Project Name Mozambique-MOZAL

Region Sub-Saharan Africa

Sector Manufacturing

Project No. 007764

Projected Board
Date: June 12, 1997

Company Name: MOZAL

Technical Partner and/or Major Shareholders:

Alusaf Ltd. (25%) from South Africa, one of the largest aluminum producers in the world.  The other major shareholder will be Industrial Development Corporation (IDC) (25%), a South African development financial institution.  IDC was also one of the major shareholders in Alusaf.  Other shareholders would include major aluminum producers and trading houses.

Project Cost Including Proposed IFC Investment

Estimated cost is US$1.3 billion, including physical contingency, price escalation, initial working capital and interest during construction.  IFC has been requested to provide the project with financing of up to US$110 million in quasi-equity and loan.

Location of Project and Description of Site

The project will be located near Maputo, the capital city of Mozambique.

Description of Company and Purpose of Project

An aluminum smelter with a production capacity of 245,000 tons per annum.  The project is expected to have a significant development impact, and more than double the country’s 1996 GDP level over 25 years.  The country will also benefit from the project’s positive impact on job creation, infrastructure development, enhanced regional integration, strong demonstration effects, technology and know-how transfer and industrialization.  IFC plays a critical role in the appraisal, financing, coordination for co-financing and environmental improvement as an honest broker for the sponsor, the Government and other financial institutions.

Environmental Category and Issues

The project is an environmental review Category A project. The principal issues involve air emissions, solid waste management, and socio-economic impact. Air emissions will fall well within World Bank guidelines and internationally accepted standards. The process to be used does not result in solid waste within the first few years. The only soild waste from the production will come when electrolysis pots have to be relined after five or six years. The mitigation plan includes a waste storage facility and other measures. The EA was prepared by Council for Scientific and Industrial Research (CSIR) from South Africa.  It comprises nine specialist reports and covers all the aspects required by the IFC environmental review procedures; it also includes separate reports on the public consultation and resettlement issues.  A change of the site has limited the relocation needs to approximately ten families; none of these families are living on the site itself, but on an industrial zone to be established by the Government of Mozambique (GoM).  Implementation of the EA is now at its final stages with active involvement of GoM particularly on the social impact.

The Environmental Assessment and EA Executive Summary are available from the Public Information Center.

Host country location of
environmental documents: IFC/World Bank Maputo office
Ave. Kenneth Kaunda, 1224
Maputo, Mozambique

Date SPI sent to PIC: May 8, 1997

For Additional Information contact:  Corporate Relations Unit -
telephone:  (202) 473-3397
facsimile: (202) 473-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).