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Summary Initial Environmental Examination SUMMARY INITIAL ENVIRONMENTAL EXAMINATION ACID RAIN CONTROL AND ENVIRONMENTAL IMPROVEMENT PROJECT IN THE PEOPLE’S REPUBLIC OF CHINA July 2001 CURRENCY EQUIVALENTS (as of 2 July 2001) Currency Unit - Yuan (Y) Y1.00 = $0.1208 $1.00 = Y8.2779 The exchange rate of the Yuan is determined in relation to a weighted basket of currencies of the trading partners of the People's Republic of China. In this report, a rate of $1.00 = Y8.30 has been used. ABBREVIATIONS ADB - Asian Development Bank ATC - Anhui Tongdu Copper Limited Company CNM - Chizhou Non-Ferrous Metals Group company EIA - environmental impact assessment EPB - Environmental Protection Bureau GDP - gross domestic product IEE - initial environmental examination NOx - nitrogen oxides NO2 - nitrogen dioxide PRC - People's Republic of China SO2 - sulfur dioxide TSP - total suspended particulates WFW - Wuhu Feiying Wood Chemicals Limited Company WHC - Wuhu Hengxin Copper Group Company WSC - Wuhu Shanjiang Chemicals Limited Company WZM - Wuhu Zhengxing Materials Limited Company WEIGHTS AND MEASURES km - kilometer m3 - cubic meter µg - microgram t - ton (metric) yr - year NOTES (i) The fiscal year (FY) of the Government and the executing and implementing agencies coincides with the calendar year. (ii) In this report, "$" refers to US dollars. CONTENTS Page MAP: Acid Rain Control and Environmental Improvement Project i I. INTRODUCTION 1 II. DESCRIPTION OF THE PROJECT 1 A. Subproject Descriptions 2 B. Project Alternatives 4 III. DESCRIPTION OF THE ENVIRONMENT 10 IV. SCREENING OF POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 13 A. Beneficial Environmental Impacts 13 B. Negative Environmental Impacts 17 C. Mitigation Measures 17 V. FINDINGS AND RECOMMENDATIONS 23 A. Economic Assessment 23 B. Social Assessment 23 VI. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PROGRAM 24 VII. CONCLUSIONS 27 i I. INTRODUCTION 1. This summary initial environmental examination (IEE) relates to the Acid Rain Control and Environmental Improvement Project (the Project) in Anhui Province in the People’s Republic of China (PRC). It has been prepared by the Anhui Provincial Government using feasibility studies, IEE and other environmental studies prepared by PRC institutes,1 and additional investigations by consultants financed under the project preparatory technical assistance (TA) provided by the Asian Development Bank (ADB).2 The feasibility study and environmental reports were prepared in accordance with PRC regulatory practices. The summary IEE has also benefited from the findings of ADB loan Fact-Finding Mission in April 2001. ADB has classified the Project as environmentally sensitive, category B. 2. This summary IEE report has not been evaluated, assessed or endorsed by ADB. ADB’s assessment of the report and evaluation of the environmental impacts related to the subprojects will be included in the documentation presented to the Board at the time the Project is considered for approval. Pursuant to ADB’s guidelines, the summary IEE is circulated to ADB’s Board of Directors in advance of the loan consideration, which is expected later in 2001. The main environmental studies are available at the Project office on request. 3. This summary IEE first describes the Project and baseline environmental conditions found in the project area. This discussion is followed by an analysis of alternatives for the proposed subprojects, an assessment of major short-term and long-term impacts associated with their implementation, and the planned mitigation measures. The environmental management plans that will be used to ensure that the suggested mitigation measures are implemented are also discussed along with the public involvement activities for each subproject. II. DESCRIPTION OF THE PROJECT 4. The Project is designed to reduce acid rain precipitation in Anhui, a relatively poor province with a per capita gross domestic product (GDP) at 72 percent of the national average. The Project has three main components: six cleaner production subprojects for industrial enterprises designed to reduce acid rain causing air emissions, wastewater, and solid wastes; two environmental improvement and acid rain damage rehabilitation subprojects; and institutional strengthening. The geographic scope of the Project covers the two cities of Wuhu and Tongling, and the prefectures of Chizhou and Huangshan in Anhui Province, the PRC. The total project area is approximately 40,000 square kilometer (km2) and has a population of 17 million. The province and the distribution of the subprojects are shown in the map. 5. The industrial subprojects include three nonferrous metal manufacturing facilities (process upgrades to reduce pollution intensity and load), a ductile iron pipe production plant (process modification and waste heat reutilization system upgrade and dismantling of steel plant), and two chemical companies (process modernization to reduce air and water pollution). One of the chemical companies will also construct an industrial cogeneration plant and close 29 small boilers. The two subprojects in protected areas include rehabilitation of power supply, water supply, wastewater treatment, and solid waste management. These investment programs include many environmental improvement activities such as industrial relocation, fly ash utilization, and waste management. The 1 Beijing Non-Ferrous Metallurgy Design and Research Institute; Environment Science Institute, People's Liberation Army Logistics Engineer Institute; 3rd Engineering Design Institute, Chemical Ministry; Maanshan Iron & Steel Design Institute; Anhui Environment Science Institute; and Environmental Impact Assessment Department, Anhui Science and Technology Consulting Center. 2 TA 3462-PRC: Acid Rain Control and Environmental Improvement, for $964,000, approved on 27 June 2000. 2 primary goal of each subproject is to improve the environmental quality by reducing sulfur dioxide (SO2) and other air emissions, and thus reducing acid rain in Anhui Province. A. Subproject Descriptions 1. Cleaner Production Enterprises 6. Anhui Tongdu Copper Limited Company. The subproject will upgrade the smelter and blast furnace system for the production of sulfuric acid, blister copper (65,000 tons per year [t/yr]), and electrolytic copper (15,000 t/yr); and install a double conversion and double absorption process to replace the current single conversion and single absorption process. The company produces 38 percent of the SO2 emission in Tongling City. The subproject will reduce SO2 production by 14,890 t/yr. 7. Chizhou Nonferrous Metals Group Company. The subproject comprises upgrading the of main process line for producing electrolytic copper (20,000 t/yr); capturing SO2 emissions for conversion to high-quality sulfuric acid that can be sold as a product; and relocating some process lines away from a residential area to a new industrial zone. The company’s industrial processes cause high emissions of SO2 and total suspended particulates (TSP) and pollute the city’s water. The company’s SO2 emissions account for about 33 percent of the total SO2 emissions in the city of Chizou. The subproject will reduce SO2 emissions by 6,040 t/yr and eliminate the threat posed by toxic metal emissions. 8. Wuhu Feiying Wood Chemicals Limited Company. The subproject comprises relocating the chemical plant from a residential area to the Wuhu Industrial Development Zone; eliminating current high pollution processes and products; using modern clean production technology to produce three industrial chemicals (paraformaldehyde, formaldehyde, and acrylic impact modifiers); and funding the process line for acrylic impact modifiers redesigned through equity investment. The company is the largest water pollution and third largest air pollution source in Wuhu City. Its chemical oxygen demand (COD) and SO2 discharge account for 14 percent and 12 percent, respectively, of the total discharges of Wuhu City. The subproject will reduce SO2 emissions by 1,372 t/yr and eliminate the largest pollution threat to the city’s drinking water. 9. Wuhu Hengxin Copper Refinery Group Company. The subproject comprises substituting pyro-smelting furnaces and establishing a modern refinery furnace and automatic copper casting system; substituting the blast furnaces with an advance oxygen-enhanced anode furnace; and providing auxiliary systems for producing electrolytic copper (75,000 t/yr) and other copper products (35,000 t/yr of polished copper bars, 21,000 t/yr of copper sheets, and 600 kilometer/yr of telecommunication cables). The company is the third largest SO2 source in Wuhu City and produces 20 percent of the total SO2 emissions in the city. Acidic wastewater discharges are 1.5 million tons per year. The subproject will reduce SO2 emissions by 1,952 t/yr. 10. Wuhu Shanjiang Chemicals Limited Company. The subproject comprises upgrading the caustic soda production line from the diaphragm process (35,000 t/yr) to the ion-membrane process (30,000 t/yr); constructing a cogeneration station to supply electricity and process heat to the Wuhu Industrial Development Zone and replacing 29 small boilers; and relocating dyestuff processing to reduce water pollution. The company emits large quantities of SO2 and is the fourth largest air and water pollution source in the city. The subproject will reduce SO2 emissions by 4,533 t/yr and provide energy efficiency improvements. 3 11. Wuhu Zhengxin Materials Limited Company. The subproject comprises demolishing of the current steel making system to eliminate air pollution
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