ISPAT-KARMET LTD Summary Of Project Information (SPI)       Project Name    Kazakhstan: Ispat Karmet              Region    Central Asia, Middle East & N. Africa      Sector   Project No007837   Projected Board DateOctober 3, 1997   Company NameIspat Karmet (the Company)   Technical Partner and/or Major Shareholders    	The company is 100% part of the LNM Group (the Group), a London based group which is the worlds largest integrated mini-mill producer of steel, with steel shipments (excluding the company) exceeding 6 million tons a year.  The Groups net sales (excluding the Company) for 1996 was about $2 billion.  The Group has significant experience in managing steel plants as well as experience in managing coal mines and power plants.     Project Cost Including proposed IFC investment    	$831 million with a proposed IFC investment of $132.5 million, including an A Loan of $65 million and a B Loan of $67.5 million.  IFC is also considering a possible equity investment of $5 million.    Location of project and Description of site    	The steel and power plants are located in Termirtau, Central Kazakhstan, 1,200 km North of the capital, Almaty.  The coal mines are located about 38 km East of Termirtau.    Description of Company and Purpose of Project   (include IFCs Role and Development Impact)    	The company, formerly one of the largest producers of flat steel in the CIS with a capacity of 6 million tons of liquid steel, also owns 15 coal mines with a current capacity of about 15 million tons of coal a year, and two captive power generation plants with a combined rated capacity of 575 MW.  The steel plant along with the smaller 140 MW power plant was privatized in November 1995 through a competitive tender.  The larger 435 MW power plant was privatized in May 1996 through a Dutch Auction and the coal mines were privatized in July 1996.  The Group bought the assets in all three cases to form the company.      	The purpose of the project is to enable the company to compete effectively in the international steel market by:     - restoring capacity in the steel, power and coal operations;   - expanding the product mix to higher value added products; and    - improving the environmental situation of the company to comply with relevant World Bank Environmental and Worker Health and Safety Guidelines.      The Group believes that IFC has a key role to play as IFCs presence provides the Group and other financiers with much needed political comfort.  In addition, IFCs due diligence has provided comfort to other financiers and has enabled the company to approach the bond market for a $150 million bond.  The Project will have a major developmental impact, both for Kazakhstan as a whole and for the regional development of the Karaganda area.  For Kazakhstan as a whole, the project will support the largest privatization to date, lead to significant technology transfer, encourage the presence and familiarization of foreign lenders in Kazakhstan and help bring in further foreign investment.  In addition, the project will lead to Kazakhstans largest export earnings besides earning from natural resources like oil, gas and gold.  For the Karaganda region, the developmental impact will be crucial.  The entire towns of Karaganda and Temirtau as well as the surrounding area (about 1 million people) indirectly depend on the Company, which used to previously account for nearly 10% of Kazakhstans GDP.  Employment not just in the plant, but in the area was thus heavily affected in 1995, when the plant was nearly closed and the workers were not paid.  The success of the project is thus essential to the economic well being of the region.      Environmental Category and Issues    	This is an environmental review Category A project.   EBRD (the lead financing agency with a loan of $217.5 million)and IFC retained Dames & Moore as an independent environmental consultant to carry out and environmental audit (EA) and an environmental impact assessment (EIA) of all the operations of the company.  The main areas of environmental concerns are:     - dust emissions;    - emissions of SO2, NOX, and volatile organic compounds;    - noise and vibration;   - effluent waste water;    - slag and other waste disposal issues;    - the presence of methane gas in the coal mines; and   - occupational health and safety concerns.      In this context, Dames & Moore, EBRD, the Company and IFC have developed three Environmental Action Plans (EAPs) for the steel works, the power plant TEC-2 and the coal mines.  The management has confirmed that it is committed to the implementation of the EAPs, through which the facilities will gradually reach full compliance with Kazakh environmental standards and with World Bank Environmental and Worker Health and Safety Guidelines.  Most of the actions required will be implemented within a three year period.  Some actions will require an additional implementation period, however, not exceeding five years except for the implementation of electrostatic precipitators in the TEC-1 power plant which will, due to technical constraints, have to be implemented gradually over eight years.  A Public Information Plan (PIP) has been carried out as part of the environmental due-diligence process.  The main objective of the PIP was to provide potentially affected residents of Temirtau, Karaganda and other communities with objective information concerning environmental impacts associated with the proposed investment program, and to incorporate, where possible, the concerns of the public into the final project plans.  The PIP, which included provision of information through local mass media including a dedicated television program as well as several public meetings, was fully implemented.  As per World Bank Environmental and Worker Health and Safety Guidelines, the Executive Summary of the Environmental, Health and Safety Audit and Assessment has been submitted to the Board of Directors.  The full environmental documentation (the EIA and the Executive Summary in Russian) has also been released for public review locally and regionally in Temirtau and Karaganda.    The  is  from the Public Information Center.       Host country location of environmental documents    The Companys office in Termirtau and in Karaganda.      Date SPI sent to PIC September 3, 1997   This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:    Corporate Relations Unit    Telephone: (202) 473-3800   Fax: (202) 974-4384  Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).