ROLE OF LAWYER IN THE DEVELOPMENT OF LARGE MINING PROJECTS Focus on Francophone Africa Frilet - Société d'Avocats

A major challenge for stakeholders and legal profession Challenge of advising on a large international investment Challenge of advising on an investment of long term nature Challenge of advising on development of associated infrastructures Challenge of advising on a public private partnership venture Frilet - Société d'Avocats

The main issues: project description The stages of development of a mining project The initial exploration The development phase Conceptual studies: order of magnitude Prefeasibility Feasibility Financing The investment phase The operation phase Example of large project The need to invest and to operate A mine A rail way A port The need to benefit from other public infrastructure The need to benefit from reliable power and water sources Frilet - Société d'Avocats

The main issues for legal advisers How to appraise the legal, regulatory and procedural risks ? How to organize the process of identifying and mitigating the risks and reward in an acceptable manner? Who is judging the acceptability of the balance between risks and reward? A good appraisal of the role of the stakeholders The mining company The State The Communities The Lenders The IFIs The NGOs Frilet - Société d'Avocats

The involvement of legal advisers During conceptual and prefeasibility phase Due diligence Compilation of law regulations & practices Identification of the main issues Organization of the legal team During feasibility phase The substance of the advice The general conclusion: need to adapt, improve or secure the legal and regulatory framework for the project The process : how to engage with the authorities? What methodology? For which purpose? Examples: land issues, resettlement issues, stability of the regulations, tax and custom regime, investment protection guarantee, early termination, dispute avoidance, Arbitration. The outcome: a mining investment agreement having a legal status How to prepare, negotiate and conclude? Frilet - Société d'Avocats

A prerequisite: avoiding cross-cultural legal misunderstanding If the project is developed by numerous companies or engineers and constructors from a Common Law country legal culture, a good knowledge of the main differences between Common Law and Civil Law systems is essential 1. Key considerations Common Law world does not distinguish between public and private contract law Civil / Administrative Law countries are governed by equitable public contract law principles In the Common Law world, the law derive mostly from case law: in the civil law world the law derives mostly from codes or from authoritative cases often establishing best practices and concepts In Common Law world there are few concept or legal principles of general references The reasoning in the Common Law world is essentially bottom up The reasoning from Civil Law world is essentially top down. Many Civil Law countries have a regulatory institution dealing with the contractual relationships between the public and the private sector. Example: French Administrative Court : “Council of State” 2. Consequences In order to reach a similar level of legal certainty and equilibrium between rights and obligations in each system the following is generally necessary. The contract conditions need to be more comprehensive and detailed in the Common Law world An outside regulator is more necessary in the Common Law than in the Civil Law world Frilet - Société d'Avocats

The organization of legal advisers team The credentials Which quality for which purpose? Local specialists International investment specialists Legal culture The importance of “administrative law” The language issue Environmental specialists Mining specialists Public infrastructure specialists including concessions and PPP Railway Port Power The team: need of integrated team The team leader Outside or in house : the issues How to select the team? How to engage with governments and to have the best guarantees of result ? Frilet - Société d'Avocats

Conclusion A major challenge for all mining companies Many lessons learnt and among others: Learning by doing always leads to problems The substance of advice in francophone civil law Africa is quite different from other countries and from Common Law world (French mother tongue is generally a prerequisite) Outcome in terms of content of documentation, letters and procedure substantially different Engaging with the authorities very different from other countries and from the Common Law world. Understanding the leverage and downside of seniority and how to optimize is essential Integrated approach between substance and process essential Need of lawyers having a broader range of skills than usual Good team is made of three layers or legal advisers with different seniority, language and other skills From those lessons it is easier to understand why some of projects in civil law Africa could be developed more easily and at a lower cost Frilet - Société d'Avocats