EIB financing for mining projects
- Feb 11, 2008
In the African, Caribbean, and Pacific (ACP) countries, the EIB finances projects that contribute to the Cotonou Agreement's objectives of poverty eradication, sustainable development and the gradual integration of the ACP countries into the world economy. The Cotonou Partnership Agreement is the agreement on economic and political cooperation between the European Union (EU) and the group of African, Caribbean and Pacific states (ACP countries). It is a particularly important aspect of the EU development cooperation policy and of the EU’s external action.
The Bank is responsive to opportunities in all sectors which offer investment projects that help attain these goals. The EIB provides investors with long-term financial resources either not available at all or at least not available on terms suitable to ensure the sustainability of projects, while often having a strong catalytic effect to attract other sources of funding. A key element of the Bank’s financial contribution is its flexibility in offering various loan instruments that meet borrowers’ needs.
Projects in the mining sector are usually prime projects for bringing value to indigenous natural resources, increasing export revenues and generating fiscal income for the country through royalties and corporate taxes. Moreover these projects create permanent - direct and indirect - jobs and provide training that contributes to local skills.
The Bank pays particular attention to environmental sustainability, the mitigation of and adaptation to climate change, natural resource management, protection of biodiversity and safeguards to improvements of the general and urban environment. All mining projects with a significant impact on the environment financed by EIB require an EIA (Environmental Impact Assessment), compliant with EIA Directive 85/337/EEC as amended by Directives 97/11/EC on the assessment of the effects of certain public and private projects on the environment, including public consultation and 2003/35/EC (alignment to United Nations Economic Commission for Europe-UNECE Aarhus Convention). The EIB also takes into consideration the need to respect areas, sites and landscapes protected by national law, international treaties or other similar conventions.
Mine closure plans, including the elaboration of financial requirements, also form one of the requirements of the EIB (at the early project appraisal stage these can only be preliminary). As to guidelines on tailing, waste disposal and use of chemicals, EIB appraisal includes verification that the relevant environmental issues have been properly addressed by the promoter and mitigating measures incorporated into the project design, or are foreseen according to best industry practice. The EIB uses the respective EU Directives as guidelines for the treatment of specific issues such as toxic waste etc. Of special interest in this respect is the EU Directive for Integrated Pollution Protection and Control (IPPC).
An EIA typically includes an EMP (Environmental Management Plan). The Bank also wishes to see documented evidence of public consultations and of how the considerations of stakeholders have been taken into account in project design and during the course of implementation and that adequate mechanisms for resolving disputes exist.
EIB also pays strong attention to the social & governance acceptability of projects based among other things on the EIB guidelines on vulnerable groups, occupational and community health and safety and labour rights.
For specific examples of mining projects financed by the EIB please see: Ambatovy Nickel Project, Madagascar and Tenke Fungurume Mining project, Democratic Republic of Congo (DRC) and the project summaries below:
- Munali Nickel Mine (Zambia) [DE], [EN], [FR]
- SNIM VI (Mauritania) [DE], [EN], [FR]
- Tenke Fungurume Mining Sarl [DE], [EN], [FR]
- African Lion Mining Fund (Regional African Mining Fund) [DE], [EN], [FR]
- African Lion Mining Fund II (Regional Africa) [DE], [EN], [FR]
- Bwana Mkubwana Mining Expansion (Zambia) [DE], [EN], [FR]
- Complexe Industriel de Moanda (Gabon) [DE], [EN], [FR]
- Kanshanshi Copper Mine and Power System (Zambia) [DE], [EN], [FR]
- Kouilou Magnesium Phase I (Rep. of Congo) [DE], [EN], [FR]
- Lumwana Copper Project (Zambia) [DE], [EN], [FR]
- Magadi Soda Pure Ash (Kenya) [DE], [EN], [FR]
- Moma Titanium (Mozambique) [DE], [EN], [FR]
- Mopani Copper Project (Zambia) [DE], [EN], [FR]
- MOZAL II Aluminium Smelter (Mozambique) [DE], [EN], [FR]