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COMPANY OBLIGATIONS

20.0 Development Obligations

(a) The Company must exercise its rights and obligations under this Agreement according to the terms hereof, the Documents, and consistent with Good Industry Practice and Applicable Law.
(b) The Company shall use its best efforts to construct and provide the required facilities and carry out the Project with due diligence, efficiency and economy, up to the Date of Commencement of Commercial Production.
(c) The Company shall use commercially reasonable efforts to optimize the recovery of Minerals and to produce and market Minerals removed from the Mining Area at rates contemplated by the Feasibility Study any subsequent feasibility study or any mine plan. All operations shall be conducted consistent with Good Industry Practice and Applicable Law.
(d) The Company may not make any material changes to operations detailed in the Feasibility Study unless it first submits those changes to the State for comment following the same procedure set forth above for obtaining State comments on the Feasibility Study.

*See related provisions and examples at 2.6 Construction.

Example 1
9.1 Scientific Exploration and Exploitation
Subject to applicable Laws and regulations:

a) Licensee shall, within sixty (60) days from the Effective Date, commence and carry out Exploration Activities. Licensee shall conduct all such operations and activities in a prudent, diligent, and efficient manner in accordance with good and acceptable mineral exploration and mining engineering standards and practices and in accordance with modern and accepted scientific and technical principles applicable to the exploration and mining of Minerals. All operations and activities under this Agreement shall be conducted so as to minimize waste or loss of natural resources, protect natural resources against unnecessary damage, and in a manner intended to minimize pollution and contamination of the environment.
b) Licensee shall take commercially reasonable measures to prevent and control fires and to identify and notify immediately the proper governmental authorities of any fire that occurs within the License Area and which Licensee is aware of.
c) Licensee shall take commercially reasonable measures to avoid damage to the properties of the Government and third parties located within the License Area.
d) Licensee shall install and utilize such recognized modern safety devices and observe such recognized modern safety precautions as are provided and observed under mining and exploration activities comparable to those undertaken by the Licensee under this Agreement.
e) Licensee shall observe internationally recognized modern measures for the protection of the general health and safety of its employees and of all other persons contracted by Licensee having legal access to the area covered by this Agreement.

Example 2
Overall development
8. (1) Having regard to the geographical relationship and physical association of the mining lease with other iron ore deposits in and to the general development of the [locale A], the Company in its initial proposals under Clause 6 and any additional proposals pursuant to Clause 9 (other than a proposal under that Clause to increase production of iron ore where the total production after such increase will not exceed ___ tonnes of iron ore per annum for transportation from the mining lease and the proposal does not involve any significant variation to the mine infrastructure) or Clause 10 shall take into account and make provision where it is reasonably practicable so to do for –

(a) the economic and orderly overall development of the lands the subject of this Agreement and those other iron ore deposits;
(b) appropriate infrastructure development in the [locale A] having regard to then existing iron ore operations and facilities and to other existing infrastructure including the [locale B]; and
(c) an open town or other appropriate housing and accommodation arrangements to service the iron ore mines and other developments in the [locale A].

(2) The Company and the State shall co-operate and consult with each other regarding the matters referred to in subclause (1), State Government policies, planning and development objectives, the Company’s commercial requirements and any other relevant matters that the Minister or the Company may wish to consider.

Example 3
2. Commitment to Operate

2.1 The Company shall, following the Completion of the Sale and Purchase Agreement:

(a) negotiate in good faith with Government (which undertakes to negotiate in good faith with Company) with a view to agreeing within six months (or such longer period as the Parties may agree) of the Effective Date the detailed terms and conditions of the Approved Programme of Operations; and
(b) subject to the terms of this Agreement, the Large Scale Mining Licenses and laws and regulations of general application in Country from time to time, implement the Approve Programme of Operations in accordance with the timetable contained therein and good international mining and metal treatment standards and practices.

2.2 Without prejudice to the obligation contained in 2.1, the Company shall […]:

(a) expend the Investment Commitment substantially in the manner, on the terms and in the amounts set out in the Scheduled Programmes; and
(b) in the event that the contingencies in the Approved Programme of Operations are fulfilled, expend the Contingent Commitment substantially in the matter, on the terms and in the amounts set out in the Scheduled Programmes.

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

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