NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here

 ACT


Supplement to the Sierra Leone Gazette Vol. CXXXIII, No. 15





dated 21st March, 2002


- ---- --- -- --- - -








Signed this 18th day of March, 2002.








ALHAJI AHMAD TEJAN KABBAH,


President.



































No. 4 2002











Sierra Leone











The Sierra Rutile Agreement (Ratification) short title.


Act, 2002





[21 St March, 2002] Date of com¬


mencement.





Being an Act to ratify and confirm an agreement made for and .


on behalf of the Government of the Republic of Sierra Leone of the


one part and by Sierra Rutile Limited of the other part.


i


Whereas an Agreement was made on the 3rd day of November,


1989 between the Government of the Republic of Sierra Leone of the c


one part and the Sierra Rutile Limited of the other part; K


it


 No, 4 Sierra Rutile Agreement (Ratification) Act 2002





And whereas this Agreement was ratified and confirmed by


Parliament as the Sierra Rutile Agreement 1989 (Ratification) Act,


1989 (Act No. 8 of 1989):


And whereas as a result of the effect of the ten year rebel war and


other factors on the operations of Sierra Rutile Limited the Government


of the Republic of Sierra Leone and Sierra Rutile Limited found it


necessary to review the 1989 Agreement:


And whereas as a result of the review it was agreed by the


Government of the Republic of Sierra Leone and Sierra Rutile Limited


to enter into a new Agreement to replace the 1989 Agreement:


And whereas an Agreement was made on the 20th day of


November, 2001 between Alhaji M. Swarray Deen, Minister of


Mineral Resources, acting for and on behalf of the Government of the


Republic of Sierra Leone of the one part and the Sierra Rutile Limited,


a company incorporated and existing under the laws of Sierra Leone,


of the other part:


And whereas it is provided in the Agreement that the Government


of the Republic of Sierra Leone will introduce and cause to be passed


legislation for the purpose of ratifying and confirming the Agreement


in all its terms:


And whereas it is further provided in the Agreement that such


Agreement shall come into force and effect upon the coming into


operation of such legislation:





And whereas it is desirable that the Agreement shall be ratified


and confirmed in all its terms:


Now* therefore be it enacted by the President and Members of


Parliament in this present Parliament assembled---


Commence¬ 1. This Act shall be deemed to have come into operation on the


ment. 21 st day of March, 2002.


Confirmation 2. The Agreement set out in the Schedule is hereby ratified and


of Agreement. confirmed in all its terms and all rights and obligations purported to be


conferred or imposed by the Agreement are hereby declared valid, any


law to the contrary notwithstanding and notwithstanding anything


contained in any law, the Minister of Mineral Resources or any person


acting under his authority shall have power to do on behalf of the


Government of Sierra Leone any act which the Agreement may


require or allow-',, within its scope, in the name of the Minister of


Mineral Resources or of the Government of Sierra Leone.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 3





SCHEDULE


AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF


SIERRA LEONE AND SIERRA RUTILE LIMITED


TABLE OF CONTENTS





Clause


1. DEFINITION


2. MINING LEASE


(a) Application of Minerals Act


(b) Term and renewal


(c) Surrender


(d) Additional mining leases


(e) Indemnification


(f) Other Minerals


3. SPECIAL EXCLUSIVE PROSPECTING LICENCES FOR AREAS


OUTSIDE LEASE AREA


4. TERM OF LICENCES


(a) Term


(b) Rights and obligations


(c) Prospecting Area Expenditures


(d) Indemnification


(e) Rent


(1) Surrender


(g) Additional Areas


5. RENEWAL OF PROSPECTING LICENCE


6. RENTS, ROYALTIES, TAXES AND DUTIES


(a) Mining and surface rent


(b) Royalty


(c) Income tax


(d) Maximum Income Tax and Royalty due in respect of financial years


1989 and 1990'


(e) Additional Income Tax


(f) Special withholding tax


(g) Limitation of charges on imports


(h) Development certificate


(i) No other taxes etc.,


(j) Coming into effect of fiscal regime


7. LIMITATION ON RIGHTS GRANTED TO OTHERS


4 No. 4 Sierra Rutile Agreement (Ratification) Act 2002





8. REPATRIATION OF FUNDS


9. government option


10. GENERAL RIGHTS AND OBLIGATIONS OF THE COMPANY





(a) Rights irfcident to mining operations


(b) Occupation of surface land


(c) Accessory works and installations


(d) Export of titanium minerals


(e) Entry of personnel


(f) Housing of labourers


(g) Government protection and assistance


(h) Importation of machinery


(i) Surveys


(j) Agricultural Development Fund


(k) Reclamation and rehabilitation of mined-out areas


(l) Feasibility study


11. GENERAL PROVISIONS


(a) Directors


(b) Assignment


(c) Notices


(d) Prior Consent or approval


(e) Limitation of application of Minerals Act and other Acts


(f) Revocation by the Government


(g) Force Majeure


(h) Amendment


(i) Interpretation and arbitration


(j) Termination of Principal and Supplemental Agreements


(k) Amendment of the mining Leases


(l) Import and export inspection fees


(m) Deductibility of losses


(n) Deductibility of outgoings and expenses


(o) Road users fuel levy


(p) Port charges and harbour dues


(q) Security


(r) Reporting


(s) Communications


(f) Foreign contractors


(u) Exportation of surplus equipment


(v) Confidentiality


(w) Government assistance


(x) Amendment of the mining leases





12. RATIFICATION AND EFFECTIVENESS OF THIS AGREEMENT


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 5





AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF


SIERRA LEONE AND SIERRA RUTILE LIMITED


This Agreement is made the 20th day of November, 2001 between the


Minister, acting for and on behalf of the Government of Sierra Leone (hereinafter


called “the Government”) of the one part and Sierra Rutile Limited a company


incorporated and existing under the laws of Sierra Leone whose registered office is


at 12, Lamina Sankoh Street, Freetown, (hereinafter referred to as “the Company”)


of the other part.


Now IT IS HEREBY AGREED AND DECLARED AS FOLLOWS:


1. DEFINITIONS


In this Agreement, the following expressions shall, unless a contrary intention


appears, have the following meanings, that is to say:


“Additional Mining Lease” means a mining lease and dredging


licence granted to the Company pursuant to Clause 2(d) hereof,


including any new lease granted to the Company upon the expiry of


the original;


“Associated Minerals” means zircon, monazite, columbite, graphite


and garnet when occurring in the same deposit with titanium


bearing minerals:


“commencement of mining operations” means the date of employment


of the dredge, wet plant and land plants on mining operations,


provided that the Company promptly furnishes to the Director of


Mines notification to that effect;


“Effective Dale” means date of coming into force of this agreement


pursuant to clause 12 (3).;


“Financial Year” means the Company’s fiscal year ending December


31 of each calendar year.


“Group Office Expenses” means any expenditure incurred or


reimbursed by the Company in maintaining an overseas office of the


Company;


“Immigration Fees” means any fees or other taxes payable under the


Non-citizens (Registration, Immigration and Expulsion) Act, 1965;


“Lease” means a Mining Lease or an Additional Mining Lease, as


applicable;


 %








6 No. 4 Sierra Rutile Agreement (Ratification) Act 2002





“marketing commissions and fees” means charges in respect of the


promotion, solicitation of orders for and negotiation of the terms


and conditions of sales of the Company’s products, and charges in


respect of shipping arrangements including insurance and other


incidental matters;


‘Minerals Act” means die Mines and Minerals-Act, 1994 (Act No. 5


of 1994);


“minerals concentrates” means the mixture of titanium-bearing


minerals and associated minerals from which a major portion of the


sand, gravel and other materials has been removed;


“Mining” means any operations for winning or obtaining minerals,


including dredging,


“Mining Lease Area” means the lands for the time being comprised


in the Mining Lease and in the Additional Mining Leases,


“Mining Leases” means the mining leases and dredging licences


granted to the Company in accordance with Clause 2 hereof.


“Minister” means the Minister for Mineral Resources;


“payroll taxes” means any Taxes payable under the Payroll Tax Act,





1972;


“Prospecting Area” means the lands for the time being comprised in


any Prospecting Licence;


“Prospecting Licence” means a special exclusive prospecting licence


granted to the Company pursuant to Clause 3 hereof;


“public body” means the State, its agencies and authorities and any


legal body whose functions are laid down by legislation or other


mandate of the State (including another Public Body and regional


or local authorities) or that depends upon the authority of the State


for:


(a) the appointment of its members;


(b) the observance of the obligations arising out of its measures;


or


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 7





(c) the collection of revenue which it is empowered to collect,


provided that any such body shall be regarded as a public


body notwithstanding that it is not part of the administrative


set-up of the State.


“Refurbishment Works” means the restoration and rehabilitation of





the Company’s mining operations and construction in progress in


Sierra Leone to their condition as on 19th January, 1995 including


but not limited to the replacement or repair of mining machinery’,


plant and equipment, infrastructure (including, without limitation,


buildings and site improvements) consumable mining and other


stores and assets.





“State” means the present, past and future government or other


governing authority of Sierra Leone, including regional or local


authorities or any other public body.





“taxes” means all and any taxes, royalties, duties, excise, charges,


levies, fees, dues, contributions, payments or other impositions of


any kind whatsoever payable to, or at the direction of, any public


body.


“titanium-bearing minerals” means llmenite, rutile and other minerals





containing titanium.





“ton” means metric ronne.





“turnover’ means in respect of a year of assessment the value of the


total gross receipts or amounts receivable in money or money’s


worth which gi ve rise to business income for the year of assessment1





(a) reduced by that part of the gross receipts for the year of


assessment or a previous year of assessment that are bad debt


claims; and


(b) increased by any amounts recovered in respect of bad debt


claims that arose in previous years of assessment.





as defined by Section 2 of the Incom 'sXK A e* 2900 (Act No. 8 of 2000).


 8 No* 4 Sierra Rutile Agreement (Ratification) Act 2002





References herein to Public Body, entities, statutes, regulations and other


pronouncements shall include their respective successors thereof and substitutions


therefore.





2* THE MINING LEASE


(a) Application of Minerals Act


The provisions of the Minerals Act relating to*mining leases and dredging


licences shall apply to the Mining Leases and Additional Mining Leases except to


the extent that they are inconsistent with the express or any implied terms and


conditions of this Agreement, in which event the provisions of this Agreement shall


prevail.


(b) Term and Renewal


The term of each of the Mining Leases shall commence as of the date of its grant


by the Government and shall cease at the expiration of thirty-three (33) years from


the date of commencement of mining operations as defined in this Agreement;


provided that the Company shall have the right to terminate the same at arty time by


not less than six (6) months prior notice in writing to the Government to that effect;,


and provided also that if a Mining Lease shall not earlier have been terminated under


this paragraph, the Company may, by giving at least six (6) months notice in writing


to the Government prior to the expiration of the period of such Lease, request the


Government to grant it a new Mining Lease for a further minimum term of fifteen


(15) years from the date of expiration of the original Lease term, upon the terms and


conditions of the original Lease (other than the terms relating to payments by the


Company or to renewal). Upon any such request, provided the Company is not then


in default hereunder, the Company shall be entitled to the grant of a new Mining


Lease for a further minimum term of fifteen (15) years upon such fair and equitable


terms as to payment by the Company as may then be agreed upon, or failing


agreement, as shall be settled by arbitration in accordance with the provisions of


Clause 1 l(i) hereof. The Minister is hereby authorized and empowered to grant


further extensions of the term of each Mining Lease in the event that the Company’s


ability to enjoy the full benefits thereof is adversely affected by any force majeure.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 9





(c) Surrender


(1) The Company may surrender any part or parts but not all of the


Mining Lease Area included in a Mining Lease or an Additional Mining Lease at any


time during the term of such Lease by notice in writing to the Government to that


effect; and upon such surrender the lands surrendered shall cease to be comprised in


or subject to the provisions of such Lease.


(2) Upon the surrender, expiration, or other termination of a Mining


Lease or Additional Mining Lease, or of any portion thereof, the Company shall


be granted a period of not less than two (2) years, or such longer period as the


Director of Mines may specify, immediately following such surrender, expiration


or termination in which to remove all or any of its buildings, structures, plants,


machinery, equipment (including dredges, barges and tow' boats) or other effects,


from the areas covered by the Lease or portion of the Lease surrendered or


terminated. Any of the Company’s buildings, structures, plants, machinery or effects


which are not removed in accordance with the provisions of this paragraph within


the period stated herein, or such longer period as the Director of Mines may specify,


shall at the expiration of such period become the property of the Government.


Nothing contained in this paragraph shall prejudice the right of the Government


to take possession of any building, plant, machinery or other effects which are


the property of the Company and w hich on the expiration, surrender or other


termination of any Lease are left upon the area of such Lease if the Company is


knowingly in default in payments due to the Government in respect of such Lease.


(d) Additional Mining Leases


At any time and from time to time w hile a Prospecting Licence is in effect, the


Company may request and shall be granted an Additional Mining Lease for titanium¬


bearing and associated minerals covering such areas w ithin a Prospecting Area .


included in a Prospecting Licence as the Company may designate by filing with the


Director of Mines a map of the areas selected together with a descriptive statement


setting forth in general terms the approximate boundaries and area thereof. All such 1


Additional Mining Leases granted pursuant to the provisions of this paragraph shall ’


be upon terms and conditions provided herein with respect to the Mining Leases, 'c


except that the term of each Additional Mining Lease shall cease at the expiration of *


twenty-five (25) years from the date of commencement of mining operations as u


defined in this Agreement.


10 No. 4 Sierra Rutile Agreement (Kati/kation) Act 2002


(e) Indemnification


The Government shall for claims arising during the term of the Mining Lease


and Additional Mining Leases indemnify the Company against such claims by


owners or occupiers (including the Chiefdom Councillors) in respect of the Mining


Lease Area other than claims for Compensation made in accordance with the


provisions of Section 26 of the Minerals Act but subject to Clause 10(b) of this


Agreement.


(f) Other Minerals


(1) Although the Mining Leases and Additional Mining Leases are to be


confined to titanium-bearing and associated minerals and the Company’s mining


operations will be directed toward the extraction and recovery thereof, the parties


recognise that mining operations such as the Company plans to conduct will of


necessity turn up along with titanium-bearing and associated minerals, other


minerals or metals that may be intermixed with or in close proximity thereto.


(2) (i) If any diamonds are recovered by the Company, they


shall be delivered by the Company to the Director of


Mines or to such other Government Agency or


Depository’ as the Director of Mines shall designate for


such purpose. The Government shall have the right to


make such disposition of any diamonds so delivered by


the Company as the Government deems proper, making


such distribution of the proceeds derived therefrom as


the Government considers fair and equitable. Except


with respect to diamonds, the Company shall have the


right to extract, recover, process and sell any such other


minerals and metals which it extracts with titanium¬


bearing and associated minerals in its mining operations.


It is expressly understood, however, that the Company


will be governed by, and will comply with, all valid and


applicable Acts, rules and regulations governing the


possession and marketing of any such other minerals


and metals, including any applicable Acts, rules or


regulations relating to radioactive minerals, and will


pay any valid taxes or other government charges assessed


jgainst any such minerals and metals paid by other


producers thereof including any royalty so assessed.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 11





(ii) If no royalty is established in the Minerals Act for any


such other mineral or metal other than diamonds


surrendered to the Government, the Government


reserves the right to establish a royalty payable therefor


that shall be consistent with the royalties payable for


comparable minerals or metals and the Company agrees


to pay a royalty so assessed.





(3) (i) A t any time during the period of a Prospecting Licence,


the Company shall upon written request to the Director


of Mines be entitled to the grant of a Mining Lease for


any minerals or metals other than diamonds and


titanium-bearing or associated minerals, the presence


of which have been proven to be in commercial quantities


by the Company’s prospecting activities including any


water and/or other rights as granted in this Agreement


or easements required in connection therewith in respect


of any lands within a Prospecting Area, provided that


such minerals or metals are not then subject to any


active mining right or lease, or other conflicting property


interest granted by the Government to another and that


the grant will not conflict with Government’s policy on


mining w hich policy shall not be discriminating against


the Company.


(ii) Any such Leases shall be granted under terms and


conditions which shall be fair and reasonable at the


time. Any dispute as to the terms and conditions upon


w hich any such Leases shall be granted shall be referred


to arbitration in accordance with Clause ll(i) of this


Agreement.


3. SPECIAL EXCLUSIVE PROSPECTING LICENCES FOR AREAS


OUTSIDE LEASE AREA





(a) In the event that the Government shall grant to the Company


upon application a Prospecting Licence for titanium-bearing


and associated minerals over an area which is not included


in the Mining Lease Area, the terms and conditions set out


in Clause 4 hereof shall apply thereto.


12 No. 4 Sierra Rutile Agreement (Ratification) Act 2002





(b) The provisions of the Minerals Act relating to exclusive


prospecting licences shall apply to all Prospecting Licences


granted hereunder except to the extent inconsistent with the


special provisions incorporated in this Agreement





4. TERMS OF LICENCES





(a) Term


The term of each Prospecting Licence shall be two (2) years from the date of


issue.


(b) Rights and Obligations


(1) Each Prospecting Licence shall confer on the Company in addition to


the rights granted by the Minerals Act, the right to raise or obtain in the course of


prospecting such quantities of titanium-bearing and associated minerals as it may


reasonably think necessary to test the adequacy and operating effectiveness of the


machinery and equipment which the Company proposes to use in its commercial


operations under an Additional Mining Lease and to retain or dispose of any minerals


so raised or obtained, subject to the same conditions as are prescribed in Section


47(3) of the Minerals Act with respect to minerals raised or obtained to test the


mineral bearing qualities of the land.


(2) Subject as hereinafter mentioned, the Company shall be under no


obligations during the period of a Prospecting Licence to survey, demarcate, beacon


or clear the boundaries of the Prospecting Areas included therein.


(3) If the Company and/or owner of any adjacent prospecting licence,


mining right or lease shall require that any common boundary be cleared, surveyed,


beaconed and demarcated, the Company shall procure that this be done and the


Company and each adjacent owner shall share the cost thereof.


(c) Prospecting Area Expenditures


The Company shall throughout the period of each Prospecting Licence undertake


an expenditure in the aggregate each year of not less than US$2,500 (two thousand


five hundred United States Dollars) per square mile or part thereof on exploring,


prospecting and developing the Prospecting Area included in that Prospecting


Licence. The Company shall submit a detailed work and expenditure programme for


that Prospecting Area for the approval of the Director of Mines. Compliance with this


 No. 4 Sierra Rutile Agreement (Ratification) Act 2002 13





paragraph shall constitute full compliance with the requirements of Section 47(1 )(a)


of the Minerals Act relating to bona fide prospecting operations. The Company shall


submit to the Director of Mines at the end of each prospecting year detailed returns


of expenditure incurred in respect of the requirements of this paragraph.


(d) Indemnification


Subject to Clause 10(b) of this Agreement, the Government shall indemnify the


Company against all claims of any owners or occupiers (including the Chiefdom


Councillors) in respect of a Prospecting Area other than claims for compensation


made in accordance with the provisions of Section 26 of the Minerals Act.


(e) Rent


The rent payable by the Company under each Prospecting Licence shall be at


the rate of US$20 (twenty United States Dollars) a year for each square mile or part


thereof contained in a Prospecting Area payable to the Government annually in


advance.


(f) Surrender


(1) The Company may surrender a Prospecting Licence in its entirety or


relinquish any area included therein at any time during the term of a Prospecting


Licence by written notice to the Director of Mines to that effect. The expenditure


obligations of the Company under Clause 4{c) hereof relating to any surrendered area


shall continue to apply until the end of the year in which such surrender of the


Prospecting Licence shall take place.


(2) Upon the surrender or other termination of a Prospecting Licence


granted hereunder, or of any portion thereof, the Company shall be granted a period


of not less than one year, or such longer period as the Director of Mines may specify,


immediately following such expiration or termination in which to remove all or any


of its buildings, structures, plants, machinery or effects from the Prospecting Areas


so surrendered or terminated. Any such buildings, structures, plants, machinery or


effects which are not removed in accordance with the provisions of this paragraph


within the period stated herein, or such longer period as the Director of Mines may


specify, shall at the termination of such period become the property of the Government.


(g) Additional Areas


In the event that the Company delineates a deposit within a Prospecting Area


which indicates that the limits of each deposit extend beyond the Prospecting Area,


the Company may with the consent of the Director of Mines, which consent shall not


 14 No, 4 Sierra Rutile Agreement (Ratification) Act 2002





be unreasonably withheld, incorporate in the Prospecting Area such additional land


as it may select, which land will be contiguous to the Prospecting Area by filing with


the Director of Mines a plan of the additional area selected., and such descriptive data


as he may reasonably require to identify the same provided that such area is not then


the subject of any prospecting Licence or mining lease granted by the Government.


5. RENEWAL OF PROSPECTING LICENCE


Upon written application by the Company not later than six (6) months prior to


the expiration of a Prospecting Licence, the Company shall be entitled to the renewal


of that Prospecting Licence for a further period of tw o (2) years from and after such


expiration date upon the same terms and conditions as herein above provided for,


except in respect of the working obligations and annual rent payable by' the Company


under Clause 4(c) and Clause 4(e) hereof, which are to be agreed upon, and provided


that the Company is not then in default under any of the terms and conditions of the


Prospecting Licence or this Agreement But the said renewal for a further period of


two (2) years will only be granted if the Company has applied under Clause 2 of this


Agreement for an Additional Mining Lease in respect of an area included in such


Prospecting Licence.


6. RENTS, ROYALTIES, TAXES AND DUTIES


(a) Mining and Surface Rent


(1) The Company shall pay to the Government annually in advance


Mining Rent under each Mining Lease and Additional Mining Lease for each square


mile or part thereof embraced within the Mining Lease Area commencing with the


Financial Year ending December 31,1989 and for each subsequent Financial Year,


at the rate of US$400 for the first year increasing annually thereafter at the


cumulative rate of 5% per annum.


(2) In addition, the Company shall pay to the Government annually in


advance a Surface Rent under the Mining Lease for all land occupied or used


thereunder, for the purposes enumerated in Section 67 of the Minerals Act at the rate


of US$4 (four United States Dollars) per acre per annum. Beginning January' 1,2003,


the rate shall increase to US$10 (ten United States Dollars) per acre per annum, such


rate increasing in respect of each subsequent year at the rate of 3% per annum. The


Company may designate and shall demarcate one or more areas within the Mining


Lease Area, not to exceed two square miles in total area, for permanent processing


and other plant facilities.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 15





(b) Royalty


(1) As from January 1,1989, the Company shall, subject to Clause 6(d)


pay a Royalty to the Government in United States Dollars in respect of each shipment


of rutile and/or other titanium-bearing and associated minerals mined under the


Mining Lease and sold by the Company as follows:


(i) a Royalty at the rate of 3.5% (three and one-half


percent) of the gross sales price, free alongside the


Sierra Leone port of shipment, payable to the Company


in respect of such shipment, such rate to increase


beginning January 1,2006, to 4% (four percent), and


(n) an additional royalty in the amount of USS 1,667,000


for each of the years 2010 to 2014 and in the amount of


US$1,665,000 for the year 2015, payable in respect of


each year but not later than December 31 of such year.


(2) Royalties payable hereunder shall constitute an operating cost of the


Company and shall be allowed as a deductible expense in ascertaining its income for


income tax purposes.


Royalties shall not be credited against or considered as part payment of the


aggregate income tax liability payable to the Government.


(3) Royalties shall be payable to the Government within forty-five (45)


days after the end of the months of shipment The Company shall prepare and deliver


to the Director of Mines a statement certified by the Company’s representative


stating the total tonnage of minerals of each kind and quantity shipped by the


Company from Sierra Leone in that month, together with a statement of the gross


sales price free alongside the Sierra Leone port of shipment. Upon delivery of such


statement the Company will pay to the Government the Royalty payable with respect


to the minerals covered by such statement. Every statement of export shall specify


the designations and names and addresses of the consignees and shall be accompanied


by a copy of die export entries certified by the Comptroller of Customs and Excise.


 16 No* 4 Sierra Rutile Agreement (Ratification) Act 2002





(c) Income Tax


(1) Subject to Clause 6(d), the Company in the conduct of its activities


in Sierra Leone pursuant to this Agreement shall be liable for taxes upon its income


derived from such activities as well as upon any other income of the Company


accruing in, brought into or received in Sierra Leone at a fixed rate of 37.5% per


annum or in accordance with the then prevailing fixed rate applicable to companies


generally as set forth in the Income Tax Act, 2000, whichever is lower.


(2) Notwithstanding the provisions of paragraph (1), the Income Tax


payable by the Company in respect of any Financial Year shall not be less than art


amount equal to 3.5% (three and one-half percent) of the amount of the turnover of


the business of the Company in such Financial Year, as such expression is defined


by Section 2 of the Income Tax Act, provided that the Company shall not be liable


to pay Income Tax pursuant to the provisions of this Clause until the Financial Year


ending December 31,2005. The Company may offset against any future income tax


liability any amount paid under this Clause for the Financial Years ending December


31,1995 and December 31, 1996.


(3) The balance sheets, statements of earnings and cash flow and other


financial statements and books of account of the Company shall be restated,


maintained and expressed in United States Dollars, and the Income Tax liability of


the Company for each year of assessment after June 30, 1987, the end of the Tax


Holiday previously granted under the Principal arid Supplemental Agreements, shall


be assessed and payable in United States Dollars.


(4) (i) All capital expenditures incurred by the Company


since its inception and in the future shall be restated,


maintained and/or expressed at their original United


States Dollar cost.


(ii) The chargeable income of the Company for each


Financial Year shall be determined after deduction of


the following capital allowances, to the extent claimed


by the Company in respect of such Financial Year, and


subject to paragraph (iii) hereof: an initial allowance in


the first year at the rate of 40% (forty percent) of the


original United States Dollar cost of qualifying


expenditures, and thereafter, an annual allowance at the


rate of 20% (twenty percent) per annum of the original


United States Dollar cost of qualifying expenditures


until the w hole of such cost is allowed.


18 No. 4 Sierra Rutile Agreement (Ratification) Act 2002


(ii) The amount of Royalties payable by the Company in


respect of its Financial Years ending December 31*


1989 and December 31, 1990 shall not exceed 150%


and 200% respectively, of the amount of Royalties paid


by the Company in respect of its Financial Year ended


December 31,1988.


(iii) In the event that either Income Tax orRoyalties payable


pursuant to Paragraph (d) (1) (i) or (ii) does not equal


150% or 200% as the case may be, of the amount of


Income Tax or Royalties paid by the Company in


respect of its Financial Year ended December 31,1988,


the combined amount of Income Tax and Royalties


payable by the Company in respect of its Financial


Years ending December 31, 1989 and 1990 shall not


exceed 150% and 200% respectively, of the combined


amounts of Income Tax and Royalties paid by the


Company in respect of its Financial Year ended


December 31, 1988.


(iv) The amounts of Income Tax paid by the Company in


Leones in respect of its Financial Y ear endi ng December


31,1988 shall be expressed in United States Dollars at


the official rates of exchange respecti vely prevailing on


the due dates for the payment thereof


(2) By way of credit against future Royalties as provided in paragraph (3)


the Company will advance to the Government on an interest free basis the total sum


of US$2,040,000 (hereinafter referred to as the “Royalty Credit”), of which


US$ 1,000,000 was advanced on January? 19,1990, and the balance of US$1,040,000


was advanced on January 18,199L


(3) Until exhausted, the Royalty Credit shall be offset against any


royalties payable by the Company, whether due at the date of this Agreement or any


time thereafter.


(e) Additional Income Tax


(1) The Company shall pay to the Government in United States Dollars


an Additional Income Tax to the extent that the annual weighted average gross sales


price per ton of all rutile sold, free alongside the Sierra Leone port of shipment,


payable to the Company in respect of total shipments during each Financial Year


No, 4 Sierra Rutile Agreement (Ratification) Act 2002 19





exceeds $625 per ton, adjusted as set forth m paragraph (2). Such excess shall be


divided into the increments shown in Column 1 of the table below. Additional


Income Tax shall be due on each such increment at the rate applicable thereto shown


in Column 2 of that table, the aggregate thereof being the total Additional Income


Tax due per ton of rutile shipped by the Company in such Financial Year.





(Column 1) (Column 2)


Increments in Rate of Tax on


Price per Ton each Increment


US$ %


625-675 10


676-725 15


726-775 20


776 and up 25








(2) With effect from January 1, 1992 the rutile price of US$625 per ton


together with the pnces defining the four increments of any excess over that price


shown in Column 1 of the table above shall each be increased at the cumulative rate


of 4°Ic (four percent) per annum.


(3) Additional Income Tax payable hereunder, as well as Minor Taxes as


provided for under Clause 6(i) hereof, shall constitute an operating cost of the


Company and shall be allowed as a deductible expense in ascertaining its income for


purposes of Income Tax.


(4) (i) Where in any month the Company ships rutile sold at a


price per ton in excess of the price of US$625 per ton


(as increased in accordance with paragraph (2) the


Company shall submit to the Commissioner of Income


Tax within forty-five (45) days after the end of that


month a statement certified by the Company’s


representative stating the total tonnage of such rutile


shipped by the Company from Sierra Leone in that


month and the gross sales price payable therefor free


alongside the Sierra Leone port of shipment. Upon


delivery of such statement the Company will pay to the


Government on a provisional basis the amount of


Additional Income Tax which the Company estimates


will be due as at the end of the Financial Year with


respect to such rutile shipment. Even' such statement


20 No. 4 Sierra Rutile Agreement (Ratification) Act 2002





shall specify the designation and names and addresses


of the consignees and shall be accompanied by a copy


of the export entries certified by the Comptroller of


Customs and Excise.


(ii) Within forty-five (45) days from the end of each


Financial Year, the Company shall submit to the


Commissioner of Income Tax a statement certified by


the Company’s representative stating the total tonnage


of all rutile shipped by the Company from Sierra Leone


in the prior Financial Y ear and the weighted average


gross sales price thereof free alongside Sierra Leone


port of shipment Upon delivery of such statement, the


Company will pay to the Government (or deduct from


the next payment due it) the difference between the


total amount of Additional Income Tax due as aforesaid


and the aggregate of the estimated monthly Additional


Income Tax payments made by the Company for such


Financial Year in accordance with sub-paragraph (i).


(f) Special Withholding Tax


Withholding taxes on dividends, interest and management fees paid by the


Company to its shareholders shall be as follows:


(i) any such tax on dividends shall not be charged on


dividends paid prior to the Financial Year commencing


January 1,2005 and shall not in any event exceed 10%


(ten percent) of the gross amount of the dividend paid;


(ii) any such tax on interest shall not be charged on interest


paid prior to the Financial Year commencing January71,


2011 and shall not in any event exceed 10% (ten


percent) of the gross amount of interest paid; and


(iii) a tax shall not be charged on management fees paid


prior to the Financial Year commencing January 1,


2003 and shall not in any event exceed 10% of the gross


amount of the management fee paid.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 21


(g) Limitation of Charges on imports


(1) (i) Notwithstanding the current charges, fees, duties and


levies made by the Government on imports into Sierra


Leone, the Government and the Company agree that for


the duration of this Agreement the percentage ad


valorem charges for levies, duties, fees, Taxes,


surcharges and all other amounts levied on, or payable


by the Company in respect of, imports of mining


machinery, plant and equipment and consumable mining


stores as defined in paragraph (ii) of this Clause will be


5% (five percent) in the aggregate, provided that the


Company shall not be liable to pay any levies, duties,


fees, Taxes, surcharges, and other amounts (including,


without limitation, any inspection fee, whether pursuant


to Clause 11(1) (1) or otherwise) levied on or payable


by the Company in respect of imports of mining


machinery,plant and equipment and consumable mining


stores (as defined in Clause 6(g) (1) (ii) of this


Agreement) necessary to complete the Refurbishment


Works, subject to the following:


(a) the Company submitting comprehensive schedules of i terns


for which the concession is sought;


(b) the Company providing an inventory, to the best of its


ability, as of December 31,1994; and


(c) the Company providing an asset register, to the best of us


ability, as of December 31, 1994.


(ii) The term “mining machinery, plant and equipment and


consumable mining stores” shall include all machinery,


plants and equipment useful to and used by the Company


in clearing land, removing minerals therefrom and


transporting, separating, handling, and packaging such


minerals for saie, including, without prejudice to the


generality of the foregoing, construction materials for


mining and processing, dredges, barges, tow boats,


pumps, piping, screens, concentrating and separating


22 No. 4 Sierra Rutile Agreement (Ratification) Act 2002


equipment, power generating and distributing





equipment, cranes, lorries, road building equipment,


mineral storage, conveying handling and consumable


mining stores and packaging facilities together with


accessories, spare parts and appliances for use and used


exclusively with any of the foregoing.





(iii) The term “plant” includes prefabricated fixtures not


including buildings or building materials, as w'ell as


special purpose vehicles such as dumpers and shuttle


trucks for use in mining or dredging.


(iv) The term “machinery” means machinery consisting of


a combination of moving parts and mechanical elements,


w'hich may be put in motion by physical or mechanical


force, admitted as such by the Comptroller of Customs


and Excise.





(2) (i) For the duration of this Agreement, the Company shall


have the right to import into Sierra Leone the w'hole of


its requirements for fuel other than petrol and kerosene


from such suppliers and on such terms and conditions


as it may determine, provided that the Company may


purchase fuel in Sierra Leone w'here such fuel can be


supplied on a competitive basis in terms of price,


quality and other delivery' terms.





(ii) The maximum amount of import, customs and excise


duties and all other levies or charges (including the


import inspection fee referred to in Clause 11(1) imposed


by the Government on such fuel imports shall be as


follows:


Imports in Financial Years 1997 through 8% of CIF price payable by the


2003: Company;





Imports in Financial Years 2004 and 10% of CIF price payable by the


2005: Company;


Imports thereafter: 12% of CIF price payable by the


Company.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 23


(iii) Subject to the provisions of this Agreement, the


Company in the conduct of its activities in Sierra Leone


pursuant to the provisions of this Agreement shall be


subject to the provisions of the Customs Act Cap. 271,


and the Customs Tariff Act, No. 16 of 1978 and Rules


thereunder currently in force and as may be from time


to time amended.


(h) Development Certificate


The Government and the Company agree and confirm that for the purposes of


the Development Act (and the Development Certificate No. 32 dated March 15,1972


issued to the Company thereunder), the Income Tax Act, this Agreement and the


Agreements replaced hereby and for all other purposes that:


(i) the Production Day of the Company was June 30, 1984


and that the expiration date of the Tax Holiday period


was June 30, 1987, and


(ii) in respect of the Tax Holiday period referred to in


paragraph (i), no income taxes, surtaxes, or taxes based


on minimum chargeable income are or shall become


due or payable or outstanding by the Company and/or


by its parent company with respect to the Company.


(i) No Other Taxes etc.


(1) The Company shall not be liable for any Taxes other than:


(i) those expressly assumed by the Company pursuant to


the provisions of this Agreement;


(ii) the payment of taxes deducted from the emoluments of


employees of the Company as required under the Income


Tax (PAYE) Rules;


(hi) the payment of Payroll Taxes at the applicable rate;


(i v ) the payment of Immigration Fees at the applicable rate;


and


(v) Minor Taxes.


 24_ No. 4Sierra Rutile Agreement (Ratification) Act2002


(2) For the purpose of paragraph (1), the expression “Minor Taxes”


means all Taxes that:





(i) are generally applicable to all corporations on a non-


discriminatory basis, and


(ii) do not result in a payment, or payments in the aggregate,


which exceed(s):


(a) in any Financial Y ear, the equivalent of US$100,000,


or


(b) over any five year period, the equivalent of


US$250,000


and the “applicable rate” in respect of Payroll Tax shall not exceed US$10 (or its


Leone equivalent) per annum per employee who is a national of any of the Economic


Community of West African States (“ECOWAS”) and US$500 (or its Leone


equivalent) per annum per employee who is not an ECOWAS national and in respect


of Immigration Fees (consisting of Residence Permit, Work Permit and Multiple


Entry Visa) shall not exceed US$110 (or its Leone equivalent) for each ECOWAS


national and US$450 (or its Leone equivalent) for each national other than an


ECOWAS national.


(3) If notwithstanding the above provisions the Company or its


shareholders, as a result of either the activities of the Company or as the result of


distributions or other payments made by the Company to its shareholders, or either


of them, becomes liable to pay any Taxes pursuant to the laws of Sierra Leone, except


for those expressly assumed by the Company pursuant to this Agreement, then the


Government will, upon demand, hold the Company harmless in respect of any


payment of Taxes made by the Company, including for this purpose any penalties,


fines or interest paid or payable by the Company in connection therewith, whether


for late payment or otherwise.


(4) The Company may, as an alternative to exercising its rights under


paragraph (3) elect to offset any sum otherwise payable to the Company under that


provision against any monies then or subsequently due to the Government under the


provisions of this Agreement.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 25





(j) Coming Into Effect of Fiscal Regime


Subject to the coming into effect of this Agreement in accordance with Clause


12 hereof, the fiscal regime described in this Clause 6 shall take effect beginning


January 1,1989 and, subject always to Clause 6(d) hereof, the provisions relating to


payments herein contained shall be deemed to have been in force from that date.


7. LIMITATION ON RIGHTS GRANTED TO OTHERS


The Government shall use its best endeavours to discourage or prevent the grant


or acceptance of any concession contemplated by the Concessions Act which would


or might hamper or restrict the operations of the Company or prove an inconvenience


to the Company in the due exercise of its rights under this Agreement.


8. REPATRIATION OF FUNDS


(a) The Company shall, during the period of this Agreement,


undertake to pay in freely convertible foreign currency to a


Bank nominated by the Bank of Sierra Leone, all taxes,


royalties, duties and other levies due to the Government. The


Company shall also meet all its operating costs in Sierra


Leone by remittance of funds from abroad and pay for all


capital expenditures brought to Sierra Leone, and all other


foreign costs and expenses, with funds from abroad.


(b) Subject to Clause 8(a), the Company shall have the right,


during the term of this Agreement freely to receive, hold in


banks of its own selection wherever located and dispose of


funds in any country.


9. GOVERNMENT OPTION


The option previously reserved in this Clause 9 of the repealed legislation for


Government to acquire 47% (forty-seven percent) of the shares of the Company is


hereby released in favour of the Company in consideration of a payment by the


Company to the Government of a royalty in the amount of US$10,000,000 which


shall be paid in accordance with Clause 6(b)(ii) of this Agreement.


26 No. 4 Sierra Rutile Agreement (Ratification) Act 20G2


10. GENERAL RIGHTS AND OBLIGATIONS OF THE COMPANY


In addition to the other rights granted by this Agreement and the Minerals Act


and other applicable laws of Sierra Leone, the Company shall have the following


rights (with the prior written consent of the Minister which shall not be unreasonably


withheld) and obligations:


(a) Rights Incidents to mining operations


(1) Except with respect to mineral concentrates recoverable from coastal


beaches, it is contemplated that some of the Company’s mining operations under this


Agreement will consist of mining in the beds and in the environs of rivers, streams


and watercourses. To permit and facilitate such mining, the Company shall have the


right:





(i) either within or outside the Mining Lease Area to dig,


widen and deepen channels in rivers, streams and


watercourses as may be necessary' to permit or facilitate


access to the area to be mined and to afford barge access


thereto.


(ii) within the mining Lease Area:


(A) to use the water from any natural watercourse and


to return the same together with mining spoils to the


river, streams or watercourses, provided that, in so


doing, the Company shall not discharge or permit to


be discharged any poisonous or noxious matter not


present in the intake w;ater;


(B) on the lands included within the Mining Lease Area





to cut, take and use any tree when necessary in the


course of mining operations or w-hen required for


mining or domestic purposes, provided that it shall


not cut or take any trees in a forest reserve or


protected forest except with the consent of a forest


officer or before paying the fees and royalties


prescribed by the Forestry7 Act 1988, (Act No. 7 of


1988).


(C) to divert streams, including the right to secure water





from the river stream or watercourse for the purpose


No, 4 Sierra Rutile Agreement (Ratification) Act 2002 27





of obtaining and maintaining a mining operation,


and to build temporary dams and impound water


therein as required for such mining operations.


Provided, however, that before taking any action


under sub-paragraphs (i) or (ii)(C) which would alter the w ater supply of any lands


in such a manner as would prejudicially affect the water supply enjoyed by any other


person or lands, the Company shall obtain the prior consent of the District Officer


having jurisdiction over the person or lands that would be prejudicially affected.


(2) The Company agrees that if its operations, including the exercise of


any of the rights incident thereto as herein above enumerated, shall be deemed by the


Director of Mines to be likely to pollute, impair, divert or destroy the normal supply


of potable water of any village, the Company will provide an alternative adequate


water supply to be determined and approved by the Minister of Health,


(b) Occupation of Surface Land


(1) In order to exercise its exploration rights and mining rights under this


Agreement and subject to the limitations of sections 40 and 61 of the Minerals Act,


the Company shall have the right to occupy and utilize permanently or temporarily


within a Prospecting Area or Mining Lease Area such parts of the surface land,


whether Government owned or otherwise, as may be reasonably required for


accessoiy- w orks and installations of the type listed in paragraph (c) of this Clause


w hich are necessary’ or useful for its operations, and such part of the surf ace as may


be required for its prospecting and mining operations. The Company shall endeavour


to make satisfactory arrangements for payment of a fair and reasonable compensation


for any prospective damage to any crops, buildings, trees or works therein. The


Government shall negotiate on behalf of the landowners or occupiers w ith the


Company to assess the compensation to be paid. The landowners or occupiers shall


have the right to participate in the negotiations.


(2) (i) It is recognized that the Company*s mining operations


will of necessity disturb the top soil and intermix sub¬


soil strata therewith, and that such disturbance and


intermixing is a necessary incident to the alluvial mining


of titanium-bearing and associated minerals.


Accordingly, it is agreed that such disturbance and


intermixing, and their effect, if any, on the future use


28 No. 4 Sierra Rutile Agreement (Ratification) Act 2002





and occupancy of the surface land shall not be taken


into account or evaluated in determining compensatory


damages payable to the owner or occupier of the land.


To minimize such disturbances, the Company agrees


that it will restore all mined areas to reasonable surface


contours not in substantial contrast with the contours of


the adjacent and surrounding land surface.


(ii) In case it shall not be possible for the Company to reach


a satisfactory agreement with the owner or occupier of


the surface, in case of land not owned by the Government,


within thirty (30) days after the commencement of its


efforts to do so, or such extended time as the Company


and such owner or occupier shall agree, the Company,


unless it elects not to occupy and utilize such surface


areas, shall bring the matter to the attention of the


District Officer having jurisdiction by filing a petition


setting forth the facts of the case and specifying as


exactly as may be possible the land which it requires


and the nature of the occupation of the same, w hether


for accessory works and installations or for prospecting


or mining operations. As soon as may be conveniently


done thereafter, but not more than sixty (60) days after


the date of the filing of the said petition, the Government


shall cause the District Officer to assess the


compensation to be paid to the ow ner of the land when


and if such prospective damages, loss or destruction of


goods or property are inflicted by the Company, and to


promptly notify the parties of the sum awarded. If the


owner of the land should be unknown or there should be


a controversy as to the ownership, the Company shall


make a payment to the District Officer who shall


determine its disposition. Either party who is dissatisfied


with the award of the District Officer may appeal to the


Minister who may render a decision or refer the dispute


for determination by arbitration. The decision by the


Minister or the arbitrators shall be final and binding on


the parties. Upon agreeing to pay the amount specified,


the Company may enter the land, but shall not be


required to agree to pay such amount if it withdraws its


petition to enter upon such land and has not already


entered upon such land.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 29





(iii) The compensation payable by the Company pursuant


to this Clause shall be based on the estimated monetary


amount (or fair market value) of the damage to be done


to the crops, buildings, trees or works on the land. Any


compensation with reference to the fact that the owner


will be deprived of the use and occupancy of the land is


included in and covered by the surface rent payable


pursuant to Clause 6(a)(2) hereof.


(iv) The Company shall not unduly disturb and interfere


with the living conditions of local population settled


within the Mining Lease Area. The Company shall


respect and cause its employees and contractors to


respect the customs of the local populations.


(v) If at any point a resettlement of the local population


appears to be absolutely essential, the Company shall


move with utmost caution, with the consent of the


Government and in consultation with local authorities


in persuading the local population to resettle and provide


a fully adequate resettlement programme in accordance


with the directions of the responsible Minister.


(c) Accessory Works and Installations


Subject to the provisions of sections 40 and 61 of the Minerals Act, the


Company shall have the right to construct and operate within the Prospecting Area


or Mining Lease Area, roads, buildings, plants, structures, living quarters, water


supply systems, pipelines, communications systems, electric power systems, ship


loading stations, airstrips, barge channels, storage facilities* and other similar


accessory works and installations which are necessary or useful in carrying out its


operations under this Agreement.


(d) Export of Titanium Minerals


The Company shall have the right to export all titanium and associated minerals


or mineral concentrates raised or obtained in the course of mining operations to any


country other than countries to which the laws of the Republic of Sierra Leone


prohibit such exports.


 i..











30 No. 4 Sierra Rutile Agreement (Ratification) Act 2002


(e) Entry of Personnel


(1) The Company and/or its contractors shall not import unskilled labour


for the carrying out of any operations, developments, or maintenance undertaken by


them by virtue of this Agreement.


(2) Subject to the foregoing restrictions and to any applicable provisions


of the Non-Citizens (Registration, Immigration and Expulsion) Act No. 14 of 1965),


all persons deemed by the Company and/or its contractors to be required for the


prosecution of its work, including executives, officers, engineers, consultants,


technicians, skilled and semi-skilled labour, shall have the right to enter and reside


in Sierra Leone and to depart therefrom. The Government agrees that it will


encourage and assist the efforts of the Company to secure and maintain an adequate


labour supply.


(3} In selecting employees to carry out i ts operations under this A greement


the Company shalt give preference to qualified and competent Sierra Leone


executives, officers, engineers, consultants, technicians and skilled and semi-skilled


labour. The Company shall also establish a systematic training programme as to


enable Sierra Leoneans to assume technical and managerial functions in the


Company.


(0 Housing of Labourers


Rule 43 (4) of the General Minerals Rules shall not preclude the Company from


demanding and receiving rents at such rates and subject to such conditions as may


be approved by the Commissioner of Labour in respect of the occupation by


labourers or others of huts or houses constructed by or at the cost of the Company


within a Prospecting or Mining Lease Area.


(g) Government Protection and Assistance


The Government undertakes to grant to the Company such assistance as it


reasonably can to enable the experts and other technicians sent by it to carry' out its


tasks in the best and most efficient manner. The Government will make available to


the Company all aerial, magnetometer and other geological surveys and photographs


and all other plans, maps, information and advice relating to titanium-bearing and


associated minerals which in the opinion of the Government it can disclose and will


permit the Company to obtain copies of all such surveys, photographs, plans, maps


and information for their own use upon payment of the actual cost of making such


documents. The Company will make available to the Government Geological


Survey Department all similar data that it compiles or acquires from others under


circumstances which permit disclosure thereof to others provided, however, that the


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 31





Government agrees that its said Department will treat all such data so made available


to it as confidential and will not communicate it to others during the life of this


Agreement without the Company’s prior consent.


(h) Importation of Machinery


The Government agrees that it will grant any and all permits and permissions


of whatever nature necessary for the importation into Sierra Leone of machinery’,


equipment, supplies (including foodstuffs) and serv ices necessary or desirable for


the conduct of prospecting, mining, processing and transport operations contemplated


by this Agreement and of such manufacture and types from whatever source as are


customarily employed by the Company.


(i) Surveys


The Company may arrange that all survey work to be performed in connection


w ith the clearing, survey, demarcation and beaconing of boundaries or otherwise,


shall be carried out by a licenced surveyor approved by the Gov eminent, subject to


the right of the Gov ernment to cause the required survey work for any disputed


boundary to be performed by the Director of Surveys and Lands, whose determination


shall be final, including the assessment of the survey costs as betw een the Company


and the other disputing party or parties.


(j) Agriculture Development Fund


The Company shall with effect from the financial year commencing January 1,


2003 (it being understood that, notwithstanding any previous version of this Clause,


the Company shall be excused from making any payment to the Agricultural


Development Fund for the period from January 1, 1995 through and including


December 31, 2002) make payment to the Agricultural Development Fund of the


higher of US$75,000 and 0.1% (one tenth of one percent) of gross sales free


alongside ship the Sierra Leone port of shipment in United States Dollars or its Leone


equivalent. The Fund shall be utilised for the development of agriculture in the


affected areas and shall be controlled by representatives of the Government,


Chiefdom representatives and the Company’s representatives.


(k) Reclamation and Rehabilitation of Mined out Areas


(i) The Company will prepare at its expense a


comprehensive master plan that will address the issues


of reclamation and rehabilitation of mined-out areas.


The Company shall adopt and implement at its expense


32 No. 4 Sierra Rutile Agreement (Ratification) Act 2002





programmes and measures approved by Government


for the effective reclamation of mined out areas including


replanting and dealing with impounded water and


mining spoils. In this regard, a detailed programme for


the progressive reclamation and rehabilitation of lands


disturbed by mining and for the minimisation of the


effects of such mining on adjoining land/water areas


shall be submitted for approval. The Company shall, in


consultation with appropriate Government Agencies,


undertake suitable reafforestation, agricultural and other


projects within the Mining Lease Area.





(ii) The master plan will'consider the ultimate outline of the


lakes resulting from dredging and the benefits to be


gained from the impounded water which will include


fish farming, flood control, and use of water in


agriculture. The plan will consider the disposal,


contouring and reafforestation of the processed sands


and the potential use of the new' land areas, and the


different products. All new roads and village sites and


potential agricultural sites will be identified.


Compensable crops and structures will be assessed and


the timing of necessary moves determined well ahead


of time.


(iii) Within two (2) months from the date of ratification of





this Agreement, the Company shall submit to the


Government an initial report including overall objective


for this broad ranging programme. Within six (6)


months from the ratification date, the Company shall


submit to the Government for its approval, a final report


including the reports of experts in various aspects


covered by the report. Such final report shall be in





sufficient detail to define the programme objectives,


costs, and methods and time frame for implementation.


Approval of the final report by the Government shall


not be unreasonably withheld. Should the programme


not be adhered to by the Company after it has been


approved by the Government, the Government reserves


the right to carry out the programme on behalf of and at


the expense of the Company.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 33





(1) Feasibility Study


The Company shall conduct feasibility studies on the local production of paint


pigments and other products from rutile produced in Sierra Leone. The Government


shall give the necessary investment incentives for the production of these and other


products.





11. GENERAL PROVISIONS





(a) Directors


The Government shall have the right to nominate two Directors to the Board of


the Company.


(b) Assignment


The Company shall have the right to assign all or any portion of the rights,


privileges and franchises including fiscal provisions and tax benefits and immunities


granted to the Company, such assignment to include all obligations under this


Agreement to a Sierra Leone Corporation. An assignment if made and the insurance,


ow nership, transfer or redemption of securities, shares or stock, bonds, notes and


other evidence of ownership and indebtedness issued by the Company in connection


with such assignment, shall be exempt from the payment of any tax, levy, duty or fee,


exclusive of stamp or registration duties whether national or local. Provided that


whenever an assignment is in the form of a security fora loan, the Mining Leases,


Additional Mining Leases and Prospecting Licences and any rights and interests


under them shall not be assigned without the prior written consent of the Minister of


such assignment thereof, which consent shall not be withheld unreasonably. Except


as provided in this paragraph, the Company shall not assign this Agreement or any


rights, privileges or franchise included herein without the prior written consent of the


Government signified by endorsement on the instrument of assignment, which


consent shall not be withheld unreasonably. Whenever a prior written consent is


signified, the Minister shall notify that it has been so signified by Order published


in the Gazette.





(c) Notices


(1) Ail orders, approvals, declarations, notices and communications of


any kind between the Minister or any other representative of the Gov ernment and the


Company shall be in writing and the contracting parties shall not under any


circumstances be permitted to allege or to rely upon any oral order, approval,


declaration, notice or communication.


34 No* 4 Sierra Rutile Agreement (Ratification) Act 2002





(2) All orders, approvals, declarations, notices and communications


from the Government to the Company shall be delivered to the representative of the


Company in Freetown.


(3) All declarations, notices and communications from the Company to


the Government shall, unless otherwise required by law or by the terms of this


Agreement or unless the Government shall otherwise direct by written notice to the


Company, be mailed or delivered to the Director of Mines at his office in Freetown.


(d) Prior Consent or Approval


Whenever, under the terms of this Agreement the tight of the Company or of


the Government, as the case may be, to do or perform any act or thing is conditioned


on the prior consent of the other party to the Agreement, or of an official or


representative of such other party, it is hereby stipulated and agreed by and between


the parties hereto that the requisite consent or approval will not in any instance be


unreasonably withheld.


(e) Limitation of Application of Minerals Act and other Acts


(1) The provisions of the Minerals Act and the Rules made under it,


including the provision of any official forms prescribed by such rules, shall be


binding upon and inure to the benefit of the Company except such provisions thereof


as may be inconsistent with any of the express or implied terms or conditions of this


Agreement.


(2) Any such inconsistency referred to in paragraph (1) shall be resolved


by giving effect to the provisions of this Agreement.


(3) In the event that the Government enacts any legislation or changes


any administrative rule or practice which under the laws of Sierra Leone is binding


upon the Company and which results in more onerous obligations being placed upon


the Company than those subsisting at the Effective Date (save for any financial


obligations that are the subject of Clause 6(i)(3), then without prejudice to any other


right the Company may have against the Government, the Government shall hold the


Company harmless in respect of the increased cost of performing the more onerous


obligation.


(f) Revocation ey the Government


If and whenever any sum of money payable hereunder by the Company as rent


or royalty1 shall be in arrears for the space of six (6) months after the date on which


it becomes cue and payable, or if them shall be any breach or noaobservance by the


No, 4 Sierra Rutile Agreement (Ratification) Act 2002 35


Company of any of the terms of any licence or lease granted herein or hereunder, or


if the licencee or lessee thereunder shall become bankrupt or make or enter into any


arrangement or composition with its creditors, or if a receiver is appointed for the


licencee or lessee or if it shall enter into liquidation whether compulsorily or


voluntarily (except a voluntary' liquidation of a solvent company for the purpose of


reconstruction) then and in any such case, the Government may revoke the licence


or lease in question and thereupon the same and all rights thereunder granted


pursuant to this Agreement shall cease and determine but subject nevertheless and


without prejudice to any obligation or liability imposed by or incurred under the


terms and conditions thereof. Provided always that save as to the non-payment of rent


or taxes the aforesaid power shall not be exercised unless and until notice has been


given to the licencee or lessee specifying the particular breach complained of and


if the breach is capable of remedy, requiring the licencee or lessee to remedy the


breach and in any case requiring the licencee or lessee to make compensation in


money for the breach if such breach is compensable, and the licencee or lessee fails


within a reasonable time thereafter to remedy the breach if it is capable of remedy


and to make reasonable compensation in money to the satisfaction of the Government


for the breach.


(g) Force Majeure


(1) Failure on the part of either the Company or the Government to fulfil


any of the terms and conditions of this Agreement shall not give rise to a claim by


the other party or be deemed to be a breach of the Agreement insofar as the failure


arises from force majeure: and if through force majeure the fulfilment by either the


Company or the Government of any of the terms and conditions of this Agreement


is delayed, then subject to Clause (g)(2) the period of such delay shall be added to


the periods fixed by this Agreement.


(2) For the avoidance of doubt, the Company’s payment ohli gations shall


be suspended for the duration of any force majeure event except in respect of any


monies due at the date of the occurrence of die force majeure event, which shall


remain due and payable.


(3) In this clause the expression ‘force majeure ” includes without


limitation an act of God, war (declared or undeclared), insurrection, riot, civil


commotion, tide, storm, tidal wave, flood, lightning, explosion., fire, earthquake,


terrorist activity or other hostilities of the types and any other happening which the


party affected could not reasonably prevent or control and the expression “the


A greemeat" includes not only, terms and conditions of this A gteement, but also terms


sad conditions of the Mining Leases.


36 No. 4 Sierra Rutile Agreement (Ratification) Act 2002


(h) Amendment


In the event that the Government and the Company mutually agree to amend any


of the provisions of this Agreement, such amendment may be effected by agreement


between the parties evidenced by an instrument in writing. Any such amending


agreement shall take effect without further ratification or cofirmation by Parliament


save to the extent that it may be inconsistent with any law in force in Sierra Leone


at the time when such agreement between the parties is executed.


(i) Interpretation and Arbitration


(1) Except as may be otherwise herein expressly provided, this Agreement


shall be construed, and the rights of the Government and the Company hereunder


shall be determined, according to the Laws of Sierra Leone and such rules of


international law as may be applicable.


(2) The parties shall in good faith endeavour to reach an amicable


settlement of all differences of opinion or disputes which may arise between them


in respect to the execution, performance and interpretation of termination of this


Agreement, and in respect of the rights and obligations of the parties deriving


therefrom.


(3) In the event that the parties shall be unable to reach an amicable


settlement of such dispute within a period of three (3) months from entering into


negotiations thereon, either party may submit the matter to the exclusive jurisdiction


of a Board of three (3) Arbitrators who shall be appointed and carry' out their mission


in accordance with the Arbitration Rules and Regulations of the International


Chamber of Commerce (ICC). The venue of the arbitration shall be London. The


English language shall be used in the proceedings. The aw ard and any decision of the


Arbitration Board shall be binding upon either Party having the same force and effect


as a judgement of a Court of last resort of the party’s concerned country.


(j) Termination of Principal and Supplemental Agreements


Upon the coming into effect of this Agreement in accordance with Clause 12


hereof, the Principal Agreement and the Supplemental Agreement (including all


related side letters and minutes) shall thereupon terminate, save that any rights and


obligations thereunder which shall have arisen or accrued prior to such termination


shall be deemed to be rights and obligations w-hich have arisen or accrued under this


Agreement.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 37





(k) Amendment of the Mining Leases


Upon the coming into effect of this Agreement in accordance with Clause 12


hereof Mining Leases shall be deemed to be hereby amended as required to conform


to the financial and other provisions of this Agreement. References therein to the


Principal Agreement and to the Supplemental Agreement shall accordingly be


construed as reference to this Agreement.


(l) Import and Export Inspection Fees


(1) Except as otherwise provided in this Agreement, the Company shall,


with effect from the Effective Date, pay an inspection fee in respect of all goods


imported by or on behalf of the Company into Sierra Leone at a rate not to exceed


1.5% (one and a half percent) of the ClF price of the imported goods.


(2) With effect from the Effective Date, the Company shall pay an


inspection fee in respect of all goods exported by or on behalf of the Company from


Sierra Leone at a rate not to exceed 0.25% (one quarter of one percent) of the gross


sales price of such goods, free alongside the Sierra Leone port of shipment.


(m) Deductibility of Losses


(1) The Company may make a claim requi ring that the amount of any loss


incurred by the Company during any of the nine Financial Years ending prior to


December 31, 1999, and the amount of loss incurred by the Company during any


subsequent period, or any portion thereof, after December 31, 1999 shall be carried


forward and, as far as may be, deducted from or set off against profits (of whatever


description, including whether from operating or other revenues or capital transactions)


on which the Company is charged any tax in any subsequent years.


(2) The Government may instruct an independent firm of accountants to


assist it in verifying the losses that have been incurred by the Company during the


Financial Years ending December 31, 1995 through December 31, 1999 and the


Company will provide all such information, including copies of documents and other


papers, that such accountants may reasonably request. The cost of the independent


firm of accountants shall be borne by the Government.


38 No. 4 Sierra Rutile Agreement (Ratification) Act 2002


(n) Deductibility of Outgoings and Expenses


(1) The Company has advised the Government that it proposes moving


its head office function to Sierra Leone hot later than December 31, 2003.


(2) Notwithstanding the provisions of Section 103 of the Minerals Act


and the provisions of the Income Tax Act, 2000, the Company, in computing its


chargeable income shall:


(a) for all financial years up to-the Financial Year ending


December 31, 2003, be entitled to deduct all Group Office


Expenses wholly, exclusively and necessarily incurred in


carrying out its activities;


(b) with effect from the Financial Year commencing January' 1,


2004, be entitled to deduct Group Office Expenses, where


the Group Office functions are carried on outside Sierra


Leone, subject to the following limitations:


(i) for the Financial Years commencing January7 1,2004


and January 1,2005, such deductions shall not exceed


5% (five percent) of the Company’s turnover for the


period; and


(ii) for any Financial Year commencing after December


31, 2005, such deduction shall not exceed 1.5% (one


and a half percent) of the Company’s turnover for the


relevant period.


(3) For the avoidance of doubt, the above provisions shall not in anyway


restrict the Company’s ability when computing its chargeable income for any period,


to deduct all outgoings and expenses that are exclusively and necessarily incurred by


the Company whether inside or outside Sierra Leone in carrying out its activities


during the relevant period, except that the Company shall not be entitled to deduct


more than 2.5% (two and a half percent) of its turnover for the relevant period in


respect of marketing commissions and fees.


(o) Road Users Fuel Levy


(1) Notwithstanding the provisions of tne Road Users Charges Act,


1994, the Company shall, w ith effect from January 1, 2003, be liable for road users


fuel levy applicable to users generally in respect of petrol or diesel consumed by the


Company’s vehicles on highway roads. This liability' shall be the Company’s sole


liability in respect of such tax. For the avoidance of doubt, off-highway usage and


usage in respect of power generation shall not attract any road users fuel levy.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 39





(2) For the purpose of calculating the amount of road users fuel levy


payable by the Company for the Financial Year ending December 31,2003, the tax


shall be based on actual consumption of the Company’s vehicles on highway roads


and for periods thereafter upon a percentage rate of total petrol and diesel purchases


made by the Company during the relevant period, such percentage rate to be agreed


between the Government and the Company on the basis of actual usage.


(p) Port Charges and Harbour Dues


(1) The Sierra Leone Ports Authority may levy port charges in respect of


vessels carrying solely the Company’s goods as follows:


(i) compulsory pilotage will be payable by the Company


in respect of any such vessels entering and leaving any


Sierra Leone port of shipment at a rate not exceeding


US$1200 (or its Leone equivalent) per vessel;


(ii) bouyage fees will be payable by the Company at a rate


not exceeding US$0.10 (or its Leone equivalent)


multiplied by the gross registered tonnage of the rele vant


vessel; and


(iii) light dues will be payable by the Company at a rate not


exceeding US$0.10 (or its Leone equivalent) multiplied


by the gross registered tonnage of the relevant vessel.


(2) With effect from but not prior to the Effective Date the Sierra Leone


Ports Authority may levy harbour dues at a maximum rate of US$1 (or its Leone


equivalent) per ton of rutile carried on behalf of the Company by vessels leaving any


Sierra Leone port of shipment. Neither the Company nor its carriers or agents will


be liable for harbour dues in respect of ilmenite or any other goods carried on behalf


o! the Company by vessels leaving any Sierra Leone port of shipment.


(3) With effect from but not prior to the Effective Date the Sierra Leone


Ports Authority may levy a freight levy in respect of goods exported by or on behalf


of the Company from any Sierra Leone port of shipment at the following rates:


(i) in respect of rutile and zircon, a maximum rate of US$ 1


(or its Leone equivalent) per ton;


(ii) in respect of ilmenite, a maximum rate of US$0.25 (or


its Leone equivalent) per ton; and


 40 No. 4 Sierra Rutile Agreement (Ratification) Act 2002


(iii) in respect of all other goods, a maximum rate of


US$1.20 (or its Leone equivalent) per ton.


(4) The Company will not be liable for freight levy in respect of any


mining machinery, plant, equipment, consumable mining stores and goods imported


by or on behalf of the Company through any Sierra Leone port.


(5) The Company’s liability under the provisions of this Clause is in


substitution for and not in addition to any liability that might otherwise be imposed,


either hereto before or hereafter, on its carriers or agents, and whether by the Sierra


Leone Ports Authority or any other Public Body, in respect of the aforementioned


matters.





(6) In the event that the Sierra Leone Ports Authority or other responsible


public body fails to provide any of the services for which the Company is required


to pay port charges, harbour dues and any other amounts pursuant to this Clause,


including, but not limited to, positioning and lighting of buoys, and the Company


incurs any costs or expenses in providing or obtaining such services, the Company


shall be entitled to deduct such costs and expenses from any amounts that are


otherwise payable to the Sierra Leone Ports Authority or any other public body


pursuant to this Clause.


(q) Security


(1) The Government and the Company recognise that an effective


security regime is important to ensure the safety of the Company’s assets and


personnel.


(2) 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.


(3) The Company may import such arms and ammunition that are


appropriate to such a security force subject only to the prior approval of the


Government and the security force may cam’ and use such arms and ammunition for


the purpose of carrying out its functions.


(r) Reporting


(i) Without prejudice to any reporting obligations under this Agreement,


the Company shall provide to the Government not later than the end of March of each


year after resumption of its operations a report showing:


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 41





(i) market developments for the Company’s products over


the previous twelve month period;


(ii) how the Company has responded to such developments;





and


(iii) how the market is expected to develop over the following


vear.





(2) The Company shall notify the Government of the contract price for


any long-term contract for the sale of rutile, ilmenite or zircon the Company enters


into, within thirty' days of entering into the contract.


(3) The Company shall instruct its auditors to provide a quarterly report


to the Government confirming that during the relevant quarter:


(i) ail sales have been made to unconnected parties, or


otherwise to connected parties at prices based on or


equivalent to arm’s length sales to unconnected parties


and in accordance with such terms and conditions on


which agreements would be made if the parties had not


been connected;


(ii) all sales other than those on the spot market have been


made under long-term contracts; and


(iii) all royalties arising from such sales have been correctly


calculated and have either been paid or accrued as


appropriate under the agreed terms of payment.


(s) Communications


The Government shall procure SIERRATEL or its successors, the Minister of


Transport and Communications, or other appropriate bodies to give effect to the


arrangements reached between the Company and SIERRATEL contained in a letter


from SIERRATEL to the Company dated February 26,1997 and shall ensure that the


consent of SIERRATEL or its successors, the Minister of Transport and


Communications, or other appropriate bodies, w here required under the terms of


such letter, shall not be unreasonably withheld or delayed.


42 No* 4 Sierra Rutile Agreement (Ratification) Act 2002





(t) Foreign Contractors


(1) In order to assist the Company to undertake the Refurbishment


Works, all and any third party contractors, including their sub-contractors and their


respective employees and agents, shall, to the extent that they are engaged in such


Refurbishment Works, be exempt from all local taxes, including payroll tax*


immigration and labour fees, withholding tax, PAYE and income tax.


(2) In the event of any such contractor, or any of their employees, being


engaged by the Company to carry out both Refurbishment Work and other work,


whether pursuant to the same contract or otherwise, the Government and the


Company will agree as to the percentage of the contractors and their employees work


which is Refurbishment Work and entitled to the above exemption.


(3) The Company shall promptly notify the Government of the


employment of any contractor to carry out Refurbishment Works and shall certify


to the Government that the contractor and its named employees are entitled to the


above exemption.


(u) Exportation of Surplus Equipment


The Government will grant any permit and permission of whatever nature


necessary for the Company to export from Sierra Leone any mining machinery',


plant, equipment, consumable mining stores, goods and surplus equipment of


whatever description imported by it for the conduct of its prospecting, mining,


processing and transport operations contemplated by this Agreement.


(v) Confidentiality


The Government will keep confidential all information provided to it by the


Company, whether before or after the date of this Agreement and confirms that it


shall not disclose such information to any third party without the Company’s prior


written consent.


No. 4 Sierra Rutile Agreement (Ratification) Act 2002 43





(w) Government Assistance


The Government will extend to the Company all reasonable assistance to enable


and facilitate the Company to cany out its functions and achieve its objectives in the


best and most efficient manner and, without limitation, to enjoy its rights and


privileges under this Agreement. The Government shall, and shall procure all


relevant public bodies to, make such lawful orders and administrative acts as may be


desirable from time to time for this purpose.


(x) Amendment of the Mining Leases


All Mining Leases shall be deemed to have been amended as required to give


effect to the financial and other provisions of this Agreement.





12. RATIFICATION AND EFFECTIVENESS OF THIS AGREEMENT


(1) Following the execution of this Agreement, the Government wall


introduce and use its best endeavours to cause to be passed legislation for the purpose


of ratifying and confirming this Agreement and implementing the terms hereof.


(2) If such legislation shall not be duly passed and become law7 within 45


days from the date of this Agreement or within such extended time as the Government


and the Company may m writing agree, this Agreement and ail rights granted and all


obligations assumed hereunder shall cease and determine upon the expiration of such


forty-five (45) day period or such extended time so agreed, and without penalty with


respect to any actions taken by the Company thereunder, prior to the date of such


termination.


(3) This Agreement shall come into force and effect upon the coming into


operation of such legislation within the period specified in paragraph (2) hereof.


44 No* 4 Sierra Rutile Agreement (Ratification) Act mi





In witness whereof, the parties hereto have executed this Agreement as of the


day and year first above written.


FOR-THE GOVERNMENT OF SIERRA LEONE


Signed, Sealed and Delivered by the said


Alhaji M. S. Deen, Minister of Mineral


Resources, for and on behalf of the Govern¬


ment of Sierra Leone, in the presence of: Date: 20th November, 2001


Witness:





Date: 20th November, 2001





FOR SIERRA RUTILE LIMITED





Signed, Sealed and Delivered by the said


..........................., Sierra Rutile Limited


Chief Operating Officer, for and on behalf of the


Sierra Rutile Limited, in the presence of: Date: 20th November, 2001


Witness:





....................................... Date: 20th November, 2001


Passed in Parliament this 7th day of March, in the year of our Lord two thousand


and two.





J. A. CARPENTER,


Clerk of Parliament.


This Printed Impression has been carefully compared by me with the Bill which


has passed Parliament and found by me to be a true and correctly printed copy of die


said Bill.





J. A. CARPENTER,


Clerk of Parliament.





Printed and Published by the Government Printing Department, Sierra Leone.


Gazette No 15 of 21st March. 2002.