Summary of Proposed Investment
Project Number
7975
Company Name
SOCIETE DES MINES DE SYAMA S.A
Date SPI Disclosed
Apr 8, 1997
Country
Mali
Industry
Metals and Mining
Status
Completed
Sector
Gold
Department
Infra-WBG Dir. Minerals & Metals
Environmental Category
B - Limited
Previous Events
Approved : Jun 6, 1997
Signed : Oct 31, 1997
Invested : Oct 31, 1997
Project Description
Summary Of Project Information (SPI)
| Project Name | Mali-SOMISY (Société des Mines de Syama S.A.) |
| Region | Sub-Saharan Africa |
| Sector |
Projected Board DateMay 9, 1997
Company NameSociété des Mines de Syama (Somisy)
Technical Partner and/or Major Shareholders
Somisy is owned by Randgold Resources Ltd. (“Randgold”)65%, the Government of Mali 20%, and IFC 15%. Randgold is a subsidiary of Randgold & Exploration Company Ltd. of South Africa.
Project Cost Including proposed IFC investment
Total project cost : US$64.0 million Proposed IFC Financing : A Loan US$ 10.0 million B Loan US$ 25.0 million Total IFC Financing US$ 35.0 million
Location of project and Description of site
The Syama Gold Mine is located in the Southern part of Mali, 500 km by road and 280 km by air from the capital city of Bamako. The 20-year exploration and mining lease granted to Somisy in March 1989 covers an area of approximately 376 square km.
Description of Company and Purpose of Project
The Somisy mine was developed in two phases, with Phase 1 being the open-pit mining and processing of oxide ore, and Phase 2 the open-pit mining and processing of sulfide ore. Phase I incorporated conventional Carbon-in-Leach (CIL) extraction technology and Phase II involved the construction of a roaster to treat the sulfide ore prior to cyanidation. IFC made an equity and shareholder loan investment in 1991 to assist with the financing of phase II. IFC’s existing investment is a 15% equity ownership and a US$26.8 million shareholder loan to Somisy. The sulfide plant was completed in 1994 but has experienced technical difficulties such that it has yet to reach full operating capacity. These difficulties resulted from a combination of factors, including incorrect ore test results and inadequate design and have led to reduced gold output and higher than anticipated operating costs. Randgold, which recently purchased BHP’s 65% Somisy interest, has developed an extensive plan to overcome the technical problems and to increase gold production and reduce operating costs. The project will be implemented in two phases at a cost of US$64 million and is designed to relieve technical constraints and expand the ore processing plant to 2.5 million tons per annum. Somisy’s mining capacity will remain the same, although mining equipment will be upgraded and replaced. The modifications to the processing plant will allow medium grade ore to be processed when mined, rather than stockpiled as at present. Gold production capacity is projected to increase from 190,000 to 270,000 ounces per annum. Randgold has also proposed that IFC swap two thirds of its equity interest in Somisy(i.e. 10%) and two thirds of its shareholder loan to Somisy for a shareholding in Randgold. The proposed investment will have a strong positive development impact as resource development remains a key component of Malian economic development. Gold output and exports will expand, generating net foreign exchange earnings for the country and taxation returns in the form of royalties, taxes and profit share. The project is consistent with overall Bank objectives of private sector led resource development in Mali. IFC will provide long term financing which would otherwise be unavailable to the project. Additionally, IFC will, through its “B” loan mechanism, attract long term financing from international commercial banks.
Environmental Category and Issues
This is an environmental review category B project. The following potential environmental impacts of the project were analyzed: surface water quality and wastewater/effluents management; air emissions including dust control; tailings disposal and sediment control; water supply and hydrological impacts; storage and handling of chemicals; solid waste management; and rehabilitation planning and land reclamation. Social issues are public consultation and company disclosure policy and proper management of the interaction between the mine personnel, government and local population. Occupational health and safety (HS) issues include health, training and awareness and general worker safety. An Environmental Audit of the Syama gold mine and ore processing plant was submitted to IFC. The audit includes a comprehensive project description, a summary of the natural environment baseline information, an assessment of the policy, legal and administrative framework, a review of the environmental impacts of the proposed improvements/changes linked with the capital expenditure program and a discussion of the audit results including detailed recommendations. The existing operation meets World Bank guidelines, and many of the proposed improvements will address matters that have been identified by the new owners in their audit of the environmental performance of the existing facilities. Randgold will implement a monitoring plan and mitigation measures to reduce various impacts. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines.
As a potential new shareholder in Randgold, IFC also carried out a review of the Company’s Environmental Policies and Management System. Randgold’s investments are operated in an environmentally responsible manner, with a clear Environmental Management Mission Statement, committing to the integration of environmental management into all aspects and stages of their business activities.
The is from the Public Information Center.
| Date SPI sent to PIC | April 8, 1997 |
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 676-0365
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).
Sponsor / Cost / Location
Related ESRS/ERS
