Document of The World Bank FOR OFFICIAL USE ONLY Report No: 24401 IMPLEMENTATION COMPLETION REPORT (IDA-28740; PPFI-P7560; PPFI-P7561) ON A CREDIT IN THE AMOUNT OF SDR 8.3 MILLION TO THE REPUBLIC OF GUINEA FOR A MINING SECTOR INVESTMENT PROMOTION PROJECT 06/25/2002 This document has a restricted distribution and may be used by recipients only in the performnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective December 2001) Currency Unit = FGN 1,000 GNF = US$ 0.50 US$ I = GNF 2,000 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ACG Alumina Company of Guinea ANAIM Agence Nationale d'Amenagement des Infrastructures Minieres Aredor Aredor S.A. (a diamond mining company) BGGA Bureau Guineen de la Geologie Appliqu6e CBG Compagnie des Bauxites de Boke FGN Franc Guineen Friguia Guinean alumina production company (operation near city of Fria) GNF Guinean Franc LNG Laboratoire National Guineen MMGE Ministere des Mines, de la Geologie et de l'Environnement MSIPP Mining Sector Investment Promotion Project OFAB Office d'Amenagement des Bauxites de Boke PACV French acronym for Village Communities Support Project PRCI French acronym for Capacity Building for Service Delivery Project PSR Project Status Report SAR Staff Appraisal Report SBK Societe des Bauxites de Kindia SDR Special Drawing Rights STG Services Techniques Generaux Vice President: Callisto E. Madavo Country Director: Mamadou Dia Sector Manager: Peter A. van der Veen Task Team Leader: Heinz Hendriks GUINEA MINING SECTOR INVESTMENT PROMOTION PROJECT CONTENTS Page No. I. Project Data I 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 6 6. Sustainability 8 7. Bank and Borrower Performance 8 8. Lessons Learned 9 9. Partner Comments 10 10. Additional Information 10 Annex 1. Key Performance Indicators/Log Frame Matrix 11 Annex 2. Project Costs and Financing 13 Annex 3. Economic Costs and Benefits 15 Annex 4. Bank Inputs 16 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 17 Annex 6. Ratings of Bank and Borrower Performance 18 Annex 7. List of Supporting Documents 19 Annex 8. Borrower's Contribution 20 Project ID: P001077 Project Name: MIN SECT INV PROMOT Team Leader. Heinz Hendriks TL Unit: CMNPO ICR Type: Core ICR Report Date: June 25, 2002 1. Project Data Name: MIN SECT INV PROMOT L/C/TFNumber: IDA-28740; PPFI-P7560; PPFI-P7561 Country/Department: GUINEA Region: Africa Regional Office Sector/subsector: NN - Mining & Other Extractive KEY DATES Original Revised/Actual PCD: 05/08/95 Effective: 06/30/96 10/10/96 Appraisal: 06/15/95 MTR: 05/31/98 06/15/98 Approval: 06/04/96 Closing: 12/31/2000 06/30/2001 Borrowzer/Implementing Agency. GOVERNMENT/Ministry of Mines, Geology and Environment Other Partners: French Cooperation STAFF Current At Appraisal Vice President: Callisto E. Madavo Jean-Louis Sarbib Country Afanager: Mamadou Dia Silvia Sagari Sector Manager: Peter van der Veen Ian Christie Team Leader at ICR: Heinz Hendriks ICR Primary Author: Heinz Hendriks 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project objectives were to increase the mining sector's contribution to national income and public revenues by: (i) strengthening the Government's capacity to act as a facilitator and regulator of mining activities and laying the groundwork for efficiently implementing new sectoral policies and procedures; and (ii) helping attract private investments for the development of the sector. The objectives were clear and important for the mining sector. Due to the sector's dominant role in the country's economy and its potential to be one of the most important pillars for economic growth, the objectives were also important for the country and for the Bank's Country Assistance Strategy, which singled out agriculture and mining as growth sectors. There were geological, political and financial risks that could have endangered the long-run prospects of the sector and the successful implementation of the project. Potential private investors could have abstained from investing in Guinea for geological and political reasons, while the Government could have failed on following through on implementing reform measures, as well as on assuring the availability of counterpart funds for project implementation. 3.2 Revised Objective: The development objective has not been revised. 3.3 Original Components: The project consisted of five components: * Legal Component. Under this component, short-term consultant services were to be provided for improvement of the legal and regulatory framework of the mining sector that would put Guinea at par with its competitors for intemational mining investment. The task was to include the elaboration of a model investment contract consistent with the mining code. * Data Component. Under this component, service contracts procured competitively and supervised under a twinning arrangement between MMGE and a foreign geological survey firm, were to deliver geophysical and geological data and maps, complemented with the mining cadastre and mining information, all installed ready for use on new computers. The component was important because of existing evidence that mining investors prefer countries with well developed geological data systems. * Institutional Component. Under this component, short-term consultant services were to be provided for assisting MMGE to increase the efficiency of its core services and reduce or divest non-essential or commercializable services. The task included improvement of organization and management of the granting of mining rights, the promotion of new investment and field surveillance of mining activities and their environmental impact. * Restructuring Component. Under this component, short-term consultant services were to be provided for assisting the Government in preparing plans for redefining its role in mining enterprises in which the Government was holding a major interest. The task was to include the elaboration of plans for divestiture of social services. * Training. This component was to support and supplement the four main components with courses, workshops, and seminars on relevant topics, with emphasis on local training and events. The component also included participation in international mining conferences for training and promotion purposes. The components were closely related to achieving the objectives. They were based on relevant lessons learned in prior projects in the country and in the mining sector, in Guinea as well as worldwide. Because of weaknesses in the country's institutional capacities, the components were designed mainly for execution by experienced international consultants and service companies. This was in particular true for the Data Component, which included highly specialized technical activities. 3.4 Revised Components: -2 - The components have not been revised. 3.5 Quality at Entry: The ICR rating for quality at entry is Satisfactory. The project objectives were consistent with the CAS and government priorities. The project design considered adequately the weaknesses in local implementing capacity and the geological, political and financial risks of the project. The contracting of services for the Data Component and their supervision under a twinning arrangement proved to be the right decision. Focusing the geological work on mapping of the northeastem part of the country did attract the interest of companies for gold and diamond exploration. The reform measures taken by the Government in the bauxite and alumina subsector improved the management of existing operations and did place Guinea on the intemational scene as a serious contender for a new large alumina investment. The design arrangements made for provision of counterpart funds effectively reduced the risk of a financial impasse for project implementation. The development impact indicators, consisting of the number of new gold and diamond mines in operation as well as of the number of active exploration permits, were selected prudently and proved to be attainable without change. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The project clearly achieved its objectives of: (i) strengthening the Government's capacity to act as facilitator and regulator of mining activities and laying the groundwork for efficiently implementing new sectoral policies and procedures; and (ii) helping attract private investment for the development of the sector. The Government's capacity was strengthened through harmonization of laws, institutional strengthening of essential services and abolishment of non-essential services. Groundwork for efficient implementation of new sectoral policies and procedures was laid by the adoption of a modern mining code and the abolishment of OFAB at the outset of the project. These measures were followed by the transfer of management to private operators and the abolishment of ANAIM. New private investment was attracted for two gold and two diamond mines, for urgent rehabilitation work at the Friguia alumina plant, as well as for a significant increase of exploration activity. These achievements exceeded the performance indicators estimated at appraisal, which only foresaw one diamond mine in operation and no investment for the Friguia alumina plant. In addition, the project clearly helped to identify future major projects for alumina production and iron ore mining, as well as to define a strategy for making them happen in the medium and longer run. At completion of the project, Guinea had increased the export revenues from mining to over $500 million per year, an increase of more than 20% from the low level of about $400 million per year in the mid-l 990s when the project was appraised. This was achieved despite a significant drop in world market prices for bauxite, gold and diamonds. Essentially, the increase is due to the output of new industrial gold mining, a development to which the project contributed. However, despite the increased exports, Guinea could not maintain its level of tax revenues from mining. Taxes paid by industrial mining operations dropped from $109 million in 1995 to $79 million in 2000. The drop is caused by a deterioration of CBG's profitability, which in turn is caused chiefly by a decline of the bauxite price and, to a lesser degree, by more difficult mining conditions that have been largely offset by the company's cost reduction efforts. In addition, the tax rate for CBG returned from the very unusual and unsustainable level of 85%, which was in effect in the mid-1990s on the basis of a temporary agreement, back to the 65% of the original concession agreement. To maintain its role in international bauxite mining and attract investment for future downstream alumina production, Guinea must fully respect the agreements with its international aluminum industry partners and adapt to existing international standards. It was therefore unavoidable for Guinea to effect the tax change for CBG. -3 - While economic growth and related indirect contribution to poverty reduction remain the most important potential impact of mining, the sector can also directly contribute to poverty alleviation, by improving its impact on sustainable development of mining communities. The recognition of the need to further contribute in this way and to decentralize mining administration services is an additional achievement of the project. By now, steps have been taken to integrate mining into the Bank's two new pillar operations, the PACV and PRCI, for implementing the new Country Assistance Strategy. 4.2 Outputs by components: Legal Component. The output of this component is rated Satisfactory, although the originally intended activities under the component were only partly completed. The non-completion is mainly due to a difficult relationship between the client and the consultant that finally led to a mutually agreed early termination of the contract and relates principally to the design of a model investment contract for mining investment, an activity that was considered important initially. However, feedback received from mining companies indicates that a standard contract is not always preferred over a negotiated contract and that the new mining code which was adopted by the Government already during appraisal of the project, is no longer a handicap for mining investments and contains sufficiently clear rules for the concessioning of mining rights. While the non-existence of a model contract remains a shortcoming, it is not a critical one. The main focus of the legal component has been on the harmonization of the mining code with other codes, in particular those related to water, forestry, urban planning, labor and the handling of explosives. Five interministerial regulations have been signed to this effect. Other positive contributions of the component have been an environmental audit of all mining operations and a bauxite study. They helped to set new directions, for decentralized services of the environmental authority and for renewed strategy focus on bauxite, the mineral in which Guinea has a clear comparative advantage. The outputs of the component have been measured in terms of average time lag between an application for an exploration permit and its issuance as well as in terms of the number of active exploration and mining permits. The targets for both indicators have been achieved. The average time lag between application and issuance of a permit was reduced from about 2 months in 1996 to about I month in 2000, while in the same period the number of active permits was increased from less than 30 to 45. Data Component. The execution, output and outcome of this component have been Highly Satisfactory. An airbom geophysical survey and a new geological map of the gold-bearing part of Northeastern Guinea were completed on time and below estimated costs. In parallel, the Government of France financed the completion of the geological map of Southeastern Guinea. Data from the geophysical surveys and the geological mapping have been entered into a computerized geological and mining information system. A website has been created, providing access to data and additional information. The maps have been printed and published, and were available at a Conakry mining symposium in early 2000. The component contributed greatly to a steep increase in exploration activity by international investors, in particular for gold mining, but also for iron ore and diamonds. The increased exploration activity led to the development of a new gold mine and also of a new diamond mine. Hitherto unknown 'world-class', high-grade iron ore deposits in the Simandou mountain range have been discovered, increasing Guinea's prospects to become also a first-rate candidate for future iron ore mining, in addition to its traditional role in world bauxite mining. Institutional Component. The output of this component is rated Satisfactory, because of the shifted emphasis towards essential services and decentralization, the arrest of unsustainable and redundant services and the improvement of governance and transparency. MMGE's capacity for investment promotion and information delivery has been significantly strengthened. In addition, two important conferences were held: a mining symposium in Conakry at the beginning of 2000; and one year later, a roundtable in Paris on the - 4 - opportunity of constructing a greenfield alumina plant based on the important bauxite reserves of the Boke area. The mining cadastre has now been established as an independent unit reporting directly to the Minister. Guidelines for more efficient field inspections and services have been prepared. It has been recognized by the Ministry that, as the next priority task, its decentralized services in the mining areas need to be strengthened with the overriding goal to facilitate and promote sustainable development in mining areas. This new policy direction has been developed during the later stages of the project, as part of a dialogue with the Government on the project's results and next steps. MMGE stopped supporting unsustainable technical services that are not compatible with the Ministry's role as a regulator and for which the state cannot afford to provide a budget. A ministerial order dissolving STG, BGGA and LNG was issued and put into effect. While the order could not solve the problem of personnel adjustment (a systemic problem of public services in Guinea that transcends the capacity of any ministry), at least it ascertains that no unsustainable programs are maintained and that the personnel is freed for more useful work within the Ministry. Restructuring Component. The output of this component is rated Satisfactory, because all mining operations are now managed by private partners and government interference with operation of the mines has been greatly reduced. When the project was prepared and appraised, the Aredor diamond mining operation was fully government-owned, due to withdrawal of the previous private partner (who had a 51% share). At the early implementation stage of the project, the Government attracted a new partner (with a 85% share under the new mining code). CBG, the country's 'flagship' mining enterprise that dominates the national economy with regard to foreign exchange earnings and government revenues, is now fully managed by Alcoa, the company's largest private shareholder. The previous post of a national deputy manager, a political appointee, has been abolished. This action has been much appreciated by the private investors. Friguia, Africa's sole alumina plant, became 100% government-owned when its previous private partners withdrew due to notorious non-profitability and a dispute with the Government over management issues. Thereafter, the Government succeeded in transferring the operation of the plant and the marketing of the product to the private group ACG under a long-term (25 years renewable) leasing agreement. ACG carried out overdue repairs and overhauls, stabilized the production and is serving old Government debt related to the plant. SBK, a cold war era bauxite venture between the former Sekou Toure Government and the Soviet Union, followed the successful long-term leasing example of Friguia. SBK is now fully run by the private Russian Aluminum company, which is committed to overdue repairs and modernizations. While the restructuring of the four companies (Aredor, CBG, Friguia and SBK) falls short of the transfer of assets, it is a major step forward that has increased potential investors' interest in the country's mining sector. While the original scope of the project included only technical assistance for the preparation of enterprise restructuring or privatization, the management of all enterprises was actually privatized and, in addition, a transfer of assets to the private partner was achieved at Aredor. Even the transfer of assets in CBG and Friguia was actually tried with involvement of a competent investment bank. However, at this stage no investors were seriously interested. The original plans for social service divestiture have been partly implemented at SBK, but became of less importance once the mining operations were transferred to full private management. The Government has demonstrated significant readiness to support the private operators if they deem the separation of social services necessary. Training. The output of this component is rated Satisfactory, because it increased competence and motivation, and because it helped to put the focus on essential services. Much of the training was provided locally with local trainers in seminars to enhance institutional capacity as well as in general courses on computer literacy and English language for several hundred persons. Training abroad was provided to 90 persons, mainly for subjects of geo-technical and mining administration interest, as well as to allow Guinean experts to participate in intemational mining conferences. Every year, the training program was - 5 - retained by MMGE on the basis of needs and merits. All candidates for training abroad were approved by the Minister. The total training costs were shared between IDA (69%), the French Cooperation (27%) and the Government of Guinea (4%). Despite the cost sharing, there was a surpassing of IDA's original cost estimate. The expenses incurred are considered justified, given the serious weaknesses in institutional capacity at the beginning of the project, the very international nature of mining and the related need to be present in key intemational events for mining promotion, as well as the need to award and motivate staff. 4.3 Net Present Value/Economic rate of return: As a capacity building and technical assistance operation, this project was not subject to an economic evaluation in terms of net present value and economic rate of return calculations. Nevertheless, a tentative economic rate of return of 55% was calculated at appraisal. Going through the same calculation with updated assumptions (Annex 3), a slightly higher rate is obtained, despite lower mineral prices but higher than originally estimated export quantities that more than offset the price decline. As expressed at appraisal, the project did help open the doors to new private investment in bauxite, alumina, gold and diamond mining. As a result, Guinea did further consolidate its leading role as a bauxite/alumina exporter, and did become a significant regional producer of gold. Despite decline of intemational mineral prices, the export value did increase by more than 20% over the US$400 million level prevalent at appraisal. However, despite this increase, the tax revenues paid to the national budget still declined, because CBG's production costs increased due to geology, and depreciation of new investment largely compensated profits from gold mining. 4.4 Financial rate of return: A financial rate of return calculation was not applicable to this project because the credit was not granted to a revenue eaming entity. Without the project and the increase in bauxite and gold output, the Govemment's tax revenues would have been still lower. I addition, the national budget would have been burdened with debt service for old existing government debt related to the Friguia plant that is now serviced by ACG as well as with hidden subsidies for SBK. It is estimated that the positive impact on the national budget averages about US$5 million per year over the medium run, an amount that justifies financially the project expenses. However, the country's overall revenue receipts from mining, which were about US$100 million per year are presently about 10-20% lower due to lower prices for the output on intemational mineral markets, gradually increasing mining costs at CBG due to geological conditions and temporary depreciation charges for recent investments. 4.5 Institutional development impact: The institutional development impact of the project has been significant. The Government clearly retired as an operator from the country's mining operations, while the original project concept foresaw neither the transfer of management nor privatization of mining enterprises, but only the provision of technical assistance for preparation of restructuring. Though today the Govemment is still to a large extent owner of the mining assets, this is due primarily to history and a related reluctance of private partners to buy the Government shares. All companies are now govemed by commercial company laws (applicable to a S.A., or Societe Anonyme). Under the long-term leasing contracts the new private operators have assumed the full economic risk of operation, without any guaranteed compensation for management. At the Govemment level, the regulating and facilitating capacity of MMGE has been strengthened. Budgetary transparency and efficiency was greatly improved by the abolishment of ANAIM. A commitment was obtained to the strengthening of decentralized prefectural services for mining and environment with the objective of facilitating and actively contributing to the sustainable development of communities in mining areas. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: - 6 - Because of the strong dependence of mining operations on international mineral markets, the project has been subject to factors outside the control of government and implementing agency. As explained in Section 4.4, the outcome in terms of annual government revenues from mining would have been higher had mineral prices not declined. Also, the disinterest of international foreign investors, in particular of major aluminum companies, for historical and world market reasons, is to a large extent outside the control of govemment and implementing agency. These factors are common in the mining industry and present inherent risks of mining projects. They can hardly be reduced through project design. Avoidance of involvement in the sector would eliminate the risk but also loose the opportunity for important improvements. 5.2 Factors generally subject to government control: There are three areas in which different government practices and policies could potentially have increased the project's positive impact: * Inter-ministerial cooperation. The harmonization of legislative texts from different codes has been hampered by difficulties in arranging inter-ministerial cooperation. Time and efforts could have been reduced and the process of harmonization could have been carried further if the cooperation had been better. * 'Per diem 'payments. The difficulties encountered in executing the legal component were caused to a great extent by the insistence of the responsible legal department on the payment of customary per diem bonuses and by the refusal of the consultant to effect such payments. * Employment of civil servants. The positive impact of the abolishment of BGGA, STG and LNG would have been augmented if it had been possible to release a portion of the personnel with fair compensation. It is recognized that these factors are of systemic nature and go far beyond the scope of the project. They are difficult to change and require time for proper problem resolution in a broad framework. 5.3 Factors generally subject to implementing agency control: MMGE, partly by own decision and partly by pressure from other Government branches, negotiated mining rights with potential private investors in a discretionary and fairly non-transparent way. This was the case for bauxite and alumina concessions, in particular those related to the Dian Dian deposits in the Boke area. These negotiations were outside the direct scope of the project and the Government considered them as an additional vehicle to effect new mining investment. It is not known whether in the absence of such practices a larger aluminium company or consortium would have stepped forward with a major investment (present intemational market conditions are not favorable for it), but certainly the practice has not improved the country's reputation for mining investments. Also, a tendency of MMGE to get involved in the design of new mining projects may alienate some potential investors, who normally prefer total freedom in making their project design and investment decisions. On the other hand, it is realized that the strong efforts of MMGE in promoting projects increased some investors' interest. It appears that the Govemment is still searching for a proper balance between its keen interest in promoting mining investment and its new regulating and facilitating role, which requires a degree of detachment and transparency hitherto unknown to the Govemrnment. 5.4 Costs andfinancing: There have been no problems related to the costs and financing of the project. Two factors have been critical for this positive outcome: * External contracting of services. The services connected with the preparation of the geological maps - 7 - have been contracted out in large, comprehensive packages to experienced (prequalified) bidders. An alternative method, normally preferred by the client but carrying a much higher risk, would have been to engage the geological services of the state with external technical assistance. * AFD supportfor counterpartfunds. Based on an agreement between the Government of Guinea and the Govemment of France, a portion of the debt service for old Friguia loans has been allocated to cover the counterpart funds of this project. 6. Sustainability 6.1 Rationalefor sustainability rating: The sustainability of the project is rated Likely, because the Government made significant progress towards an acceptable policy and an enabling institutional environment, and because the Govemment has demonstrated its commitment to follow-up on the results and recommendations of the project. The present policy continues to encourage private ownership of mining operations and a regulatory/facilitating role of the state. It is unlikely that the achieved privatization of management of mining enterprises will be reversed; in contrary, full privatization has become more likely as a result of the project. Unsustainable mining services by the govemrnment have been arrested. Again, it is unlikely that the achievement will be reversed, but it is likely that the remaining issues identified under the project will be appropriately addressed in future. Furthermore, there is commitment to institutional and management changes that will permit a decentralization of mining and environmental services for facilitation of community driven development in mining areas. Linkages have been established with the Village Communities Support (PACV) and the Capacity Building for Service Delivery (PRCI) projects and the first steps of integrating mining into these two operations have started. The strengthening of local environmental services is expected to have a particularly positive impact on sustainability. 6.2 Transition arrangement to regular operations: While for the mining operations the transition has been made through introduction of private management and adoption of policy changes, the budgetary transition is still missing for the mining administration. Arrangements are yet to be made for Borrower-intemal financing of the essential services for mining that would reduce the dependence on donor support. It is expected that progress towards achievement of satisfactory budgetary arrangements for the mining administration will be made under the PRCI. 7. Bank and Borrower Performance Bank 7. 1 Lending: The Bank's performance in preparing the project is rated Satisfactory. The identification of the project was based on the adoption of a new mining policy by the Govenmment. During project preparation and appraisal, adequate consideration was given to technical, economic, institutional, financial management and procurement aspects, secured by an adequate quantity and quality of staff and consultants work input. Major lessons leamed from previous projects have been appropriately considered in the project design. Those lessons referred in particular to: (i) Government commitment (OFAB was abolished); (ii); counterpart funds (a special arrangement was made to cover these from sector-related debt public debt payments to France); and (iii) the implementing agency's capacity (geological mapping was contracted out). 7.2 Supervision: The Bank's performance in supervising the project is rated Satisfactory. There has been a continuity of Bank staff involved. Contacts with the implementing agency have been facilitated through the Guinea Country Office. Adequate attention was paid to the likely development impact and adequate consultation was maintained with the implementing agency on issues relating to project execution. Flexibility has been -8- demonstrated in approving needed modifications, such as for the Legal and Restructuring Components. Bank managers have been involved at critical points, such as for the abolishment of ANAIM, the extension of the closing date by 6 months and the definition of follow-on operations. 7.3 Overall Bank performance: The overall Bank performance is rated Satisfactory. Borrower 7.4 Preparation: The Borrower's performance in preparing the project is rated Satisfactory. During preparation, the Borrower's commitment to sector reform was particularly appreciated. Such commitment was demonstrated in the abolishment of OFAB, a politically difficult decision for the Government, and in the adoption of a new mining code. While these have been powerful signals of Borrower engagement, active involvement of the Borrower in the detailed design of the project has been relatively modest and was mainly left to a consultant and the Bank. 7.5 Government implementation performance: The Borrower's performance in implementing the project is rated Satisfactory, despite difficult inter-ministerial cooperation and lack of progress in civil service reform (see Section 4.2, Legal and Institutional Components). The rating is based on the Government's continued commitment to sector reform during project implementation, as demonstrated through the abolishment of ANAIM and the transfer of management of mining operations to private partners. The Government's commitment was also demonstrated in its willingness to privatize Aredor, Friguia, CBG and SBK. While in most cases only the transfer of management but not of assets was achieved, the decision to engage an investment bank for privatization was a Government initiative that went beyond the original scope of the project. 7.6 Implementing Agency: MMGE's performance in implementing the project is rated Satisfactory. MMGE's project coordination unit has been efficient in managing the project's execution. The unit has demonstrated good funancial management and procurement capabilities. The unit also cooperated well with with donors (France), mining companies and, when required, with other agencies. All project audits have been satisfactory. Satisfactory periodic progress reports have been prepared by the coordination unit, though not all reports were submitted to the Bank regularly. 7.7 Overall Borrower perfornmance: The overall Borrower performance is rated Satisfactory. 8. Lessons Learned Positive lessons. The following positive lessons have been learned from the implementation of the project: * Contract special services. The external contracting of the geological mapping work has been a remarkable success. In countries with weak implementation capacity, similar special services should preferably be always contracted as long as there is insufficient local capacity. This way, the service can be delivered at high standards, including the transfer of latest international technology. The twinning arrangement with a geological survey from an important industrialized country (in this case it was Canada) contributed to the success of the arrangement. When needed, the service could be repeated in a few years. This way, the recipient country can maintain a relatively modern system in a cost-efficient way. * Have a small PCU directly reporting to Minister. The PCU consisted of a small team, basically the coordinator, a technical adviser and the accountant. The small size of the unit and the unrestricted -9- direct access of the coordinator to the Minister proved to be very efficient. The team members worked as civil servants, financed by the Government, and did not receive consultant fees. They efficiently performed coordinating and teaching/coaching tasks and were respected by other Ministry and Government staff. * Motivate by training. The training programs executed under the project had a significant motivating effect, for the coordinating team as well as for eligible staff from the Ministry. Motivation was not only induced by participation in foreign training but also by attending local courses. Eligibility for foreign training was determined by prescribed procedures and the selection of candidates had to be approved by the Minister. Negative lessons. The following negative lessons have been leamed from the implementation of the project: * Change in civil servants' status cannot be achieved at sector level. The project did not achieve a reduction in the number of MMGE staff when redundant services (STG, BGGA and LNG) were dissolved or redefined. In Guinea, it appears not possible to achieve such adjustment in any sector operation. Instead, it appears that such measures would only be possible as part of a major cross-sectoral operation, after a difficult and lengthy dialogue with the Government. * Inter-ministerial cooperation can hardly be achieved without a specialframework set up in advance. The project had difficulties in achieving efficient inter-ministerial cooperation, as required for harmonization of laws under the Legal Component. While in the end the cooperation was achieved, it is assumed that the process would have been easier and faster had the other ministries and their key staff been involved from the very beginning. 9. Partner Comments (a) Borrower/implementing agency: Detailed contributions from the Borrower can be found in Annex 8. (b) Cofinanciers: No comments have been received from cofinanciers. (c) Other partners (NGOs/private sector): Not applicable. 10. Additional Information A detailed list of additional available documentation on the project can be found in Annex 7. - 10 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: lIndicator/Matrix Projected In last PSR Actual/Latest Estimate 1. Number gold mines in operation 2 2 2. Number of diamond mines in operation 1 3 Output Indicators: IndicatorlMatrix Projected In last PSR ,. ActuaULatest Estimate 1. Number of active exploration permits 42 45 2. Completion of Data Component 100% by end 1999 100% by end 1999 End of project The outcome and output indicators shown above were listed in Schedule B of the MOP as key performnance indicators. The SAR (dated May 10, 1996) did not contain the now standard Project Design Summary (Log Frame) and related key performance indicators. Additional indicators not referred to in the legal documents and the PSR are shown below: Indicator' Actual at Appraisal' Actual at Project Completion' Export Quantity - Bauxite 13.6 million tons 13.9 million tons - Alumina 0.6 million tons 0.6 million tons - Gold none 11.4 tons - Diamonds 5.1 thousand carats 41.5 thousand carats Export Value (in S million) - Bauxite 300.9 289.9 - Alumina 96.3 102.8 -Gold 108.1 - Diamonds 0.4 0.3 tota 397.6 501 1 (+26%) thereof CBC 283.2 269 1 (-5%) Taxes Receivedfrom Mining (in X million) - Bauxite 107 3 72.0 - Alumina 1.3 1.4 - Gold 0.5 6 - Diamonds 0.04 3.7 tota 109.1 1.8 thereof CBG 107.3 79.0 (-28%) 72.0 (-33%) All indicators for industrial output only. Year 1995 results. Year 2000 results. Due to investments and new management, production increased 20% in 2001. -11 - Despite increased output, export value decreased due to 10% price decline Tax revenues from gold mining are expected to increase once accelerated depreciation for recent investments is exhausted and gold prices have recovered (during the penod 1995-2000, gold pnces dropped by 27%, making it difficult even for well established producers to return a profit) CBG's tax contnbutions declined due to decline of bauxite pnce and lower tax rate - 12 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest. Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ million Legal Component 1.34 1.56 103 Data Component 9.02 7.03 69 Institutional Component 2.30 3.19 124 Restructuring Component 1.42 2.13 132 Training 0.41 0.93 197 Project Preparation 0.50 0.28 56 Total Baseline Cost 14.99 15.12 Physical Contingencies 1.01 Price Contingencies 0.80 Total Project Costs 16.80 15.12 Total Financing Required 16.80 15.12 consultant services for promotion, training and workshops Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) E.pendIture Cat-gory ICB Procurement Method" _ ,E-x' erindlture Categorfy ,ICB 2, ..NCB Oher. N.B.F. Total Cost 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 3. Services 0.00 0.00 5.80 0.50 6.30 Consultant Services (0.00) (0.00) (4.60) (0.00) (4.60) 4. Service Contracts 9.60 0.00 0.00 0.00 9.60 (6.70) (0.00) (0.00) (0.00) (6.70) 5. Training 0.00 0.00 0.40 0.00 0.40 (0.00) (0.00) (0.40) (0.00) (0.40) 6. PPF Refinancing 0.00 0.00 0.50 0.00 0.50 (0.00) (0.00) (0.50) (0.00) (0.50) Total 9.60 0.00 6.70 0.50 16.80 (6.70) (0.00) (5.50) (0.00) (12.20) Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) L.- tProcurement Method' --otl Expendihtre'Categry -- ota l. Cot - CB NCB ~~~~~~~Othe'r 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.00 0.00 0.00 0.00 - 13- Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest. Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ million Legal Component 1.34 1.56 103 Data Component 9.02 7.03 69 Institutional Component 2.30 3.19 124 Restructuring Component 1.42 2.13 132 Training 0.41 0.93 197 Project Preparation 0.50 0.28 56 Total Baseline Cost 14.99 15.12 Physical Contingencies 1.01 Price Contingencies 0.80 Total Project Costs 16.80 15.12 Total Financing Required 16.80 15.12 consultant services for promotion, training and workshops Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) E.pendIture Cat-gory ICB Procurement Method" _ ,E-x' erindlture Categorfy ,ICB 2, ..NCB Oher. N.B.F. Total Cost 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 3. Services 0.00 0.00 5.80 0.50 6.30 Consultant Services (0.00) (0.00) (4.60) (0.00) (4.60) 4. Service Contracts 9.60 0.00 0.00 0.00 9.60 (6.70) (0.00) (0.00) (0.00) (6.70) 5. Training 0.00 0.00 0.40 0.00 0.40 (0.00) (0.00) (0.40) (0.00) (0.40) 6. PPF Refinancing 0.00 0.00 0.50 0.00 0.50 (0.00) (0.00) (0.50) (0.00) (0.50) Total 9.60 0.00 6.70 0.50 16.80 (6.70) (0.00) (5.50) (0.00) (12.20) Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) L.- tProcurement Method' --otl Expendihtre'Categry -- ota l. Cot - CB NCB ~~~~~~~Othe'r 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.00 0.00 0.00 0.00 - 13- Annex 3. Economic Costs and Benefits The main assumptions that now differ from those made at appraisal (SAR Annex 5) are: * a lower gold price, but a higher gold production; * a delay in the expansion of alumina production, but a prospect for a larger expansion in future; and * a more limited expansion of bauxite production, due to a structuraL change in the international aluminium industry that shifts new alumina production capacity to bauxite producing countries. In particular, the following changes of assumptions are involved: Assumption AtApporaisal Revised (December 2001) gold price 12 M$/t 9 M$At economic benefit from gold mining 27% of gold price 18% of gold price gold production 2 t/a 6 tla alumina expansion completed 2005 2009 alumina expansion capacity 0.5 MT/a 1.2 Mt/a bauxite expansion capacity 5 Mt/a 2 Mt/a Recalculating the net present value and the economic rate of return, the results are as follows: At Appraisal Revised (December 2001) NPV 91 Ms 91 M$ ERR 55% 57% - 15- Annex 3. Economic Costs and Benefits The main assumptions that now differ from those made at appraisal (SAR Annex 5) are: * a lower gold price, but a higher gold production; * a delay in the expansion of alumina production, but a prospect for a larger expansion in future; and * a more limited expansion of bauxite production, due to a structuraL change in the international aluminium industry that shifts new alumina production capacity to bauxite producing countries. In particular, the following changes of assumptions are involved: Assumption AtApporaisal Revised (December 2001) gold price 12 M$/t 9 M$At economic benefit from gold mining 27% of gold price 18% of gold price gold production 2 t/a 6 tla alumina expansion completed 2005 2009 alumina expansion capacity 0.5 MT/a 1.2 Mt/a bauxite expansion capacity 5 Mt/a 2 Mt/a Recalculating the net present value and the economic rate of return, the results are as follows: At Appraisal Revised (December 2001) NPV 91 Ms 91 M$ ERR 55% 57% - 15- Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating El Macro policies 0 H OSUOM O N * NA Li Sector Policies O H OSUOM O N O NA F Physical * H 0 SU C M 0 N O NA f Financial 0 H * SU O M O N O NA O Institutional Development * H 0 SU 0 M 0 N 0 NA El Environmental 0 H OSUOM O N * NA Social Li Poverty Reduction O H O SU O M 0 N * NA L Gender 0 H O SU 0 M O N * NA Li Other (Please specify) O H O SU O M 0 N * NA F Private sector development 0 H 0 SU 0 M 0 N 0 NA 2 Public sector management 0 H 0 SU 0 M 0 N 0 NA I Other (Please specify) O H O SU O M O0N * NA Physical: because of Data Component. Financial: project costs slightly below appraisal estimate. Institutional Development: Government gave up role of operator and abolished non-essential services. Private Sector Development: private management installed. Public Sector Management: Government abolished non-essential services, but budgeting for future operation of essential services and civil servant reform remain issues to be solved. - 17 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating 0 Lending OHS OS OU OHU 0J Supervision O HS * S OU OHU C0 Overall OHS OS OU O HU 6.2 Borrower performance Rating O Preparation O HS * S O U O HU O Government implementation performance 0 HS * S 0 U 0 HU Ol Implementation agency performance O HS * S 0 U O HU F] Overall O HS * S OU O HU - 18 - Annex 7. List of Supporting Documents Staff Appraisal Report, Report No. 15291-GUI, May 10, 1996 Memorandum of the President, Report No. P-6790-GUI, May 10, 1996 Credit Agreement, Amendments to Loan Agreement Back-to-office reports Project Status Reports Borrower's Contribution (in French) - 19- Additional Annex 8. Borrower's Contribution Objectifs du projet et mise en euvre Les objectifs du projet etaient centres sur le renforcement de la capacite du Gouvemement en tant que facilitateur et regulateur des activites minieres, son retrait des activites productives en tant qu'operateur et actionnaire et ameliorer sa capacite pour l'attrait des investissements prives pour assurer le developpement du secteur au niveau du potentiel geologique et minier de la Guinee. Les actions prevues comprenaient: (i) F'amelioration du cadre juridique du secteur minier; (ii) la fourniture de l'information geologique de base pour la promotion des investissements; (iii) I'amelioration de la capacites des institutions pour la promotion des investissements et I'application des lois et de leurs reglementations; et (iv) I'assistance pour la restructuration des entreprises minieres publiques. De plus la formation des cadres des institutions a constitue une composante importante pour l'accomplissement des objectifs du projet. Pour atteindre les objectifs fixes, le projet a ete articule en cinq composantes I) Une composante juridique, dont l'objectif principal a ete d'assister le Gouvernement guineen A ameliorer le cadre juridique et reglementaire relatif au secteur minier de maniere A soutenir la position concurrentielle de la Guinee en ce qui conceme l'attrait des investissements miniers et promouvoir l'efficacite et la transparence de l'administration du secteur. 2) Une composante des services avec pour objectif de fourmir aux investisseurs prives l'information geologique essentielle sur la Guinee comprenant des leves de geophysique aeroportee et geologiques modemes et l'installation d'un systeme d'information geologique et miniere modeme qui facilitera l'acces A l'information pour la promotion des investissements, l'organisation et l'informatisation du centre de documentation et du cadastre minier. 3) Une composante institutionnelle pour aider le Gouvemement A amrliorer l'efficacite institutionnelle des principaux services de I'administration miniere et A se desengager des g&o-services jug6s non essentiels. 4) Une composante restructuration pour aider le Gouvemement A preparer des plans detailles pour redefinir son r6le dans les entreprises minieres ou il detient encore des interets majeurs (SBK, CBG/ANAIM et Friguia) et pour accroitre la competitivite de ces entreprises A travers l'incorporation d'une gestion privee. 5) Une composante de formation pour ameliorer la capacite des ressources humaines de l'administration miniere dans la realisation de leurs fonctions et actualiser leurs connaissances du developpement m inier intermational A travers des semrinaires en Guinee et des voyages d'etude A l'etranger. L'agence responsable de 1'execution du projet a ete le Ministere des Mines, de la Geologie et de l'Environnement (MMGE) seconde dans cette tache par les services cles (Centre de Promotion et de Developpement Minier (CPDM), Direction Nationales de Mines (DNM), Direction Nationale de la Recherche Geologique et des Hydrocarbures (DNRGH) et les Entreprises Publiques et Mixtes, Compagnie Bauxites de Guinee (CBG), la societe Friguia et la Societe des Bauxites de Kindia - 20 - (SBK). Le Project de Promotion des Investissements dans le Secteur Minier (PISM) a ete execute a travers des services de consultants et d'entrepreneurs foumissant les services d'assistance technique ainsi que les equipements necessaires. Les services de consultants ont couverts plusieurs aspects, comprenant: * La revision et l'harmonisation des lois et de la reglementation du secteur minier * Le renforcement des capacites institutionnelles et la reforme des services cles du MMGE * L'assistance technique pour la restructuration des entreprises mixtes et publiques du secteur * La formation des cadres dans le travail. Les ouvrages realises dans le cadre du Project ont conceme: * Un leve regional de geophysique aeroport&e * Des leves geologiques au 200.000eme * L'etablissement d'un systeme d'information geologique et miniere. Le programme de fomnation s'est articule a travers de: * Seminaires et ateliers en Guin&e * Seminaires et tables rondes en Guinee et a l'tranger * Voyages d'etudes a 1'6tranger et participation aux congres intemationaux. Au sein des contrats de consultants et de services des equipements (vehicules, equipements informatiques et equipements de terrain) sont e foumis pour l'ex6cution des services et pour renforcer la capacite des institutions dans la realisation de leurs fonctions. Accomplissement des objectifs du Projet Le MMGE a ete en mesure d'accomplir les objectifs essentiels du Projet et l'impact du Projet sur les investissements prives dans le secteur est tres positif. Les resultats de chaque composante sont detailles ci-dessous: 1) Composante Juridique La coherence et de la compatibilite entre les differents codes a et examinee, les textes legislatifs et d'application visant i'harmonisation des differents codes ont ete 6eabores. L'harmonisation de la reglementation du code minier avec celles des autres codes a ete obtenue par la signature des arretes conjoints suivants: * Arrete conjoint visant a l'harmonisation des textes d'application du code minier et du code de l'Urbanisme, relatif aux servitudes afferentes aux titres miniers et carrieres ainsi que les zones interdites ou protegees. Cet arrete a e signe entre le MMGE et le Ministere charge de l'Urbanisme et de l'Habitat. * Arrete conjoint pour l'harmonisation des textes d'application du code minier et du code de l'Hydraulique, concemant la protection de l'environnement et l'usage des ressources en eau par les exploitations minieres. Cet arret a et signe entre le MMGE et le Ministere charge de l'Hydraulique et de l'Energie. * Arret conjoint portant sur l'harmonisation des textes d'application du code minier et du code - 21 - forestier. Cet arrete a et signe entre le MMGE et le Ministere de l'Agriculture. * Arrete conjoint relatif A l'harmonisation des textes d'application du code minier et du code du travail relatif A l'hygiene et la securite du travail dans les mines. Cet arrete a et signe entre le MMGE et le Ministere de I'Emploi et de la Fonction Publique. * Arret conjoint relatif A la reglementation du transport, du stockage et de l'usage des explosifs dans le cadre des operations minieres. Cet arrete a ete signe entre le MMGE et le Ministere l'Administration du Territoire, de la Decentralisation et de la Securite. Parmi les activites de la composante, un diagnostic environnemental des operations minieres a ete complete avec des recommandations quant A la reglementation portant sur l'environnement et la sante et la securite dans les mines. Comme resultat de cette etude les procedures pour la realisation d'audits environnementaux et d'etudes d'impact ont ete definies ainsi que le plan d'administration environnementale du secteur minier. Le MMGE est maintenant en possession des elements de base pour la formulation de la reglementation environnementale dans le secteur ainsi que pour l'administration de la protection de 1'environnement dans le secteur. D'autre part, les activites de la composante ont permis aussi d'effectuer une etude sur l'volution recente et les perspectives du commerce mondial de la bauxite, de l'alumine et de l'aluminium. Cette etude a eu pour but de definir les repercussions de l1'volution recente du commerce mondial de la bauxite sur la competitivite des producteurs guineens de bauxite et d'alumine et a permis de proposer des formules pour l'etablissement des prix et les transferts de benefices ou de taxes. Les conclusions de l'tude ont permis de positionner la Guinee dans le cadre des marches internationaux en reference A la qualite de la bauxite produite et de ses concurrents. 2) Composante des services Les resultats de la composante des services, destinee A ameliorer l'infrastructure geologique de la Guinee et la connaissance de son potentiel minier, sont probablement les plus positifs du Projet. Non seulement les objectifs fixes ont e entierement atteints mais aussi le cofit final de la composante a ete 20% inferieur au budget prevu. Un leve geophysique aeroporte combine en magnetometrie et en radiometrie A et effectue sur plus de 60.000 km2 du nord est de la Guinee en preparation du leve g6ologique. Tous les produits ont ete livres sous forme digitale a la satisfaction du MMGE. Le leve geologique de la meme surface a aussi ete complete dans sa totalite et les cartes geologiques au 200.000eme ont et livrees en impression papier et en format digital. Le leve finance par les fonds IDA a ete compl6te par un leve geologique a la meme echelle finance par la Cooperation Francaise (financement parallele) sur 45.000 km2 de la zone sud-est de la Guinee. Ces leves ont permis A la Guinee d'elever sensiblement la connaissance de son potentiel minier et forment de precieux instruments pour la promotion des investissements. L'acces aux donnees geologiques et mini&res existantes a et facilite par l'etablissement d'un Systeme d'Information informatise Les donnees du cadastre minier et les informations geologiques appropriees sous forme numerique ont ete transferees A un Systeme d'Information Geographique (SIG). Les activites de la composante ont ete supervisees par un ingenieur conseil, en l'occurrence le - 22 - Service Geologique du Canada permnettant de diminuer les aleas techniques de ces travaux hautement specialises. L'experience d'un ingenieur conseil pour la supervision des activites a ete tres positive qui, combinee avec une tres bonne gestion du Projet a permis le succes de la composante. 3) Composante institutionnelle La composante, dont l'objectif principal est d'aider le MRNE A ameliorer l'efficacite institutionnelle des principaux services de I'administration miniere, a obtenu des resultats tres satisfaisants concernant la definition des procedures de travail et la formation des cadres. Le cadre institutionnel des services cles du MMGE a et examine et les chevauchement de fonctions et les conflits d'interet potentiels ont ete mis en evidence. Le MMGE a mis en ceuvre les recommandations des consultants pour ameliorer l'organisation et l'efficacite de ces services, principalement concemant 1'etablissement d'un cadastre minier independant des institutions pouvant causer des conflits d'interet pour le registre des titres et la securite de la propriete miniere. Pour ce faire le MMGE a cree le Bureau du Cadastre Minier (BCM) sous la responsabilite directe du Ministre. Les geo-services, apres de vaines recherches concemant la possibilite d'incorporer une participation privee dans leur gestion, ont ete dissous permettant ainsi une rationalisation des ressources budgetaires de I'administration. La capacite de la Direction des Mines pour I'application de la reglementation en matiere d'environnement, de securite et de sante a ete renforcee par la preparation de guides et manuels d'inspection, la fourniture des equipements de terrain ainsi que de la formation pratique sur le terrain. Actuellement la DNM possede la capacite technique pour assurer le respect de la reglementation miniere. L'etude institutionnelle du secteur a mis en evidence l'importance des services decentralises (deconcentres) de l'administration miniere pour le suivi des operations sur le terrain et en particulier de l'artisanat minier. Les principales recommandations de l'etude sont dirigees sur le renforcement des services deconcentres et l'integration de l'activit6 miniere dans le d6veloppement regional et communautaire. Ces recommandations ont et suivies d'un constat detaille des besoins des services deconcentres de l'administration miniere. Les activites de Promotion des Investissements du Centre de Promotion et de Developpement Miniers (CPDM), cofinancees par le Credit IDA et la Cooperation Francaise, ont 6te renforcees par la definition et mise en ceuvre d'une strategie de promotion appuyee par du materiel promotionnel. Les cadres du CPDM ont ete inities a lenvironnement du marche des capitaux et evoluent maintenant avec plus d'agilite et un meilleur ciblage dans leur contacts avec les investisseurs. Le CPDM a organise a la fin du Projet un symposium international A Conakry avec la presence des principaux operateurs prives ainsi que des investisseurs potentiels. Au cours de ce symposium, Ies resultats du Projet et principalement l'avance du developpement des connaissances geologiques du territoire national ont et presentes et l'information correspondante mise A la vente. L'amelioration des capacites institutionnelles s'est refletee par une nette augmentation des permis miniers en vigueur et des investissements dans le secteur. - 23 - Situation des titres miniers en vigueur 1995 1996 1997 1998 1999 2000 2001 Permis de recherche 37 53 77 121 153 161 183 industrielles et semi-industfielles Permis d'exploitation 4 7 5 23 28 11 29 industrielle Permis d'exploitation 4 7 12 23 28 23 14 semi-industrielle et dragage Concession de recherche et 7 8 8 8 8 8 8 d' exploitation Total titres miniers 52 75 102 175 217 203 234 Societes et projets titulaires 46 61 87 102 102 108 115 Tous les permis d'exploitations sont en activite, tandis que l'activite des permis de recherche a ete variable selon les conditions climatiques et les conflits regionaux. 4) Composante restructuration La composante de restructuration englobe les activites les plus delicates et difficiles du Projet a mettre en ceuvre, compte tenu des implications sociales et politiques des actions necessaires. Les difficultes et contretemps n'ont pas manque, cependant le Project a accompli les principaux objectifs traces, dont les resultats les plus saillants sont: * La reactivation des operation de la mine de diamant d'Aredor au travers des investissements et de la gestion privee (la Societe Aredor First City) est intervenue tres t6t dans l'execution du Projet (1996). Depuis, la mine d'Aredor a et en production sans interruption. L'inventaire physique et financier des equipements d'Aredor finance par le Projet en 1996 a facilite le transfert de l'operation. * L'usine d'alumine de la societe Friguia a ete remise en contrat de location gerance a Aluminium Company of Guinea (ACG), un consortium comptant parmi ses membres Reynolds des Etats Unis qui a ete recemment repris par Alcoa. Bien que Reynolds/Alcoa est partenaire minoritaire du consortium ACG, sa responsabilite technique et de gestion de l'operation garantit la reussite du transfert. L'accord de location gerance signe le 30 Novembre 1999 a 6te ratifie a l'unanimite le 20 Decembre 1999 par l'Assemblee Nationale. Depuis Juillet 2000, les installations de Friguia sont operees par le consortium ACG. * SBK. En vue de realiser la rehabilitation, l'extension et l'exploitation des gisements de bauxite dans la zone de Kindia sur le site de la SBK et en assurer un accroissement des capacites de production, I'Etat Guineen, proprietaire de la Societe a decide de conceder a la Societe Rouski Alumini de Russie une convention de location gerance des installations de la Societe. Ainsi en - 24 - I'an 2000, la SBK a entame les negociations avec Rouski Alumini et A partir du mois de Mai 2001, la SBK a ete transferee A la Societe Rouski Alumini, suite A la signature d'une Convention entre ce Pays et la Republique de Guinee. La nouvelle Soci&e d'Exploitation des Bauxites de Kindia a pris le nom de Compagnie des Bauxites de Kindia - (CBK). La premiere phase des activites prevues par la Convention consistera A la realisation par le locataire gerant, A ses frais de la renovation et de la rehabilitation de la production miniere sur le gisement de Debele et I'augmentation du volume de production de bauxite de 2 500 000 T/an. La deuxieme etape consistera en la realisation des travaux de construction miniere visant A mettre en exploitation le gisement de Balandougou. La troisieme phase consistera en la realisation et l'appreciation des possibilites d'exploitation d'autres gisements du groupe de Kindia afin de porter la production A 3 000 000 T/an. * L'Office de I'Amenagement de Boke (OFAB) a e dissout et remplace par l'ANAIM avant le debut du Projet. L'administration et l'usage des infrastructures minieres de l'Etat a fait l'objet de negociations entre l'ANAIM et CBG. Ces negociations ont et conclues par la signature d'une convention le 16 Juin 1996. Le Projet a finance les services d'assistancejuridique pour assister le Gouvemement dans ces negociations. En 2000 la direction generale de l'ANAIM a ete dissoute le 31 decembre 2000. Les efforts de restructuration des entreprises minieres publiques a marque le franc succes su Projet et a consacre 1'engagement de la Guinee sur une economie de marche et une politique de promotion des investissements prives pour le developpement du secteur. 5) Formation La formation des ressources humaines a constitue une composante importante du Projet et est un volet essentiel pour faciliter la remise A niveau des cadres du MMGE en fonction de la nouvelle politique miniere du Gouvernement. Le volet formation a consiste en formation locale en Guinee et la formation A l'etranger. La formation en Guinee s'est articulee en cours de formation de base (informatique, anglais, economie), stages dans des entreprises minieres, ateliers et cours avec instructeurs intemationaux et seminaires institutionnels ou nationaux. La formation A l'etranger a consiste principalement en stages dans des institutions homologues, cours de formation de courte duree, voyages d'etude et participation aux congres et rencontres intemationales de geologie et des mines. Le programme de formation du Projet a ete co-finance par les fonds IDA et le FAC (Cooperation franqaise). Les activites de formation ont demarre en 1997 avec la mise en vigueur du projet, bien que des seminaires aient dejA ete realises en 1996 avec financement du PPF. Comnme resultat de ce programme les cours et des seminaires de formation en Guinee ont requ 1589 participants et 165 formations A l'etranger ont ete organisee. Formation: Nombre des participants 1996 1997 1998 1999 2000 2001 Total Formation en Guinke 56 254 435 304 478 62 1589 Seminaires collectifs 56 150 315 202 400 1123 - 25 - Formation de base 104 120 102 78 62 466 Formation Etranger 27 48 40 31 19 165 Individuelle 27 48 40 15 5 135 Voyages d'etudes 16 14 30 Total 56 281 483 344 509 81 1754 - 26 - IMAGING Report No.: 24401 Type: lCR