Iluka Resources Limited (“Iluka”) is the project sponsor and 100% shareholder of SRL. Iluka is an international mineral sands company with over 60 years of experience in exploration, development, mining, processing, marketing and rehabilitation. The company is headquartered in Perth, Western Australia, and listed on the Australian Stock Exchange (ASX: ILU). Iluka acquired SRL in December 2016.

The total project cost is estimated at approximately US$450 million over the next 5 years, subject to ongoing studies. IFC’s proposed investment is US$60 million to acquire a 10% equity stake in SRL.

SRL’s existing operations are located in the Bonthe and Moyamba districts, south west Sierra Leone. The Sembehun group of deposits are located 20 to 30 kilometers north-west of the existing operations.

IFC has considered the governance risks to project benefits and is satisfied that the project should be supported. In evaluating this investment, IFC has reviewed a variety of governance metrics, including the Worldwide Governance Indicators, Transparency International’s Corruption Perceptions Index, the World Bank’s CPIA and Doing Business Report. Although Sierra Leone’s rank across these metrics is low, the country has embarked on a series of institutional and administrative reforms to improve governance and enhance the regulatory framework of the mining sector. The Government of Sierra Leone continues to receive technical assistance from the World Bank aimed at strengthening the country’s management of mineral resources through capacity building for Government Ministries, Departments and Agencies, and ensuring that the mineral sector provides long-term benefits to the country. Sierra Leone has completed its Extractive Industries Transparency Initiative (“EITI”) membership process and is fully compliant as of 2014. Validation against the new 2016 EITI standard commenced in November 2018. The mining lease agreement between the Government of Sierra Leone and SRL was ratified through legislation in 2002 under the Sierra Rutile Act, which has been disclosed to the public.

The expansion project in area 1 represents incremental increases to an existing footprint and thus the risks and impacts do not represent significant incremental changes relative to the existing mining activities. However, similar risks are present in the area 5 greenfield development which will create significant impacts. Thus, the planned expansion project in total, will result in significant impacts including: dust generation; surface water and groundwater quality and flow conditions; noise; waste management; occupational health and safety; prolonged land take of land that would otherwise be rehabilitated and used for agriculture; habitat loss for great apes and priority biodiversity values; significant physical and economic displacement of communities; in-migration; and community health and safety related to project implementation and operation, including dam safety. Thus, this is a Category A project according to IFC’s Policy on Environmental and Social Sustainability.

The Company will update and strengthen its existing environmental and social assessments, management plans and reports, particularly for identified risks for its current, foreseen and planned and future expansions. In addition, SRL is committed to implement all the environmental and social action plans specific to the expansion project in accordance with IFC PS.