Environmental & Social Review Summary
Project Number
4996
Company Name
ARCELORMITTAL OSTRAVA AS
Date ESRS Disclosed
Feb 5, 2010
Country
Czechia
Region
Europe
Last Updated Date
Jun 3, 2021
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Apr 3, 1997
Signed : Jun 27, 1997
Invested : Dec 9, 1997
Sector
Integrated Steel Works
Industry
Manufacturing
Department
Gbl Ind, Manufact, Agribus & Services
Project Description
-3 - November 19, 1996
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name CZECH Republic: Nova Hut, a.s.
Region Eastern Europe
Sector Steel Manufacturing
Project No. 4996
1. Nova Hut, a.s. (NH), a joint stock company, is one of the three principal steel works in the Czech Republic. Established in the early 1950’s on 95 hectares at Ostrava, NH is an integrated steel works with an annual crude steel production capacity of about four million tons. NH’s current product mix is about seventy five percent long products (bars, tubes, etc.) and twenty five percent flat products. NH has embarked on a comprehensive modernization program that includes K 17.55 billion (US$650 million equivalent) of investments between 1996 and 2000 A.D. Key elements of the investment program are:
(i) construction of a new mini-mill to produce one million tons of hot rolled coils
(K 6.89 billion; US$255 million):
(ii) the installation of a new continuous billet caster (K 1.5 billion; US$55.6 million) and
(iii) upgrading and renovation of the existing production units including the coke ovens, the steel plant, the rolling mills, the energy plant, and the tube mills (K 5.19 billion; US$192.4 million).
Contingencies and interest during construction account for K 3.3 billion (US$122 million). Each of the capital investment components include environmental upgrades in order to comply with the Czech Republic Clean Air Act that is to go into effect in the Czech Republic December 31, 1998. The total cost of this environmental upgrade program is approximately K 2.3 billion (US$86 million). The IFC investment is an “A” loan of up to US$ 75 million (K 2.0 billion) and a syndicated “B” loan of up to US$175 million (K 4.7 billion). IFC will also assist the company in structuring and arranging a loan package totaling K 2.7 billion (US$100 million) from Czech financial institutions.
2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The environmental review of this project focused on the following key environmental and occupational health and safety issues:
· the environmental upgrades program designed to bring the NH facilities into compliance with the Czech Republic Clean Air Act that is to go into effect December 31, 1998;
· existing contamination to soil, groundwater and buildings; and
· occupational health and safety practices.
Following is information on IFC’s findings from its environmental review of this project.
3. The new mini mill plus the new continuous billet caster will enable NH to eliminate ingot casting and close its soaking pits and blooming and billet mills. These actions will result in significant environmental and occupational health and safety improvements at NH. The January, 1995 mini mill environmental impact assessment (EIA) prepared by GHE, Ostrava was approved by the Government of the Czech Republic’s environment authorities as part of the building permitting process. The Municipality of Ostrava has ruled that no soil remediation would be required on the basis of the environmental audit (GHE Ostrava) that was conducted on the mini-mill site. However monitoring of groundwater and the pump and treat of a small area of groundwater contamination is ongoing under the supervision of the Municipality of Ostrava.
4. An environmental audit (AGRA Earth and Environment Ltd) of the entire NH facility was completed in February 1996. The environmental audit was financed by NH and by the Government of the Netherlands and Switzerland through IFC’s Technical Assistance Trust Funds. The environmental audit concluded that the approximately K 2.3 billion (US$86 million) environmental upgrade program will achieve compliance with Czech Republic Clean Air Act that is to go into effect December 31, 1998. The major components of this environmental upgrade program include:
(i) electrostatic precipitators (ESP’s) at the steel plant, at the energy plant, and at the sintering plant;
(ii) bag filters on the coking ovens;
(iii) flue gas desulfurization (FGD) units at the coking plant;
(iv) construction of a biological wastewater treatment plant; and
(v) upgrades to the NH sewer system
5. The AGRA Earth and Environmental Ltd. environmental audit included an examination of NH’s ability to manage current and future environmental issues. It concluded that the central Environment Department has a very good understanding of the regulatory environment and the environmental issues affecting NH’s operations. They effectively manage a planning and evaluation program and have prioritized the environmental issues related to the various production divisions. The Division Management teams have a good understanding of the primary environmental issues. The Operating Divisions have well developed capital expenditure programs to address current and pending regulatory requirements. These include schedules, remedial measures and costs. The Production Division environmental personal maintain adequate monitoring records and regularly communicate performance and concerns to NH’s central Environment Department and management.
6. NH has retained the environmental consulting firm KAP, Prague, Czech Republic, to conduct a site assessment (Phase II environmental audit) of contamination to soil, groundwater and buildings as a result of prior activities. (Prior to this a Phase I environmental audit was prepared for NH by Unigeo, Ostrava, and it recommended the site assessment). This site assessment is ongoing. The site assessment will characterize the extent of contamination to soil, groundwater and buildings. When the site assessment is completed NH will conduct a risk analysis of prior damages identified in the site assessment which will identify optimum remedial actions. Based on this risk analysis a schedule for implementation of the optimum remedial actions will be agreed to between NH and IFC. The site assessment (Phase II environmental audit), the risk analysis and agreement on a schedule for implementation of the optimum remedial actions will be completed prior to first disbursement (The site assessment, risk analysis, and identification of optimum remedial actions are part of the Czech Republic’s environmental requirements for privatizations).
7. The environmental upgrade program for NH will include a significant occupational health and safety component. A most significant component relates to addressing benzene soluble organics (BSO) emissions that health risk studies suggest are the major cancer-causing agent in coke oven emissions. The Project Silesia Coke Ovens Demonstration Project, US AID, has identified a range of pollution control options to control BSO emissions at NH and has made preliminary estimates on the reduced cancers resulting from the implementation of these pollution control options. The US AID information for NH states that the total capital cost for installing all controls that have a positive net benefit in terms of reduced concerns is approximately US$13 million. The 1996 to 2000 A.D. environmental upgrade program for NH will include a number of these recommendations. In a broader context, NH, according to the February 1996 AGRA Earth and Environment Ltd environmental audit, has acquired a vast storehouse of knowledge and capability and has committed the resources to institute and maintain up to date occupational health and safety procedures and practices.
8. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project will meet the Government of Czech Republic requirements, and World Bank policies, and environmental, health and safety guidelines. IFC will monitor ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by Nova Hut and by conducting periodic site reviews during project supervision.
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name CZECH Republic: Nova Hut, a.s.
Region Eastern Europe
Sector Steel Manufacturing
Project No. 4996
1. Nova Hut, a.s. (NH), a joint stock company, is one of the three principal steel works in the Czech Republic. Established in the early 1950’s on 95 hectares at Ostrava, NH is an integrated steel works with an annual crude steel production capacity of about four million tons. NH’s current product mix is about seventy five percent long products (bars, tubes, etc.) and twenty five percent flat products. NH has embarked on a comprehensive modernization program that includes K 17.55 billion (US$650 million equivalent) of investments between 1996 and 2000 A.D. Key elements of the investment program are:
(i) construction of a new mini-mill to produce one million tons of hot rolled coils
(K 6.89 billion; US$255 million):
(ii) the installation of a new continuous billet caster (K 1.5 billion; US$55.6 million) and
(iii) upgrading and renovation of the existing production units including the coke ovens, the steel plant, the rolling mills, the energy plant, and the tube mills (K 5.19 billion; US$192.4 million).
Contingencies and interest during construction account for K 3.3 billion (US$122 million). Each of the capital investment components include environmental upgrades in order to comply with the Czech Republic Clean Air Act that is to go into effect in the Czech Republic December 31, 1998. The total cost of this environmental upgrade program is approximately K 2.3 billion (US$86 million). The IFC investment is an “A” loan of up to US$ 75 million (K 2.0 billion) and a syndicated “B” loan of up to US$175 million (K 4.7 billion). IFC will also assist the company in structuring and arranging a loan package totaling K 2.7 billion (US$100 million) from Czech financial institutions.
2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The environmental review of this project focused on the following key environmental and occupational health and safety issues:
· the environmental upgrades program designed to bring the NH facilities into compliance with the Czech Republic Clean Air Act that is to go into effect December 31, 1998;
· existing contamination to soil, groundwater and buildings; and
· occupational health and safety practices.
Following is information on IFC’s findings from its environmental review of this project.
3. The new mini mill plus the new continuous billet caster will enable NH to eliminate ingot casting and close its soaking pits and blooming and billet mills. These actions will result in significant environmental and occupational health and safety improvements at NH. The January, 1995 mini mill environmental impact assessment (EIA) prepared by GHE, Ostrava was approved by the Government of the Czech Republic’s environment authorities as part of the building permitting process. The Municipality of Ostrava has ruled that no soil remediation would be required on the basis of the environmental audit (GHE Ostrava) that was conducted on the mini-mill site. However monitoring of groundwater and the pump and treat of a small area of groundwater contamination is ongoing under the supervision of the Municipality of Ostrava.
4. An environmental audit (AGRA Earth and Environment Ltd) of the entire NH facility was completed in February 1996. The environmental audit was financed by NH and by the Government of the Netherlands and Switzerland through IFC’s Technical Assistance Trust Funds. The environmental audit concluded that the approximately K 2.3 billion (US$86 million) environmental upgrade program will achieve compliance with Czech Republic Clean Air Act that is to go into effect December 31, 1998. The major components of this environmental upgrade program include:
(i) electrostatic precipitators (ESP’s) at the steel plant, at the energy plant, and at the sintering plant;
(ii) bag filters on the coking ovens;
(iii) flue gas desulfurization (FGD) units at the coking plant;
(iv) construction of a biological wastewater treatment plant; and
(v) upgrades to the NH sewer system
5. The AGRA Earth and Environmental Ltd. environmental audit included an examination of NH’s ability to manage current and future environmental issues. It concluded that the central Environment Department has a very good understanding of the regulatory environment and the environmental issues affecting NH’s operations. They effectively manage a planning and evaluation program and have prioritized the environmental issues related to the various production divisions. The Division Management teams have a good understanding of the primary environmental issues. The Operating Divisions have well developed capital expenditure programs to address current and pending regulatory requirements. These include schedules, remedial measures and costs. The Production Division environmental personal maintain adequate monitoring records and regularly communicate performance and concerns to NH’s central Environment Department and management.
6. NH has retained the environmental consulting firm KAP, Prague, Czech Republic, to conduct a site assessment (Phase II environmental audit) of contamination to soil, groundwater and buildings as a result of prior activities. (Prior to this a Phase I environmental audit was prepared for NH by Unigeo, Ostrava, and it recommended the site assessment). This site assessment is ongoing. The site assessment will characterize the extent of contamination to soil, groundwater and buildings. When the site assessment is completed NH will conduct a risk analysis of prior damages identified in the site assessment which will identify optimum remedial actions. Based on this risk analysis a schedule for implementation of the optimum remedial actions will be agreed to between NH and IFC. The site assessment (Phase II environmental audit), the risk analysis and agreement on a schedule for implementation of the optimum remedial actions will be completed prior to first disbursement (The site assessment, risk analysis, and identification of optimum remedial actions are part of the Czech Republic’s environmental requirements for privatizations).
7. The environmental upgrade program for NH will include a significant occupational health and safety component. A most significant component relates to addressing benzene soluble organics (BSO) emissions that health risk studies suggest are the major cancer-causing agent in coke oven emissions. The Project Silesia Coke Ovens Demonstration Project, US AID, has identified a range of pollution control options to control BSO emissions at NH and has made preliminary estimates on the reduced cancers resulting from the implementation of these pollution control options. The US AID information for NH states that the total capital cost for installing all controls that have a positive net benefit in terms of reduced concerns is approximately US$13 million. The 1996 to 2000 A.D. environmental upgrade program for NH will include a number of these recommendations. In a broader context, NH, according to the February 1996 AGRA Earth and Environment Ltd environmental audit, has acquired a vast storehouse of knowledge and capability and has committed the resources to institute and maintain up to date occupational health and safety procedures and practices.
8. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project will meet the Government of Czech Republic requirements, and World Bank policies, and environmental, health and safety guidelines. IFC will monitor ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by Nova Hut and by conducting periodic site reviews during project supervision.
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
