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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: 23368 IMPLEMENTATION COMPLETION REPORT (CPL-39270; SCL-3927A; SCPD-3927S; PPFB-P2380) ONA Public Disclosure Authorized LOAN IN THE AMOUNT OF USS30.0 MILLION TO THE REPUBLIC OF ARGENTINA FOR A MINING SECTOR DEVELOPMENT TECHNICAL ASSISTANCE PROJECT Public Disclosure Authorized November 1, 2002 Mining Department of the World Bank Group Country Management Unit: Argentina, Chile, Paraguay and Uruguay Latin America and the Caribbean Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2001) Currency Unit = Argentine Peso AR$1.00 = US$ 1.00 US$ 1.00 = ARS1.00 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS BUD Unified Mining Information System CAS Country Assistance Strategy COFEMIN Federal Mining Council DIA Environmental Impact Declaration DNM National Mining Directorate DNSG National Geological Service Directorate DPM Provincial Mining Directorate EIA Environmental Impact Assessment GPS Global Positioning Systems GIS Geological Information Systems IHA Environmental Impacts report INTEMIN Mining Technical Institute NGO Non-governmental Organizations PASMA Mining Sector Development Technical Assistance Project PCU Project Coordinating Unit PMI Public Mining Institution PSR Project Status Reports QAG Quality Assurance Group SEA Sector Environmental Assessment SEGEMAR Argentine Geological and Mining Service SINATEM National System of Mining Technology SM Secretariat of Mines SSM Under Secretariat of Mines SUIM Unified Mining Information System UGAP Provincial Environmental Management Units UGAN National Environmental Management Unit WB World Bank Vice President: David De Ferranti Country Manager/Director: Myma Alexander/Axel van Trotsenburg Sector Manager/Director: Peter van der Veen Task Team Leader/Task Manager: Gotthard Walser ARGENTINA MINING SECTOR DEVELOPMENT TECHICAL ASSISTANCE PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 9 6. Sustainability 11 7. Bank and Borrower Performance 12 8. Lessons Learned 14 9. Partner Comments 15 10. Additional Information 15 Annex 1. Key Performance Indicators/Log Frame Matrix 16 Annex 2. Project Costs and Financing 22 Annex 3. Economic Costs and Benefits 24 Annex 4. Bank Inputs 25 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 27 Annex 6. Ratings of Bank and Borrower Performance 28 Annex 7. List of Supporting Documents 29 Annex 8. Borrower's Summary Report 30 Map IBRD 27034 Project ID: P006055 Project Name: MINING SECTOR DEVELOPMENT T.A. Team Leader: Gotthard Walser TL Unit: COCPD ICR Type: Core ICR Report Date: November 1, 2002 1. Project Data Name: MINING SECTOR DEVELOPMENT T.A. L/C/TF Number: CPL-39270; SCL-3927A; SCPD-3927S; PPFB-P2380 Country/Department: ARGENTINA Region: Latin America and Caribbean Region Sector/subsector: Central government administration (100%) KEY DATES Original Revised/Actual PCD: 03/29/1994 Effective: 12/07/1995 12/07/1995 Appraisal: 03/27/1995 MTR: Approval: 07/25/1995 Closing: 06/30/2001 06/30/2001 Borrower/lImplementingAgency: GOVERNMENT OF ARGENTINA/UNDERSECRETARIAT OF MINES Other Partners: STAFF Current At Appraisal Vice President: David De Ferranti Shahid Javed Burki Country Manager: Axel van Trotsenburg Gobind T. Nankani Sector Manager: Peter Van der Veen Alfonso Sanchez Team Leader at ICR: Gotthard Walser Aura Garcia de Truslow ICR PrimaryAuthor: Sati Achath; Gotthard Walser 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 main objective of the project was to develop and support, through an institutional development technical assistance, the government's policy, regulatory and institutional reforms which encourage the expansion of private investment in mining in an environmental sound way. The project was aimed to help build the capacity needed at the federal level and in six participating Provinces (Catamarca, La Rioja, Mendoza, Salta, San Juan and San Luis) for the efficient administration of mining rights. It was also expected to establish adequate environmental safeguards for mining operations; strengthen services that support mining growth, including the public provision of reliable geological and mineral information, and support divestiture of mining interests held by provinces. The six provinces selected to participate in the project were those actively implementing the sector reform and located within the most prospective mineral area of the country. A "PASMA" (acronym of the project name in Spanish) Agreement was signed in 1995 between the federal Government and the six Provinces to formalize the policy and implementation principles along which the project would be carried out. The choice to include only six and not all the 23 Provinces was made because of the historical complexity of the relationships between the federal and provincial States regarding the management of mineral resources. As stated in the Argentine Constitution - mineral resources belong to the Provinces. The successful implementation of the project led in 1998 to a second operation (loan 4242-AR) involving the 17 remaining Argentine provinces. The objectives of the project were clear, realistic and consistent with the Bank's Country Assistance Strategy (CAS) discussed by the Board on May 4, 1995, which stated that "Bank support for private sector development would also be provided through the strengthening of institutions providing assistance in mining development". The project aimed to facilitate increased foreign and local investment in mining to develop Argentina's hitherto underdeveloped mineral potential. It was also aimed at technologically updating the quality and enhancing the usefulness of government services supporting mining and growth, and develop a better legal framework, including a revised mining code, improved and unified concession procedures and secure tenure provisions through the Unified Mining Cadastre. In addition, the project would also help develop technical services to enhance the productivity of small and medium-scale mining. Finally, the project would help develop mechanisms throughout the sector to ensure adequate capabilities and technological skills for the application of environmental safeguards in mining and related activities. Overall, by strengthening the geological infrastructure and mining rights tenure security, the project expected to strengthen the enabling environment for overall sustained growth in mine development activities, which once established, were likely to continue. 3.2 Revised Objective: There was no formal revision of the original project objective, as it is stated in the MOP and the Loan Agreement However, as in several contemporaneous mining projects in other countries (see for example the Ecuador ICR, dated December 2001), socio-economic issues related to mining development were increasingly integrated into the project at about mid-term of its implementation (mid 1998). This trend followed the growing worldwide awareness at the end of the last decade by communities and companies alike regarding the need of deeper community involvement to optimize the potential contribution of mining to local and regional socio-economic development - 2- 3 3 OriginalComponents: The project consisted of the following four components: * Policy Development Component (US$1.4 million or 4 percent of the base cost) to ensure the consistency of mining sector policy with the country's overall economic liberalization efforts, to continue the modernization of the legal framework; and to develop tools for its implementation, including procedures for the provincial administration of mining rights and appropriate environmental norms and standards. * Policy Implementation Component (US$16.6 million or 47 percent of the base cost) to help develop the management capacity of the federal Secretariat of Mines (SM) and sector agencies in the selected provinces, including their cadastral and registry systems and advisory services, as well as the mechanisms to monitor and enforce environmental management. It was also to finance relevant skills transfer, training and divestiture efforts. * Support Services Component (US$16.1 million or 45 percent of the base cost), to build up the geological infrastructure in support of private investment decisions: geological and thematic mapping; a sector data bank and public information network; mineral and market statistics and promotion facilities; and a geological repository facility. Provisions for a selective support of laboratory; and, * Project CoordinatingUnit (PCU) to oversee the project implementation (US$1.4 million or 4 percent of the base cost). The project financed consulting services and contract works, computer equipment and software, field and office equipment and vehicles, training, incremental operating costs (for establishing and strengthening functions), and the necessary upgrading of facilities. The components
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