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entered into, by and between the REPUBLIC OF LIBERIA, through its Government

represented by Jonathan A. Mason, Minister, Ministry of Lands. Mines & Energy

(hereinafter referred to as the "Govornmont")


BHP Billiton World Exploration Inc. a corporation existing and doing business

under the laws of British Colombia. Canada, represented by Ciaran Halpin. its

Manager. West Africa (hereinafter referred to as the 'Operator"), hereby:


WHEREAS, title to Minerals within the territory of the Republic of Ubena is vested in

the Republic of Liberia (the Republic) and all rights related to the exploration for and

exploitation of such minerals pertain exclusively to the Republic; and

WHEREAS, the Ministry of Lands. Mines & Energy through the Minister of

Lands. Mines & Energy is by law charged with the responsibility of admmistenng the

mineral laws of the Republic and in that process to ensure the efficient development

of the mining industry, and

WHEREAS, the Government is determined to accelerate the development of the

mining industry of Liberia, and therefore desires to promote the Development of

minerals which may exist in exploration areas for the economic and social benefit of

Liberia and recognizes that a large capital expenditure is necessary to ensure that

such minerals are economically and efficiently developed; and

WHEREAS, Government agrees to grant the Operator such mineral hghts and

privileges in consideration of the undertaking by the Operator to make annual

payments, and to pay rents, royalties and other fees hereinafter prescribed and to

perform and observe the terms and conditions of this agreement;

NOW, THEREFORE, for and in consideration of the premises, the mutual

promises exchanged between the parties hereto (the Parties), terms and conditions

herein contained, the Parties hereto mutually agree as follows: __^



Unless the context shall otherwise clearly indicate, the following

terms wherever used in this Agreement shall have the

respective meanings set forth below

1.1 Affiliate: Means an entity that controls, is controlled by or

■S under common control of the Operator For purposes of

this section, control means the possession, directty or

mdirectty, by one entity of more than fifty percent (50%) of

the equity of or the voting power of another entity.

1.2 Centre: the term ’Centre’ means the International Centre

for Settlement of Investment Disputes estabkshed under

the auspices of the International Bank for Reconstruction

and Development

1.3 Convention the term ’Convention* means the

Convention on the Settlement of Investment Disputes

between States and Nationals of Other States opened to

signature at Washington. DC. United States of America

on March 18. 1965

1.4 Effective Date: The term "Effective Date' means the

dale, provided in Section 26. on which this Agreement

shall become effective

1.5 Exploration Aroa The term "Exploration Area" means al

any particular time the area or areas then designated in

accordance with Section 3 2, but only dunng the

Exploration Period

1.6 Exploration Period The term “Exploration Period-

means the period described m Section 2.1.

1.7 Government The term "Government" includes al of Vie

branches, divisions, instrumentalities and agencies of the

Government of the Repubfcc of Liberia

1.8 Infrastructure The term "infrastructure" means assets of

the following types

(a) Immovable transportation and communication facilities

(including roads bndges. railroads, airports, landing

strips and landing pads for aircraft, hangars and other

airport faculties, garages, channels, tramways,

pipelines and radio. telephone telegraph.


 (d) Immovable pub* welfare (including

schools, hospitals and pub* halls)

(e) Miscelaneous immovable facilities used pnmanly

in connection with the operation of other fabfcbes

(including office#, machme shop#, foundries, repair

shops and warehouses); end.

(0 Movable facilities and equipment affixed to and

used as an integral part of the immovable faakties

described in paragraphs (a) through (e)

Exploration Inc

1.10 Operator The term -Operator means BMP Mon

World Exploration Inc

1.11 Plant and Equipment The term “Plant and Epiapmenr

means the foaowmg assets (other than ^restructure)

used for Operations and Activities

(a) Movable and immovable faakties and equ

to mne. crush sliace. dredge wash, screen, dry.

beneftciate. and otherwise explore for or produce

Iron Ora.

(b) Movable and immovable faakbes and eqmiment

used pnmanty in comecbon with Vie operaton of

the foragomg (incJutfing offices, medane shops

foundries rapmr shops and warehouses).

(c) Movable and immovable faakbes and equsxnent

for the mamtenance of personnel (mcfodmg


 dwellings, stores, mess halls and recreational

faokties). and

«J) Movable facAbes and equoment used to

connection with any of the infrastructure

1.14 Produce The term “Produce” as used in reference to

Iron Ore deposit shall include dnH. develop, extract stnp.

mne, sluice, dredge, process (induing beneficiale

concentrate or otherwise treat), stockpile, transport, toad

seN and export, for the account of the operator

1.15 Production The term “Production" as used in reference

to Iron Ore shall mean the commercial exploitation of Iron

Ore found In the Exploration Area and all activities in

rospoct of or incidental thereto, induding the design,

construction, installation, fabrication, operation,

maintenance, drilling, development, extraction, stripping,

mining, sluicing, dredging, processing (including

beneficiation. concentration or other treatment),

stockpiling, transportation, loading, sale and exportation

by the Operator


2.1 The term of this Agreement shall commence on the

Effective Date and shall expire at the earlier of (a) such

time as the Operator shall have completed exploration

•cavities and resource evaluation, or (b) three (3) years

after the Effective Date, with an extension of two (2)

years at the option of the Operator plus any period of

renewal to which the Government may agree


3.1 Grant of Exploration Right* On the terms and

conditions herein provided the Government hereby grants

to the operator, dunng the period hereinafter defined,

commencing with the Effective Date plus any extension of

such penod to which the Government may agree

(referred to herein as the "Exploration Penod") the

exclusive nght to explore for Iron Ore Deposits and

appraise toe existing Iron Ore deposits in the Exploration

3.2 Exploration Area

(a) The Exploration area shall lie in the Kitoma Area.

Nimba County, as identified m*. ---~-t1ed map

**th metes and bound! art^rfwi


 hereto as Appendix "A" and covering an area of

27.918 acres

(b) The Operator shall commence exploration as soon

as possible after the Effective Date but not later

than 180 days after the Effective Date

3.3 Surrender of Exploration Area Unless the Minister and

the Operator otherwise agree

(a) At or before the end of the initial term of the

Exploration Period, the Operator shall surrender a

minimum of fifty percent (50%) of the Original

exploration area

(b) At or before the end of the term of this agreement

as set out « section 2.1 above, the Operator shall

surrender the remainder of the Exploration Area

and. upon such surrender, the Exploration License

shall automatically terminate

(c) Notwithstanding paragraphs 3 3 (b) above, if the

Operator wishes to retain aH of. or any part of. the

Exploration area upon expiry of the exploration

period, it shaH have the right to do so by applying

for a mineral development agreement over the


3.4 Minimum Expenditures

(a) Commencing no later than six (6) months after the

Effective Date, the Operator shall diligently and without

interruption explore for and evaluate Iron Ore deposits

within the Exploration Area

(b) Dunng the Exploration Period, the Operator shall expend

not less than United States Dollars one (US$1.00) per

acre dunng each calendar year as Exploration Costs, the

latter being defined to comprise all of the Operator's

managenal and corporate costs related to exploration

SECTION 4.0 Pilot Mining Rights

The Operator, in addition to exploration, is hereby also granted

the right to produce Iron Ore under a pilot mining plan to be

approved by the Minister of Lands. Mines and Energy, such total

production not to exceed not to exceed 5000 metric tones


SECTION 6.0 Mineral Development Agreement

Dunng or by the expiry of tho Exploration Period, the Operator

may apply for a Mineral Development Agreement This

agreement shall be concluded In accordance with the Minerals

and Mining Laws and Regulations of Liberia.


6.1 Grant of Rights: Subject to the terms and conditions

herein providod. and solely for the purposes incidental to

the exercise of tho nghts granted to the Operator under

Sections 3 and 4 of this Agreement, the Government

hereby grants to the Operator the nght. within the

Exploration Areas

(a) To acqure. build, and construct Infrastructure Plant

and Equipment and other facilities, and to

maintain and operate the same.

(b) To remove, extract and use. solely for its own

exploration purpose, free of tax or other charge or

fee imposed by the Government, any water

gravel, sand. clay, stone and timber (except

protected fauna and flora), provided however that

where any land, viaeges. hajses. person, or

watering places for arwnals have been supplied

water by nght through custom, the Operator shaS

not deprive them of a constant and reasonably

supply of usable water, nor shall the Operator,

without the Government's consent, interfere with

any water or other nghts enjoyed by anyone under

any agreement with the Government

6.2 Reservation of Rights The Government reserves the

right subject to section 7 2. on reasonable notice to and

after consiitabon with, the Operator, to construct roads

highways, radroads. telegraph and telephone fanes and

other fanes of commurscafcon astran tie Exploration Area

6.3 Condemnation If the use of any privately owned or

occupied property witfwi the Exptorafaon Area a

reasonably requaed for Vie conduct of operations

hereunder, and the Operator m unable to come to an

agreement with the owner or occupant of such property

for such use. the Operator may roquoat the Government,

which request shall not be unreasonably denied, to

exercise its right of eminent domain with respect to such

property. The Operator shall reimburse the Government

for any compensation paid or payable to the private


 owner or occupant as a result of the Government's

exercise of such right


7.1 Construction by Operator The Operator shal. at Is

own cost, undertake the construction installation and

improvement of all or any part of the infrastructure Afl

such Infrastructure shall be mantaoed and operated by

the Operator n a reasonably good manner

7.2 The Government warrants not exercising its rights to

expropriate land in the Exploration Area if such

•expropriation shall in any way hinder the development of

the Operation and Activities.



8.1 Host Exploration Practices Tho Oporator shall conduct

all of its operations hereunder using appropriate modern

and effective Plant and Equipment. Infrastructure,

matenals and methods Such operations shall be

conducted In a proper and workmanlike manner, with due

diligence, efficiency and economy, m accordance with the

laws of Ubena and with the best mining and engineering

practices used by efficient operators m serstar operations

elsewhere in the world


The Operator shall nstal mamtam and use modem health and

safety devices and shai practice modem health and safety

procedures and precautions (mckxkng. regular safety tracing

instruction for its employees) as are m accordance with the best

oxploralion and mining engmeenng practices, and acceptable

labor safety standard In this respect, the Operator shall comply

with health and safety rules, regulations, and Laws of the




10.1 Employment of Liberians The Operator shall not

employ foreign unstated labor To the maximum extent

feasible, the Operator shal employ Ubenan citizens at al

10.2 Training of U be nans The Operator shal provide on a

continuing basis for the trammg of its Ubenan employees

 in order to qualify them for skilled, technical

administrative and managerial positions

10.3 At least two (2) professionals from the Ministry shall be

seconded to the Operator's operations at the expense of

the Operator, provided that the Operator will be entitled to

utilize those two professionals at other operations in

Liberia at its discretion



11.1 The Operator shall encourage economic and social

development during the term of his operation and shall

provide for meetings on a regular basis between

representatives of the Operator and the local

communities for the purposes of considering and making

recommendations to the Operator and to the Government

with respect to matters of community interest, such that it

shall not hinder the Operator's work

11.2 Natural Resources: The Operator shall take preventive,

corrective and/or restorative measures to ensure that an

streams and water bodies within or bordering Liberia, all

dry land surfaces, and the atmosphere be protected from

pollution, contamination or damage resulting from

Operations hereunder

11.3 Environmental Impact Statement The parties recogrtze

that Operations may result in some pollution,

contamination or other environmental damage to land,

water and the atmosphere within the contract area and

elsewhere Accordingly tho Operator shall submit to the

Mewster. Lands Mrei and Energy, the commencement of

exploration and production an Envronmental Impact

Statement (EIS). The EIS shal show the adverse effects

operations will have on the environment and review plans

to mitigate such effects


The Operator shall provide all capital necessary for the effective

exploration for Iron Ore In this connection, the Operator shall at

at times maaitaai a reasonable and prudent capital structura


13.1 In General The Operator shal be liable to all taxes fees,

duties excises, and other charges imposed bj


 laws of general appfccatoon. except as may be otherwise

provided by other laws and admrostratrve regulations

granbng exemptions from customs duties and excise

13.2 Income Tax The Operator shal be subject to Ubenan

Income Tax Law of General Appkcabon except that

notwithstanding any provisions of such laws, the rate of

tax appacaWe to a* the taxable income of the Operator

shall be thirty percent (30%).

SECTION 14.0 Exploration Few and Surface Rental

14.1 The Operator shafl make an annual payment of Frfleen

Thousand Ur*ed States Dotars (US$15.00000) for toe

grant or renewal of the Exploration and Resourca

14.2 The Operator shal make a payment of Tlwty United

Stales Cents (US$0 30 per acre for land to exploration

and Five Urated States Dolars (US$5 00) per acre for

land utter pdotmng

14.3 The first payment for the exploration license fee and

surface rental shall be made in within ten (10) days of the

Effective Date Subsequent payments shall be made

within thirty (30) days after each subsequent anniversary

of toe Effective Date


15.1 Availability of Records The Operator shall maintain at

its principal office in Libena. or at such other office as too

Government may approve

(a) Copies of aN maps, geological, mating, or other

earth science reports and mineral analysis

(together with all field data which supports such

reports or data), production records, marketing

report and any other data obtained or compiled by

the Operator as a result of mining Operations and

Activities All information, data and material

specified In this paragraph shall be in a form

suitable for reproduction, use or processing as the

case may be The Operator shall have toe nght to

temporary remove such samples and other data

from such location and (on poor notice to


Government) from L.bena for the purpose of study

and evaluation

(b) The Operator shal keep the Government fully

informed of al Operations and Acbvrties. wherever

conducted, and of its plans m respect thereof The

Government shall have the nght to monitor

exploration and pilot mmmg operations and

Activities from time to time and a reasonable

number of Government personnel may. upon prior

notice » the Operator, at reasonable bmes and

subfect to compliance with the Operator's health,

safety and security requirements, attend and

inspect Mining Operations and Activities

conducted m Liberia

(c) WWim tmty (30) days after the end of each

calendar quarter, the Operator shall provide the

Government with a report on al Operations and

Activities for that calendar quarter including

Minerals recovered and sold Within nmety (90)

days after the end of each Fxianoai Year, the

Operator shal furnish the Government with a

report on al Mvsng Operations for that Financial

Year, including Minerals recovered and sold

15.3 Reports: The Operator shall submit such reports to the

Government, in such form, in such detail, and at such

time, as may be reasonably required by law. or as the

Government may otherwise require with respect to

exploration, production, employment and training,

marketing and such other matters as may be related to

the conduct of operations hereunder

15.4 Inspection: The Government may, upon reasonable

notification to the Operator, inspect the books and

records of the Operator, and any all facilities and area

related to the Operator's operation as provided

hereunder The Operator shall make its appropnate

employee available to render assistance with respect to

any such inspection

15.5 Confidentiality of Operator's Reports The Government

shall treat all information supplied by the Operator

hereurxfor as confidential and Shan not reveal such

information to a third party without the prior wntten

consent of the Operator, whic which consent shall not be

unreasonably withheld I


 Financial information about the Operator shall however

be treated as confidential for a period of one (1) year,

commencing as of the date of submission of such

information. The Government may nevertheless use any

such information received from the Operator for the

purpose of proparing and publishing general records or

statistics on natural resources or other conditions In

Liberia, and in connection with any dispute between the

Government and the Operator


This Agreement and any interest therein may not be transferred

or assigned, or mortgaged, pledged or otherwise encumbered,

in whole or in part, without the Government's pnor wntten

approval (which approval will not unreasonably be withheld)

unless to an affiliate


17.1 Except as provided in this Section, failure on the part of

the Operator to comply with any of the conditions hereof

(except the obligation to make payment of monies to the

Government as provided in Section 14 hereof) shall not

be grounds for cancellation or give the Government any

claim for damages insofar as such failure anses from

force majeure. if the Operator has taken aU appropriate

precautions due care and reasonable alternative

measures with the objective of avoiding such failure and

of carrying out its obligations hereunder The Operator

shal take all reasonable measures to cure such faitore

and to fulfill the terms and conditions hereof with a

minimum of delay

The Operator shal notify the Government within sixty (60)

days of an event of force majeure affecting its ability to

fulfil the terms and conditions hereof or any event wtuch

may endanger the natural resources of Liberia and

simlarty notify the Government of efforts bemg made lo

restore normal condftons wrthm seven (7) days thereof

For purpose of this Section 17. force majeure indudes an

act of God. war. raurrecfeon. dvi commotion, not. revolt

earthquake, storm, flood or any other extraordinary event

which the Operator could not reasonably be expected to

prevent or control, but shall not sickide any event caused

by a failure to observe the best mining and engineenng

practices or by the negligence of the Operator or any of

its employees or contractors If; as a consequence of

force majeure, operations hereunder remain in

substantial total suspension for an uninterrupted period


 ol more than three (3) months, the duration of the term of

this Agreement shall be extended by the time of such


17.2 Except as hereinafter provided, the time for the

performance of any obligation (except the obligation to

make payment of money) of the Operator under or anting

out of this Agreement, which performance » hindered

prevented or delayed by force manure, as wel as any

other time periods and dates set forth in this Agreement

shall be extended by the period of delay, but not longer

than the continuance thereof and such additional period

as may be reasonable in the circumstances, and the

Operator shall not be liable in damages or otherwise to

the other nor shall any action, claim or demand be taken

or made against the Operator by reason solely of such

delay in the performance of such obligation.

17.3 The Operator shall use all reasonable diligence to

remove the cause of the force majeure as quickly as

practicable after notice of the same shall have come to its

attention, save and except that this provision shall not, in

and of itsoff require the Operator to settle any strike,

lockout, ban "go slow’’ activity, stoppage restraint of labor

or other similar ("Industrial Dispute").


18.1 Accounting. A* of the Operator's accounting under this

Agreement shal be in United States Ooiars and all

amounts paid or received, and obligations incurred or

transactions earned out m currency that is legal tender n

the Republic or in any Foreign Currency other than

United States Dollars shall be converted to United States

Dollars in accordance with and pursuant to generally

internationally accepted accounting principles (except to

the extent inconsistent with the terms of this Agreement)

based upon the Prevailing Market Rate of Exchango of

United States Dollars and any such currency at the date

of the applicable transaction

18.2 Exchange Control. The Operator shall at all limes have

the right, without restriction, directly or indirectly, of the

Government, to obtain, hold, deal with and disburse funds

in such manner, currencies and places as il chooses

Without prejudice to the generality of the foregoing, the

Operator shall have the unrestricted and unencumbered

right to sell and receive payment for Minerals in any

currenc the currency which the Mxierals are


 sold and al proceeds theca from may be deposited at

bank accounts outside of the Repubbc and held there or

remitted there from to anywhere In the world,

n any currency. Notwithstanding the foregong Vie

Operator thal maintain at least one bank account with a

bank or financial tosMubon in the Republic of Libena

The Operator shall also have the right to acquire from,

and sell to, any Person currency that Is legal tender in the

Republic at the Prevailing Market Rate of Exchange.

Additionally any and al transactions between the

Government and Vie Operator deahng «wVi or referring to

currency Viat a legal tender to Via Repubbc w* be

converted to United Stales Mart at the Preva*ng

Market Rate of Exchange on the date of such transaction

Currency gams or losses for purposes of Section 20 she*

be detemwied by reference to Vie Prevailng Market Rate

of Exchange.

18.3 Currency of Payment. Payment of the Operator's direct

obligations to the Government for Taxes and Duties

payable under Sections 18. IQ. 20. and 21 Of this

Agreement shad be in United States Dollars, unless the

Parties otherwise agree Any obligation ongnaily stated

m currency that is legal tender In the Republic, or m any

currency other than United States Dollars, will be

convened to United States DoOars at the PrevaVtog

Market Rate of Exchange on the date such obkgabon «

paid, or shal fai due. whichever • earker

However, the Operator shafl make payments of sums it

collects on behaV of the Government induing, but not

limited to. taxes withheld from the salaries or wages of

the employees of the Operator, and any other sums

payable to other Persons from which a portion is requred

by Law to be withheld or retained by the Operator on

behalf of the Government to the currency in which such

salaries or wages or such other sums are coiected The

whether to the Government or to other Persons to

currency that is legal tender to Vie Repubtc.

18.4 Right to Remit and Racetve Payments. The Operator

shal have the right to remit and receive to Unfled States

Dolars all payments of dividends, interest principal and

other properly payable items arising from, as a result of.

or related to Operations, and to do so free of Taxes end

Dubes on such remittances or receipts, and without

penaftea. any requred total or partial surendar


 exchange or confiscation of such United States Dollars,

or other direct or indirect restrictions on such remittances

or receipts.

18.6 Audit.

a. The Operator shall cause its books of accounts to

be audited within three (3) months, or such longer

period of time as the Minister may approve, after

the close of each Financial or Fiscal Year by an

internationally recognized independent auditor

selected by the Operator and satisfactory to the

Government and a copy of the annual financial

statement duly certified by said auditor shall be

furnished to the Government within twenty (20)

days after its receipt by the Operator. The

foregoing shall not. in any way. imply acceptance

of any such audit or certification by the

Government, or preclude the Government from

auditing such books of accounts but at the

Government’s expense

b. The foregoing shall not in any v/ay imply

acceptance of any such audit or certification by the

Government or preclude the Government from

auditing such books of accounts at its own

expense and as provided under Law, provided that

the Government shall provide the Operator with a

copy of any such audit within forty five (45) days of

receipt However, once either the Government or

the Operator has audited any book of accounts,

the financial statement thus audited shall be

considered acceptable and the audit results

binding and conclusive as to its findings, unless a

Party shall have indicated to the contrary within

ninety (90) days after its receipt of a copy of the

audited financial statement.

c. If the Operator has. pursuant to this Agreement,

underpaid its liability for Taxes and Duties, the

Government may, subject to the Revenue and

Finance Law, assess interest and penalties but not

to exceed the London Interbank Offering Rate

(LIBOR) existing at the time of such assessment,

plus one (1) percentage point, multiplied by the

amount underpaid If LIBOR should cease to be

reported, then the rate to be applied shall be

another agreed substitute rate, If the Operator has

overpaid its liability for Taxes and Duties then, at


 its option, it may elect either to be reimbursed by

the Government or to apply such overpayment

against future Taxes and [Duties.

d. In case a review of records or books outside of the

Republic is required, the Operator win cooperate to

provide the Government with copies of the

information, books and records needed to

complete the audit. If the Government

nonetheless deems it necessary for any part of

such audit to be performed outside of the

Republic, the cost of associated travel will be

bomo by the Government.



19.1 Imports.

The Operator shall be entitled to import and use in respect

of Operations, and subsequently export, any and all

machinery, equipment, consumable items, fuels,

explosives and any other thing whatsoever reasonably

required with respect to Operations and in accordance

with the terms of this Agreement, provided, however, that

the Operator shall not re-export fuels and explosives

surplus to requirements if such surplus can be sold at

competitive international prices within the Republic The

Operator shall at all time comply with Law regarding the

safe use. sate, disposal and security of explosives

19.2 Taxes on Resale. The Operator may sell, in the Republic,

all imported items that are no longer needed for

Operations. However, if such imports were exempted

from Taxes and Duties, the Operator shall fulfill all

formalities required in connection with the payment by the

purchaser of all Taxes and Duties on the depreciated

value of the imports imposed on such sales by Law


20.1 Right of AssignmenL The Operator shall have the right

to assign or otherwise dispose of all or part of its mtorest

under this Agreement with the prior written consent of the

Government (which consent shall not be unreasonably

withheld) provided, however, that such consent shall not

be required in the case of an assignment or other

disposition to an Affiliate in which latter event the

Operator shall not be relieved of its obligations under this /

Agreement other than to the extent fulfilled by thefr


> r

Affiliate. However, any request to cede or assign any

rights to a joint venture partner, will be fully allowed and

any assignment that is legally required to protect the

interest of the joint-venture partner will be accepted.

20.2 Right to Encumber. The Operator shall have the right to

mortgage, charge or otherwise encumber all or part of its

interest under this Agreement for the purpose of raising,

from one or more Affiliates or third parties, financing for

its obligations under this Agreement

20.3 Notice of Assignment or Encumbranco. The Operator

shall promptly give Notice to the Minister of any

ossignment. mortgage, charge or other disposition or

encumbrance pursuant to this Section 20.



21.1 Termination by the Operator. During the Exploration

Period, the Operator may surrender by not less than sixty

(60) days notice to the Government, all its rights

hereunder in respect of all or any part of the Exploration

Area, and the Operator shall be relieved of all obligations

in respect of area so surrendered except those

obligations that may have accrued prior to the Effective

Dale of. or arising out of or related to the surrender

21.2 Termination by the Government. Sublet to the

provisions of Section 21. the Government shall have the

right to terminate this Agreement if any of the following

events (hereinafter called “Events of Default") shall occur

and be continuing

a) where the Operator shal fail to make any

of the payments described in this Agreement on

the due payment date, and such default is not

cured with* thirty (30) days after notice by the

Government (or within such longer period as may

be specified m said notice).

b) where the Operator shall materially fail to comply

with its obligations or any other conditions under

this Agreement and such failure shall have a

materially adverse effect on the Government and

is not cured within ninety (90) days after notice by

the Government or within spdh period as may be

specified in said notice,^/ ^


 c) where the Operator shal (i) vofantanfy dissolve

bquMlate or wind up its affairs or make an

assignment of an or substantially all of its assets

for the benefit of creditors other than an

assignment made to secure indebtedness incurred

in the ordinary course of business, (M) file a petition

or application to any tribunal for the appointment of

a trustee or receiver for all or any substantial part

of the Operator's assets. (■) commence any

proceedmgs lor «s bankruptoy. reorganaabon.

arrangement. solvency or readjust™"*

under the laws of any jurisdiction, whether now or

hereafter m effect or if any such petibon or

application « Med. or any such proceedngs are

commenced agamst 1 shal mdcate «s approval

or (iv) if any order « entered appombng any such

trustee or receiver or adjudcabng the Operator

bankrupt or meolvent. or approwig the pabbon n

any such procee<»ngs. and provided that the

Operator shal fad to take corrective measured) to

have such order removed or lifted within sixty (60)


d) where the Operator shal tad to carry out

Exploration as regueed by Section 3. cease

Exptorabon for a period of twelve (12) conseateve

months or cease Production with respect to at

Production Areas for a period of twenty four (24)

consecutive months unless such failure or

cessation is consented to by the Government or is

caused by n state of force majeure In particular

relating to security issues preventing safe access

to the Exploration or Production Areas

21.3 Opportunity to Cure. In the case of an alleged Event of

Default described in Section 212. the Government

before taking any farther action, shal provide Nobce to

the Operator of the alleged occurrence of such Event of

Default and of tie Government's views in that regard and

shal offer the Operator a fair opportunity to consult with

the Government to resolve the matter. If. after a

reasonable period of time of consuftabon. the

Government is of the reasonable optfuon that the matter

cannot be resolved by farther consuftabon. the

Government may then send to the Operator Notice of the

Government’s intention to terminate this Agreement. If

the Event of Default is not cured withxi sixty (60) da-

after said Notice, or withm such longer period as may


 necessary to allow a reasonable penod of time to effect

such cure, then this Agreement shall be terminated

21.4 Disputes Regarding Event* of Default.

Notwithstanding the provisions of Sections 21.2 and 21.3.

if the Operator disputes whether there has been an Event

of Default desenbed xi Section 212 and. withm sixty (60)

days after recent by the Operator of the Governments

Notice of its intention to ternsnate. refers such (fcspute to

arbitration in accordance with Section 22. then

termination of this Agreement shaN not take effect untt

the fnaKy of. and in accordance with, an arbitration

award upholding the Government's right to terminate


22.1 Submission to Arbitration. Any dispute between the

Government and the Operator arising out of. in relation to

or m connection with this Agreement or its formation, or the

vaMity. interpretation. performance. temsnabon.

enforceability or breach of this Agreement (inducing any

dispute concerning whether the Government or the

Operator has violated or is in breach of this Agreement or

of any Law affecting the rights, obligations or duties of any

Party under this Agreement), for which resolution by

submission to an expert Is not specifically provided

elsewhere m this Agreement shall be exclusively and finally

settled by bxidmg arbitration pursuant to the Convention in

accordance with the rules of the Centre in effect on the

Effective Date except to the extent in conflict with this

Section 22 wfsch shall preval that evert

The Parties agree that this Agreement and the Operator's

Operations pursuant thereto constitute an "investment” by

reason of the expenditure of a considerable amount of

money in the Republic and that tor purposes of

Article 25(1) of the Convention, any dispute subject to tha

Section 22 a a legal depute arising directly out of an

investment Either of the Parties to such dispute may

institute arbitration proceedings by giving Notice to the

other Party and Notice to the Secretary-General of the

Centre including in each a statement of the issues in


22.2 Nationality for Purposes of Arbitration. The Operator «

incorporated in British Colombo. Canada

22.3 Arbitrators. Any arbitral tribunal constituted pursuant to

this Agreement shall consist of one (1) arbitrator to be/>^



appomted by toa Goverrvnent one (1) arbitrator to be

appomted by Operator end one (1) arbitrator. who shall be

the president of toe tobunal and shal be a citizen neither of

the Republic nor of the United States of Amenca (or of any

other state of which a Party is a national under Section

22.2), to be appointed by the Secretary-General of the

Centre No such arbitrator shall have an nterest in the

matters m dispute

22.4 Referee. At the request of a Party, any matter otherwise

subject to arbitration under this Agreement shall instead be

referred for resolution to a single referee to be appointed by

tho Socrotary Gonoral of the Centre, or of any successor

entity as provided for by Section 22 10 below, except for

any dispute arising out of or related to Sections 3, 4. 5. 6.

20. 21. 23. of th« Agreement, which must be referred to

arbitrators appointed pursuant to Section 22 3 above

unless toe Parties jomtly agree that any such dispute is not

material, in which event it may be referred to toe referee for

decision at the option of either party

The decision of the referee shall be rendered pursuant to

Section 22 6 of this Agreement (except as regards the

requirement for a decision by majority vote) and shall be

final and binding unless appealed by any Party to

arbitrators appointed as provided in this Section 22.4, who

shall examine the roforeo's decision only as to manifest

error of law. findings of fact that are not supported by any

credible evidence, and abuse of authority, misconduct or

other unauthorized act by the referee

22.5 Venue. Arbitration proceedngs conducted pursuant to this

Agreement shall be held in Washington. D.C or such other

place as tie Partes may agree and shaB be conducted «i

the English language The costs of the proceedings sha i

be assessed and borne in such manner as the arbitral

tribunal shall decide Any procedural issues that cannot be

determined under toe arbitral rules of the Centre shal be

determined pursuant to applicable law as set forth below

22.6 Award. The arbitrators shall, by majority vote, render a

written decision stating toe reasons for their award within

three (3) months after any beanng conducted has been

concluded Any monetary award shall be assessed and

payable in Dolars (determined at the Prevailing Market

Rate of Exchange as of tho date of the award if the award

involved an obligation expressed m any currency other than

Dollars) through a bank designated by the recipient, and in

the case of an award to the Operator, shal be exempt from

any Taxes and Dubes imposed by Government Eacttf'*^


Parly shall bear its own costs and attorney fees. Neither

Party shall have any liability for either consequential

damages (except for purposes of set off) or exemplary or

punitive damages, but interest at a rate not to exceed the

London Inter-bank Offering Rate (LIBOR) existing at the

timo of such award, plus one (1) percentage point,

multiplied by the amount of the award, shall be assessed

from the date of any monetary award until its satisfaction

If LIBOR should cease to be reported, then the rate to be

applied shall be another substitute rate agreed to by a

majonty of the arbitrators In any case, the kabdity of the

Operator shal be tainted to the net book value of its

^vestment m the Republic at the time of the award

If the decision of the artxtral tnbmal is adverse to the

Operator, then the arbitral trfcunai may. in its discretion,

specify a reasonable period of grace to cure any defect or

default on the part of the Operator, provided that such

period of grace shall not exceed one hundred eighty (180)

days for the making of any payment required by such


22.7 Waiver of Sovereign Immunity. The Government hereby

irrevocably waives all claims of Immunity from the

Arbitrators' jurisdiction, and from the enforcement of any

arbitral award rendered by a tribunal constituted pursuant

to this Agreement including immunity from service of

process and mmunrfy from the Misdidion of any court

situated m any state, country or nation

22.8 Reservation of Rights The right to refer a dam or

dispute to arbitration hereunder shal not be affected by the

fact that a daimant or respondent has received full or

partial compensation from another Person for a loss or

injury that is the object of the claim or dispute, and any

such other Person may participate in such proceedings by

right of subrogation

22.9 Nature of Award. The Parties agree that the arbitral

award of any arbitral tnbunal constituted pursuant to this

Agrooment may contain such orders (indudmg orders for

specific performance, other equitable relief or monetary

damages) in resped of or affecting any of the Parties (and

any loss or damage suffered by any of them) as such

arbitral tribunal determines to be appropriate in the

circumstances. The Partios, subject to their respective

obligations contained elsewhere In this Agreement, shall

take all such actions as are necessary to give full and

complete effect to the award *•» ---th n*

terms, shall be binding upon


 22.10 Successors. The consent to the Jurisdiction of the Centre

as set forth in this Section 22 shall equally hind any

successor of or successors-in-mterest to either Party to this

Agroomont Should the Centre be replaced by, or its

functions be substantially conferred upon or be transferred

to, any new international body of a similar type and

competence, the Parties shall have the right to submrt any

dispute to such body for settlement by arbitration in

accordance with the foregoing provisions of this Section 22


(a) All notices, requests, reports, approvals, consents, designations

or othor communications (collectively referred to herein a9

"communications”) required by, provided for, in, or relative to this

Agroemont shall be in writing. All communications shall be

delivered, in case of the Government to

Tho Mlnlstor of Lands, Mines & Energy

Ministry of Lands, Mines & Energy

P.O. Box 10-9024

1000 Monrovia 10, Liberia

And in the case of the Operator to:

The Exploration Manager

BHP Billiton World Exploration Inc

Monrovia. Liberia

or such other address as may be designated m writing by the


A dehvery of a commurscatoon shall be deemed effective only

*hen marfed. postage prepaid and return rece*X requested,

telefaxed. or. hand-delivered and recent

(b) Nothing at this Section shad be deemed to relieve the Operator

from filing any report, return or other communication required by

Ubenan Laws of general application at the time and In the

manner therein prescribed


The f adore of either party at any time to requre performance by

the other party of any provisions hereiaider shad in no way

affect the nght of that party thereafter to enforce the same or

shad it effort the party's nght to enforce any of the other

provisions of this Agreement nor shad the waiver by either party /

of the breach of any provisions hereof be taken or held to be



in WITNESS WHEREOF the Parties have executed tfus Agreement, through their

respective duly authorized representatives, on the day. month and year


Signed on A O 2005




Area of Application


 510000 520000 530000 540000

Kitoma EL Application

800000 810000 820000 i 830000 BHPBilliton

km 2 acres

Area 113 27,918


•*»u- fc


527400 815500


W'J.U. 2 527400 809600

3 530000 809600

GAIAPA 14: 4 530000 804800

5 517800 804800

6 518140 805200

7 517750 808070

Bv*p4 8 516850 810660

9 518140 813000

519900 815350


11 527400 815500

W»cu«'* f c,-ysd.


5ANOXOIXMA- 1 I l»fc«i»r.n«in.f*»0503

fe..’ .9-ivh*). n n 1 i i i ?