Model Mining Agreements and International Best Practice
SADC Law Association Annual Conference – 23 August 2014
Alexander Keepin, Global Co-head of Mining
Berwin Leighton Paisner, LLP
What is a Model Mining Agreement
• Long term contract for the exploration and
development of a mining project
• Agreement between the state and a mining company
• Supplements legislation / mining code
• In 2011 IBA published the MMDA 1.0 a model mine
development agreement
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Parties to a Model Mining Agreement
Mining
company
State
Local
communities
• Role of the state
• Free prior informed consent of local communities
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Areas covered by Model Mining Agreements
(clause references are to IBA MMDA 1.O)
Framework to promote economic
development of a project
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Areas covered by Model Mining Agreements
(clause references are to IBA MMDA 1.O)
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Local content
Environmental
Fiscal regime
State
participation
Development
Legal
framework
Framework to promote economic
development of a project
Areas covered by Model Mining Agreements
(clause references are to IBA MMDA I.O)
Title
2.3
ABC
Transparency
Stabilisation
Disputes/
Arbitration
Local content
Environmental
Fiscal regime
State
participation
Legal
framework
Development
Framework to promote economic
development of a project
CPs
Free Carry
Annual rental
3
IFC/Equator
10
Local content
21
10.4
Commencement
Right to acquire
Royalty
4
Closure
Obligations
26
Community
development
22
30
Expenditure
Local ownership
Customs
Duties
5
Employment
16
Taxation
7
24
Foreign
currency
Local
Employment
8.3
Health
programmes
23
13
Permitting
32
Infrastructure
access
2.5
17
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Local content
Fiscal regime
Legal framework
State participation
Resource Nationalisation - areas of focus
New Mining
Codes
Free Carry
New royalty
regime
Employ/train
locals
Review of mining
agreements
Option to increase
Corporate taxes
Local
goods/services
BBBEE
Windfall taxes
Expropriation
Import/export
taxes
Local
beneficiation
Cancellation of
contracts
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Recent criticisms of Model Mining agreements
• Inequality of bargaining power/experience
• Corruption / transparency
• Inequality of economic benefits
• Investor friendly
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Future for Model Mining Agreements and
International Best Practice
• MDAs/Legislation
• Role of the regional economic communities
• Understand parties objectives
• Focus on sharing of economic benefit with more
flexibility
• Necessary for complex multi billion dollar
developments and protection of the interests of all
stakeholders
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Model Mining Agreements and International Best Practice
SADC Law Association Annual Conference – 23 August 2014
This document provides a general summary only and is not intended to be comprehensive. Specific legal advice should always be sought
in relation to the particular facts of a given situation.