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PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB4010
Project Name
Region
Sector
Project ID
Borrower(s)
Implementing Agency
Environment Category
Date PID Prepared
Estimated Date of
Appraisal Authorization
Estimated Date of Board
Approval
Mineral Sector Induced Growth Program
AFRICA
Mining and other extractive (40%); General agriculture, fishing
and forestry sector (15%); Power (15%); General industry and
trade sector (15%); General transportation sector (15%)
P112177
GOVERNMENT OF GUINEA
Ministry of Economy and Finance
[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
July 8, 2008 (revised November 5, 2008)
January 20, 2009
March 17, 2009
1. Key development issues and rationale for Bank involvement
Guinea hosts some of the largest global resources of bauxites and iron ore, and sizable gold and
diamond deposits. The country is the preferred destination for mineral FDI in West Africa with
possible FDI of about $12 billion over the next 3-4 years and potentially additional $8 billion
thereafter. These expected investments will likely result in extractive industries representing over
50% of the GDP by 2015 from the current levels of about 20%. In particular, two mining poles
are expected to develop: One around the CBG mines, BHP Billiton Global Aluminia (GAC) and
Alcan/Alcoa Kamsar alumina plants in the Boke/Sangaredi area in the east of the country, and
one in the South-West region around the Iron ore deposits of Simandou and Euronimba
sponsored respectively by Rio Tinto and BHP-Billiton/Newmont.
These large investments represent both risks and opportunities for economic growth and
employment in Guinea. With the right enabling environment, these mining projects can create
employment opportunities through linkages and subcontracting to local firms. Considering the
concentration of mines in the two areas, or “growth poles,” mentioned above, the cumulative
impact of these investments also has the potential to spur broader private sector growth. The key
development issues are hence to use mineral sector induced activities and available capital to
promote local and regional economic development and increase employment opportunities.
The World Bank is involved in the mining sector dialogue with the Government of Guinea since
2004, and the Mining Policy Division has established good dialogue and relations with relevant
public, private and civil society stakeholders. It is currently helping Guinea to improve
management of the mining sector by strengthening capacity of relevant public institutions,
helping to reform the legal and regulatory frameworks, and by supporting EITI implementation.
This work has placed the Bank as the leading donor in the mining sector, and the Government
has requested further Bank assistance to build on progress achieved so far and to support relevant
institutions to improve governance, effectiveness, and contribution of the sector to national and
regional development.
IDA’s comparative advantage is its long-term engagement and depth of knowledge of Guinea’s
mining sector, combined with international mining sector experience and practice. The breath of
IDA’s interventions in activities directly linked with the development of mineral projects such as
the legal, regulatory and institutional framework, infrastructure development, and local economic
development opportunities, position the organization in a particular way to help countries
optimize the benefits from mining projects by assisting them in enabling the expansion of non
mining economic activities. The methodology of promoting mining-induced regional growth
poles has been successfully applied by the World Bank in the Anosy region, Madagascar, which
has made significant gains with regard to the MDGs through integrated regional development
planning fueled by a major mineral resource development project.
There are currently no other sources of assistance in Guinea to initiate such broad, cross-sectoral
impacts. Moreover, the value added by IDA’s leadership in supporting mineral development is
recognized by other development partners in the country who have confirmed that the proposed
Project fits well with their activities and approaches.
2. Proposed objective(s)
Project Objectives are to assist the Government of Guinea to develop a dynamic framework for
resource management and economic linkages that ensures that mining activities: (a) benefit the
people of Guinea, in particular the communities and regions where the mining assets are located;
and (b) serve as a catalyst and an engine private sector led growth for other sectors of the economy.
3. Preliminary description
The program is an opportunistic operation that does not involve direct investments into mining
activities, but rather will promote the economic activities and linkages that ensure that mining
activities will benefit both the local economy and the country at large.
The proposed program has four components:
Component A: Strengthening Mining Revenue Collection Capacity of the Government and
Public Private Dialogue
(i)
Collect, administer, and monitor mining taxes and royalties;
(ii)
Facilitate the public private dialogue and engagement with the mining companies
to formulate, prepare, implement and manage medium- and long-term integrated
development projects aligned with the decentralization framework in Guinea, and
long term sought sustainable development programs.
Component B: Development of Integrated Economic Clusters.
The interventions under this component are aimed at supporting the development and the
transformation of new economic opportunities in the socio-economic spaces that are targeted for
investment in the mining sector. Micro, small and medium scale enterprises (MSME) will be
supported to capitalize on the increased direct and indirect demands generated by the presence of
mining operations or news projects. The component will strengthen the business environment in
the targeted pilot areas to allow Guineans to realize the existing opportunities and thereby
improve the contribution of mining to local and national economies.
Component C: Capacity building and Support to public service delivery in the targeted
clusters.
Institutional strengthening to enable active and informed leadership and participation of central
and decentralized authorities in the design and implementation of appropriate public policies,
and services required to tune the country economic and fiscal policies with cluster-based
economic promotion, and the development of entrepreneurship and entrepreneurs. Decentralized
service delivery may be strengthened around: (i) agricultural extension services in the targeted
clusters with the objective of increasing production, and (ii) municipal services (water,
electricity, etc.) in partnership with the mining industry through PPPs.
Component D: Program implementation, evaluation and monitoring
At the central, regional, and local level, the project would provide support for project
implementation, project coordination, procurement, financial management, monitoring and
evaluation.
4. Safeguard policies that might apply
The environmental and social impacts of the program are expected to be minimal sitespecific, and manageable to an accepted level. Hence, project is rated as a category B
operation. Since the locations, number and scale of some of the activities are undefined at
this moment, it is proposed that an environmental and social management framework
(ESMF), and resettlement policy framework to be prepared by the client. The potential for
triggering the natural habitat policy OP 4.04, the forestry policy OP 4.36 and the
international waterways policy OP 7.50 will be assessed in the context of ESMF. If
confirmed the appropriate mitigation measures will be developed and put in place. The
environmental and social assessment framework will provide guidelines for use and
management of pesticides and fostering of the integrated pest management in the agricultural
production system in the selected areas. The Resettlement Policy Framework (RPF) will
provide guidelines for resettlement compensations, mitigation measures, along with
grievance mechanisms in the event Program activities result in land acquisition and/or loss of
livelihood on the part of Program affected people (PAPs). The ESMF and RPF will be
disclosed (in English and local language) in Guinea and InfoShop before the start of
appraisal, tentatively scheduled end January.
Safeguard Policies Triggered by the Project
Environmental Assessment (OP/BP 4.01)
Yes
[X]
No
[]
Natural Habitats (OP/BP 4.04)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Involuntary Resettlement (OP/BP 4.12)
Indigenous Peoples (OP/BP 4.10)
Forests (OP/BP 4.36)
Safety of Dams (OP/BP 4.37)
Projects in Disputed Areas (OP/BP 7.60)*
Projects on International Waterways (OP/BP 7.50)
[tbd]
[X ]
[]
[X]
[]
[tbd]
[]
[]
[tbd ]
[]
[]
[X]
[]
[X]
[]
[X]
[X]
[]
5. Tentative financing
Source:
Borrower
Africa Catalytic Growth Fund (ACGF)
Other Donors
Private Sector
Total
($m.)
0.0
15.0
0.0
0.0
15.0
6. Contact point
Contact:
Boubacar Bocoum
Title:
Senior Mining Specialist
Tel:
202-478-1151
Fax:
202-522-0396
Email:
[email protected]
Location:
Washington D.C.
*
By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the
disputed areas