24 September 2007
Proposed copper-cobalt and gold projects re-enforce civil society's misgivings about the International Finance Corporation's commitment to environmental and social sustainability.
The International Finance Corporation (IFC) appears on track to meet its goal of doubling financing for mining in Africa this year. According to its website, the IFC is currently considering a $7.8 million investment in the Kalakundi copper-cobalt mining concession in the Kolwezi District of southeastern Democratic Republic of Congo (DRC). The proposed project is operated by Canada-based Africo Resources Ltd. Despite widespread evidence of the risks involved in hard-rock mining, the IFC has classified the project as environmental "Category B," meaning that it involves only limited adverse social and environmental impacts that can be readily mitigated.
The IFC asserts that it is only investing in the feasibility and exploration phase of the project, and thus that its safeguard policies and environmental classification system do not apply beyond that preparatory stage. However, one of the stated objectives of IFC’s support is to help the client company raise the additional financing needed to make the mine operational: “IFC equity interest in ARL will also provide confidence to potential equity and debt investors who will be required to provide approximately $235 million in the financing for the construction and operational phase of development of the Kalukundi project.” Given that the intended outcomes of the project are linked to the mine’s future production, it is unclear why the IFC’s obligation to assess, mitigate and be held accountable for the impacts of its financing would not extend to the operational phase of the mine.
The IFC is also reportedly interested in financing a greenfield open pit gold mine in the Sabodala gold belt of southeastern Senegal. The 20 square km concession is owned by Australian mining company Mineral Deposits Ltd. (MDL). According to the MDL website, exploration has already indicated that the project site contains over 1 million ounces of gold reserves. Production is expected to begin toward the end of 2008, and the company will use cyanide leaching to treat the ore. The project has already drawn considerable attention from local affected communities, who have serious concerns relating to: the lack of access to information and inadequate consultation on the environmental and social management plan; impending displacement; low recruitment levels of local laborers for the project; the continued lack of potable water in the area and the improper disposal of chemical waste, as well as noise, dust and other disturbances from blasting near their communities.
Meanwhile, the African Development Bank (AfDB) has indicated that it intends to invest $100 million in the contested Tenke Fungurume copper-cobalt mine in the DRC, despite calls from civil society for public lenders to await the outcome of an ongoing examination of 60 mining contracts, including the Tenke deal, before committing funds. In July, the European Investment Bank approved €100 million in financing for the project, in seeming disregard for the contract review, while last month the Overseas Private Investment Corporation (OPIC) agreed to invest a further $250 million. The Tenke concession covers what is reportedly the world’s largest untapped copper-cobalt deposit.
Resources
- Africo Resources Ltd. - Summary of Proposed Investment, International Finance Corporation (IFC website)
- IFC to double mining investments in Africa, Bank Information Center, March 14, 2007 (BIC website)
- Sabodala Gold Project webpage, Mineral Deposits Ltd. (MDL website)
- Zone aurifères de Sabodala: des foyers de tension en gestation by Boubacar Tamba, Sud Quotidien, September 13, 2007 (Sud Quotidien website)
- EIB approves DR Congo mining project despite ongoing government review, Bank Information Center, July 20, 2007 (BIC website)