1. Model Mining Agreements and International Best Practice SADC Law Association Annual Conference – 23 August 2014 Alexander Keepin, Global Co-head of Mining Berwin Leighton Paisner, LLP

2. What is a Model Mining Agreement Long term contract for the exploration and development of a mining project Agreement between the state and a mining company Supplements legislation / mining code In 2011 IBA published the MMDA 1.0 a model mine development agreement www.blplaw.com Page 2 © Berwin Leighton Paisner

3. Parties to a Model Mining Agreement www.blplaw.com Page 3 © Berwin Leighton Paisner Role of the state State Mining company Local communities Free prior informed consent of local communities

4. Areas covered by Model Mining Agreements (clause references are to IBA MMDA 1.O) www.blplaw.com Page 4 © Berwin Leighton Paisner Framework to promote economic development of a project

5. Areas covered by Model Mining Agreements (clause references are to IBA MMDA 1.O) www.blplaw.com Page 5 © Berwin Leighton Paisner Framework to promote economic development of a project Legal framework State participation Fiscal regime Environmental Local content Development

6. Areas covered by Model Mining Agreements (clause references are to IBA MMDA I.O) www.blplaw.com Page 6 © Berwin Leighton Paisner Framework to promote economic development of a project Legal framework State participation Fiscal regime Environmental Local content Stabilisation 13 Disputes/ Arbitration 32 ABC10.4 Transparency 30 Free Carry Right to acquire Local ownership Annual rental3 Royalty 4 Taxation7 Customs Duties 5 Foreign currency 8.3 IFC/Equator10 Closure Obligations 26 Local content21 Employment16 Community development 22 Local Employment 24 Title2.3 Health programmes 23 Development Permitting2.5 Commencement Expenditure CPs Infrastructure access 17

7. Resource Nationalisation - areas of focus www.blplaw.com Page 7 © Berwin Leighton Paisner Legal framework State participation Fiscal regime Local content Free Carry Option to increase BBBEE Expropriation New Mining Codes Review of mining agreements Cancellation of contracts New royalty regime Corporate taxes Windfall taxes Import/export taxes Employ/train locals Local goods/services Local beneficiation

8. Recent criticisms of Model Mining agreements Inequality of bargaining power/experience Corruption / transparency Inequality of economic benefits Investor friendly www.blplaw.com Page 8 © Berwin Leighton Paisner

9. Future for Model Mining Agreements and International Best Practice MDAs/Legislation Role of the regional economic communities Understand parties objectives Focus on sharing of economic benefit with more flexibility Necessary for complex multi billion dollar developments and protection of the interests of all stakeholders www.blplaw.com Page 9 © Berwin Leighton Paisner

10. Model Mining Agreements and International Best Practice SADC Law Association Annual Conference – 23 August 2014 This document provides a general summary only and is not intended to be comprehensive. Specific legal advice should always be sought in relation to the particular facts of a given situation.