Nimba Iron Ore

Euronimba Limited of Jersey (Euronimba or the Guarantee Holder), a company 100% owned by High Power Exploration Inc. (United States) (HPX or the Sponsor), has requested MIGA coverage against the risks of Breach of Contract, Expropriation, Transfer Restriction and Inconvertibility and War and Civil Disturbance for its equity and shareholder loan (quasi-equity) investments into Société des Mines de Fer de Guinée (SMFG), as well as additional investments into Euronimba Liberia Limited (Euronimba Liberia), for the study phase of the proposed Nimba Iron Ore Mine. Refer to the Summary of Proposed Guarantee for more information.

The proposed Nimba Iron Ore Mine is a high-grade, open pit, iron ore mine in the Nimba Mountains in the Nzérékoré Region in southeastern Guinea approximately 800 km from Conakry. The MIGA guarantee will cover the political risks that could be associated with mine’s exploration phase, including the completion of key studies preceding the construction and operations of the Nimba Iron Ore Mine, including a viability study, pre-feasibility study, bankable feasibility study and Environmental and Social Impact Assessment (ESIA). The studies will also include an evaluation of options for the evacuation of the iron ore either through Guinean rail and port infrastructure or through neighboring Liberia. Previous assessments indicate that evacuation through Guinea might not be economically feasible; and therefore, the studies will focus on evacuation through the Yekepa-Buchanan corridor using an existing rail line to the existing Port of Buchanan in Liberia.

The proposed Nimba Iron Ore Mine is located in the Guinean Nimba Mountains, which were classified as a strict nature reserve (highest category of protected area recognized by the World Commission on Protected Areas) in 1944 and then as a World Heritage Site in 1981-82 for their exceptional biodiversity, including globally threatened and endemic species. The World Heritage Site designation includes areas in both Guinea and Cote d’Ivoire; and an adjacent protected area in Liberia (East Nimba Nature Reserve) is also on the Tentative World Heritage Site list. The boundary of the strict nature reserve and World Heritage Site was modified in 1993 to exclude a keyhole-shaped area to allow mining (referred to as the ‘mining enclave’), and the proposed project concession area is located within this mining enclave. Further details on the biodiversity context are provided in the Performance Standard 6 section.

Exploration has been undertaken at the proposed project site since the 1960s and by SMFG since 2005. The most recent drilling campaign ended in 2013 and the site has been in care and maintenance ever since. Care and maintenance activities include maintenance of existing facilities (i.e. small operational worker camp; exploration work camp; waste management facility; workshop and equipment storage areas; one water pumping station; drill pads and access roads); water management to control run-off and sedimentation; invasive species control; limited environmental research and monitoring; community consultation and community support projects.

The scope of the project considered for the MIGA guarantee includes: (i) ongoing care and maintenance activities (as described above); (ii) non-invasive feasibility and environmental and social studies (including, but not limited to, hydrology, meteorology, flora, fauna and socio-economic); (iii) geotechnical drilling surveys of the access roads, elevated conveyor route and railway line; and (iv) export of commercial samples sourced from existing process testwork samples (hereafter referred to as, ‘the Project’). Resource drilling was completed in 2013, and no further resource drilling will be undertaken as part of the MIGA-guaranteed Project.

The Project will inform a final investment decision (FID) regarding the full development of the Nimba Iron Ore Mine. For the avoidance of doubt, the Project considered for the MIGA guarantee includes only the first phase (studies) and does not include any aspect of future phases. If a MIGA guarantee is required for future phases, MIGA will undertake a new assessment of the project including disclosing a separate ESRS and separate Board approval process.

According to MIGA’s Policy on Environmental and Social Sustainability (2013) the Project is categorized as Category A due to the risks inherent to the sector, the unique biodiversity context of the project site, and the fact that the risks and impacts associated with eventual construction and operation of an iron ore mine are anticipated to be diverse, irreversible and unprecedented. The environmental and social risks associated with the Project (i.e. studies and ongoing care and maintenance activities) however, are generally site-specific, largely reversible and readily addressed through mitigation measures.

While all Performance Standards are applicable to this Project, based on our current information, the Project will have impacts which must be managed in a manner consistent with the following Performance Standards:

• PS1:  Assessment and Management of Environmental and Social Risks and Impacts
• PS2:  Labor and Working Conditions
• PS3:  Resource Efficiency and Pollution Prevention
• PS4:  Community Health, Safety and Security
• PS5:  Land Acquisition and Involuntary Resettlement
• PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource
• PS8:  Cultural Heritage

The four main ethnic groups in Guinea are Peul peoples of ‘Middle Guinea’, the Malinké peoples of ‘Upper Guinea’, the Soussou and closely related peoples of ‘Coastal Guinea’, and the peoples of Guinée Forestière in southeastern Guinea (including the mine area). Whereas each ethnic group in Guinée Forestière has its own customs, languages and affiliation to sacred sites, they regularly intermarry and adopt each other’s customs and languages. These groups are not considered indigenous as per MIGA’s definition, and therefore, PS 7: Indigenous Peoples is not applicable to this Project.

In addition, the following World Bank Group Environmental, Health, and Safety (WBG EHS) Guidelines are applicable to the Project:

• General EHS Guidelines (2007)
• EHS Guidelines for Mining (2007)
• EHS Guidelines for Railways (2007)

EHS Guidelines for Ports, Harbors and Terminals (2017)

The following documents were reviewed by MIGA:

• Étude d’Impact Environnementale et Sociale Rapport de Cadrage Actualisé (Environmental and Social Impact Study Updated Scoping Report). SMFG and Hatch (March 2020)
• Étude d’Impact Environnementale et Sociale Avis de Project Révisé (Environmental and Social Impact Study Revised Project Notice). SMFG and Hatch (January 2020)
• External Engagement Plan (March 2020)
• SMFG Rapport Annuel sur la Performance Environnementale et Sociale 2019 (Annual Environmental and Social Performance Report). SMFG (December 2019)
• Revised Proposal to SMFG for the Environmental and Social Impact Assessment for the Nimba Iron Ore Project, Guinea and Liberia. Technical Offer. Hatch (November 2019)
• SMFG Standards (2018):
  • Environment
  • Land Acquisition and Involuntary Resettlement
  • Community and External Relations
  • Human Rights
  • Anti-Corruption Compliance Standard
• SMFG Rapport Annuel sur la Performance Environnementale et Sociale 2018 (Annual Environmental and Social Performance Report). SMFG (January 2019)
• SMFG Rapport Annuel sur la Performance Environnementale et Sociale 2016 – 2017 (Annual Environmental and Social Performance Report). SMFG (January 2018)
• SMFG Code of Conduct (2018)
• SMFG Corporate Policies (2017):
  • Environmental
  • Health and Safety
  • Community and External Relations
  • Business Integrity
  • Human Resources
• Environmental Management Plan (Care and Maintenance Phase) (2017)
• Community Relations Plan (June 2010)
• Community Support Plan (June 2010)

In addition to reviewing the above documents, MIGA held several conference calls with key E&S staff and management. Site visits will be undertaken during monitoring to ensure that studies are adequately scoped and developed to address all PS requirements. MIGA also plans to participate in stakeholder engagement activities during the studies phase.

MIGA’s due diligence review considered environmental and social management of the existing care and maintenance operations, as well as the planning process and documentation for the ESIA studies. Corrective measures were then identified to address any gaps between these and MIGA’s requirements. These measures are summarized in the paragraphs that follow and in the Environmental and Social Action Plan (ESAP) attached to this ESRS.  Through these measures, the studies are expected to be designed and implemented in accordance with the Performance Standards.

Key environmental and social (E&S) issues associated with the Project are summarized in the paragraphs that follow.

PS1:  Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment and Management System:

SMFG has in place an environmental and social management system (ESMS) supported by a series of policies, standards, standard operating procedures and safe work practices to guide its operations and its interactions with stakeholders. Relevant policies include an Environmental Policy (2017); a Community and External Relations Policy (2017) and a Health and Safety Policy (2017). The SMFG ESMS includes the following elements required by PS1: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review.

SMFG has also established several standards, including environmental standards, land acquisition and involuntary resettlement standards, community and external relations standards and human rights standards, which set minimum requirements for the management of these aspects. These standards, which apply to all SMFG personnel, contractors, sub-contractors and visitors, require the development of site-specific standards to protect the receiving environments and beneficial uses. Site-specific standards are developed with reference to appropriate guidelines and/or standards, such as those published by World Health Organisation, World Bank Group and other internationally recognized bodies.  

Policy:

SMFG’s Environmental Policy indicates its commitment to integrating sustainability into all facets of its operations and includes commitments to comply with environmental legislation and relevant Guinean standards and to develop and maintain an ESMS in compliance with the International Standards Organization (ISO) 14001 standard on environmental management by the commencement of mine construction (among others).

The Community and External Relations Policy provides SMFG’s commitment to respect local communities and create a positive legacy for future generations; and the Health and Safety Policy states SMFG’s commitment to provide a safe, productive and healthy work environment for all employees, contractors and visitors. All three policies include a commitment to continuous improvement. All contractors will be required to either adopt SMFG’s policies or have policies in place that are consistent with SMFG’s policies.

Identification of Risks and Impacts:

Under the Environment Code of Guinea (Code de l’Environnement, 1989) and supporting decrees, as well as the amended Mining Convention (2019), SMFG is required to prepare and submit an ESIA to the Government of Guinea. A separate ESIA is required by Liberian law and regulations to cover the transport of ore by rail in Liberian territory, which will be prepared and submitted to the Liberian Environmental Protection Agency. In the amended Mining Convention, SMFG has committed to ensuring that all studies developed as part of the Project will be carried out in accordance with relevant national laws and regulations, the Performance Standards and the International Union for the Conservation of Nature (IUCN) advisory notes on environmental assessment and World Heritage, as well as on mining and oil projects and World Heritage.

SMFG began field studies for a Guinean ESIA in 2007. These studies, as well as extensive consultations locally and with national authorities in Conakry, and with key international parties, including the World Heritage Centre (housed by UNESCO) and the IUCN, were used to develop a notice of intent and Terms of Reference (ToR) for the ESIA (the first steps in the Guinean ESIA process). The original notice of intent was submitted in 2008, and the ESIA’s original ToR were submitted and approved by the Ministry for the Environment and Water and Forests (MEEF) in 2011. Following approval of the ToR, baseline studies were undertaken from 2011 – 2013, and thematic reports were drafted but never finalized as technical and ESIA studies were suspended in 2013 due to technical issues and the Ebola crisis. During the care and maintenance period (2014 – 2019), however, SMFG did continue to monitor key environmental and social parameters and undertake studies requiring long lead times (e.g. biodiversity studies).  

Similarly, Euronimba Liberia started the Liberian ESIA process in late 2011, conducting stakeholder consultations and collecting baseline data on several physical and biological parameters for the transportation corridor from the Guinean border to the existing railway line from Tokadeh in the north down to the port of Buchanan.

As part of the Project, SMFG plans to restart and complete the ESIA process in Guinea. In order to allow an integrated and complete analysis of the proposed Nimba Iron Ore Mine and related components, a single ESIA report will be prepared which will assess the cumulative effects of the mine and all related infrastructure, as well as the transportation of ore, by rail or road, to the Liberian border on the physical, biological and socio-economic environment in Guinea. A cumulative impact assessment will also be undertaken and will consider regional development and other potential developments in the area. Further, due to the location of the mine, there is the potential for transboundary impacts, which will be identified and assessed as part of the ESIA process. To this end, an updated notice of intent was submitted in January 2020 to the Government of Guinea. In addition, a request for approval of a new lead ESIA consultant was approved in March 2020. Following extensive consultations in Conakry and Lola Prefecture in February 2020, an updated scoping study was completed in March 2020.  Revised, detailed ToR for completing the ESIA are currently being prepared (ESAP item). MIGA will review the ToR to confirm that the requirements of the PS are incorporated into the planned the ESIA, and once approved by the Government of Guinea, , the detailed ToR will be publicly disclosed on MIGA’s website. 

MIGA will continue to liaise with SMFG and their consultant throughout the ESIA process to advise on the adequacy of the approach and studies, as necessary. The draft ESIA will be provided to the government and MIGA for review and comment (ESAP item). In addition, SMFG has committed to a third-party independent review of the ESIA, which will be coordinated by IUCN. The outcomes of the review will be publicly disclosed, along with an SMFG response as appropriate (ESAP item).

For Liberia, the Project will initially include an ESIA desktop study and gap analysis to determine the status of existing baseline and impact assessment work and to develop a workplan for the preparation of ESIAs (as needed) for: (i) new rail, rail reconstruction and road upgrades from the Liberian border to the existing railhead at Tokadeh; (ii) any rail capacity upgrades required for the line between Tokadeh and Port of Buchanan; and (iii) port facilities required at Buchanan. The desktop study and workplan will be shared with MIGA for review and comment (ESAP item).

Management Programs:

Under the ESMS, SMFG currently has an Environmental Management Plan (EMP, 2018) and supporting procedures in place for the care and maintenance activities, including biodiversity management; land management; management of hazardous substances; water management; air management; noise, vibration and light management; and rehabilitation and closure. The EMP will be updated for the studies phase, and as per the existing EMP, site-specific Construction EMPs will be prepared for geotechnical drilling surveys and any other activities during the study phase that may result in ground disturbance and / or have the potential for adverse environmental impacts (ESAP item). The EMP currently references both national statutory requirementsn and PS and WBG EHS Guidelines.

During the ESIA process, a suite of mitigation actions, management controls and monitoring actions will be identified based on the findings of the environmental and social assessment process and the outcomes of stakeholder engagement. These measures will be captured within a suite of Environmental and Social Management Plans (ESMPs), which will cover all phases and components of the project. Once completed, the draft ESMPs will be provided to MIGA for review and comment (ESAP item).

The ESMPs will consist of a set of management measures, mitigation activities, performance targets, monitoring measures and reporting requirements to be undertaken taken during construction, operation and maintenance to minimize key potential environmental and social impacts identified in the ESIA. The ESMPs will comply with good international industry practice, the PS and WBG EHS Guidelines.

Organizational Capacity and Competency:

SMFG has an Environmental and Social (E&S) Director who reports directly to the Chief Executive Officer (CEO). Reporting to the E&S Director are the Biological Lead, the Social Lead, the Physical Lead, ESIA Coordinator and the Manager for Environment and Social External Relations. SMFG has also indicated that a Communications Specialist may be engaged to extend SMFG’s reach to stakeholders both directly and online. 

For the ESIA, the E&S Director is responsible for ensuring integration of the ESIA with design and engineering work and ultimately delivering an ESIA for the mine that is in line with Governmental regulations, PS, and WBG EHS Guidelines. The Director will also ensure the coordination of SMFG’s external relations, including support for development and conservation, with the ESIA’s and the Project’s overall development and execution. SMFG has engaged an international firm, who has proposed a team of suitably qualified experts and specialist sub-consultants, to undertake the ESIA and supporting studies.

On site, the implementation of the ESMS is the responsibility of the Operations Director with technical support from the ESIA team. During the care and maintenance phase, the responsibilities and duties of the Operations Director focus on management of environment, community relations, health and safety as well as maintenance and security of assets. The Operations Director is supported by a Mountain Operations Department (with primary responsibility for environmental management on the mountain portion of the enclave including road maintenance and sediment control structures as well as coordination of invasive species seasonal teams), the Infrastructure and Lowlands Department (with primary responsibility for maintenance and operation of the work areas, camp accommodation and management of all waste sorting and disposal) and a separate Health, Safety, Environment and Technical Services Department with monitoring, inspection and audit roles to verify and certify compliance with the health, safety and environment policies, standards, management plans and work procedures of the larger field management teams. There is also a Community and External Relations Department responsible for adherence to the Community Relations Standards and for implementation of the Community Relations Plan specifically. 

SMFG undertakes regular environmental training to ensure that all personnel and contractors have the necessary environmental awareness and competency to carry out their responsibilities. The site induction covers environmental aspects of SMFG’s activities including the importance and protection status of the World Heritage Site, protection of flora and fauna and avoiding the introduction of exotic species, minimizing disturbance, staying within designated work areas, waste segregation and disposal, use of portable toilets, hydrocarbon and hazardous material management, and water management. The site induction is undertaken before employees or contractors commence work and is renewed every two years. Records of induction training attendance are maintained. Additional training is provided where required based on the responsibilities of a role.

Contractors employed by SFMG to undertake activities which have the potential to affect environmental compliance of the company, or otherwise impact upon the environment, are made aware of SMFG’s environmental management requirements. Contracts include clauses on environmental compliance and termination rights and penalties for non-compliance, if appropriate.

Emergency Preparedness and Response:

An Emergency Preparedness and Response Plan will be prepared as part of the ESIA process. For the current care and maintenance activities on site, the EMP includes measures for emergency preparedness and response and there is an Emergency Response Plan in place, which is being updated for the studies phase (ESAP item).  

Monitoring and Review:

The ESIA will include mitigation and monitoring measures which will form the basis for the preparation of detailed monitoring of management plans covering the development of the mine activities and potentially affected receptors. During the ESIA process, the ESIA consultant will hold progress calls at least fortnightly with SMFG, and will provide SMFG with reports at least monthly on the progress of the ESIA.

The EMP covering the care and maintenance activities includes an environmental monitoring program for the environmental risks associated with the current activities on site. Activities are monitored against SMFG’s Environmental Standards, and key performance indicators are used to determine the effectiveness of mitigation measures. The results of monitoring are used to regularly update and improve environmental management on site. Progress on environmental activities is included in weekly and monthly reports that are reviewed by the head of departments, functional managers and CEO.

SMFG currently prepares Annual Environmental and Social Performance Reports (Rapports Annuels sur la Performance Environnementale et Sociale), which are submitted to MEEF, who then undertakes an inspection visit to validate the contents of the report, evaluates the implementation of the EMP and, if satisfied, issues an annual compliance certificate. The most recent review was undertaken in January 2019, and the compliance certificate was renewed and was valid until 26 February 2020. Its renewal for 2020 is pending due to political unrest and the COVID-19 travel restrictions. In the meantime, SMFG has reduced activities to essential care and maintenance, and keeps the regulator and local authorities informed. SMFG will also submit annual environmental and social reports to MIGA.

Stakeholder Engagement:

SMFG has undertaken stakeholder engagement in the project area since 2003 and formally established a community and external relations program in 2006. Since 2006 stakeholder engagement and community relations activities have gone through continuous improvement and following a review in 2010, SMFG developed a Community Relations Plan and a support plan for the local community, which remain in place today. An updated External Relations Plan (ERP), which includes management of relations with all interested parties at national and international levels, was developed in 2020. The Community Relations Plan is the local component of the ERP. The ERP and rules related to interaction with the local communities are communicated internally to all staff during induction. In addition to stakeholder engagement, the Community and External Relations Department is responsible for implementing SMFG’s community development programs and participating in recruitments, particularly of unskilled labor.

As per local regulations, the local authorities and communities near the project established Consultation Committees in Mining Localities (CCLMs, Comités de Concertation dans les Localités Minières) starting in 2016. The purpose of the CCLM is to facilitate dialogue between mining companies and local communities and to prevent conflict in mining localities. SMFG holds regular meetings with the CCLMs and works closely with them to manage community expectations and ensure that the community has access to accurate and timely information about the project.

SMFG also engages with Centre de Gestion de l’Environnement de Monts Nimba et Simandou (CEGENS, the Nimba and Simandou Mountains Environmental Management Center), which is the government authority responsible for the coordination and promotion of protection of the Nimba Mountains Biosphere Reserve, including the World Heritage Site. CEGENS is responsible for responding to all questions related to environmental management of mining projects in the Nimba region. Given the location of the project in a sensitive habitat adjacent to a World Heritage Site, there is significant interest in the project from international stakeholders, and therefore the ERP includes mechanisms for engaging with these external stakeholders, including international non-governmental organizations (NGOs) and the World Heritage Centre.

Records of stakeholder engagement are maintained in a cloud-based data platform and results of the implementation of the Community Relations Plan are reported in the Annual Environmental and Social Performance Report.

Stakeholder engagement is a requirement for project assessment in both Guinea and Liberia, and therefore will be incorporated into the ESIA process in both countries. In Guinea, formal ESIA-related consultations were first undertaken in 2012 as part of the official scoping process and a second set of scoping consultations were undertake in February 2020 to support the development of an updated scoping study. During the new ESIA process, the ESIA team, in coordination with SMFG’s Community and External Relations Department and local authorities, will seek the views of local communities potentially affected by the mine development and will ensure that these views are incorporated into project design and proposed mitigation measures. The ESIA will include a discussion on how the issues raised by stakeholders were considered and addressed in the ESIA. Community consultation will be ongoing throughout the ESIA process and will include: updated stakeholder mapping; updated household surveys; formal meetings with both local and international stakeholders; and documentation of the engagement process. As part of the ESIA, a Stakeholder Engagement Plan (SEP) will be prepared, which will ensure that the existing Community Relations Plan is updated to be appropriate for future mine development (ESAP item).    

External Communication and Grievance Mechanisms and Ongoing Reporting to Affected Communities

SMFG’s commitment to external communication is stated in its Code of Conduct (2018), which includes a commitment to providing timely, accurate, consistent, complete and fair information. At the local level, SMFG has notice boards in the local villages where it regularly displays news and announcements, as well as letter boxes for written communications. Also, every two months, SMFG produces and publishes an information bulletin on its activities, which is posted on company work sites and community bulletin boards, and copies are distributed to company staff and certain stakeholders.  However, the primary emphasis of SMFG’s community relations is regular, formal or informal face-to-face discussions and telephone communications.

There is a community grievance mechanism in place to systematically respond to issues raised by the community. Communities have been notified of the grievance process through regular stakeholder engagement activities. Grievances can be filed directly with SMFG by phone (a grievance phone number is posted on the notice boards) or in person or submitted anonymously through letter boxes which are posted at the notice boards. SMFG maintains a register of all grievances filed. As indicated above, the updated SEP will consider any updates required for the grievance mechanism and external reporting for when mine development moves from care and maintenance and studies to construction and operations.

PS2:  Labor and Working Conditions

SMFG current workforce for care and maintenance activities comprises approximately 130 employees and 150 employees of contractor companies. During the studies phase, the number of staff is expected to increase only marginally; however, there will also be contractors and consultants on site to undertake field work.

Estimates of the workforce required for future phases (construction and operations) will be determined as part of the feasibility studies. As part of the ESIA, a Local Procurement and Employment Plan; Occupational Health and Safety Plan and Influx Management Plan will be prepared. These plans will use existing policies, plans and procedures (described below) as a basis, and will ensure that these are scaled up to meet the needs of construction and operations.

Working Conditions and Management of Worker Relationship:

SMFG has a Human Resources Policy (2017); Anti-Corruption Compliance Standard (2017) and Code of Conduct (2013, updated in 2018) in place which provide a framework for responsible employment practices. The Human Resource Policy states SMFG’s commitment to: (i) comply with all labor laws; (ii) fair recruitment, promotion and compensation; (iii) freedom of association and right to collective bargaining; (iv) investigate workplace complaints and take corrective action; (v) fair and transparent performance management; (vi) prohibit child, forced and / or compulsory labor; and (vii) non-discrimination and equal opportunity. Both Policies and the Code of Conduct also apply to contractors and sub-contractors.

Protecting the Work Force:

SMFG’s commitment to protecting the work force is stated in its Asset Value Protection Policy and in the Code of Conduct, which state that SMFG commits to the implementation of appropriate controls to ensure the security and value of its personnel, property and other assets. Further, as indicated above, the Human Resources Policy clearly indicates SMFG’s refusal to engage in child, forced and / or compulsory labor.

SMFG currently operates two camps, one in the mining enclave and another in the closest town (Gbakoré). With the lockdown for COVID-19, only the camp in the enclave is operational for its care and maintenance workers; the other is closed. SMFG will review the conditions of the current worker camps against the requirements of PS 2 and EBRD and IFC’s Workers’ Accommodation – Processes and Standards (2009) and will prepare a Worker Accommodation Plan in line with these requirements (ESAP item).

Occupational Health and Safety:

SMFG has a Health and Safety Policy in place, which states that SMFG is committed to providing a safe, productive and healthy work environment for all its employees, contractors and visitors. For the care and maintenance activities, SMFG has a safety standard and Safety Management Plan in place, which is currently in the process of being updated (ESAP item). Activity-specific health and safety measures are also incorporated into safe work practices and standard operating procedures developed for specific activities. All consultants and contractors on site are expected to comply with SMFG’s Health and Safety Policy, standards and Safety Management Plan.

Workers Engaged by Third Parties and Supply Chain

SMFG’s approach to workers engaged by third parties and the supply chain is stated in the Code of Conduct (2018). SMFG requires contractors and sub-contractors to implement policies in line with SMFG’s policies; and prohibits SMFG from engaging in business with contractors if there is a material risk that they will violate SMFG’s policies and standards. The Code of Conduct further states that SMFG seeks to work with suppliers that act consistent with SMFG’s policies and standards. Expectations of contractors and suppliers are included in contract language that requires adherence to all applicable laws and regulations regarding safety, security, health, the environment, and human rights.

PS3:  Resource Efficiency and Pollution Prevention

For the study phase and ongoing care and maintenance activities, impacts related to resource efficiency and pollution prevention are limited. These potential impacts and mitigation measures are identified in the care and maintenance EMP and are discussed below.

In order to consider the potential PS3-related impacts of the Nimba Iron Ore Mine development, the proposed ESIA studies include: air quality surveys and dispersion modelling; noise and vibration surveys and modelling; geology and soils; hydrology and surface water availability, quality and resource use; and hydrogeology and groundwater surveys. The ESIA will also consider the generation of waste (solid and hazardous waste) and waste rock, including the potential for acid metalliferous drainage. As part of the ESIA, thematic management plans will also be prepared, including air quality; noise and vibration; hazardous materials; mine waste; erosion and sediment control; bushfire; waste soil, rock and ore; conceptual mine closure and progressive rehabilitation. 

Resource Efficiency:

For care and maintenance activities, relevant resource efficiency measures are incorporated into the EMP. These measures are primarily limited to careful tracking of water abstraction and water use to minimize the potential for leaks and to identify the potential for efficiencies; and minimizing energy use and air emissions through a rigorous equipment maintenance program.   

Pollution Prevention:

As indicated under PS1, SMFG’s Environmental Standards (2018) set the minimum requirements for the management of biodiversity, water atmospheric emissions, waste, waste rock and ore stockpiles, hazardous materials and rehabilitation and closure. The EMP for care and maintenance activities includes measures based on the environmental standards for the following areas where potential impacts have been identified: biodiversity management; water management; hazardous materials management; waste management; and closure and rehabilitation of exploration areas. Biodiversity management is discussed under PS6.

Potential impacts on surface water include stormwater run-off and sediment contamination; contamination from accidental leak or spill of sewage, hydrocarbons or other chemicals (e.g. herbicides). These potential impacts are minimized by progressive rehabilitation of cleared areas; installation and regular monitoring and maintenance of sediment control structures; appropriate storage, handling and transportation of hydrocarbons and chemicals; use of septic tanks and soak-aways; the treatment and testing of wastewater prior to discharge, and the cessation of using herbicides in favor of steam-based weed control.

Currently, hazardous materials on site are primarily limited to hydrocarbons (oil, fuels and lubricants), but there are also small quantities of other hazardous substances, such as battery acid and pesticides stored on site. All hazardous materials at site are appropriately stored in bunded structures and / or secure lockers; and there are procedures in place for managing spills of hazardous materials. Trays (or similar) are used to capture leaks and spills during maintenance activities, and oil-contaminated water is sent through an oil / water separator prior to discharge. Data Safety Sheets are available for all chemicals stored on site. Pesticides are only handled by trained staff and are applied deliberately to avoid the risk of contamination.

The major types of waste currently generated at site are domestic solid waste, including paper and cardboard; glass; metal; wood; food scraps; plastic items; scrap metal and used tyres. Small amounts of hazardous waste, such as used batteries; medical waste; and waste oil are generated. Waste management measures include avoidance of products that generate waste when possible, minimization of waste; segregation of waste at the source; sorting and storage of waste in an appropriate enclosed area; and appropriate disposal method for each type of waste. SMFG records the volume of waste generated and the final disposal method for each waste stream.

Rehabilitation and closure activities focus on the stabilization of areas disturbed to minimize erosion. Rehabilitation activities include regrading of surfaces, application of jute matting, grass mulch and seeds of native species. Rehabilitated areas are closely monitored and maintained to ensure native species take root until they are considered self-sustaining.  

PS4:  Community Health, Safety and Security

The ESIA will consider potential impacts to community health and safety, and will prepare Health and Safety Management Plans, including Influx Management Plan, Community Health and Safety Management Plan and Security Management Plan.

Community Health and Safety  

Potential community health and safety impacts associated with care and maintenance and the studies phase are limited. SMFG’s policies, including the Community and External Relations Policy and Health and Safety Policy, state the company’s commitment to community health and safety. Under the Community and External Relations Policy, the SMFG Human Rights Standard defines the minimum requirements to identify, prevent, mitigate, track and report on how SMFG addresses risks to human rights associated with its operations. This standard also defines the minimum requirements for supporting and promoting human rights and enabling remediation through legitimate processes where SMFG identifies it has caused or contributed to adverse impacts.

As indicated under PS1, a significant component of field work has already been completed for the feasibility and ESIA studies, and therefore, large numbers of staff, contractors and consultants are not anticipated to be on site during the studies phase. All studies requiring a field component and requiring contact with local residents, will be undertaken in a way that prevents the spread of infectious diseases, including coronavirus (COVID-19). Field studies and in person stakeholder engagement will not be undertaken until the current COVID-19 travel restrictions have been lifted.

Security Personnel:

The SMFG Human Rights Standards indicate the company’s commitment to the Voluntary Principles on Security and Human Rights (VPSHR). All security personnel contracted by SMFG are required to abide by the VPSHR, and must be trained in their implementation before starting duties. Likewise the military detachment assigned to SMFG for the company’s security, in accordance with Guinean law, must be trained in the VPSHR. SMFG, its security contractor and the military detachment enforce a strict zero-tolerance policy for non-compliance.

The mining enclave, and thus SMFG’s facilities and infrastructure on the mountain, are not fenced.  Legally, unauthorized access is forbidden since they are in a managed nature reserve where access is permitted only to the concession holder, its personnel and visitors, and duly authorized governmental authorities.  All worksites and infrastructure on the mountain are accessed by a single road that enters the enclave near Gbakoré.  The Guinean military operate a guard post with a boom gate at the entrance, and a second security checkpoint, 80m inside, is manned by SMFG’s security contractor. SMFG’s camp in the village of Gbakoré and its office in Lola Town are fenced, and access is controlled by unarmed security contractors.

A conflict assessment will be part of the social baseline and impact assessment, and a human rights impact assessment and management plan are part of the overall ESIA process.

PS5:  Land Acquisition and Involuntary Resettlement

General:

No land acquisition or resettlement will be required for the study phase activities. There are no existing settlements within the mining enclave, and from previous exploration and drilling campaigns, SMFG already holds the land required to undertake the proposed studies.

Geotechnical drilling outside the mining enclave, for infrastructure in the lowlands including the rail corridor to the Liberian border, stockpiles, load-out facilities and other industrial areas, will require construction of access tracks and drill platforms on land used by local communities.  SMFG and local authorities have well-established procedures for assessing and compensating losses of crops and post-use rehabilitation due to such activities.  This drilling will not impact any built-up area.

SMFG currently has in place a Land Acquisition and Involuntary Resettlement Standard (2018), which sets the minimum requirements for land acquisition and involuntary resettlement, before any site-related development or construction commences. The standard requires the rights and needs of landowners and local communities related to land acquisition to be assessed and addressed prior to impact through interactions that foster trust and mutual respect. While the standard does not explicitly reference PS5, it sets out objectives and requirements that are consistent with PS5. SMFG will update the standard to explicitly reference PS5 (ESAP item).

Displacement:

Additional land acquisition and resettlement are likely to be required for next phase of development of the mine, specifically, construction of infrastructure in the lowlands in Guinea and construction or refurbishment of a rail‐line in Guinea and Liberia will require land acquisition or leasing, resettlement and restrictions on land use that will have impacts on people owning, occupying or using these lands. The ESIA scope of work includes updating the socio-economic and health baselines, identifying impacts including physical and economic displacement and preparing a resettlement action framework and a livelihood restoration framework. Full resettlement action plan (RAP) and livelihood restoration plans (LRPs) will be developed as part of the studies phase if it is determined that these are required. As discussed in PS1, the ESIA and all supporting studies and plans will be prepared in line with the requirements of the Performance Standards.

PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource

General:

The proposed Nimba Iron Ore Mine is located in the Nimba Mountains of southeastern Guinea. The Nimba range extends along the borders of Liberia, Guinea and Cote d’Ivoire and is part of the Guinean montane forest ecoregion, with lowland evergreen and deciduous forest types as well as gallery forests. Dense forest covers lower levels of the massif with grassy mountain savannah at higher altitudes. The range serves as headwaters for many rivers and streams. It is an area of exceptional biological diversity due to its geomorphological characteristics and a variety of microclimates, produced by strong seasonal variations and altitudinal gradients. It is also an area under significant anthropogenic pressures, notably from slash and burn agriculture, grazing, poaching, uncontrolled anthropogenic bushfires and logging. In addition to SMFG’s Mining Concession, other exploration and mining permits have been issued near the Nimba range; and ArcelorMittal operates iron ore mining at Mounts Gangra and Tokadeh, across the Liberian border.

As described in the Project Description, the proposed project lies within a designated mining enclave, which is surrounded by multiple, overlapping legally protected and internationally recognized areas: a Strict Nature Reserve, a Key Biodiversity Area, an Alliance for Zero Extinction site, a UNESCO Man and the Biosphere Reserve and a Natural World Heritage Site (see further discussion below).

SMFG’s activities in the area date to 2003. Biodiversity field studies began in 2007 and the company used the care and maintenance period (2014-2019) to continue collecting data on key taxa. The ESIA to be completed as part of the Project includes a number of biodiversity-related studies, including completion and collation of baseline studies, biodiversity impact assessment, critical habitat assessment, ecosystem services assessment and offset studies. In addition to the ESIAs, the studies also include associated biodiversity assessments and plans for the Liberian transport infrastructure.

There are no anticipated impacts associated with the studies for the Guinean or Liberian ESIAs; however, there may be some very limited biodiversity impacts in Guinea from land clearance associated with geotechnical drilling.

Protection and Conservation of Biodiversity:

Although the ESIA and critical habitat assessment are not yet complete, the species richness of the area is clearly documented in previous studies and reviews of the nearby protected areas. In total, 830 vertebrate species have been described over the history of studies in and around the Guinean Nimba Mountains. These include 76 large and medium mammals, 97 small mammals, 56 species of bat, 441 birds, 90 reptiles and 70 amphibians. To date, over 2,000 species of vascular plants have been identified within the Nimba Mountains, with 16 considered endemic. The faunal diversity also includes a number of endemic species, including single-site endemic species. Numerous, globally Critically Endangered (CR) and Endangered (EN) species of high conservation significance are known to be present, including the Nimba viviparous toad (Nimbaphrynoides occidentalis, CR), Lamotte’s roundleaf bat (Hipposideros lamottei, CR) and the Western chimpanzee (Pan troglodytes verus, CR). The Nimba Mountains are one of the top seven priority sites for chimpanzee conservation in West Africa identified by the IUCN Species Survival Commission Primate Specialist Group. Several threatened species of amphibian, bat and spider associated with high-altitude savannah are present that are not known to occur anywhere else. While critical habitat mapping is pending, studies to date indicate that the project area will be considered critical habitat.  

Project impacts from the ongoing care and maintenance and the studies phase’s activities include habitat loss, fragmentation and degradation, the introduction or spread of invasive species, erosion and sedimentation, noise and light pollution. These are anticipated to be limited (pre-mitigation) due to the small scale of activities associated with care and maintenance and geotechnical drilling. There are no impacts associated with the collection of commercial samples for export, which will be from existing sample collections. From 2013 to the present, care and maintenance activities have included erosion control, control of invasive alien species and wildfires with fire-breaks, as well as rehabilitation of sites disturbed by previous exploration activities. Geotechnical drilling will occur both within existing tracks/platforms, and in newly cleared areas within the mining enclave and along the proposed rail alignment in the lowlands. It is estimated that geotechnical drilling will affect less than 10 ha of land.

As part of its management program, SMFG currently implements on-site mitigation measures to avoid, minimize and restore impacts on biodiversity. These are described in the Environmental Management Plan, and include mitigation actions, controls and monitoring for: biodiversity, land disturbance, erosion and sediment control, noise, vibration and light, fire management, and rehabilitation, including the management of trial plots and nurseries. Although it is already in the company’s operational rules and is strictly enforced, SMFG will update its Code of Conduct to include a Zero Tolerance Policy on the Possession of Illegal and/or Threatened Wildlife and Forest Resources (ESAP item). The policy will apply to workers and contractors. As a result, the project activities are not anticipated to significantly impact the area’s biodiversity values.

Baseline data studies, impact assessment and mitigation design to date have involved both national and international species experts, along with leading research organisations and international conservation organisations such as Missouri Botanical Garden (plants), Bat Conservation International (bats), the Berlin Museum of Natural History (amphibians), the Université Libre de Bruxelles (orchids), the University of Kent, Copenhagen Zoo and the Wild Chimpanzee Foundation (chimpanzees). These types of collaborations will continue, and species experts will provide input to supporting studies of the ESIA. SMFG’s engagement with members of IUCN’s Species Survival Commission, Primate Specialist Group Section on Great Apes dates to 2008. SMFG has sought the input of experts with extensive experience with the western chimpanzee populations of the Nimba Mountains to establish a robust baseline and to identify and mitigate impacts. International and national conservation NGOs form an important part of SMFG’s stakeholder engagement approach. Engagement with the World Heritage Centre and the protected area management authority for Nimba is described further below.

Legally Protected and Internationally Recognized Areas

The Nimba Mountains were designated as a Strict Nature Reserve in 1944 and then as a Natural World Heritage Site (WHS) in 1981 in Guinea, in 1982 in Côte d’Ivoire, for their testament to long-term evolutionary processes and their exceptional biodiversity, including globally threatened and endemic species (the Nimba Mountains WHS). In 1980, the mountains and part of the surrounding lowlands were declared a UNESCO Biosphere Reserve. While the WHS designation is binational, an adjacent protected area in Liberia (East Nimba Nature Reserve) is on Guinea’s Tentative World Heritage List. A Tri-National Agreement exists covering the complex of protected and internationally recognized areas. The boundary of the Biosphere Reserve and WHS was modified in 1993 to exclude a keyhole-shaped area to allow mining. A presidential decree in 2010 harmonized the boundary of the Guinean Nimba Mountains Strict Nature Reserve with the Biosphere Reserve’s and WHS’s boundaries. The project is located within this keyhole area. In 1992, the Nimba Mountains WHS was inscribed on UNESCO’s List of World Heritage in Danger in part due to the potential for mining in the area. In addition to WHS status, the Nimba Mountains are a Key Biodiversity Area and the Mount Nimba Important Bird Area. The WHS and some surrounding area is also a (transboundary) Alliance for Zero Extinction site, triggered by three species, two amphibians and one mammal, which have their entire known populations confined to this area.

Since 2005, at the request of the government of Guinea, SMFG has engaged with the World Heritage Centre and its technical advisory body on natural world heritage, IUCN. As mentioned under PS1, IUCN is considering undertaking an interim review of the ESIA’s approach, and will also manage an independent, third-party independent review of the ESIA that will focus on the compatibility of the proposed mining activities with the protection of the outstanding universal values for which the Nimba Mountains WHS was inscribed.

As indicated under PS1, SMFG also engages with CEGENS, the protected area management authority for Nimba Mountains WHS, and supports CEGENS to improve the management of the area, including fire prevention activities (such as controlled burning along roads and fire breaks), anti-poaching and encroachment patrols, training, infrastructure and equipment, and coordination with neighbouring countries’ management authorities for the Nimba Mountains.

Invasive Alien Species

SMFG’s Alien Invasive Species Management Plan defines the risks associated with alien invasive species, identifies the likely pathways for their introduction and summarizes interventions for their control. It includes measures to prevent the introduction of new invasive alien species, as well to control the spread of those already present, including Siam weed (Chromolaena odorata), which arrived in the region in the 1980s. To prevent the introduction of new species, mitigation measures include hygiene protocols for footwear, heavy equipment and shipping containers brought to site. To control the spread of Siam weed, SMFG implements a removal program every year during the rainy season and monitors the evolution of its density and distribution.

Management of Ecosystem Services:

No significant impacts on ecosystem services are anticipated from the studies and care and maintenance activities.

As described above, the ESIAs will include an ecosystem services assessment and management plan.

PS8:  Cultural Heritage

Care and maintenance and the studies phase activities are unlikely to have any impact on cultural heritage. Respect for cultural heritage is incorporated into SMFG’s Code of Conduct, and as per the EMP, site-specific Construction EMPs will be prepared for any activities that may result in ground disturbance. These Construction EMPs include a requirement for pre-clearance surveys, which include identification of sacred sites and physical cultural resources. For archaeological sites, SMFG’s consultants have already conducted surveys along the proposed rail alignment, and have mapped all sensitive areas so that geotechnical drilling activities can avoid these sensitive areas.

For sacred sites, SMFG’s Community & External Relations Department always informs communities well in advance of land disturbance, and inspects the areas with local representatives before any disturbance to identify who uses the land, what crops or other assets are present and their condition, and if there are any sacred sites to avoid. SMFG then negotiates access, compensation for lost assets, and adjusts plans if there are areas that must not be disturbed.The proposed ESIA includes identification of potential impacts on archaeology and cultural heritage and the development of a Cultural Resources Management Plan (including chance find procedure).

The documentation listed below is available electronically as PDF attachments to this ESRS at www.miga.org. 

• Environmental and Social Action Plan – Study Phase of Nimba Iron Ore Mine (April 2020)
• SMFG Rapport Annuel sur la Performance Environnementale et Sociale 2019 (Annual Environmental and Social Performance Report) (December 2019)
• SMFG Code of Conduct (2018)
• SMFG Corporate Policies (2017):
  • Environmental
  • Health and Safety
  • Community and External Relations
  • Business Integrity
  • Human Resources

Broad Community Support is not applicable for this Project.