This contract is subject to periodic review every 5 years starting from the 10th anniversary of the effective date, so that parties could consider modifications that may be necessary or desirable in light of changed circumstances. Parties agree to good faith discussion on any matter that may bring positive development benefits of
Sierra Minerals Holdings 1’s mining operations, and minimize their undesirable impacts.
Sierra Minerals Holdings 1 shall conduct its mining operations in accordance with relevant laws, regulations, and international environmental protection standards. It shall employ available techniques, practices and methods of operation to prevent, limit and treat pollution and to avoid unnecessary loss or damage to natural resources. Sierra Minerals Holdings 1 shall limit the damage and disturbance to the local environment and populace. The Government shall periodically conduct inspections on the mining area.
Sierra Minerals Holdings 1 shall pay charges on imports, in the amount of 5% times the value of the imports, to the Government with respect to imports into Sierra Leone. However, Sierra Minerals Holdings 1 shall not be required to pay charges on imports in excess of those applicable under the ECOWAS Trade Liberalization Scheme.
Financial obligations - community or commodity funds
Sierra Minerals Holdings 1 shall enter into a Community Development Agreement with the Government whereby Sierra Minerals Holdings 1 shall pay at least 1% of the net bauxite sales revenue for local community development per year.
Sierra Minerals Holdings 1 shall be liable to income tax derived from its operations in Sierra Leone in accordance with the generally applicable law from time to time; however, the tax rate is capped at 30%. The costs of food, drinks, other items provided to employees in job-related accommodation, and expenses of celebrating milestones of the Sierra Minerals Holdings 1, shall be deductible from taxable income.
For each shipment, Sierra Minerals Holdings 1 shall pay a royalty equal to 3% times the net bauxite sales price of such shipment. Net bauxite sales price is the final revenue received by Sierra Minerals Holdings 1, free on board the vessel of the shipment, net of delivery adjustments. “Free on board" means point of sale at the designated Sierra Leone offshore loading facility, including loading on to the vessel. Sierra Minerals Holdings 1 needs to supply a quarterly report to the Government on the approximate tonnage of bauxite mined, the tonnage of bauxite shipped, the price of the bauxite so shipped, and the net bauxite sales payments received by Sierra Minerals Holdings 1.
Sierra Minerals Holdings 1 shall pay annual lease rent to the Government, and annual surface rent to the lawful occupier of the mining area. Failing agreement with the lawful occupier, the Minister of Mineral Resources, on the advice of the Mineral Advisory Board, shall determine the amount of surface rent that is payable.
Sierra Minerals Holdings 1 shall give preference to Sierra Leoneans with respect to all staff potions including executives, officers, engineers, consultants, technicians, and skilled and semi-skilled labor. Sierra Minerals Holdings 1 shall not import unskilled labor its operations. It may hire skilled expatriate workers only if suitably qualified Sierra Leoneans are not available.
Sierra Minerals Holdings 1 shall give preference to local products during its procurement process, provided that local products are comparable with imported ones. Sierra Minerals Holdings 1 shall also give preference to local service providers if they are otherwise comparable in price, efficiency and quality.
Protections or benefits for employees, dependents, or others
Sierra Minerals Holdings 1 shall protect the general health and safety of its employees. It shall employ safety devises, observe safety precautions, and maintain its infrastructure and equipment up to international health and safety standard. Sierra Minerals Holdings 1-supplied housing shall provide suitable living environments adequate for employees’ health and well-being. It shall maintain health facilities in the mining area and ensure the availability of medical care for its employees and their families.
If resettlement of local population becomes absolutely necessary, Sierra Minerals Holdings 1 shall first consult with local authorities and obtain consent from the Government. Sierra Minerals Holdings 1 shall proceed with utmost caution, in persuading local population to resettle, and in providing a fully adequate settlement program.
Sierra Minerals Holdings 1 shall carry out training and employment of local employees so that they are familiar with safety requirements and have acceptable standard of operational efficiency. The training program shall provide adequate instruction and training to ensure career advancement of local skilled workers, supervisory, administrative and managerial employees. Sierra Minerals Holdings 1 shall provide the Government with a detailed plan on its training programs. It shall also report to the Government about the number of personnel employed, their nationality, their positions and the status of training programs for citizens of Sierra Leone.
Sierra Minerals Holdings 1 shall have the right to construct and operate within or outside the mining area any infrastructure or facility required to conduct mining operations, including but not limited to structures, electric power systems, pipelines, communication systems, water supply systems and other similar installations.
Sierra Minerals Holdings 1 shall pay for the damages, loss or destruction of goods or property inflicted by Sierra Minerals Holdings 1. The compensation is based on the estimated monetary value of such damages, loss or destruction to the crops, buildings, trees or works on the land. The compensation for deprivation of the use and occupation of the land is already covered by the surface rent payable for the lawful occupier of the land.
The parties shall submit any dispute to binding arbitration before a single arbitrator selected by the parties. If parties cannot agree on an arbitrator, the arbitration should be selected by the London Court of International Arbitration (LCIA). Arbitration shall be conducted according to the rules of the LCIA, shall be in English and the arbitration hearings shall be held in London, England.
Sierra Minerals Holdings 1 shall be entitled to assign this contract, the lease or any rights, privileges or franchises according to the terms and conditions contained in the assigned document.
Confidential information means information that is confidential under applicable law, personal private information, confidential technical or proprietary business information, and Sierra Minerals Holdings 1's intellectual property. Confidential information shall be retained by the Government and Sierra Minerals Holdings 1 in strict confidence, and shall not be disclosed to a third party without the other party’s express written consent. The Government can disclose such information as required to protect the health, safety, and security of the citizens, but notification to Sierra Minerals Holdings 1 is still required.
Force majeure includes acts of God, war, insurrection, riot, civil commotion, tide, storm, tidal wave, flood, lightning, explosion, fire, earthquake and any other happening that the party couldn’t prevent or control. Sierra Minerals Holdings 1 shall notify the Government within 14 days in the event of force majeure. Failure to perform the contract as a result of force majeure shall not give rise to a claim by the other party, and the affected party should be given additional time to perform the obligations under the contract.