Faculty of Law
Assignment IV
Course Code: LPML 3870
Course Name: Mining Law
Course Lecturer: Dr T.V Warikandwa
Student Name: Student Number:
Emmanuella O Omoregie 201703637
Jeripi Mbaeva 201709225
Mark D Dyakugha 201704367
Penouua V.K Katjiukua 201703957
Tuaningapara V Tjivikua 201611495
Due Date: 30 September 2020
SCHEDULE
ARRANGEMENT OF CLAUSES
Clause
Definitions ........................................................................................................... 4
Ownership of Mineral Rights/ Licences ............................................................ 4
Duration of Exploration Licence ........................................................................ 5
Tenure Security ................................................................................................... 5
Employment and Training .................................................................................. 5
Development of the Community ........................................................................ 6
Environmental Protection .................................................................................. 6
Mine Closure ....................................................................................................... 7
Revenue and Royalties ....................................................................................... 7
Tax........................................................................................................................ 8
Stabilization ......................................................................................................... 8
Contingency Plan and Emergencies ................................................................. 9
Financial Records ............................................................................................... 9
Confidentiality of Data ........................................................................................ 9
Suspension and Termination of Contracts and Penalties ............................. 10
Responsibility and Liability ............................................................................. 11
Force Majeure.................................................................................................... 11
Renunciation of Rights ..................................................................................... 12
Disputes ............................................................................................................. 12
Applicable Laws ................................................................................................ 12
Disclaimer .......................................................................................................... 12
MEMORANDUM OF AGREEMENT
FOR PROSPECTING OR MINING ACTIVITIES
Agreement in terms of Section 52 of Act No. 33 of 1992: Minerals (Prospecting
and Mining) Act, 1992(hereinafter referred to as “the Act”)
between
________________________________________________________
(hereinafter referred to as “the Owner” or “Lessee” as defined in the Act)
and
_____________________________________________________________
(hereinafter referred to as “the Company” or “Miner”, being the holder of a
non-exclusive prospecting licence and/or mineral licence)
in respect of
Farm(s)/State land:
___________________________________________________
(hereinafter referred to as “the Property”)
situated in the ____________________________________________ District;
____________________________________________ Region
Clause 1
Definitions
1.1. In this Contract, unless the context indicates otherwise:
“Commissioner” means the mining commissioner.
“Environment” includes the natural environment that is the land, water, all organic and
inorganic material and all living organisms and the human environment that is the
landscape and natural, cultural, historical, aesthetic, economic and social heritage and
values.
“Minerals” means any substance, whether in solid, liquid or gaseous form, occurring
naturally in, on or under any land and having been formed by, or subjected to a
geological process.
“Mineral licence” means a reconnaissance licence, an exclusive prospecting licence,
a mining licence or mineral deposit retention licence and includes and includes the
renewal of any such licence.
“Minister” means the Minister of Mines and Energy
“The Act” for the purposes of this agreement is explicitly the Minerals (Prospecting and
Mining) Act 33 of 1992.
Clause 2
Ownership of Mineral Rights/ Licences
2.1. Subject to article 100 of the Constitution of the Republic of Namibia, land, water
and natural resources below and above the surface of the land and in the
continental shelf and within the territorial waters and the exclusive economic
zone of Namibia shall belong to the State, if they are not otherwise lawfully
owned.
2.2. Subject to section 46 of the Act, a mineral licence shall not be granted or
transferred or any interest in such mineral licence be granted, ceded or
assignment to any person other than a company, and a Namibian citizen who
has reached the age of 18 years and who, in the opinion of the Minister, is a fit
and proper person to hold such licence- and no person other than such person
shall be joined as a joint holder of any such mineral licence or interest.
Clause 3
Duration of Exploration Licence
3.1. This agreement shall commence on the date of signature by the Owner
provided that the Company or Miner is in possession of a valid non-exclusive
prospecting licence and/or mineral licence.
3.2. This agreement shall remain in force for a duration of twenty-five (25) years or
for the life of the mine, or in the event the Company furnishes in writing a notice
of closure, to the Minister within a reasonable time.
Clause 4
Tenure Security
4.1. The holder of the exploration licence is required to prove the existence of the
mineral to such a quantity that is deemed satisfactory and mineable to a
profitable basis.
4.2. The government cannot reject the renewal of this contract based on failure to
comply with the Act unless the holder has been informed of such intention to
reject the renewal of contract and has been given a layout of the contravention
and granted an opportunity to remedy such contravention.
Clause 5
Employment and Training
5.1. In carrying out Mining Operations the Company shall, subject to section 50(b)
the Act, employ a minimum of 80% of Namibian citizens who possess appropriate
qualification, expertise and experience for the purpose of the operations to be
carried out in terms of such mineral licence.
5.2. The Company shall, subject to section 50(c) of the Act, carry out training
programmes in order to encourage and promote the development of Namibian
citizens employed by such holder.
5.3. The Company shall, subject to section 50(d) of Act, with due regard to the need
to ensure technical and economic efficiency, make use of products or equipment
manufactured or produced, and services available, within Namibia.
5.4. The Company shall, subject to section 50(e), corporate with other persons
involved in the mining industry in order to enable such citizens to develop skills
and technology to render services in the interest of that industry in Namibia.
Clause 6
Development of the Community
6.1. The Company is hereby obliged to contribute to the community to which their
activities affect the most thus their immediate community and towards Namibia
as a whole.
6.2. The Company shall undertake every year to make a donation to the local
schools in its nearest surroundings for the purpose of improving education for
the youth of Namibia.
6.3. Subject to section 3(2)(c) of the Environmental Management Act 7 of 2007,
community involvement in natural resources management and the sharing of
benefits arising from the use of the resources, must be promoted and facilitated.
Clause 7
Environmental Protection
7.1. Subject to section 27 of the Environmental Management Act 7 of 2007, various
activities may not be undertaken without an environmental clearance
certificate, including resource removal.
7.2. Subject to section 50(f) of the Act, the Company shall prepare in such form as
may be determined in writing by the Commissioner for the approval of the
Commissioner-
i. An environmental impact assessment indicating the extent of any
pollution the environment before any mining operations are being
carried out an estimate of any pollution, if any, likely to be caused by
such mining operation,
ii. If any pollution is likely to be caused, an environmental management
plan indicating the proposed steps to be taken in order to minimize or
prevent to the satisfaction of the commissioner any pollution of the
environment in consequence of any mining operations carried on by
virtue of the Company
7.3. Subject to the Act, the Company shall undertake measures to ensure the
protection of the environment at all stages of the mineral exploitation process.
7.4. Subject to section 130(1) of the Act, when in to course of any mining operation
carried on under any mineral licence, any mineral or group of minerals is
spilled in the sea or on land or in any water on or under the surface of any
land or the sea or such land or water in, on or under land, is endangered or
destroyed or any damage or loss is caused to any person, including the State,
by such spilling or pollution, the Company shall forthwith-
i. Report such spilling, pollution, loss or damage to the Minister,
ii. Take at the Company’s own costs all such steps as may be
necessary in accordance with good reconnaissance practices,
good prospecting practices or good mining practices or
otherwise as may be necessary to remedy such spilling,
pollution, loss or damage.
Clause 8
Mine Closure
8.1. Subject to the Act, if a mining claim or mining area is abandoned, the holder of
the claim or licence to which the area relates must take all necessary steps to
remedy, to reasonable satisfaction of the Minster, any damage caused by any
prospecting operations and mining operations carried on by such holder to the
surface of the land in the area in question.
Clause 9
Revenue and Royalties
9.1. Subject to section 114(1)(a) -(c) of Act the Company shall be liable to pay the
Commissioner for the benefit of the State Revenue Fund a royalty-
i. In the case of the Company in respect of any rough and uncut mineral
of the precious stone group mined by the Company in the course of any
mining operations carried on by the Company in terms of such licence,
as the case may be, and sold, or otherwise disposed of by the Company,
at a rate of 10 per cent,
ii. In the case of the Company in respect of any rough or unprocessed
mineral of the dimension stone group mined by the Company in the
course of any mining operations carried on by the Company in terms of
such licence, as the case may be, and sold, or otherwise disposed of by
the Company, at a rate of 5 per cent
iii. In the case of the Company in respect of any other mineral or group of
minerals so mined by the Company levied by the Minister by notice in
writing addressed and delivered to The Company in addition to any
royalty levied in accordance with the provisions of subsection (2), at such
rate as may be determined by the Minister from time to time by notice in
the Gazette,
of the market value determined of such mineral or group of minerals.
Clause 10
Tax
10.1. Income tax is levied on taxable income accruing to a mining company from
sources within or deemed to be within Namibia and shall calculated by
determining the gross income, being all income accrued excluding that of a
capital nature, subject to some exceptions, from which is deducted all amounts
that are exempt from normal tax as well as the deductions and set-offs allowed
by the Income Tax Act, 1981.
10.2 The mining company/ holder of exploration licence will be required to pay 37.5
percentage of income tax.
Clause 11
Stabilization
11.1. The rights and interests accruing to the Company under this agreement and its
sub-contractors under this agreement shall not be amended, modified or
reduced without the prior consent of the Company.
11.2. In the event that any governmental authority invokes any present or future law,
treaty, intergovernmental agreement, decree or administrative order which
contravenes the provisions of this agreement or adversely or positively affects
the rights or interests of the Company hereunder, including, but not limited to,
any changes in tax legislation, regulations, or administrative practice, or
jurisdictional changes pertaining to the contract area, the terms of this
agreement shall be adjusted to re-establish the economic equilibrium of the
parties, and if the rights or interests of the Company have been adversely
affected, then the State-owned Mining Company shall indemnify [the company]
for any disbenefit, deterioration in economic circumstances, loss or damages
that ensue therefrom.
Clause 12
Contingency Plan and Emergencies
12.1 The Company shall take measures to ensure that the following is undertaken
before the commencement of the mining operation;
a. identification of potential emergency situations and locations
b. details of the actions to be taken by personnel during the emergency
c. evacuation procedures
d. responsibilities and authorities of personnel with specific response
e. duties and roles during the emergency
f. interface and communication with emergency services
g. regulators and other interested parties
h. information necessary for undertaking emergency response
Clause 13
Financial Records
13.1. The company shall for among other reasons, keep financial records with
regards to all mining operations in Namibia; and present such financial records
at the end of every financial year to the Minister; or at the Minister’s request.
13.2. Subject to the Inspection of Financial Institutions Act 38 of 1984, such financial
records shall be subject to inspection by shareholders of the company
13.3. Such Financial records shall be presented by the company at the end of the
financial year to all relevant parties including but not limited to the following:
a. Shareholders
b. Stakeholders
c. The Minister
d. The Directors of the company
Clause 14
Confidentiality of Data
14.1. All mining data, information and reports prepared by the Company shall be
regarded as confidential. These reports, data, information and statements shall
not have to be disclosed for as they have to do with the mining activity
prescribed by this contract without the agreement of the other party to this
contract.
Clause 15
Suspension and Termination of Contracts and Penalties
15.1. Subject to section 130(2) of the Act, if the Company fails to comply with the
provision of subsection (1) paragraph (b) within such period as the Minster may
deem in the circumstances to be reasonable, the Minster may direct by notice
in writing addressed and delivered to the Company to take within such period
as may be specified in such notice, such steps as may be so specified in order
to remedy the spilling, pollution or damage or loss, and the Minister may, if the
Company fails to comply with such directions to the satisfaction of the Minister
within the period specified in such notice or such further period as the Minister
may on good cause shown all in writing, cause such steps to be taken as may
be necessary to remedy such spilling, pollution or damage or loss and recover
in a competent court the cost incurred thereby from such holder.
15.2. In the event that the company fails to employ at least 80% of Namibian citizens,
the contract shall be suspended for a period not exceeding six months or until
the requirement is fulfilled.
15.3. In the event that the Company contravenes section 27 of the Environmental
Management Act 7 of 2007, they shall be liable to a fine not exceeding
N$500 000 or to imprisonment for a period not exceeding 25 years or both.
15.4. In the event the Company has failed to pay an amount on or before the date
determined by or under the provision of section 114 of the Act, an additional
amount calculated at the rate of one third of one per cent per day, shall be
payable on such amount of any part thereof as from the date on which such
amount was payable until such time as such amount is paid.
15.5. Subject to section 117 of the Act, if the Company fails to pay any royalty payable
in terms of Section 114, on or before the date referred to in that section or such
date to which the payment of such royalty has been remitted or differed, the
Minister may by notice addressed and delivered to the Company prohibit-
15.6. The removal of any mineral or group of minerals from the prospecting area,
mining area, retention area, claim area, or other area to which the licence in
question relates,
15.7. Any dealings in connection with any mineral or group of minerals mined from
such prospecting area, mining area, retention area, claim area or other area,
Until such time as such royalty has been paid, or the payment of such royalty
has been remitted of differed in terms of the Act
Clause 16
Responsibility and Liability
16.1. In the event an employee, or employees, during the course of employment in
the mining operation, becomes-
a. Physically ill,
b. Incurs damages,
the Company bares the onus to compensate the employee or employees for
any damage incurred, or medical expenses incurred.
16.2. In the alternative, if an employee or employees die during the course of
employment, in the mining operation, the Company bares the onus to provide
financial assistance to the dependants of the deceased person or persons, for a
time period no longer than the agreed duration of the mining operation or for an
agreed duration.
Clause 17
Force Majeure
17.1. In the event that during the course of the mining operation, acts of war, hostility
or insurrection or an act of God, makes it impossible to carry out such operation,
the Company bears the onus to-
a. Compensate the employees, for the reminder of the mining operation,
b. Rehabilitate the land, after the closure of the mine,
c. Compensate the affected community.
17.2. Any failure by the Company to comply with any terms and conditions in this
agreement shall not be regarded as seeing a failure to comply with such term
and conditions, in so far the Company was prevented from complying with such
term and condition due to an act of war, hostility or insurrection or an act of
God.
17.3. The Company shall forthwith inform the Minster by notice in writing setting out
particulars of the nature, extent and causes of the company’s failure to comply
with the term and condition of this agreement specified in such notice.
Clause 18
Renunciation of Rights
18.1. Subject to section 54(1) of the Act, the Company may abandon the mining area
to which the licence relates by notice in writing addressed and delivered to the
commissioner and shall together with such notice return such mineral licence.
18.2. In the event of a reasonable matter arising forcing impossibility to enforce the
mineral rights, a notification must be furnished in writing to the Commissioner,
within a period of, no more than 7 calendar days, or a time deemed reasonable
by the Commissioner.
Clause 19
Disputes
19.1. Subject to section 134 of the Act, notwithstanding the provisions of any law to
the contrary, the Nigh Court of Namibia or magistrate’s court which would
otherwise have jurisdiction shall have jurisdiction to try any offence under this
Act which is committed or alleged to have been committed within the territorial
sea , the exclusive economic zone and the continental shelf.
Clause 20
Applicable Laws
20.1. This Agreement, the interpretation thereof and any dispute arising thereunder
or associated therewith shall be governed by and determined in accordance
with the laws of the Republic of Namibia.
Clause 21
Disclaimer
21.1. This agreement constitutes the entire agreement between the Owner and the
Company or Miner. The parties acknowledge and confirm that no undertaking,
warranty or representation not contained in this agreement has been made by
a party hereto, and that any variations hereto shall only be valid if reduced to
writing and signed by both parties.
Signed by the Company or Miner at: _________________ on
________________________ 20 ___________
As witnesses to the Company or Miner:
1. ____________________________
2. ____________________________
The Company or Miner
Signed by the owner at: ____________________on_________________________
20 ___________
As witnesses to the Owner:
1. ____________________________
2. ____________________________
The Owner
