Global Steel Dust Gulf LLC

Global Steel Dust Gulf LLC., (GSDG) intends to establish a facility in the Kingdom of Saudi Arabia (KSA) for recycling Electric Arc Furnace Flue Dust (EAFD) to produce (i) Waelz Zinc Oxide (WZO), an intermediary product which is a value added product used by zinc smelters around the world as a substitute for mined concentrates; and (ii) Waelz Iron Product (WIP), which can be used directly in road/civil construction, cement manufacturing, or can be sold as a low cost iron source to electric arc furnaces. To achieve this, Global Steel Dust Ltd. of Switzerland (GSD) established a joint venture, GSDG registered in KSA together with its local partner, Khudair for Trading & Contracting Co. (Khudair) on a 50/50 basis. The project is situated in the second industrial city in Dammam, in the eastern area of the country, located to the south west of Dhahran off the Dhahran-Riyadh Road, some 40 km from Al Khobar. This is a mature industrial area, now almost fully occupied, that was created in 1978 for light industry occupying a total land area of 25,500,000 m2. Itis managed by the Saudi Industrial Property Authority (MODON).

The project site occupies 48,450 m2 (285x170m).  The site was undeveloped, flat, vacant and empty land without vegetation. The plant will have the capacity to treat more than 110,000 MT of EAFD per year to produce up to 43,000 MT of WZO containing on average 60.5% zinc. Construction commenced at the end of 2012 with the erection of a permanent concrete and steel fencing surrounding the site, with full construction works due for completion by April 2016. The project comprises construction of the process plant that includes: the mixing plant; rotary kiln and settling chamber; bag filter units; storage silos;  coolers, fans and stack; compressor and electrical rooms; guard house, administration building and employee services area; maintenance and spare parts units; product storage; car parking, site roads, offset, open and green areas.

EAFD is a hazardous waste generated during the secondary steel production principally from Electric Arc (EAF) and Induction Furnace (IF) processes. Around 30% of global steel production is from the secondary smelting of scrap steel together with DRI (Direct Reduced Iron) in EAFs. The process generates significant quantities of dust, around 15-22 kg/ton of steel that is captured in bag filters used to prevent air pollution. This dust which is designated a hazardous waste actually contains a significant quantity of Zinc that varies according to the content of galvanized steel in the scrap feedstock. This valuable resource can be recovered using enhanced recovery technology. The Waelz Kiln is classified as the 'Best Demonstrated Available Technology' for this purpose by the U.S. Environmental Protection Agency (EPA) and the 'Best Available Technique' by the European Union (EU). Waelz Kiln technology is a long established technology that is used to process around 80% of the EAF dust produced globally.  The technology is more energy efficient than alternatives.  The project has several key positive environmental impacts namely: (i) avoidance of disposal to landfill of an environmentally hazardous substance; (ii) a process that converts a hazardous waste into two useful, non-hazardous materials; (iii) enhanced recovery of a valuable resource, Waelz Zinc Oxide (WZO); (iv) production of Waelz Iron Product (WIP) that can be used in road/civil construction, cement manufacturing, or can be reprocessed by the local steel mills,  and (v) use of best practice and energy efficient technology.

GSDG will apply the Saudization Policy, which was adopted by the government to boost skills and increase the contribution of qualified Saudis to the labor force. The policy requires 5 - 20% of company’s labor force to be Saudi. According to the first assumptions, the Saudization rate of the Project will be around 25%, allowing to the plant to fall under Green or Premium category.

While all Performance Standards are applicable to this investment, based on our current information indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

• PS1:  Assessment and Management of Environmental and Social Risks and Impacts
• PS2:  Labor and Working Conditions
• PS3:  Resource Efficiency and Pollution Prevention
• PS4:  Community Health, Safety and Security

The following standards have not been triggered:

• PS5: Land Acquisition and Involuntary Resettlement. The project site is located on land in a long established government owned industrial zone (the Dammam second industrial city), 40km south of Al Khobar.  The land is owned by the government and managed by the Saudi Industrial Property Authority (MODON). The company has a 20 years operating lease.
• PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource. The EIA indicates a degraded environment in the industrial area with insignificant communities of flora or fauna present in the project site or surrounding areas.
• PS7: Indigenous Peoples. No Indigenous Peoples are present in the areas surrounding the project site.
• PS8:  Cultural Heritage. No cultural heritage was identified in the EIA and no artifacts have been discovered during the current construction period.

In addition, the following World Bank Group Environmental, Health and Safety (EHS) Guidelines are applicable to this project:

• General EHS Guidelines.
• WBG Industry Sector EHS Guidelines for “Base Metal Smelting and Refining”.

As part of MIGA’s environmental and social due diligence review of the Project, a site visit was carried out between February 2-3, 2016 and the following documents were reviewed:

• Environmental Impact Assessment study report (dated July 11, 2012), Global Steel Dust Gulf LLC, reference number: AR12-279, prepared by Arabian Environmental Sciences Ltd. Company (Arensco), Al Khobar, Kingdom of Saudi Arabia.
• Global Steel Dust Gulf LLC, EAF Steel Dust Recycling & Waelz Zinc Oxide Production Project, Feasibility Study (dated August 2015)

PS1:  Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment:

An Environmental Impact Assessment (EIA) was developed in 2012 to the standards of the Kingdom of Saudi Arabia and was submitted to the Presidency of Meteorology & Environment in order to gain the initial environmental license for construction and storage of electric arc furnace (EAF) dust. This was approved in November 2012 and work started on site in December that year. Under the Country’s regulations no public disclosure was made. Though the EIA was relatively comprehensive, it did not specifically cover social issues and aspects of the project area, though those are expected to be limited. The EIA identified and assessed the potential environmental risks and impacts associated with the Project, and identified mitigation measures. These are discussed in the sections below under each Performance Standard. Any gaps identified will be addressed in the agreed Environmental and Social Action Plan (ESAP).

Identification of E&S Risks:

The EIA indicated that environmental impacts and risks are expected to be low to moderate in nature and for the most part temporary. During construction these impacts include those typically associated with construction activities, including (but not limited to) air emissions, waste generation, construction traffic, and occupational health and safety risks. During operation, the main E&S concerns will relate to labor and working conditions, vehicle traffic, impact on air quality, and occupational health and safety risks. All these impacts can be mitigated with established pollution prevention and control technologies and by applying good international industry practices (GIIP), such as those required under MIGA Performance Standards and those described in applicable World Bank Group EHS Guidelines.

Management Program and Monitoring:

The Project is currently under construction with contractors and sub-contractors on site installing the equipment under the supervision of the company’s two experienced US engineers. GSDG has appointed an Environment, Health and Safety Manager who is responsible for environmental controls, health and safety matters during operations. During the construction period the construction management firm, As System – Radicon Gulf, has an Environmental Site Manager responsible for these matters. The contractor has a construction environmental management system in place. The EIA monitoring plan includes several monitoring requirements. Parameters to monitor E&S performance have not been yet defined by GSDG but will be incorporated in the operational environmental and social management system (ESMS) that is currently under development. The ESMS will incorporate a set of procedures covering; training and environmental awareness; communication and document control; and technical procedures covering: hazardous materials management; air emissions and CO2 monitoring; noise control; and monitoring for any radioactivity of incoming EAF dust. These procedures are currently under development, with several already completed, and are expected to be finalized prior to completion of construction.

Organizational Capacity and Competency:

GSD management has long experience with EAF dust recycling, having built and operated a large scale Waelz Kiln plant in Alabama, USA which according to the company is currently considered one of the most efficient plant of its type globally. The company is preparing an Environmental and Social Policy that covers the scale and environmental impacts of its activities and includes a commitment to continuous improvement and pollution prevention, compliance with legislative and other requirements. The Health and Safety Manager will be responsible for the day-to-day implementation of the ESMS, E&S training activities and monitoring plans. Extensive training will be provided and the company plans to link up with the University of Dammam that has a major environment and engineering program. All personnel will undergo a basic training program prior to performing assigned work at the plant. This will include a detailed briefing on the manufacturing process, familiarization with the fire protection systems and personal protective equipment (PPE), general safety training, emergency response and first aid, and pollution control.

Emergency Preparedness and Response:

GSDG has established a procedure to identify and respond to potential emergency situations and potential accidents. During the construction to date, no environmental incidents have occurred. Concerning occupational health and safety no lost time incidents or fatalities have been reported. The company and contractors have not been subject to any fines from either PME or MODON for any breaches of environmental or health and safety requirements.

Monitoring and Reporting:

Monitoring will be established in accordance with the EIA recommendations and with reference to the World Bank Environmental Health and Safety General Guidelines and the industry sector guidelines for Base Metal Smelting and Refining. Monitoring of key parameters will be performed to ensure compliance with local regulatory and MIGA requirements.  During operations, in addition to any ongoing reporting and submission of relevant audit reports to PME and MODON, annual environmental and social monitoring reports will be prepared and submitted to MIGA.PME undertakes environmental monitoring and also has two mobile air quality monitoring stations that periodically check ambient air quality.

PS2:  Labor and Working Conditions

Human Resource Policy and Management:

The HR policy is under preparation that will comply with Saudi requirements and is expected to be completed prior to operations. Saudi Arabia labor regulations are comprehensive covering child labor, non-discrimination, sexual harassment, working hours, worker rights, retrenchment and grievances.  GSDG will be expected to routinely demonstrate compliance to the authorities. KSA regulations strongly encourage recruitment of Saudis into the work force with labor law requirements expected to be applied equally to nationals and expatriates. GSD will eventually employ 60-70 personnel when the plant is in operation with a target of 25% Saudi Nationals.  The company will have 3 senior managers and 4 middle managers for operations, HR, HSE and finance. For the construction period there is a project management company plus 3 sub-contractors on site, each with its own health and safety management system.

Each employee is expected to have a contract and understand their rights related to hours of work, wages, overtime, compensation, and benefits upon beginning the working relationship and when any material change occurs. Contracts will also contain explicit language on non-discrimination and equal opportunity, fair wages and benefits, and no engagement in forced or child labor. These procedures will be appropriately communicated to direct and indirect employees upon hiring.

Each worker will be covered by Saudi mandatory medical insurance under the Government’s General Organization for Social Insurance (GOSI) scheme with contributions from the company and the employee according to the regulations. For expatriate workers they will be provided with an annual air ticket home. Transport to the project site is provided, or an allowance paid. The company will operate on a 24/7 basis for 335 days per year. Employees will work on a 3 x 8 hour shift basis on a 5 days on - 2 days off basis.  This work schedule will change to adapt to certain period during the year (Ramadan in particular).

Under Saudi and MODON regulations neither construction nor operational workers are permitted to live on site. Worker accommodation has already been constructed as a dedicated housing compound occupying 900,000m2within the industrial city by MODON to a very high standard with recreational areas, three community centers, organized activities with service areas and shopping also provided. These are available to workers in the area through their employer. MODON is currently constructing a new 14,000m2 compound with extensive upgrading of the older facilities. GSDG provides each worker with either accommodation or an allowance should the worker prefer to source accommodation in Al Khobar. The company is exploring the potential in future for leasing a large unit and upgrading it further. The MODON licensed contractor and sub-contractor workers that are working on the project are also housed in the housing block.

Non-discrimination:

GSDG will operates a non-discrimination policy as far as is practicable within the social and cultural norms of the country. The site is in an industrial area some 40km from the city and so significant employment of women is not envisaged as under Saudi regulations females are not permitted to drive and require separate transport. But the company is hopeful of attracting Saudi women for managerial, financial and administrative functions.

Protecting the Work Force:

Child and forced labor is not permitted in Saudi Arabia. All employees will be required to be over the minimum age of 18 in accordance with PS2 requirements.

Occupational Health and Safety:

During construction all contractors have been operating their own occupational health and safety management systems and are working to a high standard.  During due diligence, safe working practices were observed and Personal Protective Equipment (PPE) was being worn. In the past three years of construction there have been no lost time incidents, accidents or fatalities.  All contract staff are required to use the appropriate PPE provided and were also observed to be using this during the MIGA site appraisal visit. GSDG has appointed a full time HSE manager who is developing the occupational health and safety management system.  He is responsible for training of the GSDG’s staff on general environmental issues as well as specific protection measures at the plant. Several sets of operating procedures have been produced to date, but work is in progress and expected to be completed before operations commence. The company places a high priority on occupational health and safety and the plant incorporates process and technique to minimize risks to the workforce. The feed preparation area will be under negative pressure to avoid any fugitive emissions of EAF dust and in this area, workers will be required to wear respiratory equipment to avoid any dust inhalation.

Typically for EAF smelters a protocol is developed for the systematic screening of scrap steel for any radiation contamination. This could arise from several sources and could severely contaminate the plant should any material enter the process, resulting in its closure. Hence scrap steel is screened on entry to the site and immediately prior to charging to the melt shop and personnel involved in scrap metal handling are usually provided with individual hand-held radiation detectors. As such it is highly unlikely that any EAF dust would be found to be contaminated with any radioactive material, however, GSDG will be providing workers with hand-held devices to check any consignments of EAF dust before it is permitted to be processed.

Workers will be required to avoid extended periods in noisy areas, wear ear defenders and be subject to periodic hearing checks. There will be an onsite first aid room and medical surveillance will be organized pre and during employment on a periodic basis.  There is an arrangement with a nearby hospital for any cases requiring more extensive care.

PS3:  Resource Efficiency and Pollution Prevention

Process Description:

EAF dust will be transported either in pneumatically sealed tanker trucks (from large customers) or bulk double sacks (from small customers) in enclosed cargo trucks to minimize risk of spillage during transportation, loading and unloading. The dust is transferred pneumatically from the truck to a covered storage area and into dedicated receiving silos in an enclosed building with 4 meter high concrete walls that will be kept under negative pressure by a fugitive dust collector. The dust is then mixed and pelletized using water and a reducing agent (usually PET or fine coke) to a carefully controlled standardized raw material composition by computer control. Several parameters will be carefully controlled to provide a feed material that has a constant composition (ratio: EAF dust/reducing agent/flux; moisture; consistent pellet size), ensuring a uniform kiln operation that will produce a higher zinc yield in the product (WZO)and better quality Waelz Iron Product (WIP). These pellets are then charged into the feed hopper of the Waelz rotary kiln via an enclosed conveyor, and processed. The kiln is 55 meters in length with a diameter of 4 meters. It is being installed with a slope of around 2.5 % and will rotate between 0.5 to 1.5 rpm. In the Waelz kiln, the feed materials are heated to approximately 1200°C in the presence of carbon in a reduction process producing zinc vapor and carbon monoxide (CO). When combined with the surplus of air in the kiln, the zinc vapors are oxidized to form crude zinc oxide, and the CO oxidized to form CO2.The dust-laden off-gas will be treated in a downstream off-gas system. In the first stage, coarse particles mechanically entrained and are separated in a dust settling chamber with larger or coarser material returned to the kiln. The hot, dust-laden off-gas ware then cooled and the WZO separated out in a high efficiency fabric collector. The WZO will be will be directly loaded in silo trucks or packed into supersacks immediately after production to be delivered to the port for shipping to Europe or local consumers, when they become available. These supersacks will be kept in an enclosed building until loading into standard overseas containers. The WIP co-product, will also be stored initially in an enclosed building while GSDG secures approval, and a market, for its use in road construction (typically found in the US), the steel and/or cement industry.

Pollution Prevention and Resource Conservation:

The plant and process design will result in minimal pollution. The Waelz Kiln technology is a well-established process considered as best technology in the US and Europe.  It is energy efficient, auto thermic after initial combustion and converts a hazardous waste feed material into two salable products with no solid or liquid waste being produced. At full production of 110,000 MT/year EAF dust, the process will produce up to 43,000 MT/year of WZO and 82,500 MT/year of WIP. Air quality is maintained through use of bag filters and negative pressure transfer areas to prevent fugitive emissions. At full production the plant is expected to use 14,300 MWh of electricity supplied via MODON and back up diesel and fuel oil to initiate the process. The reducing agent is coke with an annual consumption of 24,750 MT.  Industrial water used in the process is also supplied by MODON. It is recycled within the process with no waste water effluent discharge.

Air Emissions and Noise:

In the EIA a detailed air dispersion study was conducted to evaluate the potential effect and dispersion of emissions from the stack. Air dispersion modeling was carried out by using AERMOD model, with results indicating that the plant emissions will not exceed PME air quality standards issued by the PME. The main air pollutants associated with plant operations are particulate matter and combustion gases. Waelz kilns release combustion emissions (CO2, CH4, and N2O) in addition to process emissions. These will be controlled using modern and efficient bag filter units with exhaust gases discharged to atmosphere via a stack. The cleaned exhaust air is expected to have a dust load of less than 2 mg/Nm3 normally, which is within the guideline value of 1-5 mg/Nm3 in the EHS Guideline for Base Metals. The filter manufacturer has a design guarantee of 5 mg/Nm3. These filters have a high filtration and PTFE coated surface ensuring high filtration efficiency. Stack emissions will be monitored for SOx, NOx, TOC and Dioxins. Nitrogen oxides (NOx) emissions are caused by high temperatures associated with the process. Other potential pollutants of concern include organic compounds such as dioxins that are formed as kiln temperature drops from 700-800oC as exhaust leaves the kiln. Dioxin control is via rapid cooling and an adsorption technique utilizing activated carbon to take the temperature quickly below 400oC with emission levels expected to be less than 0.1 ngTEQ/m3which is below the EHS Guideline value of 0.1-0.5 ngTEQ/m3. GSDG confirms that all hazardous emissions baselines will be determined and certified during plant commissioning, after six months of operation and annually thereafter or as requested by local authorities. Stack emission testing will be performed to the applicable US-EPA methods and will be conducted by a qualified and licensed third party. Overall, air emissions are expected to comply with the strictest standards including PME and WBG EHS Guideline limits.

Ambient noise pollution is not an issue due to the remote location of the plant.

Greenhouse Gas (GHG) Emissions:

GHG emissions will arise from three principal sources: (i) electricity used by the plant and back up power generation (10,788 tCO2/year); (ii) fuel consumed during process initiation (1,108tCO2/year) and (iii) the process itself (58,096 tCO2/year). Consequently, the annual projected CO2 emission will result to approximately 70,000 tCO2/year.

Water and Waste Water:

Industrial process water is supplied by MODON and is used in the mixer and for cooling purposes by means of evaporation at 3 different locations in the process: (i) water injection into the dust settling chamber; (ii) eventual water injection in the cooling drum and (iii) through evaporation losses in the cooling tower. This is stored in the process water tank, filled by the pump and is also added to by recycling internal grey water from the employee's showers and washing machines for the workers uniforms. All water used for washing floors and spillage is collected in sumps located in the various plant areas and into the industrial water holding tank.

Potable water is also supplied by MODON and will be stored in 2 tanks inside the shared services building and then distributed by pumps through separate piping.

The Waelz Kiln process does not generate any wastewater. Sanitary waste is disposed to the sewerage system for treatment at the municipal waste water treatment plant that is operated by a MODON contractor.

Solid Waste and Hazardous Materials Management:

General construction wastes are being removed to landfill by a licensed waste management contractor. During operations, solid waste generation is expected to be limited and will include work shop and maintenance related wastes such as oil, grease and cleaning products. A waste management plan will be prepared to describe and quantify the various waste streams with appropriate storage, handling reuse and disposal routes.

In the plant, the EAFD will be delivered in pneumatically sealed tanker trucks and pneumatically conveyed from the truck to a covered storage area and into dedicated receiving silos. A hazardous materials management plan presenting the measures to be put in place to prevent leakage and manage any accidental release of the EAF dust will also be developed and shared with employees and contractors. In the unlikely event of any EAF dust found to be contaminated with radioactivity, it will be immobilized on site and the regulatory authorities notified immediately.

PS4:  Community Health, Safety and Security

Health Impact on Surrounding Communities:

The site is some 40 km from urban residential areas in a long established purpose built industrial city and so operations are unlikely to have any significant effect on the community. The major potential health issues for the communities are air pollution, hazardous materials handling and transport. The air shed in the area is degraded and air pollution from the plant will be strictly controlled through gas cleaning and monitored through continuous emissions monitoring to ensure compliance with KSA and WBG requirements. Transport of EAF dust from steel smelters to the project site will be in trucks designed for the purpose and in sealed bags in accordance with transport of hazardous materials regulations. Once on site the material is removed by vacuum pumping to the storage silos to avoid fugitive dust emissions. The process does not produce any process waste water while sanitary waste will be discharged to the public sewer for subsequent treatment at the municipal treatment plant. The industrial city benefits from an extensive wide carriageway road network with  a good portion of additional traffic derived from this project being within the industrial city itself as this is where most the EAF smelters are located.  The additional traffic is not expected to produce any significant impact on the current volume.

Security Arrangements:

The site is securely protected by permanent concrete and steel security fencing and professionally trained, unarmed security guards to protect the site from unauthorized access during the construction process. When fully operational, the site will be subject to permanent 24/7 security control. In addition to the security guards, CCTV cameras will be located around the site and monitored from the administration building.

Emergency Response:

The project site will have fire protection systems and the necessary protection equipment (fire extinguishers, smoke detectors).  The industrial city has its own dedicated fire-fighting service located within the city a very short distance from the project site.

GSDG submitted an EIA to the Ministry of Environment for approval. This was duly approved and a construction permit was issued.  During EIA preparation there was no public consultation or disclosure of the EIA as this is not a requirement under KSA EIA regulations.  Apart from approval of the EIA, and receipt of a License from the Presidency of Meteorology and Environment (PME), the company has received a construction permit from the Saudi Industrial Property Authority (MODON), Civil Defense approval (covering emergency response and life and fire safety) and Civil Aviation approval. Due to the height of the silo towers on site and proximity to the airport, it was necessary to seek this approval in case warning lights needed to be placed atop the silos, but the height was not considered an issue. Following completion of the construction works the company will be required to have in place operating permits from PME and MODON. MODON issues an annual license that includes E&S and OHS requirements and GSDG will be subject to annual license renewal.  The project is strongly supported by both PME and MODON as this will be the first facility of its type in the area (and the GCC) that can effectively process the hazardous EAF dust.

Given the remote location in the industrial city there is no formal community stakeholder engagement or development plan for this project.  However, the company will be establishing links with the local University of Dammam to offer an internship and plans to organize environmental awareness campaigns.

• Environmental Impact Assessment study report (dated July 11, 2012), Global Steel Dust Gulf LLC, reference number: AR12-279, prepared by Arabian Environmental Sciences Ltd. Company (Arensco), Al Khobar, Kingdom of Saudi Arabia.

The above listed documentation is available electronically as PDF attachments to this ESRS at www.miga.org.  The final EIA Report is also available for viewing at the following locations: