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AGREEMENT FOR THE FORMATION
OF A JOINT VENTURE COMPANY
BETWEEN
LA GENERALE DES CARRIERES ET DES MINES DU DRC, a State
company duly incorporaled in lhe DRC, with its registered office at 419.
Kamanyola Avenue. P O Box 450, Lubumbashi, DRC (“Gecamines”);
AND
TREMALT LIMITED
1. PARTIES
1.1. GECAMINES
1.2. TREMALT LIMITED
2. DEFINITIONS AND GENERAL PROVISIONS
2.1 The head notes io lhe clauses of this Agreement are inserted for
référence purposes oniy and shall in no way govern or affect the
interprétation hereof.
2.2 Unless inconsislent with lhe context, the expressions set forth below.
whether used as a verb or a noua, shall bear the following meanings:
O / z/Z1
2.2.1 “the Act” means Act N° 81 - 013 of 2 April 1981 on
general législation pertaining to mines and
hydrocarbons in the DRC;
2.2.2 “the agreement / this means the Mining Convention and Joint
Agreement/lhe Venture Agreement set out in this document
Convention" and includes ail appendices or other
annexure hereto;
2.2.3 “Auditor" means the auditors of KMC for the time
being;
2.2.4 “the Board" means the hoard of dircctor KMC as
constituted from time to time;
2.2.5 "Business Day" means any day other than a Saturday,
Sunday or an official public holiday in the
DRC;
2.2.6 “KMC" means the Joint Venture Company new
company to be incorporatcd in the DRC, as
contemplated in clause 5 below.
•Commercialisation" means the marketing and sale of extracted
minerais, including cobalt, copper and othcr
mêlais, in any format, including crushed,
concentrated, refined, metallurgically
processcd or any on the world market;
2.2.8 “Concession Area" means the demarcated area outlined in red on
the plan attached hereto as Annexure “A”
initialled by the parties for identification
purposes, which area includes ail the
Concessions, Quarries and Mines excluding
Likasi;
2.2.9 “the Concessions” means Concessions identified on Annexure
“K” to this Agreement , and any other
Mining and/or Quarry Rights, which entail
ail rights in terms of a mining permit or
mining tille granted under the provisions of
the Act, to mine Minerais in the area in
respect whereof the Concession is granted;
2.2.10 “Dollars or $” Means United States Dollars, as the official
currency of the United States of America on
the Signature Date;
2.2.11 “DRC/the DRC” Means the sovereign country known as the
Démocratie Republic of the Congo.
2.2.12 “Exploration” the activity hy which a party intends to
search for minerai deposits by way of
exploration works which disturb the surface
of the earth;
2.2.13 “Gecamines” Means the party defined in clause 1.1 above;
2.2.14 “TREMALT Means the party deftned in clause 1.2 above;
LIMITED”
2.2.15 “Management Team” Means those members of KMC personnel
front time to time contracted or employed or
appointed by KMC who are vested with the
day to day management of KMC;
2.2.16 “Metals” Means metallurgically proccssed minerais;
2.2.17 “Minerals/Mineral means any minerai substance which is the
Deposits/Ore subject of any of the Concessions or Quarry
Deposits” Rights transferred to KMC pursuant to this
Agreemcnt, occurring naturally in or on or
undernealh the earth, in or under water,
which minerai substance may hâve value and
which has been formed by or subjected to
some geological process, excluding water, in
any format or dérivative;
2.2.18 “the Minerai Rights / shall include but not be limitcd to ail
the Mining Titles” reconnaissance, prospecting, exploration,
rétention and mining licences, permissions
and Concessions to Minerais such as Coopcr,
- Cobalt Deposits and Quarry Substances,
issued by the DRC authorities (or its
predecessors) under previous, pfeyailing or
lULUJC
the Act;
2.2.19 “the Mining Zone / means the entire geographical area wherein
the Mines” KMC may conduct its exploration, research
and mining operations in the Concession
Area, being an area duly surveyed, with its
perimeter boundaries demarcated and
beaconed, as more fully illustrated in
Annexure “A” hereto, comprising no less
than the individual Minerai Deposits and
quarries set in Annexure “L” to this
Agreement;
2.2.20 “Mining/Mining means the activity by which, from a Minerai
Operations” Deposit sufficiently explored, by means of
either opencast or surface or underground
works, to an unlimited depth, a party extracts
Minerais, refînes same, and transforms it into
any dérivative or format thereof with value,
where after the Minerais are commercialised;
2.2.21 “Non-Project means any production arising from mining or
Production” exploitation or processing of Minerais other
than in terms of the Mining Operations
contemplated herein;
2.2.22 “the Project” means the joint venture Project hereby
undertaken by the parties comprising of the
conception, exploration, development
exploitation and mining operations
undertaken in the Concession Area,
including the marketing and
commercialisation of the extracted Metals;
2.2.23 “the Signature Date” the date on which the last party to sign this
Agreement, signs it;
2.2.24 “Tailings” means the discards from the processing of
minerais located within the Conception Area
and identified in Annexure “F" hereto;
2.2.25 “year means a calendar year;
2.3. Unless inconsistent with the context, an expression which dénotés :
2.3.1 Any gender includes the other gender;
2.3.2 A natural person includes an artificial person and vice versa;
2.3.3. The singular includes the plural and vice versa
2.4. Any annexure and schedules to this Agreement form an intégral part
hereof and words and expression defined in this Agreement shall,
unless the context otherwise requires, the meaning in such annexures
and schedules, and définitions in this clause 2 must inter alia be
interpreted in accordance with any substantive provisions contained
in this “Interprétation” clause.
2.5 Any term or word utilized in this Agreement shall, unless expressly
or contextually stated otherwise, bear the meaning ascribed thereto
in the Act.
INTRODUCTION
3.1 Gecamines, a State company with an industrial and commercial
character and vested with legal personality, the entire share capital
whereof is 100 % (one hundrcd per centum) owned by the DRC, is
the registered holder of respectively ail the Minerai Rights, Mining
Titles, Concessions and Quarry Rights in the Mining Zone, and
owner of the Processing Equipment defined above.
3.2 TREMALT LIMITED is a private company registered in Switzerland
with its headquarters located 6 Boulevard George Favon in Geneva.
3.3 TREMALT LIMITED wishes to conclude a Joint Venture agreement
with Gecamines for the incorporation of K.MC, whereby the Project
hereby constituted will enable K.MC to mine and process the
Minerais found in the Mining Zone, on the terms and conditions
hercin contained, to the mulual benefit of the parties hereto.
3.4 It is further recorded thaï :
3.4.1 The proposed exploitation of the Minerai Rights within the Mining
Zone will fall within the framework. of DRC’s policy topromote the
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value of the counlry’s minerai resources, train domestic manpower,
create jobs, transfer technology and elevate the population’s standard
of living;
3.4.2 The execution of the proposed mining Project will require a large
investment and substantial foreign financing will be necessary to
complément KMC’s share capital;
3.4.3 Considering the risks involved in such a mining project, the
procurement of foreign loans will be impossible unless, during the
investment period, the Project generates enough net profits from
operations to ensure the repayment of these loans;
3.4.4 The complète success of the Project will require stable and durable
legal, fiscal and économie conditions under which KMC can conduct
its operations;
3.4.5 The Project will resuit in greater économie activity and employaient
in the concession Area and its surrounding régions, as well as large
foreign export revenue for DRC;
3.5. TREMALT LIMITED and Gecamines wish to exploit Minerais in the
Mining Zone by way of a joint shareholding in KMC, based upon the
joint venture relationship provided for herein.
4 JOINT VENTURE
This Agreement is conceived as and shall constitute a joint venture
between TREMALT LIMITED and Gecamines, with effect from the
Signature Date, subject however in ail respects to the terms and
conditions and limitations hereof, with the purpose of profitable
exploitation and processing of Minerais extracted from the Mining
Zone, and each shall accordingly act as a joint venturer towards the
other with the sanie good faith upon the terms of this Agreement and
subjcct to the conditions hereof, provided however that nothing
herein contained shall be deemed to constitute a partnership between
the parties, or create any several liability, and the Parties hereto
accordingly reciprocally indemnify each other against any daims
which may be made against the one in relation to the obligations or
liabilities of the other, including obligations which were incurred
prior to --- or after the Signature Date.
5. INCORPORATION OF KMC
5.1 TREMALT LIMITED and Gecamines shall endeavour to procure the
incorporation as soon as possible of a company being a “société
privée à responsabilité limitée” to be known as KABAMBANKOLA
MINING COMPANY(KMC). TREMALT LIMITED shall be entitled
to seule the nature, constitution, initial capitalization, share
structure, notarial status documents, and ail other matters affecting
the registration, formation and incorporation of KMC.
5.2.1 Upon incorporation of KMC, or as soon as reasonably possible
thereafter, KMC shall procure the issue and allotment to respectively
Gecamines of 20 % (twenty percent) of the issued share capital of
KMC, and to TREMALT LIMITED of 80 % (eighty percent) of
KMC's issued share capital. Gecamines shall obtain its shareholding
free of any considération additional to what is provided for in this
Agreement. The Auditors shall be obliged to ensure that the formai
share registers of KMC contain ail relevant information in order to
accurately reflect the sharcholdings.
5.2.2 TREMALT LIMITED shall, during the subsistence of this
Agreement, notwithstanding anything to the contrary contained in
the founding documents or other constitutional documents of KMC,
be at liberty to sell, and to offer for sale, its shareholding (or any
portion thereof) in KMC to any third party of its élection.
5.2.3 At any stage after incorporation of KMC, Gecamines and TREMALT
LIMITED, as KMC's sole sharehoiders, may at their discrétion
further define their rclationship by of a sharehoiders agreement,
which must be signed by both parties.
6 WARRANTIES
6.1 Gecamines warrants and undertakes in favour of KMC, that as the
Signature Date hereof, and furthermorc at the date of cession of the
Minerai Right and Concessions to KMC, as contemplated herein :
6.1.1 In respect of ail the Minerai Rights and each and ail of the
Concessions :
6.1.1.1 Ail laws applicable thereto and to operations in terms thereof hâve
been complied with in ail respects by Gecamines^----jf
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6.1.1 .2 Gecamines is not in breach of any of its obligations;
6.1.1.3 No threats of cancellation, termination, withdrawal, invalidity,
unenforceability, or non-compliance hâve been received or rumoured
in respect thereof;
6.1.1.4 Ail minimum work lawfully required to be performed by Gecamines
has been performed;
6.1.1 .5 Gecamines has incurred ail minimum legally required expenditure;
6.1.1.6 Gecamines has ail rights, titles, permits and other contractual and
statutory right and authorizations in respect of the Mining Zone in
order lo carry on prospecting, development and mining operations in
respect of Minerais in the Mining Zone;
6.1.1.7 The Minerai Rights and Concessions are valid and enforceable on
the Signature Date and shall furthermore be valid for a period
terminating not earlier lhan 20 (twenty) years after Signature Date,
which validity is extendable thereafter for either the life of the
Mines or a further period of 10 (ten) years, whichever of the 2 (two)
latter periods are the shorter.
6.1.1.8 The Minerais Rights and Concessions confer on the holder thereof
the sole and exclusive right to mine, or to acquire the tight or little to
mine, for the specified Minerais in the Concession Area;
6.1.2 Gecamines do not hold and during the subsistence of this Agreement,
in respect of the Mining Zone and Concession Area, will hold no
other rights lo prospect or mine, or rights ancillary to prospecting or
mining, or options or rights of first refusai in respect thereof;
6.1.3 Gecamines is not aware of any impediments to the full
implémentation and continuation of this Agreement;
6.1.4 Gecamines in the sole titleholder and owner of the Tailings, which
are hereby transferred lo KMC in unencumbered form.
6.1.5 Gecamines is the sole holder of respectively the Minerai Rights and
Ore Deposits in the Concession Area and of the Mines in the Mining
Zone;
r\ /)/L
6.1.6 Should lhe Minerai Rights or the Concessions expire while this
Agreement is still in force, Gecamines shall timeously provide for
the renewal or for the grant of one or more new Concessions with
identical terms and conditions in accordance with Article 24 of the
Act, for the duration of this Agreement and any renewal thereof.
Gecamines warrants thaï the Project is sufficient, as a matter of law,
for purpose of renewal and/or granting anew such Minerai Rights.
Gecamines shall furthermore be obliged to cede additional
exploitable Concessions lo KMC in the eventuality of the herein
defined Concessions being depleted prior to expiry of this
Agreement.
6.1.7. The Minerai Right and Concessions are not encumbered by any
duties, obligations or constraints towards third parties and
Gecamines can transfer the Minerai Right and Concessions
unrestrained;
6.1.8 Gecamines is the exclusive titleholder, owner and beneficiary in and
to the Processing Equipment, which it warrants to be free of any
obligations towards third parties, and is entitled to grant valid
Option to lease ail facilitics of the Processing Equipment to KMC
for the duration of this Agreement. Accordingly, as recorded in
clause 4 abovc, Gecamines hereby identifies KMC against any
liabilities or claims, of whatsoever nature, made by third parties at
any stage prior to or the Signature Date, in respect of debts or
obligations or any liabilities incurred as a resuit of the direct or
indirect activities or failures of Gecamines.
6.1.9 Gecamines possesses ail rights to use the surface assets in the
Concession Area, naturally occurring or man-made, and ail
infrastructural improvemcnls necessary to operate in the Mining
Zone, and Gecamines will for lhe duration of this Agreement grant
KMC such unrestricted access and usage thereto (inclusive of rail,
water, electricity, roads, airports and airspace);
6.1.10 No non-contracting party lias any right to any part of the Processing
Equipment or to the Minerais, Metals or concentrâtes derived there
from. \\
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6.1.11 Gecamines warrants and déclarés that it has completed ail feasibility
studies, in respect of thc Concessions, the Minera! Deposits and the
Mines, which lawfully require completion, prior to the Signature
Date.
6.1.12 Gecainines hereby waives ail rights to dividends in the favour of the
DRC's Government and shall hâve no entitlement to dividends
declared by K.MC at any stage, either during the currency or after
expiry of this Agrcement.
Dividends are regulated by a profit sharing agreement executed by
I TREMALT LIMITED with DRC Government.
7.1 TREMALT LIMITED and Gecamines, stipulate, déclaré and warrant
I each to the other, that :
7.1.1 It is validly constituted company or other entity legal personality
according to the laws in effect at the place of its incorporation, it is
duly organized and exists validly according to those laws and it has
the power to exercise its activities in the jurisdictions wherein it
opérâtes;
I
7.1.2 It has full power and compétence to exercise its activities, to enter
into this Agreement, as well as to execute any and ail obligations
imposed upon it in terms of this Agreement;
7.1.3 It has obtained ail resolutions or other compulsory authorizations
needed in order to sign, remit and execute this Agreement and any
and ail agreements or obligatory acts envisaged in this Agreement;
furthermore such signature, remittance and execution;
7.1 .3.1 Do not contradict or violate any of the provisions of its statutes, any
decision by shareholders or administrators, any agreement,
stipulation’ or undertaking whatsoever to which it is a party of by
which it is bound, and do not creatc any charge on its assets by
virtue of those same Acts; and
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7.1.3.2 Do not violate any applicable law in the jurisdiction where it is
I incorporated;
I
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7.2 This Agreement is validly signed and remitted by itself and is in
accordance with its terms, valid, compulsory and exécutable on
each’s part.
PRINCIPAL OBLIGATIONS OF GECAMINES
8.1 On the Signature Date, to the extent to which it shall not already
hâve donc so, Gecamines shall deliver to KMC, ail feasibility
studies, geological, geophysical, geobotanical, geochemical, photo
geological, aero magnetic, assay and analysis information and any
other relevant data (including drilling samples and interprétation of
such data) in its possession or control relating to ail prospecting and
rnining activities carried on by Gecamines in the Concession Area
prior to the Signature Date.
8.2 Within 7 (seven) days after either the incorporation of KMC or the
Signature Date, whichever is the later, Gecamines shall cede and
assign to KMC the Tailings, Minerai Rights and the Concessions and
any and ail other relevant rights held by Gecamines in respect of the
Mining Zone.
8.3 KMC shall be entitled at any time to amcnd or extend or procure
replacements or substitutes for ail or any of the Minerai Rights or
the Concessions, or to exercise ail or any of the rights therein
contemplated, including but not limited to. rights to acquire Mining
Rights or Mining Tilles. Upon the lawful termination or Final expiry
of this Agreement, KMC shall bc obliged to cede and transfer to
Gecamines, or its nominee, ail Minerai Rights and Concessions
obtained by it in terms of this Agreement, to vacate and cancel the
leases in respect of Processing Equipment (which shall include ail
improvements or réhabilitation lhereof made during the currency of
this Agreement), and to surrender any and ail rights to any unused
portions of the Tailings.
8.4 The transfer of the Minerai Rights and Concessions will be
undertaken in such a way that KMC will hâve at its disposai ail plant
and equipment, waste dumps, slag dumps, Tailings dams and ail
other infrastructure of the Mining Zone, provided that KMC shall not
assume any liabilities associated with these assets arising prior to the
Signature Date. « x'' '
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9. THE SHITURU PLANT
9.1 Shituru Plant remains the propcrty of Gecamines.
9.2 Gecamines shall provide unhindered access to KMC in order to
proccss ils concentrate according to a toll treatment agreement to be
9.3 agreed without delay.
To ensure efficient and effective use of the plant the two parties
shall set up a joint technical collaboration team in Shituru Plant.
10.
RESTRA1NT AND EXCLUSIVITY
10.1 Gecamines shall not, during the period of this Agreement, grant any rights to any
third party in respect of the Concession Area or the Mining Zone or in any other
10.2 way relevant to this Project, without first having offered such rights to KMC.
Nothing in this Agreement shall disentitle TREMALT LIMITED from carrying
out any prospecting or mining operations independently of Gecamines or KMC
anywhere in DRC, subject to lawfully required permissions from the DRC, and
TREMALT LIMITED shall be under no obligation whatsoever, save as expressly
10.3 provided for in this Agreement, to offer any such prospecting or mining
propositions or any rights thereto to Gecamines or to KMC.
KMC shall be entitled at any time after its formai incorporation to enter into a
contract with TREMALT LIMITED or Gecamines in ternis whereof one or more
or ail aspects and functions of the Mining Operations of the Project may be
11. fulfilled by TREMALT LIMITED or Gecamines. This contract may be in the
form of either a minera! lease or any other similar agreement.
FINANCING
11.1 From the Signature Date:
1 1.1.1 TREMALT LIMITED will be subject to a 6 (six) month period in order to
establish, with the obligatory assistance of the other parties hereto as and when
required, in the name of and for the account of KMC, the necessary financing
required to conduct the mining operations of the Project. Substantive mining
11.1.2 operations in respect of at least 3 (three) of the Minerai Deposits listed in
Annexure “L” hereto, will hâve to commence within a further 3 (three) months
after the expiry of the aforementioned 6 (six) month period;
Ail financing for the Project shall be procured by means of advanccs cffected by
TREMALT LIMITED and/or by loans.
11.1.3
Gecamines shall hâve no responsibilities in respect of any of the operational
financing requirements of the Project. It shall, however, always be accurately
infomied of the Financial position of KMC and the Mining Operations, by virtue
of its seat on the board of directors of KMC. Gecamines may fiartherEg-requircd,
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in its capacity as a Shareholder of KMC, to co-operate in the procurement or
establishment of bank or other guarantees necessary for financing in accordance
with clause 13.2 below.
11.2 Gecamines hereby formally consents to TREMALT LIMITED and KMC
obtaining part or ail of the financing for the Project from international agencies
and/or banks and/or other suitable entities or persons, subject in ail respects to the
provisions of clause 13.1.2 above. TREMALT LIMITED is hereby authorised to
act at its own reasonable discrétion in this regard. Gecamines shall co-operate
fully with TREMALT LIMITED and/or KMC to facilitate the procurement of
such financing, particularly by signing any documents and by giving ail
assurances which may reasonably be required to obtain such financing, though
without any financial and legal obligations on its part.
12. AGREEMENT WITH DRC GOVERNMENT
GECAMINES, TREMALT LIMITED and. KMC will settle immediatcly with the
DRC Government a spécifie convention covering the purpose of the présent
agreement and goveming key issues of the intended operations such as:
- Social obligations
- Calculation of net taxable income
- Customs duties
- Fiscal and other duties exonérations
- Samples and exports
- Work permits and visas
- Authority for security and means of communications
- Central bank
- Arbitrations
- Performance
- More favourable provisions
- Free circulation
- Power and water, etc..
13. ACCOUNTING
13.1 Accounting Records
13.1.1 The accounting records and financial statements of KMC shall be drawn up in
accordance with the provisions of the DRC accounting législation and practice.
Such records shall also takc into account and respect the accounting rules and
procedures usually adhered to by the international mining industry;
13.1.2 KMC's accounting records and financial statements shall be drawn up in United
State Dollars and may be convcrted to Congolese Francs simultaneously with
finalization of the required audit procedures annually, by the utilization of the
official rate of exchange as effective on the final business day of the exercise
concemed.
13.2 Annual Audit
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13.2.1 The Auditors shall perform an annual audit of KMC’s accounts in the manner and
in accordance with the international régulations pertaining to mining companies;
13.2.2 Each year, within 3 (three) months of receiving the Auditors’ report, KMC shall
send the report, together with its comments and observations, to its shareholders.
14. SALES
In accordance with the provisions of clause 12 above, KMC’s products shall be
sold in the United States Dollar currency or other foreign currencies and both of
these parties shall each hâve the right to dispose freely of the retums from these
sales.
15. ACCOUNTS ABROAD
•
15.1 KMC may open, hold and operate one or more foreign accounts abroad in foreign
currency with one or more reputable international banks it has selected and which
are approved of by the Centra) Bank of the DRC. The transactions made on these
accounts wi 11 include, without limitation:
15.1.1 the payments made by the shareholders of KMC
15.1.2 the calls made by KMC on the loans granted by its financial backcrs;
15.1.3 the sale proceeds, pursuant to clauses 12 and 14 above;
15.1.4 the proceeds from other transfers and possible commercial or financial dealings.
15.2 From these accounts will be deducted the amounts necessary for:
15.2.1 the payment of supplies and contracts for the construction and investment of the
Project;
15.2.2 the payment of salaries and rémunérations owed in foreign cunency;
15.2.3 the payment for the purchase of goods, supplies and services necessary for the
normal operation of the exploitations;
15.2.4 covering the operating costs in the DRC;
15.2.5 the rédemption of debt;
15.2.6 the payment of management and other fees;
15.2.7 the payment of dividends;
15.2.8 the establishment of any reserve necessary to covcr future costs and risks;
15.2.9 the payment of the liquidation bonus in favour of the shareholders;
rx?
15
15.2.10 the repayaient of loans and the payaient of dividends, consultant fees and other
payments in favour of KMC shareholders.
16. PERSONNEL AND OTHER OPERATIONAL ISSUES
16.1 Personnel
16.1.1 KMC shall forthwith after exercising the Options be contractually responsible for
payment of the salaries of ail personnel members employed by Gecamines on date
of signature of the Agreement (“the employées”), provided however that such
employées are required and will be directly involved in the Project undertaken in
ternis of the Convention. To this end, Gecamines will supply a list of relevant
employées to KMC who shall be able to verify the correctness thereof prior to
incurring any contractual liabilities. However, ail other past employment benefits
of the employées obtained from Gecamines shall remain the exclusive
responsibility of Gecamines, for instance'pension and medical aid benefits.
Accordingly new employer/employee relationship will be established between the
employées and either KMC.
16.1.2 Furthermore al) other responsibilities and administrative aspects of employment in
respect of the employées shall remain the exclusive responsibility of KMC, and e
monthly Financial rémunérations pertaining to employées will be transferred to
KMC upon conclusive vérification of the correctness of the list of employées
subséquent to the Options having been exercised.
16.1.3 Additionally, if any employées are found to be unsuitable for their intended
position, Gecamines will hâve to replace such employées, to the complété
satisfaction of KMC, failing which the latter 2 (two) parties will be able to replace
them.
16.1.4 There are no restriefions on the number of expatriâtes KMC may appoint to the
Project, neither are there restrictions on the positions which these expatriâtes can
fin.
16.1.5 Board control and Managerial control at KMC will be exercised by the majority
shareholder, TREMALT LIMITED. Notwithstanding their respective
shareholdings, TREMALT LIMITED is allowcd to appoint 5 (five) directors to
the board of KMC for every 2 (two) directors that Gecamines may appoint. In
considération of the control it has at board level, TREMALT LIMITED shall also
be able to control the appointment of the entire Management Team of KMC.
16.1.6 Subject to the provisions of clauses 18.1.1 to 18.1.5 above and of the Labour Law
of DRC, KMC shall be free to select, recruit, employ and dismiss the employées in
accordance with the relevant régulations, provided that the consent of Gecamines
must always First be obtained for the instant dismissal of any employée
contractually utilised by KMC in respect of the Project.
16.2 TRAINING AND ANTICIPATORY MANAGEMENT
16.2.1 TREMALT LIMITED undertakes to implement a policy of technology transfer,
subject to normal confidentiality provisions. This transfer and related training in
z*z» 5?
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respect of extraction of minerais and metallurgical processing of minerais shall
take place eithcr on the Project site or elsewhere.
16.2.2 In addition to technology transfer, there will also be a transfer of operational
techniques, especially in extraction and processing sectors. The transfer of
modem management techniques will also be a primary objective for the
management and supervisory team.
16.2.3 TREMALT LIMITED undertakes to supply the employées with the training
necessary to undertake their work competently, and with the opportunity to leam
new techniques which will allow them to progress in future in relation to more
complex and demanding posts. This policy has as its objective to encourage the
employées to show initiative and to take on responsibilities in order to fulfil their
potential.
17. DISPUTES
17 ] Amicable Seulement. In the case of a dispute between the Parties resulting from
or conceming this Agreemcnt or related to a breach hereof, the Parties in question
undertake, beforc beginning any arbitral or judicial procedure, and except in the
case of urgency, to meet in an attempt to reach an amicable seulement. To this
effect, the president of the Parties in question (or their agents) will meet within 15
days of the date of a written invitation sent by registered post by the most diligent
Party to the other Parties involved. If this meeting does not take place within this
time lirait or if the dispute is not resolvcd by a written agreement signed by ail the
Parties involved within 15 days of the meeting, the Party involved may submit the
dispute to arbitration or may take it to court in accordance with the following
provisions of this Article.
17.2 Arbitration
(a) Binding Arbitration. AU disputes, controversies or daims arising out of
or related to this Agreement or the breach hereof, which are not
resolvcd in accordance with section 17.1 above, will be seUled by
arbitration.
(b) Désignation of Arbitrators. Within 15 days after delivery of its notice
demanding arbitration, the Party first calling for arbitration will
designate one person to serve as its arbitrator and will deliver a notice
containing the name and address of its désignée to the other Party.
Within 10 days after its receipt of such notice, the other Party will
designate another person to serve as a second arbitrator and will deliver
a notice containing the name and address of its désignée to the Party
who first designated an arbitrator. Within 20 days after the désignation
of the second arbitrator, the 2 arbitrators so designated will designate
and secure the agreement to serve of a third arbitrator, who will be a
person reasonably knowledgeable with respect to the matters involved
in the arbitration.
(c) Situs. The arbitration will be conducted in Geneva (Switzerland) in
English with simultaneous French translation, and the arbitrators will
17
takc inspiration from the procedure rules of the International Chamber
of Commerce to the extent such rules are not inconsistent with law or
this Agrecment. Arbitration proceedings will continue in the absence of
an arbitrator or a Party who, after notice given pursuant to this Article
17, fails to participate in or to obtain an adjoumment of the proceedings.
A Party who fails to exercise any right granted to it in this Article 17
within the time provided herein will be deemed to hâve waived such
right. A majority of the arbitrators will by written notice to the Parties
establish a schedule for the arbitration proceedings and issue orders
relating to the conduct of such proceedings goveming, among other
matters, discovery and the conduct of the hearing. Unless the Parties
agréé otherwise in writing, the arbitrators will issue their final decision
in writing within 60 das of the désignation of the third arbitrator. If
they fail to do so, they will be discharged and 3 other arbitrators will be
designated in accordance with the provisions of this Article 17 and
arbitration hereunder will begin anew upon the demand by either Party.
(d) Decision. The decision of the arbitrators will be final and binding upon
the Parties as soon as it is notified to each of the Parties pursuant to
Article 18. The decision must State clearly how the arbitrators hâve
ruied with respect to each issue submitted to them.
(e) Fees. Each Party will pay ail fees and costs of the arbitrator
designated by it and of its counsel and witnesses and ail other
expenses associated with the préparation and présentation of its
case. AU other costs and expenses of the arbitration will be shared
equally by the Parties unless the decision of the arbitrators will
specify a different apportionment of any or ail of such costs and
expenses.
17.3 Disputes with the State. If one Party considers that a dispute between Parties is
connected to a dispute between one or more Parties and the State, it must first of
ail submit the question of such connection to the arbitration court mentioned at
section 19.2. If this arbitration court confirms the connection, the latter must
déclaré itself incompetent. In this case, the most diligent Party may, in accordance
with Article 37 of the State Agreement, jointly submit the two disputes which
hâve bcen recognised as connected, to the International Centre for the Scttlement
of Investment Disputes. Gecamines hereby submits itself to the jurisdiction of this
last body, but only in this spécifie situation. If the arbitration court judges that
there is no connection, the two disputes will be treated separately in accordance
with the procedures provided in each of the agreements.
1 7.4 Jurisdiction. AU disputes, controversies or daims arising out of or related to this
Agreement, or the breach thereof, for which the arbitration court referred to in
section 19.2 or section 19.3 (and 7.6) déclarés itself not competent (except if, with
respect to the arbitration court referred to in section 19.2 the latter has declared
itself incompétent because of connection pursuant to section 19.3, in which case
the arbitration court referred to in section 19.3 will be competent), will be of the
sole compétence of the courts of Vancouver (Canada) and conducted in English,
with simultaneous translation in French. \
18
18. CONDITIONS OF TRADE
18.1 KMC shall be entitled to a free choice of suppliers, contractors or sub-contractors
without any conditions or restrictions other than those resulting from the
provisions of the législation on trading companies.
1 8.2 Howevcr, it shall firstly give preference to DRC organisations and companies,
provided always that these entities guarantee the same quality, security and supply
periods as those offered by other compétitive companies.
19. ENVIRONMENT AL PROTECTION
19.1 The activities of KMC will be carried on in compliance with environmental
standards intemationally accepted as good mining practice, provided that such
standards are in practice adhered to by Gecamines in ail its operations, prior to the
Signature Date, it being recorded that GeCamines does not expect KMC to adhéré
to environmental standards which are more onerous in any way than those of
Gecamines. In addition, KMC undertakes:
19.1.1 to take adéquate measures, for the duration of this Convention, to protect
the environment and the public infrastructures used beyond normal
industrial use, in compliance with the rules and uses intemationally
accepted in the mining industry, as far as these may e applied in the DRC,
and with the laws in force;
19.1.2 to mitigate, by adéquate measures, the damage which could be caused to
the environment and to the public infrastructure used beyond normal
industrial use;
19.1.3 to comply with the législation in force conceming dangerous waste,
damage to natural resources and protection of the environment;
19.1.4 to restore used sites and the excavated plots of land in compliance with the
rules and uses intemationally accepted in the mining industry, as far as
these may be applied in the DRC;
19.1.5 to comply with the provisions of the Forest Guide, in particular those
relating to the réclamation along banks, rivers and slopes; and
19.1.6 to set up a System for the purification or treatmcnt of used residual water
from the mines and plants, which are released from the areas foreseen in
the works program.
19.2 Following the completion, and adoption by the Board of KMC, of a bankable
feasibility study, and the design of the exploitation envisaged to be provided for
therein, Gecamines shall ensure the orderly removal of ail dwellings which are
likciy to be affected by the future Mining Operations. KMC shall fund the cost of
the relocation of the relevant inhabitants, which shall be deducted from the gross
operating income for purposes of determining the Net Taxablejnc
19
20. LANGUAGE
The English and French languages shal) be the official languages to be used under
this Agreement and shall be used by the parties in ail notices, communications,
statements and any technical or commercial documentation to be prepared and
presented under this Agreement; provided that in the case of inconsistency
between the English and French versions, the English language version shall
always prevail.
21. DURATION
This Agreement shall endure for 25 (twenty five) years after the Signature Date
and may be extended upon ternis to be mutually agreed, subject however to
extension in the case of force majeure as referred to in clause 29.
22. FORCE MAJEURE
22.1 In case of Force Majeure (as such term is hereinafter defined) the party materially
affected or which could be materially affected by Force Majeure (the “Affected
Party”) shall give to the other parties to this Agreement prompt written notice
describing such event of Force Majeure.
22.2 As from the occurrence of an event of Force majeure, the obligations of the
Affected Party shall be suspended during the whole continuance of such event of
Force Majeure and for an additional pcriod, sufficient to permit the Affected
Party, acting with ail required diligence, to place itself to the same situation as
before the occurrence of such event of Force Majeure.
22.3 AH time periods and ail dates subséquent to the date of occurrence of the event of
Force Majeure shall be adjusted to take into account the extension and delay
arising out of such event of Force Majeure.
22.4 The Affected Parties shall use ail diligence, reasonably possible to eliminate such
even of Force Majeure as quickly as possible, but such requirement shall not entail
the seulement of strikes or other industrials disputes against the judgement of the
Affected Party.
22.5 For purposes of this clause the term Force Majeure means any sudden or
unforeseen or insurmountable even outside the control of the Affected Party,
excluding lack of funds, but including without limitation: strikes, lockouts or other
industrial disputes, acts of a public enemy, riots, acts of public violence, pillage,
rébellion, revoit, révolution, civil war, coup d’Etat or any event of political
character which materially affects or could materially affect the success of the
Project, fire, storm, flood, explosion, govemment restriction, failure to obtain any
approval required from public authorities inclusive of environmental protection
agencies.
22.6 In case of Force Majeure, the parties hereto will consult with each other as to how
to limit the damage caused by the Force Majeure.
20
23. BREACH
Subjcci lo clause 24 below. if any of the parties to this Agreement commit a
materiai breach of conlract, the olher parties shall hâve the right to deinand that
such breach bc reincdied wilhin reasonablc specified period of time. If such breach
is not rcmedied wilhin such period of lime, the complaining parly shall hâve the
right to terminale this Agreement by giving 60 (sixty) days written notice to the
defaulting party. However, if the defaulting party contests such materiai breach of
this Agreement. no terminalion shall occur unless and until an alleged unremedied
materiai breach shall hâve been judged by a final award of arbitration in
accordance wilh clause 17 of this Agreement.
24. RIGHT TO EARLY TERMINATION BY TREMALT LIMITED
24.1 TREMALT LIMITED may terminale this Agreement on 30 (thirty) days written
notice forwarded to both Gecamines and KMC at ils own élection and without
being obliged to givc rcasons for such tçrmination. In such event and to give full
effect lo this right, TREMALT LIMITED will cede free of charge its shares in
KMC to Gecamines and will procure the résignation of the persons who hâve been
electcd Managing Direclor. Directors, General Managers and Consultants.
Furthcrmore. ail advances which have by then made by TREMALT LIMITED to
KMC as being part of KMC's debl in favour of TREMALT LIMITED, will
immediately be repayable and any feasibility study (if in existence at lhat time)
will romain the property of KMC.
24.2 From transmission of the abovementioned notice. TREMALT LIMITED shall be
liberated of any further obligation lo make advances or finance the expenses.
including salaries of employées to parlicipalc in any increase of capital and/or to
render to Gecamines any further paymenis of the Project Fecs and/or Pre-Option
Fees due. and TREMALT LIMITED shall not be held liable for the payaient
thereof or for any damages towards any party whatsoever. Any Project Fees
already paid by TREMALT LIMITED to Gecamines at that time will remain the
latter’s.
25. LIQUIDATION
Should the shareholders agrée on the dissolution or the liquidation of KMC, the
provisions of the statules of KMC conccrning liquidation will apply in accordance
with the laws of the Démocratie Republic of the Congo.
26. INSTITUT DRC DU COBALT
In the event of the création, on Gecamines' initiative, of an Institut DRC du
Cobalt, whose object would bc the study and promotion of the international cobalt
market. KMC will become one of its founding members.
21
27. CONF1DENTIALITY
27.1 The parties shall, savc as required by virtue of the fact that any of them is a listed
Company at any stage and savc as required by any regulatory authorities, keep
secret and conlldential and shall not wilhout prier wrilten permission of the other
27.1.1 parties hereto, publish, disclosc, divulge or communicate to third parties or make
public disclosures of:
the commercial ternis and conditions of this Agreement;
27.1.2 any information relating lo any activitics carried on or proposed to be
carried on pursuant lo this Agreement;
27.1.3 any information or interprétations thercof relating to the results of
prospecling, assay, analysis, or aeromagnetic surveys hcrein contemplated
or the minéralisation of the Concession Area and other areas contemplated
in this agreement. the feasibility or terms of a mining venture in the
27.2 Concession Area, proposed methods of mining, or geological. technical,
financial or other data and interprétations thereof relating to Minerais in
the Concession Area.
The parties shall take ail neccssary action, including legal proceedings, to compel
compliance with this clause 35 by their shareholders, directors, officers.
28. employées, agents, contractons and représentatives.
SEVERAB1L1TY
If any provision of this Agreement should be or bccome void, illégal or
unenforccablc, the parties shall negotiate in good faith to amend the agreement to
29. achieve the parties’ stated intention, but if this is not possible then such provision
shall be severed and the remaining provisions of this Agreement shall remain of
fui) force and cffect.
COSTS
TREMAL'l LIMITED shall bear the cost of and incidental lo the negotiation,
30. préparation, execution and implémentation of this Agreement.
SUPREMACY OF THIS AGREEMENT
30.1 The provisions of this Agreement shall take preccdence over the notarial status '
document, l’ounding documents, or other form of constitution of K.MC.
30.2 The parties shall procure that the notarial status document, founding documents, or
other form of constitution of KMC. reflect the provisions of this Agreement and in
the evenl of any conllict belvvcen any of the foregoing documents and this
Agreement the provisions of this Agreement will prevail and the foregoing
documents shall be deemed amended accordingly.
22
31. GENERAL
31.1 This document consiilules lhe sole record of the agreement between the parties in
regard lo the subject malier lhereof.
31.2 No party shall be bound by any express or implied term, représentation, warranty.
promise or the like, not recorded herein.
3)3 No addition to. variation or consensual cancellation of this Agreement shall be of
any force or efiecl unless in writing and signed by or on behalf of ail the parties.
31.4 No indulgence which any of the parties ("the granlor”) may grant to any other or
others of them ("the grantee') shall constitute a waiver of any of the rights of the
grantor, who shall not lhereby be precluded front cxercising any rights against the
grantee which might hâve arisen in the past or which may arise in the future.
3 ] 5 lhe parties underlake at ail limes lo do ail such things. to perfomi ail such acts and
to take ail such steps and lo procure lhe doing of ail such things, the performance
of ail such actions and lhe laking of ail such steps as may be open to them and
necessary for or incidental lo the pulting inlo effect or maintenance or the ternis,
conditions and iniport of this Agreement and furthermore to act in good faith
towards each other and to co-operale with each other to lhe fullest extent.
31 6 Ail required formai ilies. underlakings. obligations, rights and other commitments
made pur.suant lo this Agreement are accepted as material by the parties hereto.
32. DOMICILIUM
32.1 Any notice or other document lo be served under this Agreement may be delivered
or sent by prepaid first class or registered post or telex or facsimile to the other
party to be served at lhe address sel oui below or at such other address as il may
hâve nolil'icd lo lhe other parties in accordance with this clause:
32.1.1 GECAMINES La Generale des Carrières et des Mines
419 Avenue Kamanyola
B.P. 450. Lubumbashi
For attention:
Monsieur L'Administrateur Directeur General
Facsimile No: 090032 26768041
Téléphone No: 090032 26768040.
TREMALT LIMI I ED 6 BOULEVARD GOERGES-FAVON
Cl 1-1204 GENEVA
SWITZERLAND
P O BOX 5726
CI 1-1211 GENEVA 11
SWITZERLAND
TEL: 44/22/321 6800
FAX: 44/22/321 6862
23
32.2 Any party hereto shall be enlilled to change ils address as set out in clause j.2
from lime lu lime, providcd thaï any new address selccted by il shall bc an address
other lhan a box number. and any such change shall only be effective upon receipt
of notice in wriling by lhe other part ofsuch change.
32.3 Ail notices, demands, communications, legal process or payments intended for
either party shall be given. made or served as such party's address for the time
being.
32.4 A notice sent by onc party lo anoiher party shall bc deemed to be received:
32.4.1 on lhe same day, if delivered by hand;
32.4.2 on the same day. if sent by télex or facsimile;
32.4.3 on the recorded date of delivery by post, which in lhe absence of proof to
the contrat? shall bc dccmcd lo be 10 (len) business days after the date of
posling.
32.5 Nolwithslanding anything lo lhe contrary herein containcd a wrilten notice or
communication aclualiy received by a party shall be an adéquate written notice or
communication to il nolwithslanding that it was not sent to or delivered at its
chosen address.
THUS DONE AND SIGNED for and on bchalfof GECAMINES al Kinshasa on this
day of January 2001 in lhe présence of lhe undersigned wilnesses:
ASW1TNESSES:
GECAMINES
THUS DONE AND SIGNED for and on bchalfof TREMALT LIMITED on ihis 1 lIh
day of January 2001 in lhe présence of lhe undersigned wilnesses:
TREMALT LTD
F»
ANNEXURE "F"
TAILINGS TO BE TRANSFERRED FROM GECAM1NES
1. Kakanda Tailings
2. Kambove Tailings
i
ANNEXURE “K”
«
ps IDENTIFIED CONCESSIONS (MINING AND QUARRY)
[MINING CONCESSIONS AND QUARRY PERMITS]
P 1. C14
2. C15
3. C17
P 4. C18
5. C19
6. C21
Ü 7. C33
8. Laena & Kakontwe Quarry Rights
*
n
i
s
si
ANNEXURE UL"
MINERAL DEPOSITS AND QUARR1ES
(1) aüKasôte-cfeposteV (21) ail Saafi deposits;'
(2) alUMftke 2 déposés; {22) ail Kiwana II deposits;
(3) ail Guluwe deposits; (23) -aH-Lvita-deposils;
(4) ail Kakanda North & South deposits; (24) ail Kahumbwe-deposils;
(5) ail Bangwe deposits; (25) al! Disele deposits;
(6) ailKabolela North JL Soulh-doposils; (26) ail Lufomboshi deposits;
(7) ail Milebi deposits; (27) alLSignal deposits;
(8) aîHvtTndtgtMeposiUr- (28) ail Mifongwj-dcposits;
(9) ail Shangulowe deposits; (29) '-nit‘Sw8mbo deposits,
(10) allShnTTOtobV^CdcpoSils; (30) ail Kufumabsambo deposits;
(11) ail Kababankola deposits; (31) ail Kasanapi deposits;
(12) all-Mukondodeposits; (32) ail Kazilangwe deposits;
(13) ail Chimbedia deposiLs; (33) ail Kalabi deposits;
(14) ait Tarataïa deposits; (34) ail Kabdela deposits;
(15) ail Kamoya (1,2 & 3) deposits; (35) ^ali Mende deposits;.
(16) ail Kambove deposits; (36) -alLKakontwe-goaffles;
(17) ail Likasi-deposits; (37) ^alltuera-ptrames;
(18) ail Sesa deposits; (38) Kepisi.
(19) ail Kazibia deposits;
(20) ail Kamfundwa deposits;
»
PREMIER AVENANT A
L’ACCORD DE CREATION DE LA JOINT VTNTURE
KABABANKOLA MINING COMPANY. SPRL
LA GENERALE DES CARRIERES ET DES MINES, Société d’Etat à caractère industriel
et commercial, ayant son siège social à Lubumbashi, sis n° 419, avenue Kamanyola, Province
du Katanga. République Démocratique du Congo
ET
TREMALT LIMITED, Société Privée dûment constituée suivant les lois des Les Vierges
Britanniques et ayant son siège social à Akara Building, 24 de Castro Street, Road Town,
Tortola
Vu l’accord intitulé « agrcement for the formation of a joint venture company » conclu entre
les parties à Kinshasa, en RDC en date du 11 janvier 2001,
Attendu que ledit accord a été renforcé par la Convention Minière entre la République
Démocratique du Congo, la Société Kababankola Mining Company, Trerr.alt Limited et la
Générale des Garn îtes et des Mines, dûment approuvée par ie décret présidentiel Nr 034/2001
du 18 Juin 2001 ;
Vu la lettre Nr C/'B/MINTÎS-HYDRO/Ol/^l 1/02 du 19 mars 2002 du Ministre des Mines et
Hydrocarbures daiêe du 19 mars 2002, laquelle justifie une révision de l’accord du 11 janvier
2001 cité ci-avant suivant le prescrit de l’article 28 dudit accord ,
IL EST CONVENU CE QUI SUIT :
Article 1 :
Les annexes « F », « K » et « L » de l’accord du 11 janvier 2001 sont annulées et remplacées
par les nouvelles annexes « B », « C » et « D » qui accompagnent le présent avenant et en font
partie intégrante. °
.Article 2 :
Toutes les références aux annexes « F », « K » et « L » doivent être lues respectivement
«3 », « C » et « D ».
.Ainsi fait ce 09 avn) 2002 à Lubumbashi en double original chaque partie retenant le sien.
LA GENERALE DES CARRIERES TREMALT LIMITED
S
Vice-President du Comité de Gest/on YUMBA MONO A
President du C mité di(Gestion
Provisoire Pro\ isoire j
AVENANT No. 2 A L’ACCORD DE CREATION DE
LA JOINT VENTURE KABABANKOLA MINING COMPANY , SPRL
LA GENERALE DES CARRIERES ET DES MINES , Société d’Etat à caractère
industriel et commercial, ayant son siège social à Lubumbashi sis n° 419, avenue
Kamanyola, Province du Katanga, République Démocratique du Congo
(GECAMINES), d’une part ;
ET
TREMALT LIMITED, Société Privée dûment constituée suivant les lois des Isles
Vierges Britanniques et ayant son siège social à Akara Building, 24 de Castro Street,
Road Town, Tortola, d’autre part ;
Vu la convention intitulée « Agreement for’the formation of a joint venture
company » conclu entre les parties à Kinshasa, en République Démocratique du
Congo le 11 janvier 2001, lequel a été modifié par l’Avenant n° 1 conclu entre les
parties en date du 9 avril 2002, à Lubumbashi ;
Vu la Convention Minière conclue entre la République Démocratique du Congo, la
Société Kababankola Mining Company SPRL, Tremalt Limited et la Générale des
Carrières et des Mines en date du 7 mars 2001, laquelle convention a été approuvée
par le Décret Présidentiel n° 034/2001 en date du 18 juin 2001 ;
Vu 1’ avenant n° 1 à la Convention Minière précitée conclue entre les mêmes parties
en date du 15 Avril 2002 et approuvé par le Décret n° 002/2003 du 13 Janvier 2003 ;
Attendu que les parties conviennent que la Gecamincs reprend ses droits aux
dividendes, dans la société Kababankola Mining Company SPRL, qu’elle avait jadis
cédés au Gouvernement de la République Démocratique du Congo ;
IL EST CONVENU CE QUI SUIT
Article unique
L’Article 6.1.12 de la convention intitulée « Agreement for the formation of a joint
venture company» est abrogé dans son intégralité.
Fait à Lubumbashi, le 15 jour du mois de janvier 2003
LA GENERALE DES CARRIERES TREMALT LIMITED
ET DES MINES