Announcement of Project will Strengthen Vital State Enterprise in Mauritania on December 19, 1985

FOR IMMEDIATE RELEASE !7'1TEmrn.Tiot:Ar. MO!-:ETARY FUND JOINT LIBRARY World Bank I~!T[P.:'':,~";l'.J!I!\L Bl\~:::: iQR f1ECONS1 ~~uc·noN P).ND D£VE~.OPMENT WASHINGTON, D. C. 20431 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 86/42 Contact: Loso Boya December 19, 1985 (202) 477-3294 PROJECT WILL STRENGTHEN VITAL STATE ENTERPRISE IN MAURITANIA Efforts by Mauritania to diversify its economy will receive a boost from a project aimed at strengthening an important state industrial and mining enterprise. The state enterprise, Societe Nationale Industrielle et Miniere (SNIM), is investing $92.2 million in a project that will help it continue to improve its management and reduce production costs. The World Bank is providing a loan of $20 million to partly finance the project. SNIM operates the country's iron ore mines, which, after fishing, represent the second most important sector of the economy. Production capacity of iron ore is about 11 million tons a year. The corporation is an important source of foreign exchange earnings for Mauritania. The objective of the project is to enhance SNIM's international competitiveness and to help preserve the corporation's role as a financially viable enterprise that contributes positively to the economy. The project includes the rehabilitation of SNIM to consolidate and further advance an ongoing action program to improve the managerial and technical capabilities of the corporation. A series of measures will be undertaken to improve and reduce costs in management, operations, procurement and investments, personnel, overhead cost, and cash management. Equipment that is vital to SNIM's operations, training for staff, and other technical assistance will be provided. The project is expected to be completed by mid-1988. SNIM will spend $36.4 million of its own resources to carry out the project. The Kuwait and Arab Funds are providing $18.2 million; the Abu Dhabi Fund, $5.8 million; the Saudi Fund, $5.7 million; the Overseas Economic Cooperation Fund of Japan, $3.1 million, and Caisse Centrale de Cooperation Economique of France, $3 million. The World Bank loan is for 15 years, including three years of grace, with a variable interest rate, currently 8.82 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.