Togo - Phosphate Engineering and Technical Assistance Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. P-3084-To REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO' THE REPUBLIC OF TOGO FOR THE PHOSPHATE ENGINEERING AND TECHNICAL ASSISTANCE PROJECT June 4, 1981 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency unit = CFA franc (CFAF) Calendar 1979 May 1981 US$1.00 = CFAF 210 CFAF 250 CFAF 1,000 = US$4.76 US$4.00 FISCAL YEAR Republic of Togo and OTP January 1 to December 31 ABBREVIATIONS CIMAO Ciments de l'Afrique de l'Ouest OTP Office Togolais des Phosphates P20s5 = Phosphoric Pentoxide - Nutrient Element in Phosphatic Fertilizer tpy = Metric tons per year  FOR OFFICIAL USE ONLY REPUBLIC OF TOGO PHOSPHATE ENGINEERING AND TECHNICAL ASSISTANCE PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Togo Beneficiary: Office Togolais des Phosphates (OTP) Amount: SDR 4.8 million (US$5.7 million equivalent) Terms: Standard IDA terms Onlending Terms: Government of Togo to OTP for 10 years including 3 years of grace at 11% per annum. Project Description: The objective of this project would be to determine the technical and economic viability of developing a phosphate fertilizer project in Togo. Such a phosphate fertilizer project would manufacture for export phos- phoric acid and phosphate fertilizers from lower grade phosphate rock from the Dagbati deposits and from recovered slimes. The proposed engineering project would comprise a feasibility study and related geo- logical, engineering and infrastructural studies. It would be executed in two phases, with the second phase carried out if the first phase has confirmed a potentially economic phosphate fertilizer project. Phase I (a) evaluation of the phosphate deposits at Dagbati which are considered to be of adequate quality and quantity to support a phosphate fertilizer project. Further geological work would be carried out to estimate precisely the reserves in the deposits, develop a mining plan and assess mining equipment requirements. Experimental work would be carried out to establish the optimal bene- ficiation process for this rock; (b) laboratory and pilot plant tests on phosphate rock and on phosphate slimes recovered from the existing rock beneficiation plant, to determine optimum processing conditions for the manu- facture of phosphoric acid and phosphate fertilizers; This document has a restricted distribution aid may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without IFC authorization.  - ii - (c) preparation of an interim report based on the above studies assessing the economic attrac- tiveness of the phosphate fertilizer project and determining the optimal project scope; Phase II (d) determination of the optimal location for the phosphoric acid and phosphate fertilizer plants taking into account infrastructural requirements such as fresh water, effluent disposal, railways and port facilities, and estimation of investment and operating costs for alternative scopes of full-scale mining and processing operations; (e) market analysis, marketing strategy and shipping arrangement studies to determine prospects for exporting phosphate fertilizer products; (f) further evaluation of other potential phos- phate rock reserves adjoining Togo's main known deposits; and (g) if the feasibility report confirms the tech- nical and economic viability of a phosphate fertilizer project in Togo, preparation of basic engineering and contract documents, and study of project organization. The major risk facing the proposed engineering project is that if the feasibility study were to conclude that the final project is not technically and economically viable, the investments made in the study would not be recovered, apart from those concerning the evaluation of Togo's other potential phosphate deposits. This risk has been minimized by initiating the study only after substantial core drilling and rock processing tests have been completed, and economically- sized phosphate deposits have been proven at Dagbati.  - iii - Estimated Cost: The estimated cost of the project, exclusive of taxes from which it is exempt, is as follows: Foreign Local Total ----- TUS$ millions) ------ Rock Beneficiation and Reactivity Testing 0.6 0.2 0.8 Mining Plan and Mine Studies 0.2 0.4 0.6 Infrastructural Studies 0.4 0.1 0.5 Market Studies 0.1 0.0 0.1 Further Evaluation of Potential Deposits 1.0 0.9 1.9 Basic Engineering, Financial/Economic Analysis, and Feasibility Report 2.2 0.2 2.4 Base Cost 4.5 1.8 6.3 Physical contingencies 0.5 0.2 0.7 Price contingencies 0.7 0.3 1.0 Total Project Cost 5.7 2.3 8.0 Interest Charges during Project Implementation 0.1 0.8 0.9 Total Financing Required 5.8 3.1 8.9 Financing Plan: Foreign Local Total ----- (US$ millions) ------ IDA 5.71/ - 5'71/ OTP 0.1 3.1 3.2 Total 5.8 3.1 8.9 Estimated Disbursments: IDA FY 1982 1983 1984 ---- (US$ millions)