Co racr for Opg.titrg Mines in Nm-Res€rvdim &eas ARING AGREEDIIENT 蝗IINERAL PRODUCT10N S蝕 o l14_98-Iv MPSA N膜 ARING AGREEMENT(this 蝗IINERAL PRODUCT10N S蝕 This 雊S M雊 芿 LP鉣苭 L Ma葟 腅 :臧 詤T譔1鑬 顕芰 V裗 '腧 T蝕E REPUBLIC OF T蝕 for O9etaliflg Mines in Non_R€servatim Areas Contrad WHEREAS, the Contractor has, or has access to all the financing,technical competenc€, technology and environmental management skills required to promptly and eflectively carry out the objectives ofthis Agreement. NOW, THEREFORE, for and in consideration of the premises, the mutual covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as follows: SECTION I SCOPE 1.1 This Agreement is a Mineral Production Sharing Agreement entered into pu.ruun't to the provisions of the Act (R.A No 7942) and its Revised implementing Rules and Regulations The plmary purpose of this Agreement iJto provide for the sustainable development and commercial ut"ilization of t tiikel, Cobalt, Chromite and other mineral deposits existing within the Contract Area" with all necessary services, technology and financingtobefurnishedorarrangedforbytheContractorinaccordance within tie provisions of this Agreement The Contractor shall not, by virtue of this Agreement, acquire any title over the contract/Mining Area without prejudice to the acquisition by the contractor of the land/surface rights through any mode ofacquisition provided for by law' 1.2 The Contractor shall undertake and execute, for and on behalf of the Government, sustainable mining operations in accordance with the provisions oithis Agreement, and is hereby constituted and appointed' for ih. purpor" of this Agreement, as the exclusive entity to conduct mining operatiolls in the Contract Area. 1.3 During the term ofthis Agreement, the total value of production and sale of miierals derived from ihe mining operations contemplated herein shall be accounted for and divided between the Government and the Contractor in accordance with Section M hereof' SECTION II DEFINITIONS As used in this Agreement, the following words and terms , whether singular or plural' shall have the following respective meaning : 2.l"TheAct"referstoR.A.No.Tg42,otherwiseknownasthe'?hilippine Mining Act of 1995" 2.2 Agreement means this Mineral Production Sharing Agreement' 2.1 Associated Minerals mean other orevminerals which occur together with the PrinciPal ore/ mineral. 2.4 Bang*o Sentral means Bangko Sentral ng Pilipinas' means an estimate of expenditures to be made by Contractor in 25Budeet ffiE;;;;;il;. contemplated- hereunder to -accomplish the work ir.;#.i;, each particular period ^ l,/--7. for Op€ralhg Mines in Nm-Res6vatior Areas Contrad 2.6 Calendar Year or Year means a period of twelve (12) consecutive months ttu.ting *itf, the first day of January and ending on December 31, while "Caleidar Quarter" means a period of three consecutive months with the first calendar quarter starting with the first day of January' 2.7 Commercial Production means the production of suffrcient quantity of *inoul, to sustain economic viability of mining operations reckoned from the date of commercial operation as declared by the contractor or as stated in the feasibility study, whichever comes first. 2.g constitution or Philiooine constitution means the 1987 Constitution of tt"n"puuri.orthePhilippinesadoptedbytheConstitutionalConvention of 1986 on October 15, 1986 and ratified by the People ofthe Republic of the PhiliPPines on FebruarY 2, 1987 . 2.gContractAreameanstheareaonshoreoroffshoredelineatedunderthe MineralProductionSharingAgreementsubjecttotherelinquishment obligations of the Contractor and properly defined by latitude and longitude. 2.loContractYearmeansaperiodoftwelve(12)consecutivemonthscounted fromtheEffectiveDateofthisAgleementorfromtheanniversaryofsuch Effective Date. 2.11 contractor means RIO TUBA NICKEL MINING CORP.or its assignee or *igr*ofinterest,RioTubaNickelMining-Corporationunderthis Agrlement; Provided, That the assignment of any of such interest is ac-complished pursuant to the provision of the Revised Implementing Rules and Regulations (DAO No. 9640)' 2.12 Declaration of Minine Feasibility means a document proclaiming the p..*."" ,f **.als ln a specific site that are recoverable by socially acceptable, environmentally safe and economically sound methods specified in the Mine Development Plan' 2.13 Deoartment or DENR means the Department of Environment and Natural Resources. 2.14 Director means the Director of the Mines and Geosciences Bureau 2.15 Effective Date means the date of execution of this Agreement by- and b"t*""n the Contractor and the DENR Secretary on behalf of the Government. In case a Special Mines Permit had been availed of by the Contractor,theeffectivedateofthisAgreementshallbethedateof issuance of said Special Mines Permit' 2.16 Environment means all facets of man's surroundings: physical, Iofogi.uf, *ttt etic, cultural, economic, historic, institutional' and social' 2.77 Exploration means searching or prospecting for mineral resources by -alri[ing, geochemical surveys, remote sensing' test pitting' ffitogi*k"ophysical, sinking, tunneling, or any other means for the i."r.tirg, shaft- extent, quality' and quantity of purpor""of detefrining the ex'iitence, profit' mineral resources and the feasibility of mining them for 218 E豞 Contmd for Op€rating Mines in Nm-Resavatioo A,eas periods but not to exceed a total term of six (6) years: Provided That the bontractor has complied with all the requirements of the Revised Implementing Rules and Regulations. 2.lg Force Maieure means acts or circumstances beyond the reasonable control or tt " coii.o"tor including but not limited to, war, rebellion, insurrection, riots, civil disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemics' storm, flood, or other adverse weather conditions, explosion' "a.thquake, action by the Government or by any of its instrumentality or fire, adverse public enemy and any cause as subdivision thereof, Act of God or any herein described over which the affeaed party has no reasonable control' 2.20 Foreign Exchange means any culrency other than the currency of the R"p,rbtt" "f tt" Philippines acceptable to the Government and the Contractor. 2.21 Government means the Government of the Republic of the Philippines or any of its agencies and instrumentalities' 2.22 Gross Outout means the actual market value of the minerals or mineral pt"d*tt fr". each mine or mineral land operated as a separate entity' without any deduction for mining, processing, refining, transporting' handling,marketing,oranyotherexpenses:Prwided,Thatiftheminerals or -ineial producti u." *id o, consigned abroad by the contractor undcr C.I.F. terms, the actual cost of ocean freight and insurance shall be deducted:Providedfurther,Thatinthecaseofmineralconcentrateswhich arenottradedincommodityexchangesinthePhilippinesorabroadsuch as copper concentrate, the actual market value. shall be the world price qrotuiion of the refined mineral products contained thereof prevailing in tire said commodity exchanges, after deducting the smelting 'refining' treatment, insurance, transportation and other charges- incurred in .the p.*at, "f converting mineral concentrates into refined metal traded in those commoditY exchanges. 2.23 Mine Develooment refers to work undertaken to prepare an ore body or u .in"*f A$otit for mining, including the construction of necessary infrastructure and related facilities' 2.24 Minerals mean all naturally occurring inorganic substances in solid' gu, or any intermediaie state excluding energy materials such as nq=-"ia, materials and geothermal energy' coal, peiroleunq natural gas, radioactive 2.25 Mineral Products mean materials derived from mineral oreVrocks and !i-pu..ainto..,tetablestatebymetallurgicalprocesseswhichinclude ileneficiation, cyanidation, leac-hing, smelting' calcination and other similar Processes 2.26 Mining Area means that portion of the C,ontract Area identified by the Contractor as defined and delineated in a Survey Plan duly approved by theDirector/ConcemedRegionaloffrcesforpurposesofdevelopment and/or utilization and sites for support facilities' 227 Mining Operations means mining activities l1]-"^Y" exploration, ronmental impact aSSesSment, idy, en銈 蹏鎪 雊 醔郮 鋓 賋 靊 限 腂 cettn3andtterehabl膡 nettp葟 1,酏 躏 觃 躧 荴 膍 腧 4 for Operating Mines in Non-Resewali(,l *eas Codrad 2.28 Notice means notice in writing, or by telex or by telecopy (authenticated by**"'backorconfirmationreceived)addressedorsentasprovidedin Section 16.2 of this Agreement. 2.2g Ore means naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit' 2.3O Pollution means any alteration of the physical, chemical and/or biological ptop".ti"t ofany water, air and/or land resources of the Philippines, or any iit.t.rg. thereto of any liquid, gaseous or solid wastes or any production of unneicessary noise or any emission of objectionable odor, as will or is likely to create or render such water, air, and land resources harmful' tletrimental or injurious to public health, safety or welfare or which will adversely affect their utilization for domestic, commercial, industrial' agricultural, recreational or other legitimate purposes 2.31 Secretary means the Secretary of the Department of Environment and Natural Resources. 2.32 $1419 means the Republic of the Philippines' 2.33 Work Program means a document which presents the plan of major .iningpp".utions and the corresponding expenditures ofthe Contractor in its cointract Area during a given period of time, including the plan and expenditures for develJpment of host and neighboring communities and of local geoscience and mineral technology, as submitted and approved in accordanlce with the Revised Implementing Rules and Regulations' SECTION III TERM OF AGREEMENT 3.1 This Agreement shall have a term of twenty-five (25) years from Effective Date, ;d may be renewed thereafter for another term not exceeding twenty-five (25) years. The renewal of this Agreement' as well as the changes in the terms and conditions, shall be upon mutual consent by the parti;. In the event the Government decides to allow mining operations ihereufte. by other Contractor, this must be through comp€titiv€ public tiaaing. AIier due publication of notice, the contractor shall have the .ight io equal the highest bid upon reimbursement of all reasonable expenses ofthe highest bidder. SECTION IV CONTRACT AREA 4.1 Size, Shape, and Location of Contract Area This Agreement covers a totalareaofNineHundredNinetyhectares(990has.),situatedat nu.unguy Rio Tubq Bataraza, eahy11 and- bounded by the following g""giipt i""f coordinates ( ANNEX 'ts- - 1:50'000 Location Map/Sketch Plan): LONGITUDE LATITUDE POINT 芸 艐 11724'595 腃 荓 8 33'14680P' 苂 膌11724'595 艓 莋 833'24446'' 葉  腁腁 陭 腁 Conttacr for Op€rsting Mines in N(,l-Reservation Areas 艒 11724'49741" 833'24446'' 艓 11724'49741'' 833'43977'' 艔 腌11724'39932'' 833'43977'' 艕 腌11724'39932'' 834'03508'' 艖 -834'03508" 11724'30123" 艗 11724'30123'' 834'13274" 艘 11724'39932'' 834'13274'' 艐艏 11724'39932'' 834'42571" 艧 腌11724'49741" 834'42571" 11724'49741' 834'52337" 12 11724'59550'' 834'52337'' 13 11724'59550'' _835'02102'' 14 11724'20319'' 835'02102'' 15 11724'20319'' 834'52337'' 16 11723'50880'' 834'52337'' 17 11723'50880" _835'02102" 18 11723'41067'' 835'02102'' 19 艑腂 11723'41067'' 835'31399'' 艑腝 11723'01015'' 835'31399'' 艑艑 11723'01815" 835'50930'' 艑艒 11723'21441'' 835'50930'' 艑艓 11723'21441" 836'10461'' V 艑艔 11723'11628'' 836'10461" 艑艕 11723'11628'' 836'20227'' 艑艖 11723'01815'' 836'20227'' 艑艗 艓 11723'01815'' 836'29993" 艑艘 11722'52002'' 836'29993'' 艒艏 11722'52002'' 836'39759'' 艒艐 11723'21441'' 836'39759'' 艒艑 11723'21441'' 836'29993'' 艒艒 11723'31254" 836'29993'' 艒艓 11723'31 254'' 835'41165'' 艒艔 11723'41067'' 835'41 165'' 艒艕 11724'39932'' 835'31399'' 艒艖 11724'39932'' 835'21633'' 艒艗 11725'19184" 835'21633'' 艒艘 11725'19184 835'02102'' 艓艏 11725'28997'' 835'02102'' 艓腝 11725'28997'' 834'52337'' 艓艑 11725'38810'' 834'52337'' 艓艒 11725'38810'' 834'42571'' 艓艓 11725'48623" 834'42571'' 艓艔 11725'48623'' 834'23040" 艓艕 11725'58436'' 834'23040'' 艓艖 11725'58436'' 833'53743" 艓艗 11725'48623'' 833'53743'' 艓艘 11725'48623'' 833'43977'' 艔腂 11725'28997'' 833'43977'' 艔腝 11725'28997'' 833'24446" 艔艑 11725'19184" 833'24446" 艔艒 184'' 11725'19腁 833'14680" 詏 6 for Operating Mines in Non_Res€rvatial Areas Contrad SECTION V OPERATING PERIOD - The Contractor shall continue development and commercial 51 Timetable registration of this Agreement' utilization immediately upon approval and The Contractor shall conduct mining operations and other activities for the duration of the Operating Period in accordance with the duly approved Work Program and Budget (Annex "C") and Environmental Compliance Certificate (Annex 'D") and any modifications thereof shall be approved by the Secretary. Failure by the Contractor to start production within the period shall be considered a substantial breach ofthe Agreement' Area - The final Contract/Mining Area shall 52Final Contract/Mining not be more than five ihousand hectares (5,000 has.) for metallic minerals and two thousand hectares (2,000 has ) for non-metallic minerals The Director, with the approval of the Secretary, may allow a Contractor to hold a larger mining area depending upon the nature ofthe deposit subject to technical verification and evaluation by the Bureau . 菌 芤 莊 艏 Commercial Operation Work Program and Budget - During the Operating Period, the Contractor shall submit to the Secretary through the negionaf Director, copy fumished the Director, Work Programs and euigets covering a period of three (3) years each which shall be subriitted not later tha-n thirty (30) days before the expiration ofthe period covered by the previous Work Programs. The amount to be spent by the Contractor during the Operating Period under the term of this Agreement shall be in the ag$egate ofnot less than that hereinafter specified for each ofthe Contract Years, as follows' First Contract Year P 254 Million Second Contact Year P 257 Mllion Third Contract Year P 281 Million and Modification of Facilities - The Contractor may make 54Expansion e*iansions, modifications, improvements, and replacements of the mining facilities and may add new facilities as the Contractor may consider necessary for the tperarions, provided such plans shall be embodied in an appropriate Work Program approved by the Secretary' 腥菌 膌膌 Reporting a) Quarterly Reports - Beginning with the first Calendar Quarter ' fittowing the approval of ihis Agreement, the Contractor shall submit' within th-irty 1:O) days after the end of each Calendar Quarter, to the Secretary througir thi Regional Director, copy furnished the Director' a Quarterly Report stating the tonnage of production- in terms of ores' and their lonesponding grades and other types of "oicentrat"s, destination of sales or exports and to whom sold; products; value, terms of sales and exPenditures' b) Annual Reports - During the Operating Period, the^Contractor shall submit, within sixty (60) days from the end of each Calendar Year' to ii"- S""tJu.y thougi the Regional Director, copy-turnished the Director, an Annual Report indicating in suffrcient dttll- L 7 Contrad lbr Opedting Mirles in No-Res€rvaticn Areas b.l) The total tonnage of ore reserves whether proven, probable, or inferred, the total tonnage of ores, kind by kind, broken down between tonnage mined, tonnages transported from the minesite and their corresponding destination, tonnages stockpiled in the mine and elsewhere in the Philippines, tonnages sold or committed for export (whether actually shipped from the Philippines or not), tonnages actually shipped from the Philippines (with full details as to purchaser, destination and terms of sale), and if known to the -Contractor, tonnages refined, processed or manufactured in the Philippines with full specifications as to the intermediate products, by-products or final products and of the terms at which they were disposed; b.2) Work accomplished and work in progress at the end of the year in question with respect to all the installations and facilities related to the utilization progranL including the investment actually made or committed; b.3) Profile of work force, including management and staff, stating particularly their nationalities, and for Filipinos, their place of origin (i.e., barangay, tow4 province, region ); and b.4) Ownership ofthe Contractor, particularly with respect to nationality' SECT10N VI FISCAL REGIDIIE 腜 General Principle Contrad for Operating Mines in Non_Res€ffation Ar€as For purposes of determining the amount of the herein government share, the Conira"tor shall strictly comply with the auditing and accounting requirements prescribed under existing laws and regulations' The government share shall be allocated in accordance with Sections 290 and igz ofR. A. No. 7160, otherwise known as "The Local Government Code of 1991". of Sales - The Contractor shall endeavor to obtain the best 65Pricing achiev-able price for its production and pay the lowest_achievable marketing commissions and related fees. contractor shall seek to strike a balance between long-term sales comparable to policies followed by independent producers in the international mining industry. The Contractor shall likewise seek a balanced distribution among consumers. Insofar as sales to Contractor's affiliates are concerned, prices shall be at arm's lengh standard and competing offers for large scale and long-term contracts shall be procured. The Bureau shall be furnished a copy of ihe said Sales Agreemeni subject to confidentiality between the Bureau and the Contractor. Minerals - If Minerals, other than Nickel, Cobalt and Chromite 66Associated are discovered in commercial quantities in the Contract Area, the value thereof shall be added to the value of the principal mineral in computing the share of the government. SECTION VII WORK PROGRAMS 71SubmissiontoGovemment-Withintheperiodsstatedherein'the Contractor shall prepare and submit to the Secretary through the negionai Director, copy furnished the Director' a Work ".r..-"4 Jorresponding Budget for. the Area stating the P;";; and .Contract proposes to minlng operations and expenditures which the Contractor carry iut^during the period covered with the details and particulars set forth elsewhereln this Agreement or in the supporting documents' 72Govemment'sExaminationandRevisionintheWorkProgram-Should the Government wish to propose a revision to a certain specific feature- in iir" W.* p.ogtam or Budget, it shatl within thirty (30) days after receipl tiereof prouid'e a Notice ti the Contractor specifuing in reasonable detail its reasons therefore. Promptly thereafter, the Govemment and Contractor will meet and endeavor io- ugr"t on the revision proposed by .the Govemment. In any event, any portion of said Work Program or Budget as to which the Government rtrati fal to notiry the Contraclor of proposed revision shall insofar as possible be carried out as prescribed herein lf the Gou"-.n"nt should faii within sixty (60) days from receipt thereof to C"ro*tor of the proposed- revisio-ns, the Work Program and ""1ify p."p"."d by the Contractor shall be deemed to be approved i"ad", Contractor's Changes in the Work Program - - It is--recognized by the Cou.**.nt and th'e Contractor that the details of any Work Program may Cornract f'or Opef,aling Mines in Nfi_Res€rvation Areas variance of at least twenty percentum (20%) shall be subject to the approval of the Secretary. approval of a proposed Work Program and Budget will 74 The Government's not be reasonably withheld. SECTION VIIT ENVIRONMENTAL PROTECTION, MINE SAFETYANDHEALTE shall manage its mining operations in a technically, 81The Contractor financially, socially, culturally and environmentally responsible manner to achievi the sustainable development objectives and responsibilities as provided for under the revised implementing rules and regulations of the Act. shall prepare a plan of mining so that its damage to the 82The Contractor possible, control of pollution environment will be minimal. To the extent and the transformation of the mined-out areas or materials into economically and socially productive forms must be done simultaneously with mining. V Compliance Certificate (ECC) shall be secured first by 83An Environmental the Contractor prior to the conduct of any mine development work and construction of production facilities in the Contract Area shall submit within thirty (30) Calendar days after the 84The Contractor issuance and receipt of the ECC, an Environmental Protection and Enhancement Program (EPEP) using MGB Form No. 16-2 covering all areas to be affected by mining development, utilization and processing under this Agreement. The Contractor shall allocate for its initial environment-ielated capital expenditures approximately ten percent (107o) of the total project cost or in such amount depending on the environment/geological condition, nature and scale of operations and technology to be employed in the Contract Area. shall submit within thirty (30) days prior to the beginning 85The Contractor of every calendar year an Annual Environmental Protection and Enhanc#ent Program (AEPEP) using MGB Form 16-3, which shall be based on the approved EPEP . The AEPEP shall be implemented during the year for which it was submitted. To implement its AEPEP, the Coniractor shall allocate annually tkee to five percent (3%-5%) of its direct mining and milling cost depending on the environment/geologic condition, nalture and scali of operations and technology employed in the Contract Area. shall establish a Mine Rehabilitation Fund (MRF) based 86The Contractor on the financial requirements of the approved EPEP as a reasonable environmental deposit to ensure satisfactory compliance with the commitments/strategies of the EPEP/AEPEP and availability of funds for the performance of-the EPEP/AEPEP during the specific project phase The'MRF shall be deposited as Trust Fund in a government depository bankandshallbeusedforphysicalandsocialrehabilitationofareag 苉av n苊eSi苨 鱝 Prl访 i裻 鑑 鏤 誂 释 :韭 車靛 10 Corl1rad for Operating Mhes in Non_Res€rvation Arcas 8.7 The Contractor shall set-up mitigating measures such as mine waste and mill tailings disposal system, mine rehabilitation or plan, water quality monitoring, etc. to minimize land degradation, air and water pollution, acid rock drainage and changes in hydrogeology. 8.8 The Contractor shall set-up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement and monitor its approved EPEP. g.g The contractor shall be responsible in the monitoring of environmental safety and health conditions in the Contract Area and shall strictly comply with all the rules and regulations embodied under Mines Administrative Order No. 51, Series of 1991, otherwise known as the'?'evised Mine Safety Rules and Regulations". g.10 The contractor shall be responsible for the submission of a final mine rehabilitation and/or decommissioning plans including its financial requirements and incorporating the details and particulars set forth in the revised implementing rules and regulations of the Act. SECTION D( RIGHTS AND OBLIGATIONS OF THE PARTIES 9.1 Obligations ofthe Contractor: a) To exclusively conduct sustainable mining operations within,the Contract Area in accordance with the provisions of the Act and its revised implementing rules and regulations. b) To construct and operate any facilities specified under the Mineral Agreement or approved Work Program' c) To determine the mining and treatment process to be utilized in the mining oPerations; d) To extract, remove, use and dispose ofany tailings as authorized by an approved Work Program; e) To secure all permits necessary or desirable for the purpose of mining oPerations; 0 To keep accurate technical records about the mining operations as well as financial and marketing accounts and make them available to Government representatives authorized by the Director for the purpose of assessing the performance and compliance of the bont.u"tot with ttri terms of this Agreement' Authorized representatives of other Government Agencies may also have access to such accounts in accordance with existing Laws, Rules and Regulations; g) To furnish the Bureau all the data and information gathered on the ContractAreaandthatallthebooksofaccountsandrecordsshallbe h) TO al10W access to Govemment du賜oPen for insPection:ng for Opdating Mines in Nm_Res€rvstim Ar€as Conlract purposes of monitoring compliance with the terms of this Agreement; i) To hold the Govemment free and harmless from all claims and accounts of all kinds, as well as demands and actions arising out of the accidents or injuries to persons or properties caused by Mining Operations of the Contractor and indemnify the Government for any expenses or cost incurred by the Govemment by reason of any such claims accounts, demands or actions. i) In the development of the community, j l) To recognize and respect the rights, customs and traditions of indigenous tribal communities over their ancestral lands and to allo-ate royalty payment of not less than one percent (17o) of the value ofthe gross output ofthe mineral(s) sold; j.2) To coordinate with proper authorities in the development of the mining community and for those living in the host and neighboring communities through social infrastructure, livelihood programs, education, water, electricity and medical services Where traditional self-sustaining income and the community activities are identified to be present, the Contraclor shall assist in the preservation and/or enhancement of such activities; j 3) To allot annually a minimum of one percent (l%) of the direct mining and milling costs necessary to implement the activities to be undertaken for the development of technology and the host and neighboring communities. Expenses for community development maybe charged against the royalty payment of one percent ( I %) of the gross output allocated to the indigenous cultural community; j4) To give preference to Filipino citizens, who have established domicile in the neighboring communities, in the hiring of personnel for its mining operations. If necessary skills and expertise are currently not available, the Contractor must 膌 腜 immediately prepare and undertake a training and recruitment prognm at its expense; k) In the development of Mining Technology and Geosciences: k 1) To produce, in the course of its operations, geological, ' geopilysical, geochemical and other types of maps and reports that -appropriate in scale and in format and substance which are are with the internationally accepted standards and consiitent be made available to the scientific practices. Such maps shall cost effective forms' community in the most convenient and of subject to the condition that the Contractor may delay release saii information for a reasonable period of time which shall not exceed three (3) Years; k.2)Tosystematicallykeepthedatageneratedfromthecontract/mining area such u. "o."t, assays and other related information' including economicandfinancialdataandmakethemaccessibletostudents' researchersandotherpersonsresponsiblefordevelopingmining' geoscience and procesiing technology subject to the condition that ihe Cont actor'maV delaV release of data to th,e science 6nd >F- lh/ & t2\ \ Contrad for Ope.atiflg Mines in Non-Resavation Areas technology community within a reasonable period of time which shall not exceed three (3) Years; k 3) To transfer to the Govemment or local mining company the appropriate technology it may adapt in the exploration, development and commercial utilization of the minerals in the Contract Area; k 4) To allocate research and development budget for the advancement of mining technology and geosciences in coordination with Bureau, Research Institutions, Academe, etc. ; k.5) To replicate data, maps and reports cited in (k.1) and (k.2) and fumish the Bureau for archiving and systematic safekeeping which shall be made available to the science and technology community for conducting research and undertaking other activities which contribute to the development of mining, geoscience and processing technology and the corresponding national pool of manpower talents: provided, however, that the release of data, maps and the like shall be similarly constrained in accordance with (k. 1) and (k.2) above; l) To incorporate in the mine project feasibility study the planned expenditures necessary to implement all the plans and programs set forth in this Agreement. m) To pay all other taxes and fees mandated by existing laws, rules and regulations; 9.2 Rights of the Contractor The Contractor shall have the right: a) To conduct mining operations within the confines of the Contract Area in accordance with the terms and conditions hereof and that it shall not interfere with the rights of other Contractors/Lessees/ OperatorslPermittees; b) Of possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easement rights; c) To use and have access to all declassified geological, geophysical, drilling, production and other data relevant to the mining operations; d) To sell, assign, transfer, convey or otherwise dispose of all its rights, interests and obligations under the Agreement subject to the approval of the Govemment; e) Contrad for Op€rating Mines in Non-Res€rvati(,I Ar€as understudies shall be undertaken. The alien employment shall be limited to technologies requiring highly specialized training and experience subject to the required approval under existing laws, rules and regulations; 0 To enjoy easement rights and use of timber, water and other natural resources in the Contract Area subject to pertinent laws, rules and regulations and the rights ofthird parties; g) Of repatriation of capital and remittance of profits, dividends and interest on loans, subject to existing laws and Bangko Sentral rules and regulations; and h) To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with existing laws and regulations; 9.3 Obligation ofthe Govemment The Government shall: a) Ensure that the Contractor has the Government full cooperation in the exercise ofthe rights granted to it under this Agreement; b) Use its best efforts to ensure the timely issuance ofnecessary permits and similar authorizing documents for use of surface of the Contract Area; and c) To cooperate if Contractor seeks to obtain financing contemplated herein from banks or other financial institutions, provided, that such financing arrangements will in no event reduce Contractor's obligation on Government rights hereunder. SECTION X ASSETS AND EQUIPMENT V 10.1 Contractor shall acquire for the Mining Operations only such assets that are reasonably estimated to be required in carrying out such Mining Operations. 10.2 All materials, equipment, plant and other installations erected or placed on the Contract Area of a movable nature by the Contractor shall remain the property ofthe Contractor and shall have the right to remove and re-export iucir materials and equipment, plant and other installations from the Philippines, subject to existing rules and regulations. In case of cessation of Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Contractor shall have a period of one (1) year from the time of cessation within which to remove its improvements; otherwise, all social infrastructures and facilities shall be tumed over or donated tax free to the proper government authorities, national or local, to ensure that said infrastructures and facilities are continuously maintained 雊臥 雊 鏊 鹂苟 蹫 邃 蝖 苪 鞂 "蹫 腧 荼 .荧 14 Confact for Operding Mines in Non-Reservation Areas SECTION XI EMPLOYMENT AND TRAINING OT' PEILIPPINE PERSONIITEL ll.l The Contractor agroes to employ, to the extent possiblg qualified Filipino personnel in all types of mining operations for which they are qualified; and after Commercial Production commences shall; in consultation and with consent of the Government, prepare and undertake an extensive training programme zuitable to Filipino nationals in all levels of employment. The objective of said programme shall be to reach within the time table set forth below the following targets of 'Tilipinization". Un,鏺lled Skilled Clerical Professional Management Year l 1000/0 100% 1膇 %100% 100% Year 3 100% 100% 100% 100% 100% Year 5 100% 100% 100%100% 100% Year 7 100% 100% 100% lllll%100% Yoar10 100% 100% 100% 100% lClll% Yoar15 100% 100% 100% 100% 100% 艥 ll.2 Cost and expenses of training such Filipino personnel and the Contractor's own 腪 employees shall be included in the Operating Expenses. I1.3 The Contractor shall not discriminate on the basis of gender and shall respect the right of women workers to participate in policy and decision-making processes affecting their rights and benefits. XII SECTION ARBITRATION l2.l The Government and the Contractor shall consult with each other in good faith and shall exhaust all available remedies to settle any and all disputes or disagrecments arising out of or relating to the validity, interpretetions, enforceability, or performance of this Agreement before reulting to arbitration as provided for in Section 12.2 below. 12.2 Any disogreement or dispute which can not be settled amicably within a period of one (l) year from the time the issue was raised by a Party shall be settled by a tribunal of three (3) arbitrators, one to be appointed by the Contractor, another to be appointed by the Secretary. The first two (2) appointed arbitrators shall continue to consider names of qualified persons until egreement on a mutually acoeptable Chairman of the hibunal is selected. Such arbitration shall be initiated and conducted pursuant to Republio Act No.. 876, othenvise known as the "Arbitration Lau/'. In any event, the a$itration shall be conducted applying the substantive laws of the Republic of the Philippines. 12.3 Each party shall pay fifty per centum (50%) ofthe fees and expenses of the Arbitrators and the costs ofarbitration. Each party shall pay its own costs and attomey's fee. SEmON钨 Cootrae for Op€rating Mines in Ncn_Reselalicir Areas 13.2 This Agreement terminates or may be terminated for the following causes: (a) expiration of its term whether original or renewal; (b) withdrawal from the agreement by the Contractor; (c) violation by the Contractor of the Agreement's terms and conditions; (d) failure to pay taxes, fees/or charges or financial obligations for two(2) consecutive years; (e) false statement or omission of facts by the Contraclor; and (f) any other cause or reason provided under the Act and its Implementing Rules and Regulations, or any other relevant laws and regulations. 13.3 All statements made in this Agreement shall be considered as conditions and essential parts hereof, and any falsehood in said statements or omission of facts which may alter, change or affect substantially the fact set forth in said statements shall be a ground for its revocation and termination. 13.4 The Contractor may, by giving due notice at any time during the term of this agreement, apply for its cancellation due to causes which, in the opinion of the Contractor, render continued mining operation no longer feasible or viable. In this case, the Secretary shall decide on the application within thirty (30) days from notice, provided that the Contractor has met all the financial, fiscal and legal obligations. V 13.5 No delay or omissions or course of dealing by the Government shall impair any of its rights under this Agreement, except in the case of a written waiver, The Government's right to seek recourse and relief by all other means shall not be construed as a waiver of any succeeding or other default unless the contrary intention is reduced in writing and signed by the party authorized to exercise the waiver. 13.6 In case of termination, the Contractor shall pay all the fees and other liabilities due up to the end of the year in which the termination becomes effective. The Contractor shall immediately carry out the restoration of the Contract Area in accordance with good mining industry practice' 13.7 The withdrawal of the contractor from the Mineral Agreement shall not release it from any and all financial, environmental, legal and fiscal obligaions under this Agreement. 13.g The following acts or omissiorl inter alia shall constitute breach of contract upon which the Government may exercise its right to terminate the contract: a) Failure of the Contractor -urithout valid reason to commence Commercial Production within the period prescribed; and b) Failure ofthe Contractor to conduct mining operations and other activities in accordance with the approved Work Programs and/or any modification thereof as approved by the Secretary. may suspend and cancel tax incentives and credits if the 139The Govemment fails to abrdqby the terms and conditions of said incentivesand ~~~~腝 contractor y腝 荾 襶 c鞎 膍 1鎟荧 荦 腌 艏 Cornrad for Opetding Mifles in Nofl-Res€rvation Ar€as SECTION XIv OTHER PROYISIONS l4.l Any terms and conditions resulting from repeal or amendment of any existing laws or regulation or from the enactment of a law, regulation or administrative order shall be considered a part ofthis agreement. 14.2 Notice All notices, demands and other communications required or permitted hereunder shall be made in writing or by telex or telecopy and shall be deemed to have been duly given in the case of telex or telecopy notice if answered back or confirmation received, or if delivered by hand upon receipt or ten days after being deposited in the mail, airmail postage prepaid and addressed as follows: If to the Government: TID SECRETARY Department of Environment and Natural Resources DENR Building , VisaYas Avenue Dilimaq Quezon City Ifto the Contractor : TEE PRESIDENT Rio Tuba Nickel Mining CorP. 2F Solid Mills Bldg. De la Rosa ,cor. Adelantado sts. Legazpi Y illage, Makati CitY Either party may substitute or change such address on notice thereof to the other party 14.3 Governing Law This Agreement and the relation between the parties hereto shall be gorc*"-d by and construed in accordance with the laws of the Republic of the lhilippines. The Contractor hereby agrees and obliges itself to comply with tha provisions of the Act, its knplementing Rules and Regulations and other relevant laws and regulations. 14.4 Suspension of Obligation a) Any failure or delay on the part of any party in the performance of its ' obligation or duties hereunder shall be excused to the extent attributable to Force Majeure. b) If Mining Operations are delayed, curtailed or prevented by such Force ' Majeureiauies, then the time for enjoying the rights and carrying out the obligations thereby affected, the term of this Agreement and all rights and oblilations hereunder shall be extended for a period equal to the period involved. C) Contract for Operating Mines in Nqr-Reservation Areas the expected duration thereof, and its anticipated effect on the Party expected to perform and shall use its efforts to remedy such delay, except thit neither Party shall be under any obligation to settle a labor dispute. 14.5 Amendments This Agreement shall not be annulled, amended or modified in any respect except by mutual consent in writing of the herein parties. IN WITNESS W蝕 Contrad for Op€r.ling Min€s in Nm-Ressvdion Areas ACKNOWLEDGEPIENT k苨 芢 腧 :ss 赢 驢  躯 腣  鑍 腒 腁 at 膌 on 荏 io Certificate No. 0110 issued 莋 -!.bA--