The MMDA Project, which was undertaken by the Mining Law Committee of the International Bar Association (IBA), was launched in 2009. The aim has been to draft an agreement that can be used by mining companies and host governments for mining projects. The project is led by the IBA Mining Law Committee, with civil society and university-based groups working with the Committee to ensure a well-balanced final product.
The Committee collected and analyzed more than 60 existing mine development agreements that were "deconstructed" in the review process and then assembled in the model agreement. The result was the MMDA, which contains representative language for each provision with links to example clauses taken from the existing agreements.
The project is aimed primarily as a tool for use with and in developing countries, in particular where a mature mining code is not in place or effective. The MMDA may also be of use where the mining code must be supplemented by private agreement, or as a template for agreements with state owned mining enterprises.
According to the Mining Law Committee:
"The MMDA project seeks to provide a tool with a specific starting point. It asks what a mining contract might look like if the process started from the precept of a project aiming to contribute to sustainable development not just of the project itself, but of the local, regional and national community as well.Peter Leon, chair of the IBA Mining Law Committee and partner and co-head of the Mining, Energy, and Natural Resources Practice Group at Webber Wentzel in Johannesburg, South Africa, said:
"While the project clearly recognizes that a mining development must be commercially viable to proceed, it also recognizes this is no longer the only issue around which contract negotiations should proceed. Rather, all parties to a negotiation should take a broader, and integrated, look at the relationship between the proposed project, the state and the local communities.
"The natural, social and economic environments around mining projects are also essential considerations today. The final product is web-based and publicly accessible. It is not “prescriptive” in the sense of setting out one standard form. Rather, it seeks to provide an agenda for negotiations based on a sustainable development objective that is common to all parties."
"The Model Mining Development Agreement (MMDA) is an attempt by the Mining Law Committee to take an important step forward in an area that has long seen its share of conflicts and problems – the contractual relationship between host states and mining investors.Its public nature will also allow local communities and civil society groups to contribute in a sound manner to negotiation processes. By setting out a comprehensive and common template, it is hoped the project will enable and assist better structured negotiations, and better lasting results in mining projects.
"All of us share the vision that in the future mineral investment can increasingly catalyze and support sustainable development of the countries and regions where it occurs, and that we can find ways to avoid or minimize any negative environmental, social or economic impacts of mineral development. In other words, far from how it is so often perceived, mining can be a force for good.
"We envision[ed] producing...a non-prescriptive,web-based, widely available resource that can lead to informed, transparent, and equitable negotiations and contractual outcomes. Our vision is that host countries and investors share an interest in the stability of the investment relationship, and that this stability is best achieved when host countries and regions secure sustainable and meaningful social and economic development.
"We accept that a model agreement, albeit one of a non-prescriptive kind, cannot alone solve all of the problems. At most, it can be one element of a better future.
"We invite you to participate, comment, and help us achieve the goal of a model contract negotiation tool."
Denver Law adjunct professors who played a central role in the preparing of the MMDA included Project Coordinator Bob Bassett, a partner at Holland & Hart in Denver who teaches "International and Comparative Mining Law," Dr. Elizabeth Bastida, who teaches mining law at the University of Dundee and also teaches in the Denver Law "Sustainable Natural Resources Development Series," and Cecilia Dalupan and Luke Danielson, both principals in the Gunnison, Colorado-based Sustainable Development Strategies Group who also teach in the "Sustainable Natural Resources Development Series."
Denver Law alumni who participated included Cassies Boggs, General Counsel for Resource Capital Funds, Jim Cress, a partner at Holme, Roberts & Owen in Denver and a frequent speaker at DU, Steve Gottesfeld, General Counsel at Newmont Mining, and Bruce Kirchoff, General Counsel at Royal Gold.
Denver Law students who helped on the project included Nino Coppero, Jeff Cullers, Kristi Disney, Kasmali Mochamad, and Kelli Schulte.
The full-text of the 200+ page agreement can be accessed by clicking here. Comments about the draft agreement can be entered at the website.