Announcement of World Bank Provides Sixty Million Dollars to Mauritania for Mining Development Project on July 16, 1979

FOR .IMMEIDIA- . ERELEASE. '. eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.,. Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/1 July 16, 1979 WORLD BANK PROVIDES $60 MILLION TO MAURITANIA FOR MINING DEVELOPMENT PROJECT A loan of $60 million to Mauritania has been approved by the World Bank for t'ne first phase of a mining project to develop two new iron ore pits. Fourteen co-financiers are joining the Bank in funding this $500 mill ion project, under which pits with proven reserves of 386 million tons of ore will be opened at El Rhein, near the mining town of Zouerate, to gradually replace those at Kedia. During the second phase (1986-89) a new mine will be opened at Oum Arwagen, about l2 kilometers from El Rhein. In addition to opening the mines, the project provides for the construc- tion of facilities for the crushing and upgrading of raw ore. The railway will be extended to El Rhein, and supplied with four locomotives and about 300 new • ore wagons to help transport the 14 million tons of ore per year which the mines are expected to produce. Existing port handling and loading systems will also be modified to handle the greater quantities of ore. The project also includes the provision of water supply and power, as well as roads, buildings, housing for the work force, and other auxiliary facilities and services. This project is crucial to Mauritania's continued development. By maintain- ing and developing mining operations, it will help sustain government revenues and foreign exchange inflows and will create employment. It will also help ensure the continued existence of the implementing agency, the Societe Nationale lndus- trielle et Miniere. Through its training program, project p~omotion, and geologi- cal research, this organization is the main instrument for the future development of Mauritanian mining activities and industry. Joining the Bank in co-financing this project are: Kuwait Foreign Trading, Contracting and Investment Company, $40 million; Arab Mining Company, $28 million; Republic of Iraq, $22 million; Kingdom of Morocco, $20 million; Islamic Development Bank, $10 million; Saudi Fund, $65 million; Caisse Centrale de Cooperation Econo- mique (France) and French suppliers' credits, $50 million; Kuwait Fund, $45 mill ion; Arab Fund for Economic and Social Development, $35 million; European Investment Bank, $30 million; Abu Dhabi Fund, $20 million; Overseas Economic Cooperation Fund (Japan), $16 million; African Development Bank, $12 million; and OPEC Special Fund, $5 million. The Societe Nationale lndustrielle et Miniere is contributing $42.7 • mi 11 ion . The Bank loan is for a term of 15 years, including 5 years of grace, with interest at 7.9% per annum. NOTE: Money figures are expressed in U.S. dollar equivalents.  j, FORM NO. 1121 (5-76) T ECHN I CA L D A T A PROJECT: COUNTRY: Guelbs Iron Ore Islamic Republic of Mauritania • TOTAL COST: $500.7 million BANK FINANCING: $60 million OTHER FINANCING: Equity: Kuwait Foreign Trading, Contracting and Investment Company, $40 million; Arab Mining Company, $28 mill ion; Republic of Iraq, $22 million; Kingdom of Morocco, $20 million; Islamic Development Bank, $10 million; and the Societe Nationale lndustrielle et Miniere retained cash generation, $42.7 million. Loans: Saudi Fund, $65 million; Caisse Centrale de Co- operation Economique and French suppliers' credits, $50 million; Kuwait Fund, $45 mil- lion; Arab Fund for Economic ar.d Social Deveiopment, $35 million; European Investment Bank, $30 million; Aau Dhabi Fund, $20 million; Overseas Economic Cooperation Fund (Japan), $16 million; African Development Bank, $12 million; and OPEC Special Fund, $5 million. IMPLEMENTING ORGANIZATION: Societe Nationale lndustrielle et Miniere 5 rue Scribe 75009 Paris, France Telex: 230550 • Succursale de Paris 42 rue Cambronne 75015 Paris, France Societe de Cooperation Miniere et lndustrielle 30 rue Cambronne 75015 Paris, France Telex; 200559F Societe Nationale lndustrielle et Miniere B. P. 1260 Noakchott, Mauritania Telex: 531 PROJECT DESCRIPTION: It consists of: a) opening the El Rhein desposits; b) con- structing the proposed concentration/beneficiation facili- ties; c) extending the railroad to El Rhein and increasing the capacity of existing rail and port facilities; d) providing power, water supply, roads, buildings, housing, and other auxiliary facilities and services; and e) providing engineering, project manaqement, and training. PROCUREMENT: Procurement will be carried out in accordance with the rules of the lending agencies, which generally require international competitive bidding (ICB). Thus, packages representing at least 85% of the total pro- ject cost will be subject to ICB. Pro¢urement has been divided into 18 packages, sepa- rating supply of imported equipment from construction work. CONSULTANTS: Consultant services will be provided for engineering, pro- ECONOMIC RATE OF RETURN: ject management, and training. 12% ESTIMATED COMPLETION DATE: 1982 • - 0 -