YGUAZÚ CEMENTOS S.A.

Proyecto TUPI – Yguazú Cementos – Paraguay

Environmental and Social Impact Assessment – ESIA

Executive Summary May, 2011

Proyecto TUPI – Yguazú Cementos – Paraguay Environmental and Social Impact Assessment – ESIA Executive Summary May, 2011

SUMMARY 1.0 Introduction 1 2.0 Project Characterization 2

2.1 Villa Hayes Cement Plant 2 2.2 Port of the Villa Hayes Cement Plant 5 2.3 Puerto Itapucumi Limestone Deposit 7 2.4 Implementation and Operation Phases Expected Workforce 7 2.5 Schedule 8 2.6 Investments 8

3.0 Legal Aspects and Applicable Standards 8 4.0 Social and Environmental Baseline 8

4.1 Indirect Area of Influence (IAI) 10 5.0 Environmental and Social Impacts 18 6.0 Social and Environmental Management of the Enterprise 24 7.0 Public Consultation 26

7.1 Stakeholders 26 7.2 Consultations Conducted for Project ESIA 28

7.2.1 Consultation During Social Baseline Assessment 29 7.3 Consultation to be Held on the EISA 29 7.4 Consultations to be Held During the Construction and Operation Phases 30

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1.0 Introduction The object of this Environmental and Social Impact Assessment (ESIA) includes a Cement Plant Project to be built in the city of Villa Hayes, Department of Presidente Hayes, in Paraguay, about 30 km from Asuncion, Paraguay’s capital. The plant will use the dry process pre-calcination technology to produce two types of cement: CP IV 32 (70%) and CP II F-32 (30%). The Project will also include a Port operating a total of 69,000 tons of raw materials at the Plant’s full capacity. Most of this raw material will consist of limestone (460,000 t / year). Limestone to be used in Villa Hayes will come from a deposit located in Puerto Itapucumi, a village about 400 km upstream from the Cement Plant site, in the Department of Concepción. The Limestone Deposit and its associated Port are also part of this ESIA, where the previously explored and crushed limestone will be transferred to barges and transported by the Paraguay Waterway to the Cement Plant site. The other raw materials and inputs to be used in the cement manufacturing process consist of clay (76,000 t / year), pozzolan (56,000 t / year), iron ore (11,000 tons / year), gypsum (20,000 t / year), mineral coal (22,400 tons / year) and petroleum coke /petcoke (22,400 t / year). Clay is obtained from a deposit yet to be defined, and which is not part of this ESIA. For practical purposes, therefore, this clay deposit should be considered as an "associated facility" of the Project. The same situation applies for pozzolan, which, at first, will be imported from Brazil or Argentina, and later, a mine deposit will be determined to explore this raw material. In both cases, after the identification and negotiation of the clay and pozzolan mining areas, the Project Company must develop Simplified Environmental and Social Assessment Studies for each of these associated facilities. Both the Cement Plant and Limestone Deposit have a license issued by the Dirección General de Control de la Calidad Ambiental y de los Recursos Naturales (DGCCARN) of the Secretaría del Ambiente (SEAM), based on Environmental Impact Assessment prepared in compliance with Law No. 294 / 93 for Environmental Impact Assessments. However, the licensing process does not meet the environmental assessment standard required by the Environmental and Safeguards Compliance Policy (OP-703). Therefore, the present Environmental and Social Impact Assessment (ESIA) was developed to meet these requirements.

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2.0 Project Characterization 2.1 Villa Hayes Cement Plant As already mentioned, the Villa Hayes Cement Plant will use the dry process pre-calcination technology to produce 400,000 tons of cement per year. The plant, port and power substation, which are all part of the Villa Hayes Cement Plant, will be built in a 50 ha area owned by Cementos SA Iguazú, with facilities occupying 19 ha of the total area. Figure 2.1.a below shows the Villa Hayes Cement Plant layout on Iguazú’s property in a recent photo taken in May 2010. Figure 2.1.a Villa Hayes Cement Plant Layout on Iguazú’s Property

Quantification of raw materials and other inputs to the process Table 2.1.a below presents the annual consumption of raw materials and other inputs, location of materials supplied, type of storage of the Villa Hayes Cement Plant, and information about the final product.

Access road

Access road to port construction

Substation

Storage Yard

o

Plant site borrow

area

Truck parking

Construction site

Plant site

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Table 2.1.a Consumption, source and storage of raw materials, other inputs and final product

Raw Material / Inputs

Consumption Storage Capacity(in days)

Source Type of storage (Capacity)

Limestone 460,000

tons /year 220

Limestone deposit

in Puerto Itapucumi

2 piles of 12,500 tons each, in an uncovered area of the raw

material storage area (25,000 tons)

4 piles of 65,000 tons each, on the storage area next to the

raw material storage area (260,000 tons)

Fine Limestone 12,000

tons /year 55

1 pile in a covered area of the raw material storage area

(2,000 tons)

Clay 76,000

tons /year 15

Clay deposit from location not yet

defined (probably from Asunción)

1 pile in a covered area of the raw material storage area

(3,600 tons)

Gypsum 20,000

tons /year 36 Brazil or Argentina

1 pile in a covered area of the raw material storage area

(2,000 tons)

Pozzolana 56,000

tons /year 13

Deposit from location not yet

defined (probably from Asunción). At

first it will be imported from

Brazil or Argentina

1 pile in a covered area of the raw material storage area

(2,000 tons)

Iron ore 11,000

tons /year 60 Brasil or Argentina

1 pile in a covered area of the raw material storage area

(2,000 tons)

Petcoke 22,400

tons /year 45 Brasil or Argentina 2 piles of 2,500 tons each, in a

covered area of the raw material storage area

(5,000 tons) Mineral coal 22,400

tons /year Brasil or Argentina

Electric Power 0.12 GWh

220 kV Transmission Line currently supplying Asunción and Great

Asunción

220 kV Transmission Line currently supplying Asunción

and Great Asunción

Water for laboratory and

office, irrigation of green areas, road wetting, and other non estimated uses

211.2 m3/day Villa Hayes city

water supply network

Villa Hayes city water supply network

Water for the industrial process*

602.4 m3/ day River Paraguay River Paraguay

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Table 2.1.a Consumption, source and storage of raw materials, other inputs and final product

Raw Material / Inputs

Consumption Storage Capacity(in days)

Source Type of storage (Capacity)

Homogeneized raw materials (powder)

2 1 silo (3,200 tons)

Clinker 15 1 silo (15,000 tons)

Final Product

Product Production Storage Capacity(in days)

Source Type of storage (Capacity)

Cement 400,000 tons/year

14 (10 days

CPIV and 4 days CPII)

2 silos of 4,000 tons each

Water used for the industrial process will be supplied by the Paraguay River through the Project Company’s own water intake process. Water will be pumped to the Water Treatment Plant (WTP) at a nominal capacity rate of 185 m3/h. Water supply for office and laboratory, and for use in irrigating green areas, will come from the public water supply network of Villa Hayes. Drinking water for human consumption will be mineral water acquired in 20 L bottles. All domestic sewage generated in the Cement Plant’s laboratory and administrative facilities will be collected and treated in a Sewage Treatment Plant through an activated sludge process with aeration tank, secondary sedimentation, chlorination chamber, and sludge aerobic digester for treating the sludge that is not returned to the aeration tank. The treated sewage is released into the Paraguay River, after checking compliance with discharge standards of Resolution SEAM No. 222/02 and IFC - General EHS Guidelines: Environmental Wastewater and Ambient Water Quality. After digestion in an aerobic digester, sludge will be sent to a drying bed.

The Villa Hayes Cement Plant’s estimated production is 400,000 tons / year, consisting of a total of 80,000 tons / year in bulk and 320,000 tons / year in 50 kg bags. Pollution Control All cement production stages will have particulate matter emission control devices, such as dust removal systems with bag filters and fans. Equipment provided with dust removal systems are: conveyor belts, inlet hoppers, silos and raw materials and cement containers,

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fluidized transport systems, bucket elevators, cement containers in bulk loading area; cement container in the cement bags packaging area, repair and cleaning machine for cement bags, crude material, coal and cement mill. The bag filter to be provided in the crude materials mill chimney is also expected to control NOX and SO2 emissions. Other dust removal systems, such as water sprinklers, cyclone dust collectors, and the conditioning tower are also provided. As for CO2 emissions, the Project Company has provided information based on measurements taken at other cement plants with similar production processes resulting in a conservative production estimate for the Villa Hayes Cement Plant of 660 kg CO2 / t cement. 2.2 Port of the Villa Hayes Cement Plant The Port of the Villa Hayes Cement Plant will receive limestone shipments from Puerto Itapucumi, and also barges with iron ore, coal, gypsum and pozzolan cargoes, from Brazil or Argentina. Construction license for the port has been obtained from the Merchant Navy. The estimated port movement expected for the Plant’s full operation is: • 35,204 tons of limestone per month (1,173 ton / day); • 971 tons of fine lime per month (32 tons / day); • 880 tons of iron ore per month (29 tons / day); • 6,521 tons of coal / petroleum coke per month (214 tons / month); • 21,224 tons of gypsum per month (59 tons / day); • 4,200 tons of pozzolana per month (50,000 ton / year); • 3 vessels are docked per month. The Port design will combine three facilities that are the essence of its operation, as follows:

• Reinforced concrete pier, which will serve as a docking area for barges. It will contain

the unloading system (movable or fixed) that will allow barges to be unloaded one after another in a continuous flow.

• Elliptical platform for maneuvers, which will function as a maneuvering area for cranes or auxiliary fixed or movable equipment, and also as the basis for the discharge hopper, which will feed the conveyor belt to conduct the material to the Plant.

• Reinforced concrete bridge (50 meters) connecting the elliptical platform to the Plant. The bridge connection meets legal requirements with respect to non interruption of access to Paraguay River margins.

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Dredging has been carried out with suction dredgers in order to excavate the maneuvering basin that gives access to the wharf by the Paraguay River. This dredging has reached a depth of 6 meters, and a total of 150,000 m3 of material has been removed. This material was used to construct the landfill used to prevent flooding of the raw materials storage and sub-station areas. Mississipi type 1,000, 1,500 and 2,000 - ton barges will be used to transport limestone and other raw materials by the Paraguay Waterway. Barges are approximately 46.0 m long, 11.0 m wide, 5.1 m high and 2.7 to 3.0 m draft. Limestone transport will use 2,000 ton-capacity barges in 10 barges convoys, totaling 20,000 tons per convoy. Limestone transport will take place during 8 months/year, 30 days/month, 16 hours/day. The transport of other commodities by the Waterway will take place during 12 months of the year, also 30 days/month, 16 hours/day. Transportation will be outsourced. Table 2.2.a below shows means of transport and quantity of materials transported to the Plant. Table 2.2.a Raw materials transportation data

Raw materials Means of transport

Quantity transported tons/year tons/month tons/day tons/hour

Limestone Barge 460,000 54,262 1,809 113 Limestone for

cement Barge 12,000 971 32 2

Iron ore Barge 11,000 880 29 2 Coal/petroleum

coke Barge 44,800 6,421 214 14

Gypsum Barge 20,000 1,759 59 4 Clay Truck 76,000 7,921 264 17

Pozzolana Barge* 56,000 5,133 171 11

Total material to be transported

River Transport 69,426 2,314 146

Highway Transport

76,000 7,921 264 17

* At first pozzolan and other raw materials will be obtained in Brazil or Argentina. After identification of the nearest deposit to the Plant, a specific study will be carried out.

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2.3 Puerto Itapucumi Limestone Deposit The Limestone Deposit is located at a 400 km distance from Villa Hayes Cement Plant, at Puerto Itapucumi, Departament of Concepción. The deposit explored through open pit mining is currently being mined by Concret Mix to produce lime. The boundary between Iguazú Cementos S.A. and Concret Mix properties coincides with the centerline of mine currently in use by Concret Mix. The northeast portion belongs to the latter and the southwest, to Iguazú. Concret Mix should move forward in its exploration activities, up to the line dividing the properties, while Iguazú’s exploration activities will be towards the southwest. Mined limestone will require crushing to reduce its size to a maximum of 25 mm, using a hammer crusher. From the crusher, limestone will be transported by conveyor to a 16,000-ton surge pile, and then to the port where the barges transporting the limestone to Villa Hayes will be loaded. A monthly output of 40,000 tons of limestone is expected from the deposit in Puerto Itapucumi, with an average production of 1,688 m³ / month of waste material (soil and rock). The estimated deposit lifespan is of 330 years. The blasting plan anticipates one blast per week, each one with 29 holes in order to achieve a 4,000 m3 weekly production. Pollution Control All limestone processing and transport stages will have equipment to control particulate materials emissions, such as dust removal systems with bag filters and fans. Equipment to be provided with dust removal systems are the conveyor belts and limestone piles. Other dust removal systems such as sprinklers and water filters are planned for the processing facilities. 2.4 Implementation and Operation Phases Expected Workforce To build the Cement Plant and Limestone Deposit facilities, a total of 915 workers are estimated at peak construction, with an average of 422 workers at any one time. Of the total, about 40 workers are expected to work in the Limestone Deposit construction. Estimated indirect workforce is 180 workers.

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During the Operation Phase, the Cement Plant will require 122 workers, and generation of 180 indirect jobs is also expected in this Phase. In the Itapucumi Deposit Operation Phase (crushing and transport) 8 workers are estimated to be hired. 2.5 Schedule The Project’s construction work, including the Villa Hayes Cement Plant and the Limestone Deposit in Itapucumi, are expected to last 28 months. 2.6 Investments Total Project investment including the Villa Hayes Cement Plant and Itapucumi Limestone Deposit is US $ 105 MM (base Feb/2011). 3.0 Legal Aspects and Applicable Standards The Project complies with the laws of Paraguay and, as already described in Chapter 1.0, it was subject to licensing by the SEAM and received the construction license. In addition, the Project was also adjusted to comply with Inter-American Development Bank – IDB’s standards and guidelines. In addition to the legal requirements, this ESIA was developed to meet the Environmental and Safeguards Compliance Policy (OP-703), applicable to Category "A" Projects, which provides the following environmental and social safeguards: (i) Environmental Assessment - compliance with legislation and national regulations, impact forecast and classification, as well as supervision and enforcement of mitigation measures, (ii) natural habitats and cultural sites, and (iii) prevention and reduction of contamination. 4.0 Social and Environmental Baseline The Social and Environmental Baseline studies describe the physical, biotic and socio-economic aspects of the Cement Plant and Limestone Deposit and areas along 400 km of Paraguay River between the two locations before the start of work (i.e., baseline conditions). This information allows estimation of the Project’s potential impacts and is fundamental for the decision-making process for the Project’s engineering design, construction and operation phases and to develop mitigation measures and monitoring

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programs. Baseline conditions were described for the Project’s Indirect Area of Influence (IAI), Direct Area of Influence (DAI) and Directly Affected Area (DAA). The IAI for the physical, anthropic and aquatic fauna environments included a 400 km-long and 5 km-wide strip on each side of the Paraguay River between the Cement Plant and the city of Puerto Pinasco, which was included due to its role as a magnet for the city of Puerto Itapucumi, where the Limestone Deposit is located. One end of the IAI was located 5 km from the boundary of the area where the Cement Plant will be built, whereas the other end was located 5 km beyond the town of Puerto Pinasco. This strip of land of approximately 400 km-long and 10 km-wide covers part of the territory of the Departments of Presidente Hayes, on the right bank of the Paraguay River, and of Concepción, San Pedro, Cordillera and Central, on the left bank. For this analysis, however, only data from the Departments of President Hayes and Concepción will be considered, because these locations were chosen for building the Project’s Cement Plant and Port (in the city of Villa Hayes, Presidente Hayes Department), and Limestone Deposit (in Puerto Itapucumi, Department of Concepción). The IAI for the vegetation and the terrestrial fauna has the same boundaries at both ends. However, it does not include the 400 km strip along the river that interconnect both sides of the Project, since its impacts on these components are limited to the vicinity of the jobsite facilities. The DAI for the physical, anthropic and aquatic fauna environments was also differentiated for the several environments considered. This DAI encompasses the entire 400 km land strip of Paraguay River between Villa Hayes and Puerto Itapucumi, including the property area of the Villa Hayes Cement Plant with 50 ha, added to a surrounding area of 2 km; in Itapucumi, the 169 ha, where the limestone exploration is expected over a 100-year period, added to the area where other Deposit operation facilities will be built, and also added to a surrounding area of 500 m. The DAI also includes the runway area, the city of Puerto Itapucumi and the organic soil and waste material deposit areas. The DAI and the IAI for the vegetation and terrestrial fauna, both present the same configuration as the DAI for the physical and anthropic environments at both ends, without including the 400 km stretch of river. The Directly Affected Area (DAA) included the property area of the Villa Hayes Cement Plant with 50 ha added to the Port area. In Itapucumi, the DAA includes the 100-year period limestone exploration area of 169 ha and the area where other the Deposit operation facilities will be built.

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4.1 Indirect Area of Influence (IAI) Although the configuration of the Project’s IAI covers two areas distant from one other (southern and northern areas), it is inserted in the Gran Chaco or Western Paraguay (Paraguay Occidental) area, and close to the boundary with the Eastern Paraguay area (Paraguay Oriental). According to the ecological zones world map of the United Nations Food and Agriculture Organization (FAO) (Figure 4.1.a), Paraguay includes two major ecological zones, separated by the Paraguay River channel: the dry tropical forest in the western area and the tropical moist deciduous forest in the eastern area. Despite its configuration, the Project’s IAI is located within the tropical dry forest ecological zone, although very close to the boundary with the tropical moist deciduous forest in the east. The wide distribution of this ecological zone along Paraguay suggests that the intercepted environments are not exclusive in the Project’s IAI. Figure 4.1.a The IAI within the ecological zones of Paraguay

Source: FAO1.

1 http://www.fao.org/forestry/country/19971/es/pry/. Access in March 2011.

IAI

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The south portion of the IAI (Villa Hayes) is in the floodplain of the Paraguay River, consisting of alluvial sediments resulting from erosion in the Andes during the Cenozoic period and of Tertiary and Quaternary sediments and unconsolidated sediments, along a meandering segment of the river because of movements of the sedimentary margins (ECKLE, 1959 apud HAYES, 1995). The north portion of the IAI (Itapucumi) lies on a stretch of the Paraguay River where its riverbed is altered towards west due to calcareous rocks on the left, on the high plateau where the Project’s Limestone Deposit is located. These calcareous rocks are the result of marine deposits that occurred in the early Paleozoic period (ECKLE, 1959 apud HAYES, 1995). The Paraguay River floodplain develops on the river’s right bank, as already described in the description of the southern portion of the IAI. According to Cabrera & Willink (1973), from the standpoint of vegetation and flora, both portions of the IAI (northern and southern) are included in the biogeographic region known as the Chaqueño Domain. The climate of this domain is varied, but in general, it is predominantly continental, with moderate to low rainfall, mild winters and warm summers. The vegetation is polymorphic: deciduous dry forests, shrublands, herbaceous steppes, etc. In general, xerophytic vegetation predominates. Hygrophilous formations appear only along rivers or lakes. With regard to terrestrial fauna in the Project’s IAI, it is possible to identify 130 mammal species, distributed among 92 genera, 27 families and 10 orders. In the Project’s IAI, the bird survey recorded 519 species belonging to 24 orders and 70 families, among which 32 are on the international list of threatened species (IUCN 2010) and 52 are considered threatened in Paraguay (SEAM 2010; SEAM, 2006; Guyra, 2005). In the Project’s IAI and surrounding areas, the herpetofauna survey registered the occurrence of 37 species of amphibians (1 order and 7 families) and 81 reptile species (3 orders and 17 families), totaling 118 species from 4 orders and 24 families. Ichthyofauna As for fish, the Paraguay River basin includes a rich variety of fish, but the number of described species is still controversial. The most recent ichthyological investigations in the Project’s IAI are primarily the AquaRAP-Paraguay expedition (CHERNOFF et al., 2001) and the Guide to Fishes of Paraguay (NERIS et al., 2010). According to these studies and inventories made by the MNHN-P (Ramlow, 1989 and MANDELBURGER et al., 1996), there are 109 fish species listed, which are distributed in 8 orders. The largest order is the Characiforms (62 species), followed by Siluriforms (32 species), Perciforms (7 species), Gymnotiforms (4 species), Cypronodontiforms (1 species), Beloniforms (1 species), Synbranchiforms (1 species) and Rajiforms (1 species).

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The fish species of commercial interest which are caught in the main production areas of the country are Salminus maxillosus (Dorado), Pseudoplatystoma fasciatum (Surubí atigrado), Pseudoplatystoma coruscans (Surubí pintado), Piaractus mesopotamicus (Pacu), Prochilodus sp. (Carimbatá), Leporinus sp. and Schizodon sp. (Boga), Pimelodus sp. (Mandi'í), Plagioscion ternetzi (Corvina River), Sorubim file (Pico de pato), Paulicea lutkeni (Manguruyú), Luciopimelodus pati (Pati) and Brycon orbygnianum (Pirá pyta). Tare'yi species (Hoplias malabaricus), Piraña (Serrasalmus sp.) and Armado (Pterodoras granulosus) are often caught by fishermen, but are not considered of commercial interest. 4.2 Direct Area of Influence (DAI) and Directly Affected Area (DAA) Geology The Itapucumi DAI contains a deposit of limestone rock, which corresponds to the upper sequences of the Itapucumi Group, belonging to the Camba Jhopo Formation, which include the limestone deposit to be used by the Project. In addition to the limestone deposits, the DAI contains recent sediments associated with the fluvial plain of the Paraguay River, represented by the sand, silt, clay, gravel and organic matter, as well as conglomerates. In the DAI of the Cement Plant in Villa Hayes, at its north, there are rocks of the Patiño Formation, especially close to the urban area. This unit consists of conglomerated sediments at the base and sandy ones on the surface, associated with fluvial and aeolic sedimentation processes. To the south-southwest of the future plant and west of the Paraguay River there are recent sediments, with the presence of sand and clay, which are associated with the fluvial plain of the Confuso River, a tributary of the Paraguay River, where sediments are mainly clay, varying from medium to high clay content.

Land Topography / Soils In the DAI / DAA of the Itapucumi deposit there is a unit of Llanura Baixas topography, with elevations reaching 150 meters above sea level and gentle slopes between 1 and 3%, with moderate to poor drainage in the area of occurrence of limestone. The Llanura de Inundação unit predominates to the west of the DAA in an area of occurrence of Gleysoles. The Gleysoles are soils formed from unconsolidated materials and alluvial deposits that have fluvial properties. These are hydromorphic soils, which are greatly influenced by water in their formation and evolution. The Llanuras de Inundação and Llanuras Baixas units predominate in the DAA of the Cement Plant. The first occurs in an area of distribution of Fluvisoles and Gleysoles and second in an area of occurrence of Solonetzes.

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The Fluvisoles are usually located in areas closer to the water courses, forming part of their territory, in pure units or associated with Gleysoles. The Solonetzes in DAI / DAA are located in areas topographically higher than the Fluvisoles and Gleysoles. These soils are characterized primarily by having a B salt horizon with the presence of clays in the subsurface horizon and, fundamentally, an important content of salts. Vegetation Cover / Associated Fauna Considering the distribution or the quantity of native vegetation cover and the status or level of human disturbance of the current vegetation, the southern part of the DAI (Villa Hayes) is distinct from its northern portion (Itapucumi). In view of the fact that the southern portion of the DAI contains part of the urban area of Villa Hayes, there are large tracts with areas affected by human activities, as is the case of the project site. The disturbed areas are in the town of Villa Hayes and its surroundings, mainly made up of the urban area and extensive artificial pasture for livestock, as well as industrial facilities. Especially at the project site, and surrounding the town of Villa Hayes, it is common to find secondary regeneration formations with shrubs and small trees. There are differences between native vegetation existing in areas over recent deposits of sediment in the Paraguay River floodplain (especially on islands and on the left bank) as compared to the slightly older (high areas of the right bank) or those areas distant from the Paraguay River channel. Grasslands (flooded savannas, palm groves, swamp scrubland, pioneering formations, herbaceous wetland vegetation and wetlands in the more depressed areas of paleochannels) predominate in the lower areas, of recent origin and largely seasonally flooded land, where the various lines of river sedimentation can be seen, as well as some narrow bands of wooded areas of water-loving vegetation in areas of earlier deposition. Emphasis is given to formations of forest and higrophylous scrubland along the meandering stretch of Confuso River, around which can also be found extensive palm groves and savannas subject to flooding, and wetlands and pioneer formations in paleochannels. In the Confuso River, there are also stretches with floating vegetation. In flood-free areas, distant from the channel of the Paraguay River, there are semi-deciduous forests, partially affected by fragmentation by the establishment of pastures and by Route 9 (Carlos Antonio López Highway). In the northern portion of the DAI (Itapucumi), native vegetation predominates over areas affected by human occupation. The disturbed areas are concentrated around the village of Itapucumi and in the industrial area and pits for mining limestone, besides small subsistence crops, the aircraft runway, planted forests of eucalyptus, areas of secondary vegetation and several roads opened for logging activities in native forests. The distribution and type of vegetation are determined by the dynamics and formation time of the terrain, and flood duration, if applicable. Thus, there is clear distinction between the vegetation

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existing in the areas of recent sediment deposits in the floodplain of the Paraguay River (on islands and along bands on the banks of the Paraguay River) in relation to areas outside the flood plain and over the Itapucumi limestone deposit. Areas formed by deposition of sediments and seasonally flooded by the Paraguay River, where you can see lines of sedimentation, both located on the left bank as well as on the islands, are dominated by grasslands with palm groves, herbaceous or scrubby swamp, pioneering formations and wetlands in depressions (paleochannels with ponds in the deepest parts). Higrophylous wooded groves can be found in older and more stable deposition sites where there is high humidity or which are subject to periodic flooding. Among these there may be areas which are at slightly lower elevations, covered with grasslands (savannas and herbaceous vegetation which are periodically flooded) or in association with palms groves. Semi-deciduous forest formations are to be found on the high ground which is free from flooding, located over the Itapucumi limestone deposit, exactly in the Project area. These are severely degraded due to the exploration of timber for energy generation. Many areas of secondary scrub or low forest formations may also be found due to the regeneration of old deforested areas.

With regard to local fauna, investigations of mammals carried out in Villa Hayes recorded six wild species belonging to different families, representing four Orders (Artiodactyla, Carnivora, Cingulata and Lagomorpha). The recorded species are widely distributed geographically since they are generalists which are tolerant of human environmental disturbances. None of the observed species is considered endangered according to IUCN and SEAM lists. One species, however, Leopardus pardalis, is included in Appendix I of CITES and the SEAM list for 2010. As for the birdlife, the presence of 88 species was recorded in the DAI of Villa Hayes, distributed through 15 Orders and 34 Families. None are shown in the IUCN list (2010) and only one (Bartramia longicauda) is close to an endangered condition on the national list of Paraguay (GUYRA, 2005). The majority of the birds observed can be classified as generalists and are well adapted to human interference (79.5% of species have low sensitivity) and are independent (56.8%) or semi-dependent (35.2%) on forest habitats. Moreover, the two birds species showing high sensitivity are aquatic (Charadrius collaris and Phaetusa simplex). With regard to herpetofauna, Villa Hayes proved to be exceptionally poor. Only 3 species were found, of which 2 were amphibians (Pseudis paradoxa and Rhinella schneideri) and one crocodilian (Caiman yacare), recorded through traces found. In Itapucumi, investigations of mammalian fauna resulted in the identification of 16 species of wild mammals, including representatives of seven Orders and 11 Families. Fauna here was better conserved than that in Villa Hayes, although the following were recorded:

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• one nearly endangered species (NT, Tayassu peccary) and two vulnerable ones (VU, Tapirus terrestris and Myrmecophaga tridactyla) according to IUCN;

• one on a national list of endangered species in 2006 (M. tridactyla); • one CITES Appendix I (Leopardus pardalis); and • three in Appendix II of CITES (T. peccary, T. terrestris and M. tridactyla). Although most of the species recorded are also generalists and tolerant of human-caused alterations, some, like the endangered ones described above, are more sensitive, particularly T. peccary and T. terrestris, to hunting activities. Studies of birds in Itapucumi indicated 111 species, with representatives of 18 Orders and 37 Families. None of the species are recorded on the international list of endangered species (IUCN, 2010). However, four species are present on the national list (GUYRA, 2005): Cairina moschata (local name: Ype guasu), Amazona aestiva (local name: parakáu), Philydor rufum (local name: Ka'a'i guyra pytâ) and Xolmis velatus (local name: Jiveru), all classified as "Near Endangered Status” (NT). Even though there are a large number of threatened species in Itapucumi, species with low sensitivity to impacts (64%) and those which are not dependent (35.4%) or semi-dependent (55.8%) on forest habitats represent a majority of species recorded. The highly sensitive species recorded were the Phaetusa simplex (local name: Ati) and Ramphastos toco (local name: Tukâ guasu), while some which are dependent on forest habitats are Piculus chrysochloros, Xiphocolaptes major, Pachyramphus validus and Cacicus chrysopterus. The herpetofauna observed in Itapucumi was much more diverse than in Villa Hayes, including 33 species, among them 20 amphibians (5 Families) and 13 reptiles (two Orders and six Families). In addition, there were three species which were discovered through interviews with local people, the tutle Chelonoidis carbonaria and snakes Eunectes notaeus and Crotalus durissus. None of the species in Itapucumi is considered endangered by national and international lists, although one species (Caiman yacare) is included in Appendix I of CITES and one (the lizard Tupinambis merianae) is included in Appendix II. The recorded species are, in general, a wide distributed and are generalists that are tolerant of degraded environments. Many of them are common in urban, agricultural and grassland areas. C. yacare and T. merianae, moreover, are commonly targeted by hunting activities. Overall, the fauna found in both localities affected by the project is generalist and not very sensitive to human-caused alterations, even though fauna in the Itapucumi area is richer but has some species with higher environmental requirements and a lower tolerance to environmental degradation, including some threatened and / or of interest for conservation.

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Ichthyofauna The study conducted in the project area, by means of questionnaires, recorded 15 fish species, distributed among the most observed, appreciated and caught by local fishermen in Playa de Itapucumí and Villa Hayes. Of this total species, 07 are considered migratory Pterodoras granulosus (local name: Armado), Prochilodus sp (local name: Carimbatá), Salminus maxillosus (local name: Dorado), Paulicea Lütken (manguruyú), Brycon orbygnianum (local name: Pira Pyta), Pseudoplatystoma fasciatum (local name: Surubí atigrado) and Pseudoplatystoma coruscans (local name: Surubí pintado), all of which are appreciated by amateur fishermen. In this baseline survey only common species were recorded, most of which are widely distributed geographically and there is no record of an endangered species in the Project area. Socio-economics Villa Hayes The population of Villa Hayes grew from 23,370 inhabitants in 1992 to 57,217 inhabitants in 2002 and to 69,493 in 2008, and contains a large part (69.6%) of the population of the Department of Presidente Hayes. The urbanization rates of Villa Hayes in 1992 and 2002 were 43.3% and 27.7% respectively, indicating that during this period there was a large increase in employment in the rural areas. This can be observed in the geometric growth rates of the population, which were 7.65% per year between 1992 and 2002 (total population), 2.93% per year for the urban population and 10.3% per year for the rural population. The pace of population growth declined between 2002 and 2008, when it was 3.3% per year. In the urban area of Villa Hayes, the arrival of large companies such as ACEPAR prompted the increase in population. The growing need for labor for the plants triggered the migration of families from other locations and departments, mainly from the eastern region, who settled in Villa Hayes. Land Use The total area of the DAI (Direct Area of Influence) is nearly 2,000 hectares (or just under 20 km²). Most of the DAI (56%) is represented by rural areas, which includes areas of native vegetation (trees, shrubs and herbaceous vegetation) and a small fraction of areas with farming activity (2.926 ha), only 0.15% of the total area. Consolidated urban areas account for 18.71% of the DAI.

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The share of urban-industrial activities in the DAI is just under 20%. Of the industrial areas, either existing or under construction, only one is located within the consolidated urban area. The area occupied by the Transchaco Highway was also considered as human-occupied within the DAI and represents 0.29% of total area. Much of the rural area is covered with native vegetation, represented in part by arboreal formations (with 502.7 ha, 25.8% of total) and partly by herbaceous and shrub vegetation (less than 580 ha or 29.8% of total area). These two categories account for 55.6% of DAI. Another category with a large percentage share of the total DAI is water body surface area, including both the Paraguay and Confuso Rivers and the wetlands (which can be characterized largely as water bodies). Only 20% of the DAI is urban. The DAI is primarily industrial. In general, the roads in the DAI are dirt, but some are paved, including the main avenues of the town, where most of the trade and educational institutions are located. Puerto Itapucumi Puerto Itapucumi is in the district of Concepcion, capital of the department of the same name. There are no census records for the population of this village. According to data obtained from the school, Puerto Itapucumi has 130 houses, each inhabited by six to eight people, resulting in an estimated population of 900 people. Population growth is directly related to labor demand of the lime plant, the only local company. The low level of community development, its isolation and the lack of training of its population for other productive activities, lead to a lack of growth opportunities and of a diversified labor force. Residents who travel to other locations are usually responsible for bringing food and clothing to the community, and these are usually Itapucumi store owners. The distance and high cost of water transport to other villages make it impossible for the population to work in other areas. Puerto Pinasca is the nearest town to Itapucumi, but given the deteriorating conditions that followed the tannin plant closing in 1967, unemployment and poverty are the reality in this town. Land use The entire village is located on property of the Concret Mix SA company, which has a project to grant some land titles to residents with homes on their lands. The whole area is rural. The roads do not have names and are all dirt. The town is not divided into districts.

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When the lime plant was established, families that were in the higher areas were relocated to lower areas. All homes have electricity supplied by the Administración Nacional de Electricidad (ANDE). There is no rainwater or sewage collection. Drinking water comes directly from the river with no processing and is stored in a 5000 liter tank. The town has about 130 houses, mostly built of wood. It has a cemetery, a park, a soccer field, a police station, a sports field, a church and a school. A health center is being built by the Concret Mix and Yguazu Cementos companies. With respect to land use, most of the DAI (43.7%) is native tree cover. The category “fields” (which includes all forms of herbaceous vegetation and shrubs found) also occupies much of the area, representing 18% of the total. Another large share of the DAI is water (mostly the Paraguay River), which takes up nearly 30% of the DAI. The areas occupied by human activities are a very small share of the total DAI. Mining and industrial facilities account for 2.36% of the total DAI and, summed with the areas of the village and airstrip (including the edges with herbaceous vegetation), make up 4.34% of the total area. Vegetation of human origin (reforestation and agricultural areas, including some buildings) makes up an additional 4.36% of the DAI. 5.0 Environmental and Social Impacts The purpose of this section is to present an assessment of the Project (Cement Plant and Limestone Quarry, both with associated ports) and the direct, indirect and cumulative impacts on the physical, biotic and social environments. The procedure for identifying and assessing impacts used in this study allows a detailed estimate of the project’s impact on each of the environmental and social components within its area of influence, based on project actions. The resulting impact is defined as the net effect of the project on each of the environmental and social components, including impacts related to all project actions and after considering preventive, mitigation or compensatory measures.

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5.1 Pertinent Project Actions The identification of pertinent project actions was based on detailed analysis of engineering design, construction methods and construction logistics. The pertinent actions are classified into three groups according to the construction phase of the project: • Actions during the project planning and pre-construction phases • Actions during construction • Actions during operation Table 5.1a, below, shows the list of actions affecting the project. Table 5.1.a Pertinent Project Actions A.1 Planning and pre-construction phase A.1.01 Initial Operational Structure A.2 - Construction Phase Limestone Quarry and Cement Plant A.2.01 Implementation and operation of construction camp A.2.02 Land clearing and vegetation removal A.2.03 Construction Demobilization Limestone Quarry A.2.04 Foundation construction on land and along river banks A.2.05 Construction of port embankment A.2.06 Construction of the civil and electromechanical infrastructure works necessary for operating the limestone mine A.2.07 Transport of materials, equipment and staff to quarry works Cement Factory A.2.08 Earthwork - cuts& fills A.2.09 Underwater work - excavation of the harbor basin A.2.10 Excavations A.2.11 Construction of foundations on land A.2.12 Construction of foundations in the riverbed A.2.13 Construction of the civil and electromechanical infrastructure works necessary for the operating the cement plant A.2.14 Implementation of civil works in the riverbed A.2.15 Access road improvements A.2.16 Transport of materials, equipment and staff to plant site A.2.17 Electromechanical assembly A.2.18 Construction of green areas / landscaping A.3 - Operation Phase Limestone Quarry and Cement Plant A.3.01 Hiring of operation labor force A.3.02 Vegetation removal A.3.03 Overburden removal A.3.04 Mining activities A.3.05 Transport of rock to crusher A.3.06 Preliminary Crushing

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A.3.07 Limestone Stockpiling A.3.08 Transport to port A.3.09 Loading of barges A.3.10 River transport of limestone A.3.11 Unloading limestone at Villa Hayes A.3.12 Transport of other raw materials A.3.13 Stockpiling of limestone and other raw materials A.3.14 Internal transport of raw materials, intermediate and finished goods A.3.15 Milling / grinding / pulverization of raw materials and final product A.3.16 Mixing and homogenization raw materials A.3.17 Stockpiling of raw materials, intermediate and finished goods A.3.18 Pre-calcination A.3.19 Calcination in a rotary kiln A.3.20 Cooling A.3.21 Pozzolan drying A.3.22 Handling and packing of final product A.3.23 Shipping and transport of final product 5.2 Environmental and social components The definition of environmental component adopted in this environmental impact assessment is the relatively homogeneous set of elements that make up the environment and which are subject to interactions with actions to be implemented during construction and operation of the Cement Plant and Limestone Quarry, both with associated ports. This set of components may include both elements of the natural environment (soils, water resources, vegetation) as well as man-made ones (the economy, quality of life or social infrastructure). The environmental components likely to be affected by the actions described above are listed below. Physical environment C.1.01 - Surface water resources C.1.02 - Groundwater resources C.1.03 - Landforms and soils (land) C.1.04 - Climate and air

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Biotic environment C.2.01 - Vegetation C.2.02 - Ichthyofauna C.2.03 - Terrestrial Fauna Socio-economic environment C.3.01 - Demographics and quality of life C.3.02 - Economic activities and public finance C.3.03 - Public Health C.3.04 - Infrastructure and public services C.3.05 - Landscape C.3.06 - Historical, Cultural and Archaeological Heritage C.3.07 - Indigenous peoples and traditional communities C.3.08 - Protected Natural Areas 5.3 Identification of Project Impacts Potential positive and negative impacts of the project were identified by evaluating the relationship between pertinent project actions (Section 5.1) and the social and environmental components of the project (Section 5.2). A total of 74 negative and positive impacts were identified and are listed below for the physical, biotic and socio-economic environments. The impacts listed below are potential impacts and do not take into account the effects of any preventive, compensatory or mitigation project measures. Physical environment 1.01 - Change in water quality during construction 1.02 - Silting of water bodies during construction 1.03 - Change in the risk of contamination of water bodies during construction 1.04 - Change in the risk of contamination of water bodies during operation of the Cement Plant / Port 1.05 - Use of the Paraguay River water for cement manufacturing process 1.06 - Change in the risk of contamination of water bodies during operation of the Limestone quarry / Port 1.07 - Change in water quality during operation of the quarry Limestone / Port 1.08 - Silting of water bodies during operation of the Limestone quarry / Port 2.01 - Change in the risk of groundwater contamination during construction 2.02 - Change in groundwater level during operation of the Limestone quarry / Port 2.03 - Change in the risk of groundwater contamination during operation 3.01 - Modification of topography and occurrence of erosion due to construction

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3.02 - Change in the risk of soil contamination due to construction 3.03 - Change of underwater morphology 3.04 - Destabilization of riverbanks caused by barge operation 3.05 - Change of topography and occurrence of erosion due to operation of the Limestone quarry 4.01 - Increased levels of noise, dust and emissions from mobile sources 4.02 - Increased levels of noise and dust in during operation of the Cement Plant 4.03 - Change in air quality from atmospheric emissions of the Cement Manufacturing Process 4.04 - Contribution to climate change by emission of Greenhouse Gases (GHG) 4.05 - Increased levels of noise, dust and vibration during operation of the Limestone quarry Biotic environment 5.01 - Reduction of vegetation cover to build the Cement Plant, Limestone Quarry and Ports 5.02 - Risk of fire in nearby vegetation during construction of Cement Plant and processing facilities of Limestone Quarry 5.03 - Deposit of particles on vegetation during construction of the Cement Plant and Limestone Quarry 5.04 - Deposit of particles on vegetation during operation of the Cement Plant 5.05 - Risk of fire in vegetation during operation of the Cement Plant 5.06 - Reduction of vegetation cover during operation of the Limestone quarry 5.07 - Deposit of particles on vegetation during operation of the Limestone quarry 5.08 - Risk of fire in adjacent vegetation during operation of the Limestone quarry 5.09 - Edge effects in the forests bordering the Limestone Quarry 6.01 - Reduced habitat quality for fish and benthic community during construction 6.02 - Reduced habitat quality for fish and benthic community during operation 7.01 - Disturbance and driving away of wildlife during construction 7.02 - Loss / death of animals during construction activities 7.03 - Risk of increased hunting pressure during construction period 7.04 - Disturbance of wildlife during operation of the Cement Plant 7.05 - Loss / death of animals during operation activities of the Cement Plant 7.06 - Risk of increased hunting pressure during operation of the Cement Plant 7:07 - Disturbance of wildlife during operation of the Limestone quarry 7.08 - Loss / death of animals during operation activities of the Limestone quarry 7.09 - Risk of increased hunting pressure during operation of the Limestone quarry Socio-economic environment 8.01 - Generation of expectations in the population 8.02 - Generation of income and jobs during construction

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8.03 - Disturbance to bordering population due to increased noise levels, dust and emissions from mobile sources 8.04 - Risk of conflict between workers and the community during the construction 8.05 - Employment and income generation during operation, including navigation 8.06 - Health risks to plant workers associated with the generation of noise and dust 8.07 - Disturbance to bordering population due to increased noise and dust levels during operation of the Cement Plant 8.08 - Disturbance to bordering population due to change in air quality from atmospheric emissions of the Cement Manufacturing Process 8.09 - Risk of conflict between workers and the Villa Hayes community during operation 8.10 - Job and income creation during operation of the Limestone Quarry 8.11 - Disturbance to bordering population due to increased noise, dust and vibration levels during operation of the Limestone quarry 8.12 - Health risks to quarry workers associated with the generation of noise and dust during operation 8.13 - Risk of conflict between workers and the Puerto Itapucumi community during operation 8.14 - Risks to the Puerto Itapucumi community related to operation of the Limestone quarry 9.01 - Stimulated regional economy during construction 9.02 - Increased tax collection during construction 9.03 - Stimulated regional economy during operation 9.04 - Increased tax collection during operation 9.05 - Improved balance of payments 10.01 - Increased pressure on public medical facilities during construction 10.02 - Increased pressure on public medical facilities during operation of the Plant 10.03 - Increased pressure on public medical facilities during operation of the quarry 11.01 - Partial appropriation of the installed capacity of local utility companies during construction 11.02 - Increased land traffic during construction 11.03 - Partial appropriation of the installed capacity of local utility companies during construction 11:04 - Intensification of river traffic 11:05 - Increased ground traffic to operate the Cement Plant 11.06 - Intensification of traffic on local roads 12.01 - Change in landscape in the Cement Plant area 12.02 - Change in landscape in the Limestone Quarry area 13.01 - Risk of lost archaeological heritage due to construction activities 13:02 - Risk of lost archaeological heritage when extending quarry 14.01 - Risk of interference with indigenous peoples during construction 14.02 - Risk of interference with indigenous peoples during operation

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6.0 Social and Environmental Management of the Enterprise Proposed measures for the prevention, mitigation and compensation of environmental impacts for Proyecto TUPI – Yguazú Cementos – Paraguay were grouped into nine Socio-environmental Plans and Programs, to allow their implementation and management throughout the different project phases of pre-construction, construction and operation. This set of plans and programs, with their respective measures, is comprehensive and ensures that all direct and indirect impacts of project implementation are in some way prevented, mitigated or compensated. The Social and Environmental Plans and Programs are listed below, as well as measures proposed for each: Compliance Assurance Plan for Environmental, Social and Health and Safety during Construction Integrated Plan for Environmental, Social and Health and Safety Management during Construction ICA 01 - GENERAL GUIDELINES FOR ENVIRONMENTAL CONTROL Air Pollution Control: control of dust and smoke emissions Noise Management Hazardous products management Hazardous spills management Water and wastewater management Solid construction waste management ICA 02 - ENVIRONMENTAL CONTROL FOR LAND CLEARING ACTIVITIES ICA 03 - ENVIRONMENTAL CONTROL FOR EARTH MOVEMENT ACTIVITIES Temporary drainage guidelines General measures to control erosion and siltation ICA 04 - ENVIRONMENTAL CONTROL OF DREDGING ICA 05 - ENVIRONMENTAL CONTROL OF AREAS OF EARTH REMOVAL AND STORAGE AREAS FOR SURPLUS EARTH Measures to control erosion and siltation ICA 06 - OPEN PIT EXCAVATION ICA 07 - CEMENT AND CONCRETE WORK ICA 08 - ENVIRONMENTAL CONTROL FOR OPERATING VEHICLES AND EQUIPMENT ICA 09 – DECOMMISSIONING AND RECOVERY OF DEGRADED AREAS General measures for the recovery of affected areas Decommissioning of facilities Terrain recovery and vegetation restoration TRANSPORTATION MANAGEMENT

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STANDARD PROCEDURE FOR ENVIRONMENTAL EMERGENCY RESPONSE LABOUR MANAGEMENT GUIDELINES FOR CONSTRUCTION CAMP REGULATIONS Social aspects that affect construction camps and other support areas Labor issues of construction sites and other support facilities Minimum requirements to include in regulation of operation of the construction camp and other support facilities Minimum requirements for employee Code of Conduct COMMUNITY RELATIONS MANAGEMENT OF OCCUPATIONAL HEALTH AND SAFETY SAFE WORKING PROCEDURES (SWP) Biodiversity Monitoring Program Flora Monitoring Subprogram Fauna Monitoring Subprogram for Wild Vertebrates Fish Monitoring Subprogram Deforestation Program for Operation of the deposit and adjacent areas Integrated Plan for Environmental, Social / Health and Safety Management during Operation Socio-Environmental Training Environmental control of vegetation removal Wildlife protection Dust control Control of stationary source emissions Control of vehicle emissions Control of air quality Control of noise and vibration Effluent management Executive procedures to reduce the risk of slope instability Erosion mitigation and control Executive procedures to reduce siltation of water bodies Executive procedures for reducing the risk of slopes instability of overburden piles Stabilization of the side walls of the pit Solid Waste Management Management of hazardous products Management of hazardous product spills Standard procedure for responding to environmental emergencies Control of explosives Health / Safety Management Control of environmentally critical suppliers and service providers Transportation Management Safe Work Procedures (SWP) Monitoring Subprogram during Operation Air quality monitoring

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Septic tank monitoring Effluent monitoring Monitoring of quarry excavation slope stability conditions Monitoring of overburden and waste pile slope stability conditions Environmental monitoring and control of erosion and silting of drains and watercourses Monitoring of groundwater level behavior Noise and vibration monitoring Social Communication Program and Community Relations Social Responsibility Program Plan for end of mine’s useful lifetime Localized corrective measures Reclamation of waste material mined Construction of fencing around the pit perimeter 7.0 Public Consultation The objectives of the public consultation are to incorporate the community perspective, opinions, questions and concerns early in the project, in a way that allows them to be taken into consideration during project design and implementation. It also serves to inform stakeholders about the project, especially its characteristics that can have impacts on them. A transparent public consultation process helps reduce conflict, and promotes trust and communication between the project and local communities and other stakeholders. 7.1 Stakeholders Tables 7.1.a, 7.1.b and 7.1.c show potential stakeholders of the Cement Plant Project and associated activities. Table 7.1.a Interested parties of national scope Power Knowledge • Ministerio de Obras Públicas y Comunicaciones - MOPC - Dirección de Marina Mercante del Estado - MOPC - Vice ministerio de Obras Públicas • Administración Nacional de Navegación y Puertos (ANNP) • Alcaldía General Naval • Ministerio de Industria y Comercio • Secretaría del Ambiente • Ministerio del Interior

• Sistema Nacional de Formación y Capacitación Laboral (SINAFOCAL) (National System for Labor Education and Qualification) • Servicio Nacional de Promoción Profesional (SNPP) (National Service for Professional Development)

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Table 7.1.a Interested parties of national scope Power Knowledge • Dirección Nacional de Transporte • Sanitary Services Regulatory Body (ERSSAN) Production Community • Sociedad de Capitanes de Cabotaje y Prácticos de la Zona Norte • Land-based Transport Union • River-based Transport Union • Maritime agencies • Shipowners • Land-based Transport Companies • Construction Companies • Means of Communication

• Vida Silvestre Foundation • Moises Bertoni Foundation • Paraguaya Foundation • Tierranuestra Foundation • Alter Vida • GEAM - Gestión Ambiental para el Desarrollo Sustentable (Environmental Management for Sustainable Development)

Table 7.1.b Interested parties in Area of Influence - Villa Hayes Power Knowledge

• Gobernación de Presidente Hayes • Municipalidad de Villa Hayes

• Universidad Nacional de Asunción • Universidad Politécnica y Artística del Paraguay (UPAP) • Universidad del Norte • Universidad Metropolitana • Universidad San Carlos • SINAFOCAL • SNPP, Regional Bajo Chaco • Escuela Agrícola San Francisco - Benjamin Aceval

Production Community

• Companies that distribute cement in Villa Hayes • Local land-based transport Companies • Regional Hospital N° 80in Villa Hayes • Shipowners • Land-based Transport Companies • Local Construction Companies • Means of Communication

• Centro Cultural Melodía – Villa Hayes • Fundación DesDelChaco • Local associations • Comisiones vecinales • Radio Sembrador - 88,7 FM • Radio Sagrado Corazón de Jesús de la COOTRAPAR • COOTRAPAR (Cooperativa de trabajadores de ACEPAR) • Cooperativa Nueva Burdeos

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Table 7.1.c Interested parties in Area of Influence – Itapucumi Power Knowledge

• Gobernación de Concepción • Municipalidad de Concepción • Municipalidad de Puerto Pinasco

• Escuela Básica N°1.461 "8 de Diciembre" – Itapucumi

Production Community

• La Concepcionera – land transport company • Local enterprises • Boats that transport people and goods on the Paraguay River • Puerto Pinasco Health Center • Puerto Pinasco IPS Hospital • Companies that distribute cement in Concepción • Companies that distribute cement in Horqueta

• Centro Cultural Melodía – Villa Hayes • Contraloría Ciudadana – Villa Hayes • Comisión Juvenil – Villa Hayes • Radio Pinasco – Puerto Pinasco • Coordinator of “Comisiones Vecinales” in Villa Hayes • “Comisión vecinal” for Bouvier District – Villa Hayes • “Comisión vecinal” for El Progreso District – Villa Hayes • “Comisión vecinal” for Alonso District – Villa Hayes • “Comisión vecinal” for Santa Librada District – Villa Hayes • “Comisión vecinal” for Pa'i Roberto District – Villa Hayes • “Comisión vecinal” for San Jorge District – Villa Hayes • "Virgen Serrana" Comission for running water - Itapucumi

7.2 Consultations Conducted for Project ESIA Public consultation was performed associated with the development of the Project ESIA in 2011. The objectives of the public consultations (workshops) are to:

• Provide information to allow relevant stakeholders to better understand the Project (including the Limestone Quarry)

• Facilitate stakeholder input regarding potential concerns or issues with the Project, which can be addressed as part of this ESIA and, especially in programs to be implemented and measures to be taken.

• Facilitate the development of positive benefits from the Project, such as increased local employment, sale of local goods and services, etc.

As a measure to ensure that the perspectives of stakeholders be considered in project implementation and preparation of the ESIA, programs and measures, workshops were

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attended by the Director of the project company, the project manager and a representative of the consultancy firm hired to prepare the ESIA, as well as a support team and organization, made up of consultants from Paraguay. 7.2.1 Consultation During Social Baseline Assessment

During the social baseline assessment work as part of this ESIA, consultation with relevant stakeholders was held from February 8 to 11, 2011.

Public consultation meetings were held in Villa Hayes and Puerto Itapucumi. The meeting at Villa Hayes had an attendance of about 47 people, including community members, representatives of “Comisiones Vecinales”, of Radios Sembrador and Sagrado Corazón, of the government, of the Universidad Metropolitana, of the Centro Cultural Melodia, of the Associação de Turismo, of SNPP and of SINAFOCAL. Of those present, 23 were women. Participation in the Puerto Itapucumi workshop was more than 50 people, of which about 28 were women. The public consultation with stakeholders took the form of a workshop during which information about the project was presented, and allowed participants to participate with their questions, suggestions and criticisms. The Villa Hayes workshop was held on February 8, 2011, at 10 am. The Puerto Itapucumi workshop was held in the Itapucumi School, on February 10, 2011, also at 10 am. The Headmaster of the school translated for the Guaraní during part of the consultation to clarify information to workshop participants. The presence of a translator was planned due to the status of official languages, which include Guaraní and Spanish in Paraguay, and the fact that in the hinterlands, the population, may feel more comfortable speaking the Guaraní language, even though they are probably fluent in Spanish. 7.3 Consultation to be Held on the EISA Stakeholders will be provided with detailed information about the social and environmental aspects of the Project, allowing a better understanding and increasing their comprehension. Consultation will be provided to interested parties. The EISA will be published in multiple locations and the Internet. The documents will generally be available approximately two weeks before any community meeting, consultation or workshop. Informative workshops and public consultation will take place in Villa Hayes and Puerto Itapucumi. The aim is for those interested to have more information about the project and

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the EISA results,and to have the opportunity to present their views, comments and suggestions. The proposed consultation includes informal meetings with local NGOs, government officials and others. The public consultation / meetings with the community include a description of the Project, indicating the expected direct and indirect impacts, proposed mitigation and compensation measures, opportunities provided for local employment, purchases of goods and services and mechanisms for continued participation and complaints. 7.4 Consultations to be Held During the Construction and Operation Phases As part of the Social Communication Program and Community Relations, ongoing participation activities will be proposed to be implemented during Project construction and operation periods. The proposed actions will include: • Routine disclosure of information on Project status and performance; • Ongoing actions to consult with relevant Project stakeholders; • System for responding to consultations and complaints, in order to provide a formal

means of receiving, resolving, and following up on any complaints the local population may have, related to the Project, to be conducted in a way that will permit the affected population to voice its complaints without fear of any type of reprisal.