Within the Mining Lease Area, the Compant will have the right to use the water from any natural watercourse and to retum the same together with mining spoils to the water courses, provided that, no poisonous or noxious matter is present in the intake water. It also has the right to divert streams, including the right to secure water from the river stream or watercourse for the purpose of obtaining and maintaining a mining operation, and to build temporary dams and impound water therein as required for such mining operations.
The government may instruct an independent firm of accountants to assess lossese between December 31 1995 and December 31 1999; obligation to report to the government any chance in the market and how it affects the company, long-term contract price of the relevant commodities within 30 days entering into the contract; obligation for the company's auditors to report on a quarterly basis on the fact that sales have been arm's length transactions, all sales have been made under long-term contracts besides those on the spot market, all royalties have been correctly calculated and paid
Amortization: 40% for the first year, and 20% for following years. Upon company's requests losses incurred by the Company 9 financial years before 1999 and after can be carried forward. Authorized deductions for group office expenses incurred in carrying out activities until December 31, 2003; from January,1, 2004, authorized deductions for group office expenses when carried out outside Sierra Leone if: from January,1, 2004 to January,1, 2005 those deductions do not exceed 5% of the company's turnover of that period; after december 31, 2005, those dections do not exceed 1.5% of the company's turnover; all outgoings and expenses exclusively related to the project whether incurred in Sierra Leone are deductible provided that marketing commissions and fees do not exceed 2.5% of the turnover
Fixed rate of 37.5% on incomes of the company received in Sierra Leone, or the fixed rate of the Income Tax Act 2000 as this rate is lower. The income tax payable by the company of any financial year must not be less than 3.5% of the turnover of the company as defined by the Income Tax Act. An Additional sliding-scale Income Tax may be due by the Company if its average weighted fross sale price per ton of rutile sold reaches 625US$/ton. The different increments of the sliding scale will be increased by 4% each year and ranges at the date of the contract from 625$/ton to 776$/ton. The rate of tax on each increment is ranges from 10% to 25%
For titanium and associated minerals: rate of 3.5% of the gross sale price, free alongside the Sierra Leone port of shipment from January, 1 1989 and 4% after January,1, 2006 and an additional royalty of $1,667,000 per year between 2010 and 2014 and $1,665,000 for the year 2015. If no royalty is established by the Mineral Act for other minerals discovered (not including diamond), the government will apply a royalty consistent with comparable minerals.
The option previously reserved in a former agreement for the Government to acquire 47% of the shares of the Company is released in favor of the Company in consideration of a payment of a royalty of $10,000,000.
From January 1, 2003, payment to an Agricultural Development Fund of the higher of $75,000 or 0.1% of gross sales free alongside port of shipment in Sierra Leone. The Fund will be utilized for the development of agriculture in the affected areas and shall be controlled by representatives of the Government, Chiefdom and the Company.
The company shall not import unskilled labor of the carrying out of any operations and the Company should give preference to qualified Sierra Leone executives. The Company shall also establish a training programme to enable Sierra Leoneans to assume technical and managerial functions.
The Company will prepare at its expense a comprehensive master plan that will adress the issues of reclamation and rehabilitation of mined-out areas. The final draft will be subimitted 6 months after the ratification date. The company will implement the plan at its expense and upon approval of the government.
In order to achieve an effective security regime, the Company may create and maintain a security force to provide a deterrent, defence and reaction capability to incidents. The Company may import such arms and ammunition that are appropriate to such a security force subject only to the prior approval of the Govemment and the security force may carry and use such arms and ammunition for the purpose of carrying out its functions.
The Company shall undertake an expenditure in the aggregate each year of not less than $2,500 per square mile on exploring, prospecting and developing the Prospecting Area. Company shall submit a detailed work and expenditure programme for that area. For the approval of the Director of the Mines.
If Parties cannot reach an amicable settlement of all disputes, they will submit the matter to a board of three Arbitrators appointed in accordance with the ICC rules. The venue of the arbitration shall be London.
The Company must endeavour to make satisfactory arrangements for payment of a fair compensation for any prospective damage to any crops, buildings, trees or works . The Govemment must negotiate on behalf of the landowners, with the company to assess the compensation. The landownerl have the right to participate in the negotiations. Subject to Clause 10(b) of this Agreement, the Govemment will indemnify the Company against all claims of any owners or occupiers in respect of a Prospecting Area, other than claims for compensation made in accordance with the provisions of Section 26 of the Minerals Act.
If the Government enacts any legislation or administrative rule or practice which results in more onerous obligations upon the Company than those at the date of the agreement, then the Government should hold the Company harmless in respect of the increase cost of the more onerous obligations.