Washington D.C., December 14, 2005—
The International Finance Corporation, the private sector arm of the World
Bank Group, is investing up to $39 million to support construction and
operation of Russia’s Kupol gold and silver mine. IFC’s financing will
support Chukotka Mining and Geological Corporation, a company engaged in
helping develop Russia’s rich natural resources in a responsible and sustainable
way. Kupol will provide up to 850 jobs at the height of its operation.
One of the mine’s key social objectives is to support indigenous people
through job creation, supplier linkages, and the creation of a local foundation.
The Kupol mine is located slightly north of the Arctic Circle in the Chukotka
Autonomous Okrug, Russia’s sparsely populated, most northeastern region.
The nearest settlement is 90 kilometers away. Bema Gold Corporation holds
a 75 percent stake in Chukotka Mining and Geological Corporation, with
the remaining quarter owned by the government of Chukotka. IFC’s $39 million
investment consists of a $14 million senior loan and a subordinated loan
of $25 million to Chukotka Mining and Geological Corporation. The subordinated
loan has associated warrants in Bema Gold.
The project will promote the modernization of the local mining industry,
which will in turn increase demand for local goods and services, stimulate
the development of supply chain linkages, and improve local living conditions.
IFC will help identify the needs of the local population and assist in
establishing Chukotka Mining and Geological Corporation’s charitable foundation,
which will implement community and business development programs in the
“IFC is pleased to support Chukotka Mining and Geological Corporation,
as its Russian sister company, Omsukchansk Mining and Geological Company,
has demonstrated a leadership role in sound practices on environmental
and corporate social responsibility,” said Edward Nassim, IFC’s Director
for Central and Eastern Europe. “We are impressed by Bema’s contribution,
through its Russian subsidiary, to the development of many local suppliers,
as well as by the favorable work conditions for its staff,” Nassim added.
Clive Johnson, Chairman, President, and Chief Executive Officer of Bema
Gold, said: “The partnership between Bema and IFC has been very successful,
and we are pleased to see IFC’s continuing support and confidence. Once
the Kupol mine is operational it will be the largest employer in the Chukotka
area. IFC recognizes our commitment to social responsibility, and we look
forward to this partnership furthering our impact in this area.”
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.
Russia joined IFC in 1993. Since then IFC has invested $2.4 billion in
the country, including $246 million in syndicated loans, in over 100 projects
across a variety of sectors. In fiscal year 2005 (July 2004–June 2005)
IFC’s investments reached $832 million. IFC’s investment portfolio in
Russia stands at $1.7 billion, making it the largest country exposure for
IFC globally. IFC has invested in key sectors including banking, leasing,
housing finance, infrastructure, mining, agribusiness, pulp and paper,
construction materials, oil and gas, telecommunications, information technologies,
retail, and health care. For more information, visit www.ifc.org/europe.