Argentina - Mining Decontamination Project

Report No. 444393rgentina-Mining Decontamin Region Latin Amer Authorized Sector Mining & O Project ARPE57124 Disclosure Borrower(s) The Argent Public Implementing Agency The Nation Av. del Li Contact: I tel: +54-1 fax: +54-1 Environment Category A Authorized Date PID Prepared October 23 Appraisal Date March 15, Disclosure Board Date July 1, 19 Public 1. Country and Sector Background The National Atomic Energy Commission was control the whole nuclear sector in Argent technology development to energy productio economic reforms initiated in 1989, CNEA w Authorized functions related to (a) sector regulation research and development assigned to three (a) The Agencia Regulatoria Nuclear (ARN); S.A. (NASA) with two operating nuclear pla Disclosure capacity) which are open to private partic respectively. The functions assigned today Public Government with respect to nuclear policie development. However, CNEA is still under commercialization of nuclear products stil mostly through subsidiary companies, some private capitals and with an accompanying Another example of sector opening is the p and prices of about 2/3 of the uranium con two nuclear power plants. Authorized CNEA functions regarding technology develo are more clearly defined. The Nuclear Law Congress Management of Radioactive Residue responsibility to ensure that radioactive Disclosure disposed, within the regulatory framework the Mining Code in the case of mining site Public experience within this field. However envi been addressed in a piecemeal way and ther improve the preparation and decision proce information, public consultation, accounta effectiveness criteria. The principal site  framework of this program are the mining and mineral processing sites at Malargue, San Rafael (Mendoza), Cordoba and Los Gigantes (Cordoba); other minor similar sites included are Pichinian (Chubut), Tonco (Salta), Huemul (Mendoza), La Estela (San Luis) and Los Colorados (La Rioja). 2. Objectives The proposed project is the first phase of a national development program of uranium mining decontamination and environmental management which aims at: (i) mitigate and control environmental impacts generated at the main uranium mining and mineral processing sites under CNEA's responsibility for which the State accepts liability; and (ii), build up CNEA's environmental management capacity to decommission sites, remediate impacts and monitor the areas under the agency's responsibility, in an accountable and cost-efficient manner. 3. Rationale for Bank's Involvement The Bank has been an important provider of assistance to the development of environmental management capacity for mining activities in Latin America and elsewhere.The Bank will provide a valuable support to CNEA and the Argentine Government through: (a) assisting in the implementation of a comprehensive methodological approach based on direct experience in closure and remediation of mining sites and environmental management, including overall environmental and social assessments, legal and institutional issues, sites specific environmental audits, evaluation and priorization of measures based on environmental risks and hazards assessment, costs-benefits analysis, consultation processes, monitoring, set-up of information systems, planning, design and implementation of pollution abatement measures. (b) Facilitating the access to international expertise and best practice. (c) Helping CNEA to improve its credibility and acceptation by local governments and community that environmental management and compliance issues will be properly addressed, in line with internationally recognized best practice. And, (d) providing funds which would be unlikely from other sources for urgently needed (i) remediation works to meet on a consistent basis State environmental liabilities at the principal CNEA's sites and (ii) build up of CNEA's institutional capacity for the monitoring and management of sites. 4. Description The operation will be an Adaptable Program Lending (APL), and include the following program phases: Phase one will consist of three components: A. restitution works and studies, including the on-site confinement of 710,000t of tailings in Malargue (Mendoza province) and the preparation of EIAs at the Cordoba and Los Gigantes sites (Cordoba province) as well as at other sites (San Rafael, Pichinian, Huemul, Tonco, La Estela and Los Colorados). B. Strengthening of CNEA's environmental management capacity, specifically (i) the establishment of CNEA's Environmental Management Unit (organization, staffing, financial resources and work methodology; works and equipment: upgrade facilities; and training); (ii) development and implementation of systematized public consultation and information processes; (iii) the development of an Environmental Management and Information System, including a GIS (implementation, organization, staffing, financial resources and work methodology; works and equipment: upgrade facilities; and training). Phase two: the main triggers for the second phase wpould be the approval by the competent authorities of the EIAs authorizing CNEA to proceed with the Cordoba and Los Gigantes sites. It would include (A) the disposal of tailings at Cordoba (transport of 90,000t to a more proper disposal site and - 2-  decommissioning of the uranium dioxide plant) and Los Gigantes (on site disposal of 1,600,000t of wastes), and possible other sites which might be ready, as well as the completion of preparatory studies and EIA process at San Rafael. Complementary activities regarding institutional strengthening might be included if needed. Phase three would mainly consist of tailings disposal and remediation works at the San Rafael site and others which would not have been included in phase two. A coordination unit will be set up and maintained during the life of the program to coordinate, monitor and supervise project activities. 5. Financing Total project cost for the first program phase is estimated at US$20 million and the proposed loan would provide US$17 million. The total cost of the entire program is preliminary estimated in US$50 million. Government 3 IBRD 17 IDA 0 Total Project Cost 20 6. Implementation Project implementation period. Implementation period of the development program would extent over approximately seven years. The program would tentatively consist of three phases. Each phase would unfold for a period of about three years and would be constitued by a new batch of sites and activities. Executing agency. The National Atomic Energy Commission (CNEA) would be responsible for the implementation of the Project. Project administration. CNEA will maintain and strengthen the coordinating unit already established and responsible for the preparation of the Project and management of the PPF. The Project Coordination Unit (PCU) will (i) be responsible for the execution of the Project Implementation Plans (PIPs); (ii) manage (a) procurement - including all contracting for works and purchases - and the hiring of consultants, (b) project monitoring, reporting and evaluation, (c) the contractual relationship with the Bank, and (d), financial record keeping, the Special Account and disbursments; and (iii), establish communication and/or coordination links between CNEA and the different sectors involved in the Project. Accounting, financial reporting and audits. A financial and a procurement management assessments will be carried out during pre-appraisal and, if needed, procedure adjustments to comply with Bank norms will be recommended to CNEA. Monitoring and evaluation. The PCU will be responsible for monitoring and evaluation of the Project, according to the indicators and benchmarks included in the Environmental Assessment (EA), the PIP and the Loan agreement.Not later than 45 days after each quarter, the PCU will submit to the Bank quarterly progress reports covering all Project activities, including procurement and a financial summary report. Annual reviews, the first one to take place 12 months after effectiveness, would provide detailed analysis of implementation progress towards development objectives. - 3-  7. Sustainability Awareness and interest regarding environment is growing in Argentina and the increasing national, sectoral - and CNEA - commitment to improved environmental management is expected to sustain public and government interest in the activities the Program supports. Such interest and commitment are indicated by, i.a.: (a) the country has enacted an Environmental Law for Mining Activities (Law 24585, November 1995) and related environmental regulations in the Provinces for its application, mandating, i.a., the use of EIAs for all phases of the mining cycle and rules assigning liability for environmental damages due to past contamination; (b) legal procedures for public consultation are under development or, in the case of the Mendoza Province, already established; (c) Argentina has established and continues to strengthen environmental institutions responsible for the monitoring and control of mining environmental regulations at the provincial level; and (d), federal and provincial mining institutions are developping a permanent environmental monitoring system with respect to sector activities. Specific program activities would be sustained because: (a) a key component consists in information, policy development and institution-building; (b) remediation works will be (i) designed according to internationally accepted technological standards, (ii) selected with the active participation of stakeholders and (iii) implemented in an accountable way. 8. Lessons learned from past operations in the country/sector Investment loans in actual environmental clean-up of past environmental damages or hazards related to mining activities (e.g. Bolivia and Bulgaria) are rather new for the Bank. For this reason, and also because of dealing with uranium mining, the proposed project would be of an innovative character. However lessons have been learned from the projects mentionned hereabove, as well as from a number of industrial privatization projects and from a growing experience in the industry with respect to environmentally sound mine closure, more particularly from uranium districts in Canada (Lake Elliott, Saskatchewan), Germany (WISMUT reclamation program), Spain and the United States (e.g. the UMTRA project). The main lessons learned and reflected in the project design include: (a) the need to develop a comprehensive process instead of a piecemeal or purely engineering-focused approach, including inter alia, an environmental management policy; the institutional capacity for management and monitoring; information and consultation procedures; an integrated remediation plan including all identified sites; and alternatives, risks and cost-benefits assessments; (b) the importance to improve trust with stakeholders with respect to information and proposed technical solutions; (c) the need to clearly define and agree with stakeholders about environmental liabilities and present as well as future obligations with respect to monitoring and maintenance; (d) the importance for Argentine institutions to benefit from international best practice and leading-edge technology; (e) the importance to coordinate efforts and information with other environmental and mining governmental and non governmental organizations at the local, provincial and federal levels; (f) the importance of consistent ownership and/or commitment to implement environmental remediation measures (community, CNEA and Government levels) 9. Program of Targeted Intervention (PTI) No 10. Environment Aspects (including any public consultation) Issues. Investments under the proposed Project are related to the decommissioning, decontamination and/or remediation works related to the - 4 -  closure and post-closure of uranium mining and mineral processing facilities under the management responsibility of CNEA. There are no investments in mining operations. Identified issues include: (i) Environmental hazards from radiation and radioisotopes released from the tailings either to atmosphere or to the hydrosphere and resulting in on-site radiation exposure, inhalation of radon gas and its daughter products, inhalation of dust particles containing radionuclides, or internal contamination resulting from ingestion of dissolved radium or uranium in water and reaching the foodchain; the tailings may also create problems related to mining waste in general, for example increased turbidity in watercourses (Los Gigantes, San Rafael), or acid rock drainage. Because of the presence of residual long-lived radioisotopes, the tailings will remain radioactive for ever at the human timescale; however, the concentration of radioactive contaminants in uranium mine and mill tailings is low to very low, by comparison with waste generated at other parts of the nuclear fuel cycle, and consequently, exposure risks are limited, particularly for humans, unless extended over a long period of time. (ii) Potential environmental impacts related to remediation works (e.g. dust and radiogenic contamination related to tailings and earth movement, transport-related impacts and others) . (iii) Lack of an environmental policy definition, reduced institutional management capacity and absence of a long term, comprehensive and integrated environmental management plan for CNEA's sites. (iv) Reduced application of consistent cost-benefit or cost-efficiency criteria for environmental priority setting and selection of mitigation solutions. (v) Lack of consistent public information and consultation process. (vi) Lack of a systematic environmental information and monitoring system. (vii) Public risk perception is, as a rule, higher than shown from technical risk assessments. And, (viii) CNEA's limited public credibility with respect to environmental mitigation proposals - although CNEA shows a good technical capacity -, mainly as a consequence of issues described under (v) and (vi) . Other identified issues include: (i) Argentine environmental norms and standards are not always consistent with both adequate risk mitigation and cost effective environmental management. And (ii), the scope of CNEA's environmental liabilities is not always accurately defined (e.g. what happens when CNEA has decommissioned and decontaminated a site which is then transferred to another authority or owner; or in the case of private operations?). Public consultation. An extensive public consultation program has been carried out in Malargue as part of the process of project design and approval, as defined by the the Mendoza Province environmental regulations. The overall program EA, prepared by CNEA, is presently submitted to stakeholders for their evaluation. Comments will be integrated in the final version. 11. Contact Point: Task Manager Gotthard Walser The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: +1-202-473 4234 Fax: +1-202-522 0396 Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. - 5 -