Logar Province

Afganistan

Logar Province. The coordinates of the Aynak Reserved Areas are: Exploration Area D Point A - Long: 69⁰ 16' 00"", Lat: 34⁰ 14' 30"" Point B - Long: 69⁰ 25' 30"", Lat: 34⁰ 14' 30"" Point C - Long: 69⁰ 25' 30"", Lat: 34⁰ 19' 30"" Point D - Long: 69⁰ 16' 00"", Lat: 34⁰ 19' 30"" Point H - Long: 69⁰ 16' 00"", Lat: 34⁰ 17' 30"" Point G - Long: 69⁰ 20' 00"", Lat: 34⁰ 17' 30"" Point F - Long: 69⁰ 20' 00"", Lat: 34⁰ 15' 00"" Point E - Long: 69⁰ 16' 00"", Lat: 34⁰ 15' 00"" Exploitation Area - E Point E - Long: 69⁰ 16' 00"", Lat: 34⁰ 15' 00"" Point F - Long: 69⁰ 20' 00"", Lat: 34⁰ 15' 00"" Point G - Long: 69⁰ 20' 00"", Lat: 34⁰ 17' 30"" Point H - Long: 69⁰ 16' 00"", Lat: 34⁰ 17' 30""

MCC-Jiangxi Copper Consortium, comprised of China Metallurgical Group Corporation and Jiangxi Copper Company Limited.

China Metallurgical Group Corporation and Jiangxi Copper Company Limited

Aynak Copper Deposit

Copper

Ministry of Mines

Exploitation Permit/License

Effective Date of the Agreement is defined as the date two months from the date on which the parties sign the Agreement, and the parties obtain final approval from the National Development and Reform Commission (in the case of MCC-Jiangxi) and the Council of Ministers (in the case of the Ministry of Mines)

MCC-Jiangxi shall prepare an environmental and social impact assessment in accordance with the requirements of the Minerals Law, the Environment Law, Afghanistan's environmental and social protection guidelines and policies, all World Bank Environmental and Social Safeguard Policies, the Equator Principles and the Voluntary Principles on Security and Human Rights. MCC-Jiangxi shall submit its assessment programs to the Ministry of Mines for review and approval prior to commencing construction of project facilities and structures. The Ministry may require additional assessment activities as a condition for approval. At the minimum, MCC-Jiangxi shall undertake the environmental and social impact assessment program specified in Appendix 6 of the Agreement. MCC-Jiangxi shall prepare an environmental management plan that presents a detailed, technically and scientifically sound approach to the management, mitigation or elimination of project impacts and risks to the environment and local residents. MCC-Jiangxi shall submit its environmental management plan to the Ministry of Mines for review and approval prior to commencing mining operations or commercial production, and the Ministry of Mines may require additional or alternative environmental management provisions, including ISO14001, as a condition for approval. At minimum, MCC-Jiangxi shall undertake the environmental management plan, including all the sub-plans specified in Appendix 6. MCC-Jiangxi shall be responsible for the preparation and submission of a final mine closure plan to the Ministry of Mines for approval, which should, at the minimum, identify the measures and financial requirements necessary to decommission the mine, complete reclamation and rehabilitation and establish agreed upon post-mining land uses.

Subject to the Government's approval and consistent with the requirements in the water supply Memorandum of Agreement (the ""MOA"") attached as Appendix 9, MCC-Jiangxi may appropriate and use water found within or outside the license area for the operations and activities in the Agreement. For water outside the license area, the Government will facilitate the acquisition of water resources. MCC-Jiangxi shall not utilize agricultural water or deprive any lands, villages, houses, or watering places for animals of a reasonable supply of water insofar as such water has, through custom, been utilized for such lands, villages, houses, or animals. MCC-Jiangxi shall not interfere with any water rights or existing uses of water enjoyed by any persons under the law of Afghanistan. MCC-Jiangxi commits to (1) construct water supply wells and pipeline system, at its sole expense, in the vicinity of the project to supply the project's fresh water requirements, and (2) reuse and recirculate process water to the extent possible. The Government commits to make available sufficient water resources for MCC-Jiangxi's use in the project. Subject to the protection of local water use, the parties agree that MCC-Jiangxi may obtain water from local water sources to supply its needs, and if sufficient water is not available, the parties shall work cooperatively to locate water supplies that are likely to be of a sufficient quantity to meet MCC-Jiangxi's needs. The Government shall provide all necessary assistance with respect to making available information and licenses to plan and expedite the necessary water supply development, and upon identification of water supplies of suitable quality, the Government will diligently process the approvals necessary to allow MCC-Jiangxi to utilize water supplies. As of the date of this Agreement, the specific conditions and requirements for the location, construction, and operation of the water supply system have not been definitively established by the parties; hence, MCC-Jiangxi's commitments concerning water supply shall be memorialized in a Memorandum of Agreement (the ""MOA"") (attached as Appendix 9). The MOA requires the parties to negotiate in good faith to conclude a water supply agreement within 3 months from the effective date of the Agreement, extendible for another 3 months. Failure to conclude a water supply agreement within this timeframe shall constitute cause to revoke this Agreement. MCC-Jiangxi agrees that it shall be subject to fines, penalties, and fees in the event that of breach of the terms of the Agreement, including without limitation, emissions and discharge standards which MCC-Jiangxi is required to comply with pursuant to this Agreement.

MCC-Jiangxi acknowledges and agrees to pay the Ministry of Mines USD808 Million for the Agreement (the ""Premium""). The Premium should be paid to the Ministry of Mines in connection with the milestones identified in the Agreement's project schedule. Failure to make timely payments shall result to the application of the non-performance provisions in the Agreement. Within 10 days from the Effective Date of the Agreement, MCC-Jiangxi shall pay the amount of USD80.8 Million (10% of the Premium). Upon approval of the feasibility study, MCC-Jiangxi shall pay to the Ministry of Mines USD161.6 Million (20% of the Premium). Upon commencement of commercial production, MCC-Jiangxi shall pay to the Ministry of Mines USD565.5 Million (70% of the Premium).

Taxes shall be paid in accordance with Afghanistan's Income Tax Law, and MCC-Jiangxi shall qualify as a Qualified Extractive Industries Taxpayer.

Tax shall not be payable on any construction materials obtained from the license area, and used for public purposes, such as, but not limited to, roads, bridges, port facilities, airports, community buildings, housing, or any other infrastructure used in relation to the Agreement.

Appendix 5 outlines the details on the royalties to be paid on the Agreement, which must be paid on or before the last day of the first month following the end of each calendar quarter. Each payment shall be accompanied by a statement in reasonable detail showing the basis of computation of royalties due in respect of production made during the preceding calendar quarter. Royalties will be computed as follows: a) metal quantities: the tonnage or quantity of copper and associated minerals used in computing for the royalties shall be the quantity delivered for shipment or domestic sale, determined by internationally accepted assay methods. The value of the associated minerals will be converted to copper equivalent weight by using defined metal prices, and added to the tonnage of copper subject to royalty calculation. (b) metal prices: for copper and associated minerals having a London Metal Exchange (the ""LME"") price quotation or for which the saleable mineral content has an LME price quotation, the price used shall be the US Dollar price per unit for the same or most equivalent traded type of grade of the minerals concerned. This shall be calculated as the average of the LME daily official settlement prices for the calendar quarter. For those without an LME price quotation, the price used shall be the average calendar quarter US Dollar price as published in the Metals Week Monthly Average Report for the calendar quarter. (c) royalty rates: the royalty rate is a sliding scale royalty based on the copper price, as described in Appendix 5. The formula for the royalty rate is: 1) when the copper price is equal to or less than US$1/pound, the royalty rate is 2.5% x 120%, or 3.0%; 2) when the copper price is greater than US$1/pound and equal to or less than US$2/pound, the royalty rate is based on: (10 x copper price/pound - 7.5) x 120%; and 3) when the copper price is greater than US$2/pound, the royalty rate is 15% x 130%, or 19.5%. Payment in Kind: In lieu of royalties, the Government may elect to receive a part of the finished product produced by MCC-Jiangxi by giving not less than one year's notice to MCC-Jiangxi. The payment in kind shall continue for the period stated in the notice. When payment is made in kind, MCC-Jiangxi shall be deemed to have paid royalties in an amount equal to the value of the finished product delivered to the Government. The value of the finished product shall be calculated on the basis of the same formula used to calculate the royalty obligation. Delivery of finished product shall be effected at such times and points of delivery as may be agreed upon by the parties.

The parties agree and acknowledge that mine development and operations will impact surrounding villages and residents, and MCC-Jiangxi shall, in consultation with government officials, develop and finance an aid program for the benefit of the surrounding villages and residents, which shall be done in coordination with the local and regional benefits specified in the Agreement.

MCC-Jiangxi shall employ Afghan personnel, to the maximum extent practicable, and upon terms which are acceptable to MCC-Jiangxi, in all classifications of full-time employment. For the Aynak project, MCC-Jiangxi shall employ 100% of Afghanistan nationals as unskilled labor. MCC - Jiangxi shall employ the following percentages of Afghan labor: 50% of the skilled, clerical and supervisory, technical, management and professional labor should be Afghan for the first 3 years. On the 5th year, 100% of the skilled labor should be Afghan, and 75% of the clerical and supervisory, technical, management and professional labor should be Afghan. On the 8th year, 85% of clerical and supervisory labor, 90% of the technical labor, and 85% of the management and professional labor should be Afghan. Failure to achieve these percentages shall be considered a breach of contract, unless MCC-Jiangxi can justify such failure on grounds acceptable to the Government. The employment and terms and conditions of such employment and the discharge or disciplining of Afghan personnel shall be done in compliance with the labor laws of Afghanistan. MCC-Jiangxi shall provide for the training of suitable Afghans to qualify them for skilled, clerical and supervisory, technical, and management and professional posts.

MCC-Jiangxi, including its subcontractors, shall use its best efforts to purchase goods and services in Afghanistan, if these are available in suitable and reasonably comparable quality, and at no higher price than goods available from abroad. To compare prices of goods and services available in Afghanistan with those of imported goods and services during the construction period, customs duties shall not be added to the other expenses incurred up to the time the imported goods are landed in Afghanistan. For goods and services imported during operations, customs duties for raw materials shall be added. Price comparison shall not delay MCC-Jiangxi's construction activities or operations.

MCC-Jiangxi shall compensate local residents adversely affected by mine development activities at or in the vicinity of Aynak. Compensation shall be determined through applicable Afghan law and internationally accepted principles of fairness and reasonableness. Should residents be required to move, they shall be properly resettled in a location and in a condition that do not (a) result in a diminishment of the resettled resident's standard of living, or (b) adversely impact the resident's livelihood, and the resettlement shall be done in accordance with World Bank Resettlement Guidelines.

MCC-Jiangxi is authorized to construct and operate project facilities in accordance with such reasonable safety regulations relating to design, construction, and operation as required by international mining practice and Afghan laws. Railway: MCC-Jiangxi commits to construct, at its own expense, a railway associated with the project, and the Government commits to assist MCC-Jiangxi in securing the land and route necessary for the railway. Under the MOA, MCC-Jiangxi commits to: (1) conduct reconnaissance (survey) and prepare a feasibility study according to the schedule provided in MCC-Jiangxi's August 16, 2007 letter; (2) upon the completion of the feasibility study and on the basis of the railway project being feasible, MCC-Jiangxi will build the railway on a Build-Own-Operate-Transfer (""BOOT"") basis: (a) MCC-Jiangxi will arrange for 100% financing for the construction of the railway; (b) MCC-Jiangxi will design and build the railway on its own; and (c) MCC-Jiangxi will own the railway and be responsible for the overall operation and management of the railway upon completion of the railway construction and commencement of operations; (3) within 2 years before the full recovery of MCC-Jiangxi's investment, the Government should form an operating entity (or joint venture operating entity with MCC-Jiangxi) to work together to study and formulate relevant issues and policies regarding the operation and management of the railway, following the Government's takeover; (4) after the full recovery of MCC-Jiangxi's investment, MCC-Jiangxi will transfer the railway to the Government; (5) MCC-Jiangxi will provide free training concerning the maintenance, operation, and management of the railway. Power Supply: MCC-Jiangxi commits to construct, at its own expense, one 400 megawatt capacity coal-fired power plant to supply electrical power to the project and to Kabul, and the Ministry of Mines commits to make available sufficient coal resources for MCC-Jiangxi's use in the power plant and to make available sufficient land to establish the power plant. The coal resources shall be granted to MCC-Jiangxi pursuant to a sole source process under the Minerals Law and on the basis of MCC-Jiangxi paying a reasonable royalty to be agreed upon. MCC-Jiangxi's exploration, development, exploitation, and use of the coal resources shall be at MCC-Jiangxi's sole expense and in compliance with all applicable requirements under Afghan laws, including those requirements concerning the payment of royalties and income tax. The parties shall work cooperatively to locate suitable areas where coal resources are likely to be of a sufficient quantity and quality to fuel the power plant. MCC-Jiangxi shall undertake all exploration, development, and exploitation activities in the areas identified, and the Ministry of Mines shall provide all necessary assistance with respect to making available information and licenses to plan and expedite the necessary coal exploration and mine development.

MCC-Jiangxi shall allow the public and the Government to use, free of charge, any roads located outside the project area constructed and/or maintained by MCC-Jiangxi, provided that such use shall not unduly prejudice or interfere with MCC-Jiangxi's operations.

This is about the third party agreements.

The parties acknowledge that the establishment and maintenance of acceptable security for the project is a necessary condition for the successful construction and operation of the project. The Government shall be responsible for the overall security of the project, and MCC-Jiangxi shall cooperate with the Government in taking security measures requested by the Government: in particular, while security will be the general responsibility of the Government, specific security tasks may be the security of MCC-Jiangxi. While security arrangements for the adequate protection of the project have not been definitively established as of the date of the Agreement, the parties agree that security commitments shall be included in a Memorandum of Agreement, to be attached as Appendix 10, which shall form part of the Agreement. The Memorandum of Agreement incorporates the parties' commitment to develop, install, and maintain adequate security structures, procedures, and personnel as part of the Agreement, and further requires the parties to negotiate in good faith to conclude a comprehensive security agreement within 2 months of the effective date of the Agreement. Failure to conclude the security agreement within the timeframe shall constitute cause to revoke this Agreement.

Obligations de travaux, d'investissements//Work and investment commitments

If, during the Agreement or thereafter, there shall be any question or dispute with respect to the structure, meaning, or effect of this Agreement, or arising out of or in connection with the Agreement, either party shall have the right, subject to no conditions precedent, to refer the dispute to the International Centre for Settlement of Investment Disputes (the ""ICSID"") for settlement by conciliation and/or arbitration. Any party may commence such proceedings by giving notice to the other party and to the ICSID Secretary-General, which must include a statement of the question or dispute and of the claim or contention of the party giving the notice. The Rules of Conciliation and Arbitration of ICSID shall govern the conciliation and arbitration. Pending the issue of a decision or award, the operations or activities that shall have given rise to the arbitration need not be discontinued, but if the decision recognizes that a complaint is justified, provision may be made in the award for such reparation or compensation in respect of such continued operations and activitieses as shall be decided by the arbitrator. Should ICSID be replaced by, or its functions substantially devolve upon or be transferred to any new international body of similar type and competence, the function of the arbitral tribunal of ICSID shall be exercised by the chief officer of such international body without further agreement among the parties. If ICSID is not available, then the dispute shall be referred to the Arbitration Institute of the Stockholm Chamber of Commerce for arbitration pursuant to the Rules of Arbitration of the United Nations Commission on International Trade law (""UNCITRAL""). The place of arbitration shall be in Stockholm and the tribunal shall be composed of three arbitrators appointed in accordance with UNCITRAL rules. The award shall be final and binding, and both parties agree to accept the jurisdiction of the said arbitration institute and voluntarily execute the award. Arbitration fees shall be borne by the losing party.

Any information supplied by MCC-Jiangxi shall (except with the consent in writing of MCC-Jiangxi, which shall not be unreasonably withheld) be treated by all persons in the Government as confidential, but the Government shall nevertheless be entitled at any time to make use of any information received from MCC-Jiangxi to prepare and publish aggregated returns and general reports on the extent of prospecting or mining operations in Afghanistan, promoting mineral exploration and development in Afghanistan, and for any arbitration or litigation between the Government and MCC-Jiangxi.

Fiscal Terms: The parties shall, at 5-year intervals from the Effective Date of the Agreement, review its economic terms to determine whether the Agreement shall be amended to provide for an adjusted allocation of economic benefits between MCC-Jiangxi and the Government. During the review, the parties shall bargain in good faith with a view to providing a fair and equitable division of profits, in light of the economic factors prevailing at the time of the review. The following factors shall guide the review: (a) economic value of the license, (b) terms of other comparable copper agreements negotiated by the Government within the 5-year period preceding the review date, (c) terms of other comparable copper agreements negotiated by MCC-Jiangxi within the 5-year period preceding the review date, and (d) terms of other comparable copper agreements negotiated by third parties. General Review The parties shall, at 5 year intervals from the effective date of the Agreement, review the Agreement, excluding the dispute settlement provisions, to determine whether, in light of changed circumstances, the Agreement should be amended. The review shall be carried out in good faith, giving due regard to the legitimate interests of the other party. Disputes arising from periodic review shall be resolved under Section 55 of the Agreement (Disputes).