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TENURE

2.0 Development of Mining Area

2.1 Term of this Agreement

This Agreement takes effect on the Effective Date and shall remain effective for [25] years. So long as:

(i) there remain commercial quantities of undeveloped Minerals in the Project Area at the end of such [25] year period,
(ii) the Company is not in material default under this Agreement, and
(iii) this Agreement has not been sooner terminated in accordance with its terms,
the Company shall have the option to renew this Agreement up to [FOUR] time(s), each for an additional period up to [10] years, on terms and conditions that the Parties may then agree upon to reflect then-existing and foreseeable conditions, provided that this Agreement (as previously renewed, if applicable) shall remain in effect during the period during which the parties are negotiating the terms of any such renewal.

Example 1
Subject to the terms of this Agreement, this Agreement shall remain in force for a period equal to the term of the large scale mining licences and for such further period as the large scale mining licences may be renewed from time to time provided that, where Company, at the expiry of the initial period on 31 March 20xx, applies to Government for the renewal of any of the large scale mining licences and:

(1) Government rejects the application for renewal; or
(2) Any of such large scale mining licences are renewed in a manner other than in accordance with Company’s application for renewal under [LAW].

Example 2
The term of this Agreement is ___ years beginning on the Effective Date, and for such additional period, if any, for which this Agreement shall be extended or renewed.

Example 3
The Term of this Agreement shall commence on the Effective Date and will continue until the earliest of:

(i) The expiration of the [GOVERNMENTAL ENTITY] Election Term if [GOVERNMENTAL ENTITY] shall have elected to participate in the Downstream Company in accordance with Section 2.3 (iv);
(ii) The termination of this Agreement pursuant to its other terms;
(iii) Solely with respect to the applicable Joint Enterprise, the entering into a JEA by the Parties or their respective Affiliates, or
(iv) The termination of the Exploration Agreement without entering into a [Mineral] Lease by the Parties or their respective Affiliates.

Example 4
Term. The term of this Agreement shall be for twenty (20) years from the Effective Date and for so long thereafter as Products are produced from the Properties on a continuous basis, and thereafter until all materials, supplies, equipment and infrastructure have been salvaged and disposed of, any required Environmental Compliance is completed and accepted and the Participants have agreed to a final accounting, unless the Business is earlier terminated as herein provided. For purposes hereof, Products shall be deemed to be produced from the Properties on a “continuous basis” so long as production in commercial quantities is not halted for more than __________ (___) consecutive days.

2.1.1 Grant of Mine Development Rights

The State hereby grants to the Company full and complete access to the Mining Area subject to Applicable Law and the terms of this Agreement, including the rights to:

(a) Have priority in the exercise of its rights under this Agreement, to the extent necessary for Mining Operations, over any other permit, concession, grant or any other activity of whatever nature granted or issued in the Mining Area before or after the date of this Agreement, including, but not limited to timber concession, reforestation activity, plantation, or exploration of oil and gas and other hydro-carbon products, gravel, sand and metals, or any mineral of any kind whatsoever;
(b) Make all necessary excavations to mine the mineral deposits and, subject to submission of updated Documents if necessary, to re-work mine tailings and dumped materials;
(c) Construct all plant, machinery, buildings, workshops, pipelines and other production facilities which are necessary or convenient for Mining Operations;
(d) Adjust production schedules, operating rates and manpower levels as necessary and prudent to respond to temporary operating conditions according to Good Industry Practice;
(e) Stockpile products or dump any waste products of mining or mineral processing operations, including tailings;
(f) Take and use water from waterways, wells and bores, to lay water pipes, to make water races and ponds, dams and reservoirs, and to divert and use any water necessary for the Project;
(g) Construct and maintain all transportation and telecommunication facilities and conveniences and such other areas as specified in the Feasibility Study to be necessary or convenient to construct and operate the Project;
(h) [reserved];
(i) Cut and utilize timber, and quarry stone, sand, gravel and other construction materials, for use in construction and operation of the Project, free of charge and within the Mining Area, to the extent reasonably needed for the Project (but not for any other purpose, including resale);
(j) Construct and maintain houses, buildings, amenities and incidental facilities for the use of the Company, its contractors, agents and their employees and their immediate families;
(k) Conduct all other Mining Operations as are necessary or convenient to carry out the Company’s rights and obligations under this Agreement and engage in all other activities as are reasonably necessary or convenient to carry out the Project consistent with Good Industry Practice; and
(l) Market, sell and export Minerals within the State and internationally, at market prices.

2.1.2 Grant of Access Rights

The State hereby grants to the Company full and complete access to the Project Area subject to Applicable Law and the terms of this Agreement, including the rights to Acquire, import, construct, install, and operate in the Project Area plant, equipment, railroads, roads, bridges, airports, ports, jetties, breakwaters, pipelines, power generation and transmission facilities, and any other infrastructures reasonably required for the operations.

*Note that many of the Company’s rights mentioned in the examples appear elsewhere in the MMDA.

Example 1
The Mining Lease shall grant to Company the exclusive right to mine and market minerals within the Mining Area, along with the right to engage in all activities reasonably necessary or convenient to mine such minerals.

Example 2
The rights granted to Company by Mining Lease shall include the rights to do the following, subject to compliance with relevant laws, permits, and this Agreement:

(a) Explore for, develop, mine, remove, leach in place, treat, produce, refine, ship and sell, using technologies and practices now known or which may exist in the future, for its own account subject to the provisions of this Agreement, all Minerals which are or may be found within Mining Area;
(b) Construct and use excavations, openings, pits, shafts, ditches, and drainage ways;
(c) Construct, erect, maintain, use, and at its election, remove, any and all buildings, structures, plants, machinery, equipment, railroads, roadways, pipelines, electrical power and communication lines and facilities, conveyors, stockpiles, waste piles, reservoirs, tailing impoundments and facilities, settling ponds, and all other improvements, property and fixtures for mining, removing, beneficiating, processing, concentrating, smelting, extracting, leaching (in place or otherwise), bio-leaching, autoclaving, refining and shipping of Minerals, or for any activities incidental thereto (whether or not now contemplated or known), or for any of the rights or privileges of Company under this Agreement;
(d) Divert streams, remove lateral and subjacent supports, cave, subside, use, consume, or destroy the surface of Mining Area;
(e) Deposit earth, rocks, waste, low-grade ore and materials onto the surface of Mining Area;
(f) Drill wells for the water and lay and maintain all water lines as may be necessary or convenient for operation of the Mine;
(g) Install high voltage electrical transmission and substation facilities as required for operation of the Mine, including towers, conductors, transformers, switches and other ancillary facilities;
(h) Mine and use for Operations any sand, gravel, aggregate, clay, rock and soil located within the boundaries of Mining Area;
(i) Use, without the payment of any royalty, fee or other charge, the Government’s intellectual property;
(j) Mine, remove and process ore, products and materials through or by means of shafts, openings or pits without limiting the possibility of Company enjoying other mining rights under any form in accordance with Mining Law;
(k) Use the land within Mining Area, and any shafts, openings, wells, pits, roads, facilities, and improvements, for the mining, removing, beneficiating, processing, concentrating, smelting, extracting, leaching (in place or otherwise), bio-leaching, autoclaving, refining, shipping and disposal of ores and materials;
(l) Receive from Government, under the commercially reasonable terms and conditions, any rights of way and easements that are necessary for the development of the Mine in accordance with Mining Law, with the purpose of: (i) transporting Minerals; (ii) transporting materials for consumption and raw materials, including hazardous items, such as cyanide and explosives; and (iii) transmitting electricity to the Mine; and
(m) Perform, to the extent permitted by Mining Law and this Agreement, any other activities necessary or convenient to carry out the Project and Company’s obligations under this Agreement.

Example 3

The Licensee shall have the continuing right:

(i) To undertake any legal actions relating to the rights given to it by a License and this Agreement; and
(ii) Subject to issuance of a Mining License, to construct, operate and maintain production and social facilities on the License Area required for normal Mining Activities, including roads, communications and power, as well as to use common facilities and communications both inside and outside of the License Area in accordance with the duly established procedure; and to establish on the License Area Licensee’s private satellite communications system to and from [name of host country] for purposes of both Exploration Activities and Mining Activities, subject to Licensee obtaining required licenses from the relevant Government authorities; and
(iii) To import all equipment, machinery, vehicles, supplies, and spare parts required for Exploration Activities and Mining Activities on the License Area and export such equipment, machinery, vehicles, and spare parts, subject to relevant Laws; and
(iv) To use the exclusive right to perform Mining Activities within the License Area and to receive the Mining License in accordance with Section 6.2 (Mining License); and
(v) To establish branches, representative offices, and such other offices, provided the requirements of the legislation of the Government are fulfilled; and
(vi) Subject to relevant Law and Section 9.4 (Employment Preferences), to hire and fire its employees as it may require, and Licensee shall have the right to employ foreign nationals for technical, specialized and advisory positions; to require its employees to work overtime and to work nights and holidays; and
(vii) To obtain visas required for its personnel, Contractors, and consultants (collectively “Licensee’s Staff”); to obtain, with the support of the Licensing Authority, all working permits and any other authorizations required for Licensee’s Staff by the Government, its agencies, or authorized representatives.

Example 4

11.2. Rights of the Contractor:

a. To conduct Mining Operations within the confines of its Contract/Mining Area in accordance with the terms and conditions hereof and without interfering with the rights of other Contractors/Lessees/Operators/Permittees/Permit Holders;
b. Possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easement rights;
c. To use and have access to all declassified geological, geophysical, drilling, production and other data relevant to the mining operations;
d. To sell, assign, transfer, convey or otherwise dispose of all its rights, interests and obligations under the Agreement subject to the approval of the Government;
e. To employ or bring into the Country foreign technical and specialized personnel, including the immediate members of their families as may be required in the operations of the Contractor, subject to applicable laws and regulations: Provided, That if the employment connection of such foreign persons with the Contractor ceases, the applicable laws and regulations on immigration shall apply to them. Every time foreign technologies are utilized and where alien executives are employed, an effective program of training understudies shall be undertaken. The alien employment shall be limited to technologies requiring highly specialized training and experience subject to the required approval under existing laws, rules and regulations;
f. To enjoy easement rights and use of timber, water and other natural resources in the Contract Area subject to pertinent laws, rules and regulations and the rights of third parties;
g. Repatriation of capital and remittance of profits, dividends and interest on loans, subject to existing laws and [bank] rules and regulations; and
h. To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with existing laws and regulations.

Example 5
The Contractor shall have the following rights:

a. The exclusive right to conduct Mining Operations in the Contract Area in accordance with the terms and conditions hereof, the Act, IRR and other pertinent laws, rules and regulations, and to determine the timing, nature, extent and location of Exploration, Mine Development, construction, and the mining and treatment process to be utilized in the Mining Operations.
b. Of possession of the Contract Area, with full rights of ingress and egress and the right to occupy the same, including the right to enter private lands and concession areas to conduct Mining Operations, subject to prior notice and to payment of compensation for damage caused by such operations, in accordance with Section [x] of the Act and Sections [xx] of the IRR.
c. Subject to payment of just compensation in accordance with Section [x] of the Act and Section [x] of the IRR, to build, construct or install infrastructure and facilities on lands owned, operated or leased by other persons when necessary for purposes of more convenient Mining Operations.
d. To use and have access to all declassified geological, geophysical, drilling, production and other information held by the Government or any agency or enterprise thereof, now or, in the future, relative to the Contract Area.
e. To sell, assign, transfer, convey, encumber and create security interests, or otherwise dispose of all its rights, interests and obligations under the Agreement, subject to the approval of the Government to the extent required under Clause 18.13.
f. Subject to Clause 15.1, Section XV of this Agreement and applicable laws, rules and regulations, to employ or bring into the [Country] foreign technical specialized personnel (including the immediate members of their families) as may be required in the operations of the Contractor.
g. To enjoy, subject to pertinent laws, rules and regulations and any prior valid existing rights of third parties, easement rights and use of timber, water and other natural resources in the Contract Area, including, but not limited to:

i. The right to extract, use and remove from the Contract Area, in accordance with Section [x] of the Act, sand and gravel and other loose unconsolidated materials without the need of a separate permit, provided that Contractor shall use such materials exclusively for Mining Operations and shall make no commercial disposition of the same, and Contractor shall submit to the Director/Regional Director monthly reports of the quantity of such materials extracted;
ii. Subject to applicable forestry laws, rules and regulations, the right to cut trees or timber within the Contract Area as may be necessary for Mining Operations, provided that if the Contract Area is covered by existing timber concessions as of the Effective Date, the volume of timber needed and the manner of cutting and removal thereof shall be determined by the Regional Director, upon consultation with the Contractor, the timber concessionaire or permittee and the Forest Management Bureau of the Department; provided further, that in case of disagreement between the Contract and the timber concessionaire, the matter shall be submitted to the Secretary whose decision shall be final; and
iii. Water rights for Mining Operations upon approval of application with the appropriate government agency in accordance with existing water laws, rules and regulations promulgated thereunder, provided that water rights already granted or vested through long use, recognized and acknowledged by local customs, laws, and decisions of courts shall not be impaired, and further provided that the Government reserves the right to regulate water rights and the reasonable and equitable distribution of water supply so as to prevent the monopoly of the use thereof.

h. Subject to existing laws, rules and regulations, and payment of Government Share as provided in Section IX hereof, to repatriate capital and remit profits, dividends and interest and principal of loans from third parties of affiliate of Contractor, including the rights to:

i. Repatriate the capital investment actually brought into the country in foreign exchange or other assets and registered with the [bank];
ii. Convert into foreign exchange and remit abroad any excess balances of their [local currency] earnings from Mineral production and sales over and above the working current balances they require;
iii. Convert foreign exchange into [Country] currency for all purposes in connection with its Mining Operations at rates prevailing at the time of remittance no less favorable to Contractor than those available to any other purchaser of such currency; and
iv. Convert into foreign exchange and remit abroad sums received for expropriated or requisitioned property under Clauses 13.2(k) and 13.2(l). The Government shall make all of the foregoing rights with respect to exchange of foreign currency available to Contractor on the most favorable terms and conditions available to [Country] citizens or entities and other foreign citizens or entities under the laws of the [Country].

i. Subject to existing laws, rules and regulations of the [bank] and Monetary Board policies, to purchase, sell, use and retain, any acceptable foreign currency or currencies it may determine; to open, maintain and use accounts in foreign banks and financial institutions, local banks and financial institutions, or both, for such purposes, from which payment may be made to financiers, suppliers and subcontractors, employees and expatriates, and for other expenses of Mining Operations; and to deposit into and withdraw freely from the above described foreign and local accounts, in local or foreign currency, the proceeds of any debt or equity financing, proceeds from the sale of Minerals and mineral products, and any other cash from, or required for, Mining Operations;
j. Subject to existing laws, rules and regulations, the Contractor shall have the right to import into the [Country] all equipment, machinery and spare parts required by Contractor for Mining Operations, and to export the same when no longer needed for Mining Operations; Provided that machinery, equipment and spare parts are of comparable price and quality are not manufactured domestically, are actually needed and will be used exclusively by the Contractor in its Mining Operations, and we are covered by shipping documents in the name of the Contractor to whom the shipment will be delivered direct by the customs authorities.
From the date of approval of the Mining Project Feasibility Study until the end of the Recovery Period and/or within a period of five (5) years from the date of acquisition of such machinery, equipment and spare parts, the Contractor may not sell, transfer, or dispose of such machinery, equipment and spare parts within the [Country] without the prior approval of the Director and payment of any taxes due the Government that were previously exempted; Provided, that should the Contractor sell, transfer or dispose of such machinery, equipment and spare parts within the [Country] without the prior consent of the Director within the prescribed period, it shall pay twice the amount of the tax exemption granted; Provided further, that the Director may allow the sale, transfer, or disposition of the said items within the [Country] within the prescribed period without payment of previously granted tax and duty exemptions under terms and conditions to be formulated by the Bureau; Provided finally, that any sale, transfer or disposition made after the prescribed period shall not require prior approval of the Director but notice thereof shall be made within ten (10) days from the sale, transfer or disposition thereof.
k. To be free from expropriation by the Government of the rights granted under this Agreement or the property represented by investments or loans or of the property used in Mining Operations except for public use or in the interest of national welfare or defence and then only upon payment of just compensation.
l. To be free from requisition of the rights granted under this Agreement, the property represented by the investment or of the property of the enterprise except in case of war or national emergency and only for the duration thereof. Just compensation shall be determined and paid either at the time or immediately after cessation of the state of war or national emergency.
m. To maintain all books of accounts and records in accordance with generally accepted accounting standards, principles and procedures. The Contractor may use U.S. Dollars as the basis for calculating the Government Share as provided for in Section IX hereof.
n. To receive and to make payments for goods and services utilized in Mining Operations, including payments to employees and subcontractors, whether [Country] citizens or expatriates, in accordance with the applicable laws of the [Country] regarding payments in foreign currency.
o. To transport from the Contract Area to any place of export, and to export from the [Country], any and all Minerals and mineral products in accordance with Chapter [x] of the Act and pertinent rules and regulations.

REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE
PRIOR TO ANY USE OF THIS DOCUMENT.

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