An area of 124.82 square kilometres within the Lower Bambara and the Dodo Chiefdoms, both in the Kenema District. Schedule 1 includes a map and the coordinates of the licence area.
Tonguma shall have the right within the mining licence area, to use the water from any natural water course and to return the same together with washing spoils to the river, stream or watercourse, provided that in so doing, Tonguma shall not discharge or permit to be discharged any poisonous or noxious matter not present in the intake water.
Tonguma shall at ail times do everything reasonable in its power to limit the damage and disturbance to the local environment and populace. The Environment Protection Agency may at any time conduct periodic inspections of the mining licence area.
In accordance with the EPA 2008, Tonguma shall conduct the mining operations and all project activity with a degree of care and professionalism that meets or exceeds the best international environmental protection standards.
In particular, Tonguma shall employ in the mining operations advanced techniques, practices and methods of operation for the prevention, limitation or treatment of pollution and the avoidance of unnecessary loss of, or damage to, natural resources, in each case in accordance with generally applicable law.
Notwithstanding anything to the contrary in this contract, the mining law, the EPA 2008 or any other legislation or regulation, Tonguma shall not bear any liability whatsoever in respect of any pollution or loss or damage to the environment or the risk thereof, or any other claim, where such pollution, loss, damage, risk or claim arises from, or in connection with
(a) any acts or omissions in or with respect to the mining licence area prior to 29 March 2004; or
(b) any acts and or omissions caused by illegal artisanal mining prior to or subsequent to 29 March 2004 in areas of the mining licence area that are not fenced and demarcated for Tonguma mining operations.
Tonguma shall have the right within or outside the mining licence area to dig, clean and widen channels in streams, rivers and watercourses as may be necessary to permit or facilitate water flow to or from the mining licence area and the processing plants and concentrator.
Tonguma shall also have the right within the mining licence area, to use the water from any natural water course and to return the same together with washing spoils to the river, stream or watercourse, provided that in so doing, Tonguma shall not discharge or permit to be discharged any poisonous or noxious matter not present in the intake water.
Tonguma shall provide the government financial statements for the previous financial year that have been audited by an independent internationally recognized accounting firm registered in Sierra Leone by the 30 June of each year. The government; may audit such statements or appoint an auditor to conduct such an audit on its behalf at its own cost. The government and/or its auditor shall be given access to all underlying documents necessary to complete the audit of such annual financial statements. If an audit reveals material underpayment by Tonguma, then Tonguma shall bear the cost of the government audit.
For the duration of this contract, no taxes, royalties, duties, excise, charges, levies, fees, dues, contribution, payments or imposition of any kind payable to the central, regional or local governments authorities or agents or to any chiefdom or tribal authority or any other agency of the government will apply to Tonguma, or any affiliate company or agent of the employees of Tonguma or any affiliate company, other than:
- annual rent and surface rent,
- income tax,
- royalties,
- withholding taxes,
- charges on imports,
- import inspection fees,
- community development fund contributions,
- profit sharing.
Except as provided by the contract, no tax, royalty, duty, excise, levy, fee, due, contribution, payment or imposition of any kind will be payable by Tonguma, its employees or shareholders, or any of its affiliates, where the effect of such tax is confined wholly to Tonguma or its employees, shareholders or affiliates or agents.
Tonguma shall be liable in respect of each financial year to pay income tax upon the income derived from its operations conducted in Sierra Leone as provided by the law; provided, however, that at any time that the income tax rate for mining companies exceeds 25%, the income tax rate that shall be deemed to apply to Tonguma at such time shall be 25%.
As soon as practicable after the date of this contract, and in any event on or before the distribution of any profit by Tonguma, or by such later date as may be agreed in writing between the parties, the government shall procure that a trust is properly formed, constituted and registered as a trust in terms of the laws of Sierra Leone for the benefit of the beneficiaries, as determined by the government, of the profit share arrangements described in schedule 6, ("Tongo Trust").
Subject to the prior repayment of all loans and shareholders' claims, Tonguma agrees to pay to the Tongo Trust within 15 days following receipt by Tonguma of its audited accounts for each fiscal year, a sum equal to 10% of the profit generated during such fiscal year.
القيود المفروضة على المعاملات مع الأطراف التابعة لها
Any transaction between Tonguma and any affiliate shall be an arm's-length fee basis negotiated and such transaction will be accompanied by contemporaneous documentation. Tonguma shall make sales commitments to affiliates only at prices based on or equivalent to arm's length sales to non-affiliated purchasers and in accordance with such terms and condition which agreements would be made if the parties had not been affiliated. The government have the right to review the terms of all transactions between Tonguma and any affiliate, including documentation.
Any discounts or commissions allowed in transactions between Tonguma and its affiliates shall be no greater than the prevailing rate so that such discounts or commissions will not reduce the net proceeds below those which it would be received if the parties had not been affiliates.
Tonguma shall pay royalties on all diamonds produced by mining operations as follows:
(a) 8.0% for all diamonds whose ex-mine price exceeds $500,000 ("Special Stones")
(b) for all other diamonds, the lower of 6.5% and the royalty on diamonds prescribed by generally applicable law to commercial diamond mining operations
Tonguma shall pay a royalty on precious metal of 5% of the ex-mine price.The ex-mine price for precious metals shall be determined by reference to the price for the relevant mineral published in the financial times of London on the publication day following the date of receipt by the refinery, after the necessary adjustment. The royalty must be paid on or before the 20th day of each month after export shipment, and a copy of the payment advice is to be furnished to the director of mines and the comptroller of customs and excise.
Tonguma shall pay to the Bank of Sierra Leone and without demand, on the 1st July 2012 and at each anniversary, the sum of US$500,000 to the government in respect of an annual lease for the mining licence area.
The lease rent to be paid to the government shall be increased from the first anniversary of the reference date by an amount equal to 3% of the annual lease rent for the previous year.
Tonguma shall pay a surface rent to the lawful occupiers of the mining licence area. The amount of such surface rent shall be determined pursuant to agreements with the lawful occupiers of the mining area. Failing such agreement with any lawful occupiers, the surface rent payable to such occupier shall be determined by the minister of mineral resources on the advice of the minerals advisory board in accordance with the law.
It is the objective of the parties that the mining activities be carried out in a manner that is consistent with the continuing economic and social viability of centers of population surrounding the mining lease area. Tonguma shall consult with the government and the communities in the mining area to establish plans and programs for the implementation of this objective, and thereafter cooperate in good faith with the government in efforts to realize the plans and programs.
Tonguma shall enter into a community development agreement with the primary host community pursuant to which 0.25% of Tonguma's sales revenue in US Dollars shall be paid each year to a community development fund.
In accordance with the mining law, Tonguma shall, in the conduct of its mining operations, give preference to qualified and competent Sierra Leonean citizens possessing the necessary qualifications and experience, taking into account the requirements of safety and the need to always maintain acceptable standards of efficiency in the conduct of the mining operations.
Tonguma undertakes not to employ expatriate workers in unskilled labour positions. For purposes of this contract, the parties agree that "unskilled" workers are workers who do not require more than basic training to perform their duties safely, efficiently and reliably.
In accordance with the mining law, Tonguma shall, in the conduct of its mining operations, give preference to products and materials made in Sierra Leone and to service agencies located in Sierra Leone and owned by Sierra Leoneans, as provided in the mining law, to the maximum extent possible and consistent with safety, efficiency and economy.
Any contracting arrangement entered into by Tonguma will contain the provisions that Sierra Leonean citizens are to be employed where possible, and that these employees are the be genuinely trained and groomed for higher skilled positions.
Tonguma shall, in the conduct of the mining operations, observe and perform the programme for the training and employment of Sierra Leoneans as set out in Schedule 7.
From the commencement of mining operations, Tonguma will make available an annual budget of US$ 100,000
(a) 60% of which will be used for the training of suitable employees at all levels in Sierra Leone and overseas, and
(b) 40% for training of Sierra Leone students of secondary school leaving age in various technical vocational institutes in Sierra Leone.
Tonguma will collaborate with other mining companies within the Sierra Leone chamber of mines to establish in Sierra Leone a "school of excellence" for the training of Sierra Leonean citizens in technical and vocational skills.
Tonguma shall have the right to construct and operate within the mining licence area roads, living quarters, water supply systems, electric power systems, loading stations, airstrips, storage facilities and recreation facilities and to do any such work or erect any buildings necessary or useful in carrying out its operations under this contract.
Tonguma shall provide a financial guarantee that shall assure that the cost of closure shall be borne by the Tonguma and not the public. The guarantee shall be in an amount calculated to be necessary to implement the closure plan should Tonguma fail to implement that closure plan and shall be updated any time the closure plan is updated, so that it continues to be sufficient to ensure that all steps in the closure plan can be completed in a satisfactory manner should Tonguma fail to implement the closure plan.
The Parties shall comply with the anti-corruption laws at any time and from time to time applicable in Sierra Leone.
Tonguma shall have the right, in consultation with the government, to take such measures as may be required to establish and maintain control over the mining, processing, handling, sorting, storage and transportation of diamonds within the mining licence area, and, to, from and in, the sorting office, including the right to establish and maintain enclosed and security areas, to prevent access into and out of such areas and the right to search persons within or seeking access to such areas.
The government shall provide Tonguma with an armed security force, which:
(1) Tonguma shall be entitled to deploy throughout the mining licence area and sorting office and to deploy to accompany Tonguma property at any time when in transit within Sierra Leone but outside of the mining licence area and the sorting office;
(2) shall be under the command and control of the Local Unit Commander (LUC) of Tongo Police Division.
The government at the request of, and in consultation with, Tonguma shall take such measures as may be agreed with Tonguma in order to ensure the maintenance of proper security in the mining licence area and the sorting office, and the surrounding areas of both.
Immediately after commencement date, Tonguma shall secure the mining lease area and shall start with the feasibility study on the first mining cell. This work shall be completed within 24 months of the commencement date.
Subject to the feasibility study demonstrating viability and a safe working environment, Tonguma shall proceed with mining operations within 36 months of the feasibility study.
Tonguma undertakes to be in commercial production within 24 months of the start of mining operations.
The parties will in good faith endeavor to reach an amicable settlement of all disputes and differences of opinion arising in respect to the execution, performance and interpretation of the contract and in respect of the rights and obligations of the parties under the contract. If such a settlement is not reached within 3 months, either party will submit the matter to exclusive jurisdiction of a board of 3 arbitrators appointed and working in accordance with the Arbitration Rules and Regulations of the International Chamber of Commerce. The place of arbitration will be London, and arbitration will be in English. The award and any decision of the board will be binding upon either party, having the same force and effect as a judgment of a court of last resort of the party's country. The contract will remain in full force and effect during dispute resolution or arbitration proceedings.
Subject to proper undertakings relating to confidentiality, the government shall make available to Tonguma all aerial, magnetometer and other geological surveys photographs and all other plans, maps, information and advice relating to the mining licence area upon payment of the actual cost of making such additional copies.
All data, information and reports relating to the mining licence area or to the mining operations owned by or in possession of Tonguma shall be treated as confidential by each of the parties, and no party shall disclose the contents hereof to any third party without the written consent of the other party.
This contract will be governed by, interpreted and construed in accordance with the laws and regulations of the republic of Sierra Leone, as in effect from time to time, except as otherwise specifically provided in the agreement.
Tonguma shall at all times comply with the provisions of the mining law and other relevant laws and regulations in connection with the carrying out of its obligations and work as described in this contract, except to the extent that they are inconsistent with the provisions of this contract.
Tonguma shall be liable in respect of each financial year to pay income tax upon the income derived from its operations conducted in Sierra Leone as provided by the law; provided, however, that at any time that the income tax rate for mining companies exceeds 25%, the income tax rate that shall be deemed to apply to Tonguma at such time shall be 25%.