MMDA Background

At its 2009 Annual Meeting, the Mining Law Committee of the International Bar Association established a project to prepare a Model Mining Development Agreement (MMDA) that can be used by mining companies and host governments for mining projects. The project is led by the Mining Committee, with civil society and university-based groups working with the Committee to ensure a well-balanced final product is achieved.

The Committee collected and analyzed over 50 existing mine development agreements during the past year, and then assembled the model agreement to contain representative language for each provision with links to example clauses taken from the existing agreements. The project is aimed primarily as a tool for use with and in developing countries, in particular where a mature mining code is not in place or effective. The MMDA may also be of use where the mining code must be supplemented by private agreement, or as a template for agreements with state owned mining enterprises.

The MMDA project seeks to provide a tool with a specific starting point. It asks what a mining contract might look like if the process started from the precept of a project aiming to contribute to sustainable development not just of the project itself, but of the local, regional and national community as well. While the project clearly recognizes that a mining development must be commercially viable to proceed, it also recognizes this is no longer the only issue around which contract negotiations should proceed. Rather, all parties to a negotiation should take a broader, and integrated, look at the relationship between the proposed project, the state and the local communities. The natural, social and economic environments around mining projects are also essential considerations today. The final product is web-based and publicly accessible. It is not “prescriptive” in the sense of setting out one standard form. Rather, it seeks to provide an agenda for negotiations based on a sustainable development objective that is common to all parties. Its public nature will also allow local communities and civil society groups to contribute in a sound manner to negotiation processes. By setting out a comprehensive and common template, it is hoped the project will enable and assist better structured negotiations, and better lasting results in mining projects.