Written by MMDA Admin on 30 March, 2011 – 1:26 am
MMDA 1.0 (Model Mine Development Agreement)
A Template for Negotiation and Drafting
NOTE: This document should not be used to create legal relationships. It is intended only as a template for negotiating and drafting a mine development agreement. The text is merely illustrative, and the examples are taken from existing mine development agreements without modification. Neither the text nor the examples are sanctioned for use in any specific agreement by the authors or the International Bar Association.
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1.0 Definitions and Interpretation
1.1 Definitions
1.2 Interpretation
1.3 Existing Rights
TENURE
2.0 Development of Mining Area
2.1 Term of this Agreement
2.2 Exclusivity
2.3 Legal Title to Minerals
2.4 Obligations Prior to Construction
2.4.1 Feasibility Study
2.4.2 Environmental Assessment and Environmental Management Plan
2.4.3 Social Impact Assessment and Action Plan
2.4.4 Financing Plan
2.4.5 Compliance with Law; Requested Changes by State
2.5 Requirement to Obtain Permits
2.6 Construction
FINANCIAL
3.0 Annual Rental
4.0 Royalty
4.1 Calculation of Royalty
4.2 Royalty on Other Mineral Materials
4.3 Production Statement
4.4 Payment of Royalty
4.5 Disputes Regarding Royalty Payments
5.0 Customs Duties and Reimbursement
5.1 Customs Duties
5.2 Reimbursement of Import Duties
6.0 Insurance
7.0 Taxation
7.1 Taxation – General
7.2 Income Tax
7.3 Deductions in the Computation of Company Income Tax
7.4 Value-Added Taxes and Project Activities
7.5 Property Taxes
7.6 Taxes on Expatriate Employees
7.7 Taxes on Non-Resident Contractors
7.8 Withholding Tax Obligations
7.9 Provisions Relating to Other Taxes and Levies
7.10 Local Government Taxes and Levies
8.0 Financing
8.1 Security Interest
8.2 Debt-Equity Ratio
8.3 Foreign Currency Remittance and Availability
8.4 Role of State in Financing
8.5 State Guarantees
9.0 Financial Records and Statements, Accounting Standards and Currencies
9.1 Payments and Exchange Rates
9.2 Financial Records and Financial Statements
RIGHTS AND OBLIGATIONS
10.0 Mutual Obligations
10.1 Information to Local Government
10.2 Applicability of IFC Performance Standards and Equator Principles
10.3 Parties’ Commitment to Protecting Human Rights
10.4 Prevention of Corruption
10.4.1 Obligations of the Company
10.4.2 Obligations of the State
10.4.3 Other Applicable Norms
10.4.4 Understanding of the Parties
STATE RIGHTS
12.0 Inspection of Books, Records and Information, Independent Audit
STATE OBLIGATIONS
13.0 State Assurances and Obligations
13.1 Legislation to Approve Agreement
13.2 Tax Stabilization Clause
14.0 Fair and Economical Project Operation
15.0 Permits
16.0 Expatriates
17.0 Infrastructure
17.1 Availability of Existing Infrastructure
17.2 Access to Infrastructure
18.0 State Obligations Re: Local Governments and Landowners
COMPANY RIGHTS
19.0 Company Rights
19.1 Affiliated Company Transactions
19.2 Company Hiring Decisions
19.3 Security
COMPANY OBLIGATIONS
21.0 Use of Local Goods and Services
22.0 Local Community Development
22.1 Community Development Agreement
22.2 Relationship of This Agreement to Community Development Agreement
22.3 Local Business Development Plan
23.0 Community Health
24.0 Employment and Training of Local Citizens
24.1 Minimum Employment Levels
24.2 Investment in Skills of Local Work Force
24.3 LabourTraining and Capacity Enhancement
24.4 Management Training and Capacity Enhancement
25.0 Labour Standards
25.1 Labour Standards
25.2 Health & Safety
26.0 Mining Closure/Post-Closure Obligations
26.1 Closure Plan and Closure Obligations
26.2 Guarantees for Closure Expenses
26.3 Post-Closure Monitoring
27.0 Rights of Citizens of the State
27.1 Company Grievance Mechanism
27.2 Forum for Claims and Disputes Involving Citizens of the State
OTHER TERMS & CONDITIONS
28.0 Obligations of Contractors and Subcontractors
28.1 Applicability of Obligations to Contractors and Their Subcontractors
28.2 Applicability of Obligations to Parent Company, and Affiliates
29.0 Assignment
29.1 Affiliated Company Assignment
29.2 Third Party Assignment
29.3 Capacity of Successors and Assigns
29.4 Release
29.5 No Assignment by State
30.0 Availability of Information
30.1 This Contract a Public Document
30.2 Certain Information Confidential
31.0 Force Majeure; Suspension of Operations for Market Conditions
31.1 Obligations of Party in Event of Force Majeure
31.2 Extension of Agreement
31.3 Negotiation in Event of Force Majeure
31.4 Suspension of Operations for Market Conditions
32.0 Cooperation, Dispute Resolution and Arbitration
32.1 Cooperation
32.2 Arbitration
33.0 Surrender and Termination
33.1 Surrender
33.2 Termination by the State
33.3 Termination by the Company
33.4 Retention of Assets on Surrender, Expiration or Termination by the State
33.5 Retention of Books and Records
33.6 Access following Expiration or Termination
33.7 Obligations Following Expiration, Surrender or Termination
34.0 Notices
34.1 General
34.2 Change of Address
34.3 Delivery Methods
34.4 Effective Time of Delivery
35.0 Applicable Law
36.0 Periodic Review
36.1 Modification and Review
37.0 Ancillary Provisions
37.1 Entire Agreement
37.2 Survival of Certain Provisions
37.3 Amendment
37.4 Severability
37.5 Limitations on Waiver
37.6 Indemnification by Company and by the State
37.6.1 Indemnification for Breach of Agreement
37.6.2 Indemnification of the State by Company
37.7 Conflicts of Interest
37.8 Governing Language
37.9 Further Acts
37.10 Duplicate Originals
37.11 Representations and Warranties
38.0 Good Faith
Summaries of Prior Comments on MMDA 1.0
REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE PRIOR TO ANY USE OF THIS DOCUMENT.
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