground and surface water, with cyanide and other parameters at concentrations below World Bank guidelines. The frequency with which these samples are taken has now been reduced to every quarter.Conclusion19. The Environment Division is satisfied that the existing mine is operating according to World Bank guidelines. The expansion will have limited impacts on the environment. IFC will monitor the Sponsor’s ongoing compliance with World Bank environmental, health and safety guidelines during the life of the project by the evaluation of periodic audits, and site visits.