Guiding Principles for Durable Mining Agreements in Large Mining Projects

Abstract

In recent years ‘resource nationalism’ has topped or been prominent in the concerns of the international mining industry.1 The opposite side of the same coin has been host nations seeking larger and wider benefits from their mineral endowment. The consequence of host nation aspirations has been reviews of and revisions to statutory and contractual terms. Mining companies have responded by seeking to expand and make more visible their contributions to host nations while also stressing (and not infrequently protesting) that states reviewing existing laws, regulations or contractual terms creates unpalatable investment risk in an already inherently risky business. Can there be an approach and a legal framework that create durability of agreement by satisfying the needs and wants of investors and of host nations? The authors – who are both highly experienced in negotiating and implementing complex mining agreements (often in under-developed nations) – propose guiding principles for creating modern and durable mining agreements. The principles are particularly relevant for large composite projects2 to meet the new and evolving socio-economic and geopolitical realities of the 21st century, alongside meeting the abiding needs of very large, risky and long-term investments that are inherent to large mining projects.