AMN - REP OF CONGO: Zanaga agreement adopted as law

Zanaga Iron Ore's project, a joint venture with Glencore plc, has had its Mine Operating Agreement adopted as a law of the Republic of Congo. The Mining Convention covers the proposed staged development of Zanaga and sets out the fiscal and legal terms with respect to the construction and operation of the project pursuant to its Mining Licence.

The Mining Convention has been promulgated as a law of the Republic of Congo following ratification by the Parliament of the Republic of Congo.

The ratification of the Mining Convention and its adoption as law is a significant milestone for the permitting of the Zanaga project; it confirms, as a legal act, the provisions relating to the development and operation of the project.

The project team continues to be engaged in advancing other key permits and agreements which are part of the ongoing process of establishing the operating framework for Zanaga.

Zanaga Iron Ore non-executive chairman Clifford Elphick says: "I am delighted that the Zanaga project has now had its Mining Convention approved and adopted as law.

We believe this further demonstrates the Government of the Republic of Congo's support for the development of the country's mining sector and is testament to the project's strong stakeholder relations.

This world class iron ore project has the potential to have a significant beneficial impact on the Republic of Congo, both at the grassroots level around the project site, as well as more broadly on the country's infrastructure and economy.

The Mining Convention, which establishes the project's fiscal and operating regime, is now confirmed as an act of law. Such confirmation is expected to be well received by potential financial investors and lenders as the project navigates the current challenges of the iron ore market."

Key terms of the Mining Convention:

-          25-year operating licence effective from the issue of the Mining Licence (August 2014) and renewable for successive terms of 15 years and in accordance with the Mining Code

-          A mining royalty of 3%

-          Identification of the specific taxes which will apply to the project

-          A 5 year tax holiday following the construction phase and a corporate tax rate of 15%

-          Agreement of the customs regime which will apply to the project, including exemptions from import duties and taxes on plant and equipment imported temporarily for project construction

-          The Republic of Congo will receive a non-dilutory 10% stake in the Mining Company

Zanaga Iron Ore Company Limited as the owner of 50% less one share in the Zanaga Iron Ore Project based in the Republic of Congo (Congo Brazzaville) through its joint venture partnership with Glencore. The Zanaga Iron Ore Project is one of the largest iron ore deposits in Africa and has the potential to become a world-class iron ore producer.

www.zanagairon.com

News courtesy of International Mining