South Africa: Tsodilo-01/Badplaas
Director of the Cradle of Life initiative
Environmental impact to biodiversity and cultural heritage of protected area
Up to US$10.47 million equity
Tsodilo is a publicly listed exploration company currently exploring for diamonds, base and precious metals in Botswana and other parts of southern Africa. In the company’s March 2013 Annual Meeting of Shareholders report, Tsodilo presents the Barberton gold project around Barberton, South Africa as a new project for which they are processing a Prospecting Right Application. The land covered in the application is immediately adjacent to, and may overlap the Badplaas area. IFC has an approximate 14% equity stake in the Tsodilo that was invested in June 2010.
In April 2013, CAO received a complaint from the Director of the Cradle of Life initiative which aims to conserve the Badplaas protected area and pursue sustainable eco-tourism initiatives. The complaint raised concerns about mining exploration licences being granted over this area in South Africa which is protected and already hosts eco-tourism efforts through the Cradle of Life organization. The complainant contends that mining activities and their potential environmental impact is incompatible with sustaining the biodiversity and cultural heritage of the protected area.
CAO found the complaint eligible for further assessment in May 2013 and an assessment was conducted in July 2013. Following discussions with the key parties, CAO found no agreement to proceed with a dispute resolution process. In line with CAO Operational Guidelines, the case was referred to CAO Compliance for appraisal of IFC.
A CAO Compliance appraisal focuses on IFC’s performance, not the client. The purpose of an appraisal is to ensure that investigations are initiated only for those projects that raise substantial concerns regarding environmental and/or social outcomes, or issues of systemic importance to IFC.
Having considered available information on the potential environmental and social impact of this project in light of the issues raised by the complainant and the application of relevant IFC policies, standards and procedures, CAO concludes that further investigation in relation to this complaint is not warranted.
Acknowledging the risks that attach to extractive industry projects in sensitive habitats, however, CAO reserves the right, in line with its Operational Guidelines, to consider further appraisal of this investment should the Company proceed to develop the Barberton Gold Project in a manner that raises significant concerns regarding impacts on communities or the environment.
CAO's Appraisal Report, providing a full description of CAO's decision with regard to this case, is available under "View Documents" below. As of August 29, 2014, CAO has closed the case with no further action.
Updated: August 29, 2014