Kasese Cobalt Company Limited Summary Of Project Information (SPI)       Project Name      Uganda-Kasese Cobalt Company                Region    Sub-Saharan Africa        Sector       Project No004895   Projected Board DateMay 17, 1995   Company NameKasese Cobalt Company Limited (KCC)   Technical Partner and/or Major Shareholders    	LaSource Compagnie Minière (LaSource) 55%, Kilembe Mines Limited (KML) 25%, IFC 8%, Commonwealth Development Corporation (CDC) 8%, Proparco 4%.  LaSource is owned 60% by Normandy Poseidon Ltd, a publicly listed Australian Company, and 40% by Bureau de Recherches Géologiques et Minières, a French state owned natural resource and geological survey group.    Project Cost Including proposed IFC investment    	Total project cost is $100 million to be financed on a 60/40 debt:equity basis.  Senior Loans of $60 million will be financed by IFC, CDC, Proparco and the European Investment Bank (EIB).  IFCs investment will be $3.5 million in equity and $15.8 million in loans.    Location of project and Description of site    	The project is located at Kasese in the Western region of Uganda, 420 km west of Kampala.  The project site consists of a sublease from KML of approximately 75 ha of land that covers the existing pyrite stockpiles and sufficient area for the proposed processing plant and ancillary facilities.    Description of Company and Purpose of Project (include IFC role\development impact)    	The project will process an existing stockpile of cobalt-rich pyrite concentrate, in order to produce 1000 tonnes per annum of cobalt. The stockpile, of slightly more than 820,000 dry tonnes of pyrite concentrate assaying 1.38% cobalt, will provide sufficient reserves to produce 10,300 tonnes of cobalt over 11 years.  The concentrate stockpile remains from the mining and processing of a copper sulphide ore by KML.  The deposit was mined for 26 years (1956-1982) and processing the ore gave a copper concentrate which was sent to the Jinja Copper Smelter, and a cobalt rich concentrate which was stockpiled at the Kasese railway terminal, 12km from the Kilembe mine.  The project will utilize a bioleaching process to produce cobalt cathodes (99.8% cobalt).  The project will include a limestone quarry to produce 90,000 tpa of limestone to be used as a neutralizing agent, and a small dedicated 10 MW hydro-electric plant to provide power to the project. The project has a number of features that ensure a strong positive developmental impact.  The stockpile is a valuable resource which is not currently utilized and erosion of the stockpile has had a negative impact on the surrounding environment.  Reprocessing of the stockpile results in a significant environmental improvement by placing newly processed tailings in a more secure tailings deposit in a chemical matrix significantly less susceptible to leaching of heavy metals.  The project will provide a boost to economic activity through a combination of increased employment, local purchasing, exports and taxation receipts to Government.  The hydro electric power station will have surplus capacity during periods of high rainfall, and will be able to provide power to the national grid.  Commercial bank finance is not currently available to Uganda in sufficient quantities of the required maturity to finance a private sector project of this size. IFC involvement is essential to complete the financing plan.    Environmental Category and Issues    	This is a category A project according to IFC''s environmental review procedure because diverse and significant environmental impacts may result.  Environmental issues relating to this project include: water supply and management for process water and hydroelectric power, tailings disposal following reprocessing, dust control, noise impacts from reprocessing and quarry operations, site reclamation, resettlement, and public consultation and disclosure. The existing cobalt concentrate stockpiles are severely eroding and visibly contaminating waterways and shorelines of Lake George within the Queen Elizabeth National Park.  The sponsor has implemented mitigation measures to intercept and control surface runoff above and on the site in order to minimize further erosion of the stockpiles.  Reprocessed tailings will be placed in new engineered tailings dams, and land reclamation will be phased throughout the projects lifetime to reduce erosion and dust generation.  Process water will be recycled, and any excess will be neutralized prior to discharge.  The sponsor has agreed to compensate land users for the hydroelectric plant transfer canal right-of-way and will provide water taps for local use.  The sponsor has also agreed to coordinate its construction plans for the hydroelectric plant for potential offtake of tailrace water by local water users.  Noise effects on residents near the projects limestone quarry will be mitigated by using conventional excavating techniques, and, when blasting is required, limiting blasting to once per week and using low burden explosives and microdelays to minimize noise. Approximately 200 squatters living in huts on the polluted sediment trails were relocated in 1992 and compensated by the municipality (funds for compensation were provided by the sponsor).  The sponsor has completed a detailed EA for the project, which incorporated the results of public consultations in Kampala and Kasese, and which was made available in-country through Ministries and Local Government.       The Environmental Assessment is  from the Public Information Center.       Host country location of environmental documents    Institute of Environment, Makerere University, Kampala; Directorate of Environmental Protection, Kampala; and Kasese District Offices, Kasese.      Date SPI sent to PIC March 19, 1996   For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 676-0365  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).