Latin America & the Caribbean
Peru / Quellaveco-01/Moquegua
Currently in the pre-construction stage, Quellaveco is a large scale copper mining concession located in the Department of Moquegua in southeastern Peru. The concession was nationalized in the 1960s, and was the first copper prospect to be privatized in 1993. That same year, the IFC Board approved an equity investment in Anglo American Quellaveco for the acquisition and feasibility work of the mining company, comprising a 20 percent equity stake in the company. By 2011, IFC maintained an 18 percent equity stake, which was sold in February 2012.
In November 2011, the CAO received a complaint from a local environmental NGO raising concerns about the mine’s anticipated impacts on local populations and the environment. As part of its eligibility screening, the CAO requested documentation verifying the participation of project-affected groups, which was received in March 2012. At this point, CAO accepted the complaint, informed all stakeholders, and started its assessment process. Collectively, the complainants raise concerns regarding impacts to water quality and quantity in an arid area characterized by rising competition over water sources. The complaint also questions the proposed handling of toxic wastes and the impact this could have on communities’ health. Other issues in the complaint reference IFC’s due diligence including the quality of the EIA, community consultation and disclosure of project information.
The CAO found the complaint eligible in March 2012, and a CAO Ombudsman team explored options for resolution with the relevant parties. CAO's Ombudsman assessment does not entail a judgment on the merits of the complaint. Rather, the aim is to listen to people's concerns, understand the different perspectives, and gauge whether it is possible to address the concerns in a collaborative process.
Following the assessment, a collaborative resolution to the complaint convened by CAO was not found to be possible and a final assessment report was released. In accordance with CAO’s Operational Guidelines, the case was transferred formally to CAO's compliance function in December 2012 to ascertain whether there were any outstanding concerns regarding IFC’s compliance with applicable requirements.
The appraisal, completed on May 15 2013, concluded that a review of certain aspects of this project, which relate to its nature as an early equity mining investment, might better inform the application of policies (or other Compliance Investigation criteria) to future projects. Therefore, CAO will conduct a Compliance Investigation into this project with a focus on the following questions:
· Are IFC’s policies and procedures regarding environmental and social categorization of projects, as applied to its investment in Quellaveco, effective to reflect the magnitude of project risks and impacts?
· Are IFC’s policies and procedures in relation to rights issues, as applied to its investment in Quellaveco, consistent with IFC’s commitment to ensure that the business activities it finances are implemented in accordance with relevant environmental and social standards?
· Do IFC’s policies and procedures regarding divestment from projects, as applied to its investment in Quellaveco, ensure appropriate consideration of environmental and social aspects prior to exiting?
CAO's appraisal report is available under "View Documents" below. CAO will issue Terms of Reference for a Compliance Investigation of IFC’s investment in Quellaveco covering the above issues. Compliance Investigation panelists will be appointed. The Compliance Investigation report will be posted on this website when complete.
Updated: May 21, 2013
- Project Name & Number
- Quellaveco 3823
- Oil, Gas, Mining, & Chemicals
- Anglo American Quellaveco S.A.
- Latin America & the Caribbean
- Environmental Category
- $60 million equity (currently divested)
- Eligible: Completed
- Assessment Period: Transferred
- Under Appraisal: Completed
- Under Audit: In Process