THE INTERNATIONAL BAR ASSOCIATION'S MODEL MINING DEVELOPMENT AGREEMENT PROJECT

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development, and Investment
(Apr 2011)
CHAPTER 9C
THE INTERNATIONAL BAR ASSOCIATION'S MODEL MINING DEVELOPMENT AGREEMENT PROJECT
James F. Cress
Holme Roberts & Owen
Denver, Colorado

JAMES F. CRESS is a partner in the Denver office of Holme Roberts & Owen LLP practicing international mining and natural resources law. Jim is also a part time Director of Sustainable Development Strategies Group (SDSG), a non-profit research organization and a practical source of policy, institutional, and capacity building advice for sustainable development issues. He has negotiated and documented complex acquisitions, asset dispositions and financings for coal, uranium, molybdenum, gold, copper, oil and gas and other mineral-producing clients, including investments governed by the International Finance Corporation's Performance Standards and the European Bank of Reconstruction and Development's Performance Requirements. His international mining experience includes negotiation of substantial investments in developing and developed countries, including negotiations with host governments, and includes work in Argentina, Brazil, Burma, Chile, Columbia, Ethiopia, Georgia, Ghana, Haiti, Indonesia, Kazakhstan, Kyrgyzstan, Mexico, Peru, the Philippines, Sierra Leone, Suriname, Sweden and Tanzania. He has advised clients on the development, implementation and interpretation of mining law and regulation in a number of countries in North America, Asia, Africa, the former Soviet Union and Latin America. His mining practice also has experience in private and U.S. federal mineral royalty matters and has testified as a royalty expert before House and Senate committees considering mining royalty legislation. He has been an adjunct professor and lecturer at Western State University and in the University of Denver's Graduate Studies Program in Natural Resources and Environmental Law, teaching International Oil and Gas Law, Mining Law and SDSG's Sustainable Development of Natural Resources Series. He is listed as a mining law expert in "Who's Who of International Mining Lawyers" and in "Best Lawyers in America".

MMDA financial provisions

• "Goodwill Payment" (deleted)

• Annual Rental

• Taxes

• Royalty

• Transfer Pricing

• Stabilization

MMDA financial provisions

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MMDA financial provisions - concepts

Applicable Law as starting point - here, more than anywhere in the MMDA, the text is merely an example or outline of issues

All Taxes + Royalty + community payments = "legal, fair and balanced" = "competitive"?

Consideration of stabilization / transfer pricing issues

"Goodwill payment"

MMDA Draft August 12, 2010:

"3.0 Goodwill Payment

The Government acknowledges receipt prior to or upon execution of this Agreement of $ _____ from the Company as a goodwill payment on the understanding that Government shall utilize the payment received to develop the institutions and expertise required at the local and national levels to effectively perform the activities of the Government under this Agreement. The Government shall quarterly report publicly on the specific expenditures of all funds received...