27248 - Baobab Resources

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Environmental & Social Review Summary

Project Number

27248

Company Name

BAOBAB RESOURCES PLC

Date ESRS Disclosed

Sep 2, 2008

Country

Mozambique

Region

Africa

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 26, 2008
Signed : Nov 27, 2008
Invested : Jan 27, 2009

Sector

Copper

Industry

Metals and Mining

Department

Gbl Infrastructure & Natural Resources

Project Description

Baobab Resources Plc (Baobab or the company) is a London-based, AIM-listed (AIM ticker “BAO”) junior exploration company focused on exploring and developing mineral deposits in Mozambique. The company has a total of 25 prospecting licenses in Mozambique covering an area of 4,760 km2. The two main prospects are the Manica Project Area and the Tete Project Area. The Manica Project Area is host to a significant portion of the eastern extension of the Odzi-Penhalonga-Manica greenstone belt, which has produced more than two million ounces of gold approximately 10 kilometers away in Zimbabwe. The Mundonguara copper mine with gold and silver credits (“Mundonguara”), Baobab’s most advanced project to date, is within this project area. Mining at Mundonguara was opened in 1902 and continued operations until 1989 when the mine was shut down due to the civil war in Mozambique. Baobab is now working to increase Mundonguara’s resource base in order to develop commercial operations.

The Tete Project Area is located immediately north of the provincial capital of Tete and is composed of 3 contiguous exploration licenses. The licenses contain 5 known vanadiferous titano-magnetite deposits. The area is considered analogous to various mineralized systems including the Bushveld Complex and is therefore also prospective for Platinum Group Metals (“PGMs”) mineralization as well as nickel/copper sulphide deposits. The Tete Project Area is still in the early exploration stage. Baobab is also undertaking exploration at Changara (Broken Hill type deposits), Sussendenga (gold lode desposits) and Senga Senga (Telfer type deposits). Baobab is seeking IFC’s engagement to help with general corporate purposes, including financing the company’s exploration activities in the Republic of Mozambique in line with industry best practice in environmental and social sustainability.

Overview of IFC's Scope of Review

The team visited Mozambique in May 2008, focusing on the Mundonguara mine in Manica Province. The field trip involved an underground inspection of the mine, a visit to prospects in the vicinity and inspection of rock dumps and a tailings dam left over from the former mining operation, as well as a tour of artisanal workings in the nearby Revue River – within the exploration area but unlikely to fall within any mining area. Discussions with company staff and a local social historian were held at Baobab’s Manica offices. IFC also reviewed a Baseline Environmental Assessment for the Mundonguara Project and company presentations.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security

Other PS may become applicable in the future should any of the exploration sites be taken forward to mine development, any IFC investment in such a development would be assessed as a new project. IFC Environmental Health & Safety (EHS) Guidelines that are expected to be applicable to this investment include:

General EHS Guidelines (April 30th, 2007)
Mining Guidelines (December 10th, 2007)

Environmental and Social Mitigation Measures

- PS 1 Social and Environmental Assessment and Management Systems:

The management of risks discussed in this ESRS consists of those associated with exploration activities, as IFC intends to invest in exploration and feasibility studies. Baobab subscribes to the IFC Policy and Performance Standards on Social and Environmental Sustainability. If any of the exploration projects is proposed for mining development, Baobab will prepare the environmental and social documentation required to demonstrate compliance with IFC Performance Standards and EHS Guidelines. Should IFC be involved in financing such a project, it would be treated as a separate investment and its categorization would be determined after the necessary due diligence.

Consultants GCS (Pty) Ltd of Johannesburg, South Africa were requested by Baobab to undertake an Environmental Baseline Assessment for the Mundonguara project. The mine site lies in the foothills of the Chinaminami mountains at an altitude varying between 600-1200 m. Field surveys were completed in April 2007. Undertaking this baseline assessment at such an early stage in the project, i.e. prior to any decision to go forward with mining, affords Baobab the opportunity to document the current environmental and social conditions and to start to identify issues that may become relevant if mine development goes ahead. Any mine development would require a full Environmental & Social Impact Assessment (ESIA).

Baobab has committed to a Health, Safety, Environment and Community Policy (“HSEC”) document which is being jointly developed with IFC. Baobab has also agreed on an “Action Plan” to cover all HSEC aspects related to exploration activities, feasibility work and potential future mine development. Baobab has indicated that it will require IFC’s assistance in developing an Environmental Health & Safety Management System (EHSMS) to adequately manage, plan and document the environmental and social issues relating to their activities in Mozambique. As an exploration company, Baobab does not yet have any E&S capacity, relying to date on consultants. This is not yet an issue on environmental matters as these can be easily managed via the HSEC Policy defined above. Baobab has agreed to engage a local community liaison officer to assist with public consultation.

- PS 2: Labor & Working Conditions:

As this is an exploration company at present there is a relatively small workforce (approx. 40 persons). A culture of open communication and participation is encouraged. Regular staff meetings are held and presided over by the Project Manager. Staff members are updated on company policies and new exploration programs; discussion is encouraged and suggestions to improve working conditions are solicited. The workforce is unionized and Baobab meets all legislative requirements. The company hires physically impaired workers and senior citizens who are capable of doing less demanding jobs. The company strictly enforces the minimum hiring threshold of 18 years as mandated by Law. The company follows all legislative requirements relating to retrenchment. The company maintains or exceeds legislated standards of worker compensation and ensures that government mandated deductions are properly deducted and remitted to the concerned agencies. In the 18 months that Baobab has been undertaking exploration activities in Mozambique there have been no fatalities or Lost Time Injuries. The company provides a safety induction and ongoing training for all workers and visitors and appropriate Personal Protective Equipment is issued. In general staff members were observed to follow company safety policies.

- PS 3: Pollution Prevention & Abatement:

IFC’s review of this copper-gold exploration project has identified the following environmental issues currently associated with exploration activities:

- Control of erosion and rehabilitation of drill roads, drill sites and trenches, safe disposal of oils, waste etc.
- Water management
- Infrastructure & associated facilities - public safety, dust control, hazards management, mitigation of transport risks

Exploration sites are well managed and monitored against the baseline studies completed by GCS. Water samples were taken by GCS at many different areas within the survey area. The results indicate that the water found in the area is of relatively poor quality and likely as a result of cattle grazing in the area, as well as the fact that the area to the west of the watershed (ridge) is more densely populated. Water at the local clinic is provided via a pipeline built in the 1950s from another defunct mining area to the northwest of the Mundonguara Mine and is used by the local community as a source of drinking water but its faecal coliform levels are above the potable range. Certain surface water samples exceeded WHO limits as a result of either elevated background levels of certain elements or historic mining activity. No exceedances were found to be related to Baobab’s current exploration activities. Baobab will monitor all its operations and ensure that any discharges from its activities meet all applicable IFC and Mozambican standards.

The ambient air quality surrounding the Mundonguara Mining project is relatively good as activities are mainly limited to subsistence agriculture and no industries or sources of pollution and dust occur within the area. The main impact on the air quality in the area is as a result of vehicle emissions, fires used for cooking, bush fires and dust from dirt roads. Community members indicated that dust from the three small defunct tailings dams was a problem although one has been grassed and is used as a football pitch. Baobab indicated that they intend to stabilize and re-vegetate the remaining areas.

No archaeological investigations were undertaken for the baseline study but discussions with a local historian and areas traversed by foot did not reveal any signs of prominent archaeological sites. However, it is possible that archaeological artefacts could be present in the area and a detailed survey should be undertaken as part of the full ESIA if mining development occurs.

As regards current activities, the company avoids spillage of used drilling media and lubricants into water channels via the construction and use of sumps and maintains monitoring of water quality. To prevent landslides and avoid siltation of waterways, drilled areas are rehabilitated as soon as they are no longer required by re-vegetating the area. Natural vegetation growth is rapid in the area. The company does not deal with hazardous or toxic substances at this stage of its activities. As no groundwater investigations were undertaken as part of the baseline study Baobab has agreed to initiate a sampling program for community wells and boreholes to establish a baseline. In addition Baobab will undertake monthly sampling of existing surface water sampling points.

- PS4 Community Health Safety and Security:

Since exploration activities are away from areas of habitation and no hazardous or toxic substances are used there are few risks to the community. The company does not yet have an Emergency Preparedness and Response capability as operations to date have not required it although one will be developed once required. Eleven homesteads have been identified in the valley between the Mundonguara mine and the access road and each has provided at least one employee for the project. Assuming a local mulitiplier of between 6 and 10 dependents per employee, this equates to approximately 100 people supported by exploration activities in the valley. Should a mining project be developed in future, it is likely that resettlement of these families would be needed. None of these households have access to electricity, water or sanitation. Water is mostly drawn from boreholes and springs. Lonrho (who operated the mine in the 1950s) established a pipeline from the northern side of the Sierra Shitaca mountain and this provides water at the clinic. The predominant land use surrounding the Mundonguara Mine is subsistence farming with homesteads spread throughout the area. The main crops being farmed include maize, rice, sweet potatoes and limited vegetables. Livestock include cattle and chickens.

There are artisanal miners working within the exploration license areas but these persons will not be impacted by exploration activities (nor are they likely to be affected by any future mining activities). Safety and security is not an issue as the area of operations has low crime and is otherwise peaceful. As a result only unarmed mine security personnel are present on site, no outside agency is used.

Stakeholder Engagement

Baobab has taken positive steps to interact with the local communities particularly in Manica where the exploration office is based. The company has been transparent about its activities. At present, Baobab seems to enjoy the support of local communities in relation to its exploration activities. Baobab will ensure that consultation and disclosure activities already undertaken as well as those planned with the aid of a new community liaison officer are laid out in a Stakeholder Engagement Plan (“SEP”).

This ESRS will be publicly disclosed at the World Bank Infoshop and will be available at the offices of Baobab in Perth, as well as in Manica, Mozambique, for consultation by the public.

Perth Address: 49 Phillimore Street
Fremantle
Western Australia, 6160
Australia

Manica Address: 41 Bairro Josina Machel
Manica
Mozambique

Client Documentation

File Name	Actions
Environmental & Social Action Plan - Baobab.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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