The project sponsor is the SUAL Group, Russia’s second largest aluminium producer and a major exporter. The Group’s parent company is SUAL International Ltd (Bahamas) and its management company is OAO SUAL-Holding (Russia). The SUAL Group has an integrated aluminium operation, mining bauxite, refining alumina, smelting aluminium and producing semi-finished and some finished aluminium products. SUAL Group owns approximately 80% of OAO Bauxite Timana, with the remainder held by the Government of the Republic of Komi. ZAO Komi Aluminium is owned 100% by the SUAL Group.

The total project cost is estimated at $321 million. IFC is proposing an investment of $75 million, comprising an A loan of $45 million for IFC’s own account and a syndicated B loan of $30m million.

45.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	45.0
Equity

* These investment figures are indicative

The integrated project is located in the Komi Republic in the north of the Russian Federation. The Middle Timan Bauxite Mine is an existing mine in a remote area of the Komi Republic. The SUAL Group has already constructed a railway linking the mine to the national rail network. This investment also entails early works (site clearance, basic infrastructure) on a proposed 1.4 million tonnes per annum greenfield alumina refinery to be located near the towns of Ukhta and Sosnogorsk.

The Phase I project is a category A project as it is considered a key component of the future Integrated Project. There are no major environmental, health and safety risks associated with this expansion project as mining bauxite does not require the use of chemicals or of a process flow generating emissions or effluents. Starting in about 6-8 years the dewatering of certain pits will require caution, and proper mitigation measures and a management plan will be in place by that time. The Phase I project is not anticipated to result in major social and cultural property impacts, as it is an existing site located in a remote and unpopulated area. SUAL Group has agreed to carry out a detailed environmental, social, health and safety assessment of the mines. The due diligence of the mining project was undertaken in two separate phases. The first one, phase 1a, consisted of an environmental and social audit of the current mine (1 to 2.5 mtpa capacity), a detailed review of the SUAL Group’s environmental and social management and the initiation of the public consultation and disclosure (PCD) process. Phase 1b includes an Environmental and Social Impact Assessment for the expansion to 6 mtpa, a detailed environmental and social action plan (ESAP), a formal PCD strategy supported by key stakeholders and the necessary environmental documents for initiating permits and early civil works at the refinery site. Strong emphasis was especially put on public consultation, land acquisition, mine decommissioning, water resource management, and local economic development activities (supplier and other SME development, training, etc). As a result of IFC involvement the SUAL Group has hired key environmental and social executives and implemented the first steps of an Environmental Management System (EMS).

Location of environmental documents In locally affected community
A dedicated web site is being maintained by the SUAL Group, including all the public documents in downloadable format in both the English and Russian languages. The web address is:
http://www.sual.com/business/komi_aluminium/ecology/.

In addition an e-mail address (info@komial.ru) and a phone number (82147) 67342 are available, where comments and issues can be sent/discussed in either English or Russian.

Visitor’s and information centres are being established in Syktyvkar, Yemva, Chin’avoryk, Ukhta, Sosnogorsk, and Pechora in the municipal administrations of the relevant towns and villages. The current Visitor’s and information centres’ details are presented in the table below.

City of Ukhta
Mr. Pyotr Novoselchenko, Deputy General Director of ZAO Komi Aluminium
Prospekt Lenina 26 b, Ukhta, 169300
Tel: +7 82147 67342

Ms. Maria Kotova, Ecologist, MTBM
Prospekt Lenina 26 b, Ukhta, 169300
Tel: +7 82147 13204

Ms. Svetlana Strekalova, Library of Domestic Reading (Visitor’s Center)
Ulitsa Mira 5, Ukhta, 169300
Tel: +7 82147 33546


City of Syktyvkar
Ms. Tatiana Evdokimova, Institute of Biology, Komi Scientific Center, Russian Academy of Sciences
Ulitsa Kommunisticheskaya 28, Syktyvkar, 167982
Tel : +7 8212 241247


City of Emva
Ms. Natalia Kravchuk, City of Emva Administration (Visitor’s Center)
Ulitsa Dzerzhinskogo 81, Emva, 169200
Tel: +7 82139 21033

Mr. Anatoly Shevelev
Head of Knyazhpogost District Environmental Protection Committee
Ulitsa Dzerzhinskogo 110, Emva, 169200
Tel: +7 82139 24977


City of Sosnogorsk
Ms. Elena Melekhina, Sosnogorsk District Administration (Visitor’s Center)
Ulitsa Zoi Kosmodemyanskoi 17, Sosnogorsk, 169500
Tel: +7 82149 54907

This project represents Phase I of one of the largest greenfield projects in Russia to date. The project should have a major development impact on the Komi Republic which to date has had a limited industrial base. The overall size of the integrated project is expected to be in excess of $2 billion. IFC involvement will help secure longer term financing for the project than is currently available and will establish the project on the international financial markets, thereby allowing the SUAL Group to secure further financing for Phase II (refinery construction) and Phase III (smelter construction). IFC’s extensive technical experience of the aluminium sector is being used to enhance the technical assessment and design of the mine and refinery.

IFC is proposing a large donor funded effort to stimulate local supply chains to the project and improve the climate for SME’s in the Komi Republic. This initiative also envisages the establishment of a financing facility for local SMEs. IFC involvement will also help ensure that best practice is employed in minimizing environmental and social impacts.