Washington, July 18, 2006—The International
Finance Corporation, the private sector arm of the World Bank Group, has
signed a $125 million loan to the Ahafo gold mine in Ghana to support the
country’s mining sector, help raise environmental standards, employ international
best practices on resettlement, and ensure that local communities benefit
from the project.
The loan consists of $75 million for IFC’s own account and an additional
$50 million in syndicated loans from commercial lenders to Newmont Ghana
Gold Limited, a subsidiary of Newmont Mining Corporation, for the construction
and operation of the Ahafo mine. As a development lender, IFC’s primary
role in this project is to advise on environmental and social issues.
“IFC’s involvement brings expertise and guidance to help ensure that
the mine’s social and environmental performance meets international standards,
particularly with respect to the resettlement process and community engagement
and that the project provides increased benefits for Ghana and particularly
for the people living near the mine,” said Rashad Kaldany, IFC’s Director
for Oil, Gas, Mining and Chemicals. “That is why Newmont sought our engagement
and we are pleased to work with them on our common goal of bringing benefits
to local communities.”
To maximize local development benefits, IFC and Newmont will provide information
and expertise on business practices to local small and medium-sized firms,
putting them in the position to become potential suppliers and providers
of services such as food, laundry, equipment maintenance, cleaning to Ahafo
and other ventures outside the mine. A special emphasis will be placed
on empowering women entrepreneurs. The program will also help local enterprises
to develop the business skills needed to obtain loans from local banks.
In addition, IFC is working with the company on the development and implementation
of an effective HIV/AIDS program.
The mine has created over 1200 permanent jobs and will be an important
source of income for one of Africa’s most mature democracies. It will
pay over $300 million in taxes and royalties to Ghana, increase the country’s
gold production by 30 percent and raise its foreign exchange earnings by
eight to ten percent.
“This is an important project for Ghana, which is one of the few countries
in Sub-Saharan Africa that stands a chance of meeting the Millennium Development
Goals,” said Thierry Tanoh, IFC’s Director for Sub-Saharan Africa. “Mining
is the biggest source of foreign direct investment in the country and IFC
has dedicated a significant amount of its own resources to help ensure
Ghana benefits from the project.”
IFC, together with the company, developed an environmental and social monitoring
system and Newmont is implementing a biodiversity management plan in collaboration
with environmental group Conservation International. IFC has also instituted
an ongoing, independent review of the programs establish by Newmont to
restore the livelihoods of the more than 9000 people either resettled or
otherwise affected by the mine.
“We have engaged with IFC to benefit from their expertise on environmental
and social matters,” said Wayne Murdy, Newmont Mining Corporation’s chief
executive. “Their help and advice on resettlement and restoration of livelihood
has been particularly valuable to us. We are committed to operating the
Ahafo mine to the highest international standards.”
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the other
institutions of the World Bank Group but is legally and financially independent.
Its 178 member countries provide its share capital and collectively
determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.
The commercial banks participating in
the $50 million syndicated loan are: Calyon, NM Rothschild and Sons Limited,
Bank of Nova Scotia, Société Générale and Royal Bank of Scotland plc.