Mining development agreements are important contracts between a host government and the mining company that wants to mine in that country. They often supplement local law or provide concessions from laws that would otherwise discourage investment, but are important in balancing the needs of both parties.
Why are they important for mining companies?
Mining companies will want the agreement to provide:
- Assurance that they can convert exploration into a mining license in due course
- Certainty they can develop infrastructure or get operating permits without delays
- Guarantees against state expropriation
Governments, on the other hand, tend to want to see investment in country, as well as wider social and economic benefits, and will add provisions in the agreements to that effect.
In this video, Job Perry and Emma de Ronde also discuss taxation and how mining companies can often secure a number of tax concessions on their project. Companies will also want to have visibility as to what the tax position will be for the full life of the mine, which is why these agreements are also called stability agreements.
Download our detailed guide to help you navigate your mine development agreement, answering the common questions our clients regularly ask, such as:
- why tax concessions are requested;
- how you can secure the relevant permits; or
- how to ensure these agreements are enforceable.
How we can help
Norton Rose Fulbright has recently advised a consortium of mining companies to agree a model form of mine agreement in Egypt and has experience in mining countries around the world, helping investors or host countries to consider these arrangements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.