EX-10.12






EXHIBIT 10.12




 





ESTABLISHMENT AGREEMENT




dated




September 30, 2004




between the




Government of Jamaica




and




St. Ann Bauxite Limited





 




CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY ASTERISKS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.




 









 





Table of Contents




	 	 	 	 	 
	 	 	Page #
	 
	 	 	 	 
	Article I Definitions 
	 	 	2	 
	 
	 	 	 	 
	1.01 Definitions 
	 	 	2	 
	 
	 	 	 	 
	Article II CERTAIN IMPLEMENTING MATTERS 
	 	 	4	 
	 
	 	 	 	 
	2.01 Implementing Agreements 
	 	 	4	 
	2.02 Certain Statutory Designations 
	 	 	4	 
	2.03 Publication of Orders and Amendment of Acts 
	 	 	5	 
	2.04 Managing Partner 
	 	 	5	 
	2.05 Substitution of Rights of Others 
	 	 	5	 
	2.06 Investment Arrangements 
	 	 	5	 
	 
	 	 	 	 
	Article III BAUXITE RESERVES; LANDS 
	 	 	5	 
	 
	 	 	 	 
	3.01 Bauxite Reserves 
	 	 	5	 
	3.02 Mining Lands Adjustment Provisions 
	 	 	6	 
	3.03 Access to and Use of Lands 
	 	 	7	 
	3.04 Acquisition and Disposition of Lands 
	 	 	9	 
	 
	 	 	 	 
	Article IV EXPANSION BY THE GOVERNMENT 
	 	 	9	 
	 
	 	 	 	 
	4.01 Expansion by the Government 
	 	 	9	 
	 
	 	 	 	 
	Article V INCOME TAX 
	 	 	10	 
	 
	 	 	 	 
	5.01 Tax Rate; Application 
	 	 	10	 
	5.02 Sales Revenue 
	 	 	10	 
	5.03 Expenses 
	 	 	11	 
	5.04 Form of Payment of Taxes 
	 	 	11	 
	5.05 Tax on Dividends and other Payments 
	 	 	11	 
	5.06 Connected Persons 
	 	 	11	 
	5.07 Double Taxation 
	 	 	12	 
	 
	 	 	 	 
	Article VI PRODUCTION LEVY 
	 	 	12	 
	 
	 	 	 	 
	6.01 Production Levy 
	 	 	12	 
	6.02 [No Heading] 
	 	 	13	 
	 
	 	 	 	 
	Article VII ROYALTIES 
	 	 	14	 
	 
	 	 	 	 
	7.01 Royalties 
	 	 	14	 
	7.02 Monohydrate Levels 
	 	 	14	 






 









 





Table of Contents (continued)




	 	 	 	 	 
	 	 	Page #
	 
	 	 	 	 
	Article VIII OTHER TAXES AND CHARGES 
	 	 	14	 
	 
	 	 	 	 
	8.01 Other Taxes and Charges 
	 	 	14	 
	8.02 Property Tax 
	 	 	14	 
	8.03 Customs Duties and Other Similar Impost 
	 	 	15	 
	8.04 Consultation on Extension of Fiscal Regime 
	 	 	15	 
	 
	 	 	 	 
	Article IX (INTENTIONALLY OMITTED) 
	 	 	16	 
	 
	 	 	 	 
	Article X MINIMUM PRODUCTION REQUIREMENTS 
	 	 	16	 
	 
	 	 	 	 
	10.01 Minimum Production Requirements 
	 	 	16	 
	 
	 	 	 	 
	Article XI GOVERNMENT OPTION FOR UNUSED CAPACITY 
	 	 	16	 
	 
	 	 	 	 
	11.01 Option to Government 
	 	 	16	 
	11.02 Establishing and Paying for Shortfall 
	 	 	17	 
	11.03 Annual Capital Charge 
	 	 	18	 
	11.04 Further Assurances 
	 	 	18	 
	 
	 	 	 	 
	Article XII APPROVALS AND AGENTS 
	 	 	18	 
	 
	 	 	 	 
	12.01 Permits and Approvals 
	 	 	18	 
	12.02 Agents and Contractors 
	 	 	18	 
	 
	 	 	 	 
	Article XIII SETTLEMENT OF DISPUTES 
	 	 	18	 
	 
	 	 	 	 
	13.01 Settlement of Disputes 
	 	 	18	 
	13.02 Arbitration Procedures 
	 	 	19	 
	13.03 Continued Effectiveness 
	 	 	21	 
	 
	 	 	 	 
	Article XIV MISCELLANEOUS 
	 	 	21	 
	 
	 	 	 	 
	14.01 Force Majeure 
	 	 	21	 
	14.02 Notices 
	 	 	21	 
	14.03 Assignment 
	 	 	23	 
	14.04 Integration, Modification and Waiver 
	 	 	23	 
	14.05 Headings 
	 	 	23	 
	 
	 	 	 	 
	Article XV TERM AND EFFECTIVENESS OF AGREEMENTS 
	 	 	23	 
	 
	 	 	 	 
	15.01 Effective Date and Term of this Agreement 
	 	 	23	 
	15.02 Execution and Effectiveness of Implementing Documents 
	 	 	24	 
	15.03 Rights and Obligations Surviving Expiration 
	 	 	24	 






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Table of Contents (continued)




	 	 	 	 	 	 
	 
	 	 	 	 	Page #
	Exhibits
	 	 	 	 	 
	 
	 	 	 	 	 
	Exhibit A-1

	 	—
	 	Special Mining Lease	 
	 
	 	 	 	 	 
	Exhibit A-2

	 	—
	 	Special Reserves Map	 
	 
	 	 	 	 	 
	Exhibit B

	 	—
	 	Deed of Partnership	 
	 
	 	 	 	 	 
	Exhibit C

	 	—
	 	Management Agreement	 
	 
	 	 	 	 	 
	Exhibit D

	 	—
	 	Mining Agreement	 
	 
	 	 	 	 	 
	Exhibit E

	 	—
	 	Agency Agreement	 
	 
	 	 	 	 	 
	Exhibit F

	 	—
	 	Century Aluminum Company Undertaking	 
	 
	 	 	 	 	 
	Exhibit G

	 	—
	 	Noranda Aluminum, Inc. Undertaking	 
	 
	 	 	 	 	 
	Exhibit H

	 	—
	 	Government of Jamaica Undertaking	 
	 
	 	 	 	 	 
	Schedules
	 	 	 	 	 
	 
	 	 	 	 	 
	Schedule 3.03(a)

	 	—
	 	GOJ Lands	 
	 
	 	 	 	 	 
	Schedule 3.03(a)(i)

	 	—
	 	Rental Lands Formula	 
	 
	 	 	 	 	 
	Schedule 7.02

	 	—
	 	Monohydrate Certification	 






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ESTABLISHMENT AGREEMENT




     THIS AGREEMENT is made on the 30th day of September, 2004 by and between THE GOVERNMENT OF
JAMAICA acting through the Minister of Finance and Planning and the Minister of Development
(hereinafter called the “Government”) and ST. ANN BAUXITE LIMITED, a company organized and existing
under the laws of Jamaica (hereinafter called “St. Ann Bauxite”).



W I T N E S S E T H:




     WHEREAS, the Government, Kaiser Bauxite Company, a corporation organized and existing under
the laws of the State of Nevada, United States of America (hereinafter called, “Kaiser Bauxite”)
and Kaiser Aluminum & Chemical Company, a corporation organized and existing under the laws of the
State of Delaware, United States of America (hereinafter called, “Kaiser Aluminum”) entered into an
agreement, dated 2 February 1977, providing for the grant by the Government to Kaiser Bauxite of
mining leases entitling it to mine bauxite in Jamaica and related matters, including the
establishment of the Original Partnership (as hereinafter defined) (as supplemented and amended
from time to time prior to the date hereof, the “1977 Agreement”); and



     WHEREAS, Kaiser Bauxite and Jamaica Bauxite Mining Limited, a company organized and existing
under the laws of Jamaica and which is wholly-owned by the Government (hereinafter called “JBM”),
established a partnership pursuant to a Deed of Partnership, dated October 26, 1979 (the “Original
Partnership”); and



     WHEREAS, Kaiser Bauxite and the Original Partnership entered into a Management Agreement,
dated 26 October 1979, pursuant to which Kaiser Bauxite was appointed to manage the operations of
the Partnership; and



     WHEREAS, Kaiser Bauxite and the Original Partnership entered into a Mining Agreement, dated 26
October 1979, pursuant to which the Original Partnership was contracted to conduct mining
operations on Kaiser Bauxite’s behalf pursuant to the mining leases granted to it by the
Government; and



     WHEREAS, Kaiser Bauxite has agreed to sell and St. Ann Bauxite has agreed to purchase all of
Kaiser Bauxite’s rights, title and interest in and to the Original Partnership, including its
undivided interest in the assets and property of the Original Partnership, and Kaiser Bauxite’s
liabilities associated with the Original Partnership, but not including certain KBC Excluded
Assets, and certain KBC Retained Liabilities, all on terms and conditions set forth in that certain
Purchase Agreement dated as of May 17, 2004 entered into by and among Kaiser Bauxite, Kaiser
Aluminum, St. Ann Bauxite and Gramercy Alumina LLC (hereinafter referred to as the “Asset Purchase
Agreement”), a certified copy of which has been presented to the Government; and



     WHEREAS, contemporaneously herewith the Government, JBM, Kaiser, Kaiser Aluminum and St. Ann
Bauxite have entered into a Transaction Consent Agreement wherein, among other things, JBM has
consented to the transfer by Kaiser Bauxite to St. Ann Bauxite of



 









 







its interests in the assets and property of and its interests in the Original Partnership, as
contemplated by the Asset Purchase Agreement; and



     WHEREAS, as a consequence of and in connection with the consummation of the sale, St. Ann
Bauxite and JBM will form a Partnership that will continue the business and operations of the
Original Partnership.



     NOW, THEREFORE, it is hereby mutually agreed as hereinafter set forth:



ARTICLE I




DEFINITIONS




     1.01 Definitions.



     The following terms shall have the following meanings when used in the Agreement, unless the
context shall otherwise require:



          “Affiliate” means any Person that directly or indirectly by whatever means controls, is
controlled by, is under common control with the Person in question, and in the case of each of St.
Ann Bauxite and the Partnership, shall include each of Century Aluminum Company and Noranda
Aluminum, Inc. and their subsidiaries (including Gramercy Alumina LLC).




          “Agency Agreement” means an agreement in the form attached hereto as Exhibit E, as the same
may be supplemented and amended from time to time.




          “Agency Lands” means Land acquired after the date hereof for and in the name of the Government
as contemplated in Section 3.04(b), for so long as it is in the possession of the Partnership in
accordance with the Agency Agreement.




          “Bauxite,” whether used in capitalized or uncapitalized form, means those aluminous laterites
containing hydrated aluminum oxide which are capable of being processed and manufactured into
alumina in an efficient manner.




          “Bauxite Reserves Requirement” shall have the meaning specified in Section 3.01(b).




          “Century Aluminum Company Undertaking” means an undertaking in the form attached as Exhibit F.




          “Dollars” and the sign “$” mean United States Dollars.




          “Effective Date” means the date specified in Section 15.01 of this Agreement for commencement
of the term of this Agreement.




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          “GOJ Lands” means land owned by the Government on the date of this Agreement and identified in
Schedule 3.03(a), for so long as it is in the possession of the Partnership in accordance with the
Agency Agreement.




          “Government of Jamaica Undertaking” means an undertaking in the form attached as Exhibit H.




          “Gramercy Plant” means the alumina refining facility located in Gramercy, Louisiana, United
States of America, that Kaiser Aluminum has agreed to sell and Gramercy Alumina LLC has agreed to
purchase pursuant to the Asset Purchase Agreement.




          “Implementing Documents” means each and all of those agreements, leases and other documents,
forms of which are set forth in Exhibits A through H to this Agreement.




          “Jamaican Dollar” and “J $” mean Jamaican Dollars.




          “Lands” mean lands and rights and interests therein, that are included in a St. Ann Mining
Lease.




          “Management Agreement” means an agreement in the form attached hereto as Exhibit C, as the
same may be supplemented and amended from time to time.




          “Mining Agreement” means an agreement in the form attached hereto as Exhibit D, as the same
may be supplemented and amended from time to time.




          “Mining Lease” means a Special Mining Lease in the form attached hereto as Exhibit A-1, as
such mining lease may be supplemented and amended from time to time.




          “MT” means a unit of metric weight of 1,000 kilograms.




          “New Mining Lease” means any Special Mining Lease granted by the Government to St. Ann Bauxite
after the Effective Date pursuant to the terms of the Mining Lease and/or this Agreement, as the
same may be supplemented and amended from time to time.




          “Noranda Aluminum, Inc. Undertaking” means an undertaking in the form attached as Exhibit G.




          “Partner” means either of JBM or St. Ann Bauxite, in such Person’s capacity as a partner in
the Partnership, or any of its successors and permitted assigns in such capacity.




          “Partnership” means the Partnership organized and operated pursuant to the Partnership Deed.




          “Partnership Deed” means a Deed of Partnership in the form attached hereto as Exhibit B, as
the same may be supplemented and amended from time to time.




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          “Person” means any individual, partnership, committee, association, corporation,
unincorporated organization, trust or government or political subdivision thereof or any other body
of persons, natural or juridical.




          “Reserve Map” means the map annexed as Exhibit A1 to the Mining Lease.




          “Special Reserves Map” means the map annexed hereto as Exhibit A-2.




          “St. Ann Mining Lease” means, collectively, the Mining Lease and the New Mining Leases.




ARTICLE II




CERTAIN IMPLEMENTING MATTERS




     2.01 Implementing Agreements.



     In implementation of certain of the provisions of this Agreement, and other understandings,
the parties have agreed that they will execute, or will cause to be executed, in accordance with
the provisions of Section 15.02, the following agreements in the forms attached hereto:



          1) the Mining Lease from the Government to St. Ann Bauxite, attached hereto as Exhibit A-1;




          2) the Partnership Deed between JBM and St. Ann Bauxite, attached hereto as Exhibit B;




          3) the Management Agreement between the Partnership and St. Ann Bauxite, attached hereto as
Exhibit C;




          4) the Mining Agreement among the Partnership, JBM and St. Ann Bauxite, attached hereto as
Exhibit D;




          5) the Agency Agreement among the Commissioner of Lands, JBM, St. Ann Bauxite and the
Partnership, attached hereto as Exhibit E;




          6) the Century Aluminum Company Undertaking, attached hereto as Exhibit F;




          7) the Noranda Aluminum, Inc. Undertaking, attached hereto as Exhibit G; and




          8) the Government of Jamaica Undertaking, attached hereto as Exhibit H.




     2.02 Certain Statutory Designations.



     With effect from the Effective Date, St. Ann Bauxite shall be declared a “Recognised Bauxite
Producer” in accordance with Bauxite and Alumina Industries (Encouragement) Act



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(hereafter referred
to as the “Encouragement Act”) and a “Bauxite Producer” and an “Associated Producer” in accordance
with the Bauxite and Alumina Industries (Special Provisions) Act.



     2.03 Publication of Orders and Amendment of Acts.



     The Government undertakes to make and publish all necessary orders consistent with this
Agreement including designations under the Bauxite and Alumina Industries (Encouragement) Act and
the Bauxite and Alumina Industries (Special Provisions) Act.



     2.04 Managing Partner.



     The Government will join with St. Ann Bauxite in procuring that the Partnership appoints, and
the Government will procure that JBM concurs and agrees to the appointment of, St. Ann Bauxite to
be the Managing Partner of the Partnership on the terms contained in the Management Agreement.



     2.05 Substitution of Rights of Others.



     The Government agrees that if it extends to any other bauxite producer a fiscal regime which
in any respect is more favourable to such producer than the fiscal regime provided in this
Agreement, then if St. Ann Bauxite so requests, this Agreement will be amended, retroactively if
necessary, so that St. Ann Bauxite will be on a basis no less favourable than such producer. The
provisions of this section shall not apply in the event of the Government agreeing to grant to any
other bauxite producer special benefits on account of circumstances applicable to that producer and
such circumstances are temporary in nature, or in the opinion of the Government warrant special
treatment in the national interest.



     2.06 Investment Arrangements.



     The Government will give such reasonable assistance as is needed to enable St. Ann Bauxite or
its shareholders to obtain from any agency or department of any government other than the
Government any investment or similar guarantees that may be sought by or for the benefit of St. Ann
Bauxite with respect to this Agreement. The foregoing shall not be construed as affecting the
authority of the Partnership’s executive committee or the Partners in respect of activities by the
Partnership.



ARTICLE III




BAUXITE RESERVES; LANDS




     3.01 Bauxite Reserves.



          (a) In accordance with Section 15.02, the Government is granting to St. Ann Bauxite on the
date hereof, the Mining Lease (i) for the lands outlined in the Reserve Map (being lands that are
estimated by the Commissioner of Mines to contain mineable bauxite reserves of a quantity and
quality sufficient to satisfy the bauxite production requirement of St. Ann Bauxite at its current
production rate of 4,500,000 dry MT per year (the “Bauxite Reserves Requirement”)) and (ii) which
is for a term ending on its anniversary in 2030. The understandings between the




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parties with
respect to the availability of bauxite reserves are set forth in the Mining Lease and in this
Article. The Government undertakes that nothing done by it will adversely affect the availability
of the bauxite reserves to be included in the Mining Lease or any New Mining Lease, except as
otherwise contemplated in Section 3.02(a).




          (b) In the event that St. Ann Bauxite’s customer requirements increase, including its
customers that are its Affiliates, or the Partners expand the Partnership’s bauxite producing
operations, the Government agrees to assess the feasibility of granting a New Mining Lease and St.
Ann Bauxite and the Government agree to cooperate to define and select specific areas of
bauxite-bearing lands for inclusion in such New Mining Lease, taking into account availability,
quality, location and the other factors bearing on the costs.




          (c) Prior to the third anniversary hereof, St. Ann Bauxite and the Commissioner of Mines or
his agent shall assess whether the lands that are the subject of the Mining Lease granted pursuant
to Article 3.01(a) contain a sufficient quantity or quality of mineable bauxite to satisfy the
Bauxite Reserves Requirement. In the event that it is mutually determined that the said lands do
not contain a sufficient quantity or quality of mineable bauxite to satisfy the Bauxite Reserves
Requirement, then as provided in the Mining Lease the Government shall modify the Mining Lease or
grant a New Mining Lease by adding thereto additional bauxite reserves. The additional reserves
shall be taken from lands identified as Blocks 12 and 13 on the Special Reserves Map. The
additional lands required to meet the Bauxite Reserves Requirement shall be taken firstly from
lands contained in Block 12 and thereafter from lands contained in Block 13.




     3.02 Mining Lands Adjustment Provisions.



          (a) In the event that the Government elects in the national interest to develop any Lands for
a major non-bauxite mining project it shall so notify St. Ann Bauxite, specifying the Lands which
are to be surrendered to it. As soon as practicable after receipt of such notice, St. Ann Bauxite
shall surrender such Lands to the Government in exchange for the receipt by St. Ann Bauxite of:





               (i) a modification of the Mining Lease or a mining lease granted by the Government to
St. Ann Bauxite on the same terms as the mining lease under which St. Ann Bauxite was
entitled to mine the surrendered Lands, for the purpose of mining bauxite in, under or upon
such additional lands as close as possible to and accessible to the Lands as are estimated
by St. Ann Bauxite and the Commissioner of Mines or his duly authorized agent to contain
mineable bauxite reserves of an amount and quality approximately equivalent to those
contained in the Lands being surrendered under this Section; and




               (ii) reasonable compensation for any disturbance of passageways, works, buildings or
other properties which belong to St. Ann Bauxite, the Partnership or any or their agents or
contractors.



          (b) If pursuant to the provisions of this Section 3.02, the Government is required to modify
the Mining Lease or grant to St. Ann Bauxite a mining lease over additional




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lands in substitution
for any Lands being surrendered, St. Ann Bauxite may refuse such modification or mining lease and
the Government shall thereupon be relieved of its obligation to grant the mining lease. St. Ann
Bauxite shall not as a result of such refusal be precluded in any way from receiving additional
mining leases pursuant to Clause 2 of the Special Conditions of the Mining Lease or the
corresponding provisions of any other St. Ann Mining Lease.




     3.03 Access to and Use of Lands.



          (a) The Government shall grant to the Partners and the Partnership possession of the GOJ Lands
and the Agency Lands in order to conduct mining operations and other activities related to the
mining of bauxite; provided that the Government’s obligations to grant possession of Agency Lands
is subject to the provisions of Section 3.04 and the Agency Agreement. Lands made available by the
Government under this Section 3.03(a) shall be on the following terms:





               (i) Annual rent (dedication and depletion) shall be paid annually in advance starting
on the Effective Date and thereafter on each anniversary thereof during the term of this
Agreement. The rent (dedication and depletion) shall be computed as set forth on Schedule
3.03(a)(i), it being understood that for each year, the dedication and depletion fees shall
be calculated in accordance with the current formula (as set forth on Schedule 3.03(a)(i))
save and except that the formula shall be amended so that the “New Acreage” (or “NA”)
component of the formula is excised from the formula.




               (ii) Insofar as the Partnership and the Partners will fund all costs, expenses, charges
and expenditures included as Land Lease Fees in the Mining Charges pursuant to the Mining
Agreement, no further rents will be owed directly to the Government in respect of the Agency
Lands.



          (b)    (i) Agency Lands shall be made available to the Partnership for resettlement purposes upon
payment to the Government by the Partnership of one-third of the
acquisition cost therefor. The parties shall cause to be prepared such documentation as may
be required.





               (ii) GOJ Lands may be made available for resettlement purposes on such payment and
other terms as are mutually agreed between the Government and the Partnership.



          (c) The Government covenants with St. Ann Bauxite that, subject to applicable laws governing
mining, the Government shall not disturb, interfere with, or interrupt the Partnership’s or any
third party’s enjoyment and possession of any Land that is in the Partnership’s possession pursuant
to Section 3.03(a) or (b) or has been transferred or conveyed to a third party pursuant to Section
3.04(b).




          (d) The Partners or the Partnership shall deliver possession of parcels of GOJ Land and Agency
Land to the Government by way of notification and delivery of the corresponding Certificates of
Title issued to the Government upon the earliest of the following events: (i) thirty days after the
date of the issue by the Commissioner of Mines of a certificate to the effect that every acre mined
within that parcel of land has been duly restored in accordance




-7-









 




with applicable laws and
regulations; or (ii) thirty days after the date on which the Partnership notifies the Commissioner
of Mines that no mining operations have been or are intended to be carried out on land; or (iii)
thirty days after the date of surrender by St. Ann Bauxite or the Partnership of the St. Ann Mining
Leases; or (iv) in the event that a certificate of title is not available within the applicable
thirty-day period under clause (i), (ii) or (iii) above, within such later time period as shall be
agreed by the parties; provided that, subject to the payment required under Section 3.03(b), the
Partners and the Partnership shall not be obligated to so deliver to the Government any Agency Land
which they notify the Government within the time period specified in the applicable clause above
that they propose to retain for resettlement or possible resettlement use.




          (e) The Partners and the Partnership shall continue to have the right to use any road or
passageway constructed on Lands for so long as the same is reasonably required for use by the
Partnership in connection with its mining operations.




          (f) If the Government uses or develops, or permits anyone to use or develop any GOJ Lands or
Agency Lands in the possession of the Partnership, by building or erecting any structures thereon
which increase the cost to the Partnership of mining the bauxite therefrom, the Government will
bear such increased cost.




          (g) In accordance with the provisions of the Mining Act, the Mining Regulations, the
Encouragement Act, the Bauxite Industry (Declaration of Recognized Producer) (St. Ann Bauxite
Limited) Order 2004 and any other statutory provision, regulation or order and as provided in
Section 3.03(h) below, the Partnership and the Partners shall have, and be under, an obligation to
maintain in agricultural or pastoral productivity, and to pay the costs or expenses of such
agricultural or pastoral maintenance, productivity or development of the Lands, during any period
when the Partners or Partnership is in occupation or possession of such Lands.




          (h) If, during the period when the Partnership is in possession of any parcel of Land pursuant
to the terms of this Agreement, the Partnership is not actually carrying on mining activities on
such Land or is not developing or using such Land for resettlement purposes, the Partnership shall
use its best efforts consistent with the best interests of its bauxite mining operations, to use,
administer and manage such Land in its possession for agricultural, pastoral or other productive
purposes in accordance with applicable law, and the Partnership shall be entitled to sublease the
whole or any part of such Land for agricultural pastoral or other productive use on such terms and
conditions as St. Ann Bauxite determines are appropriate under the circumstances.




          (i) The obligations of St. Ann Bauxite with respect to the restoration, reclamation and
rehabilitation of the Lands shall be those contained in the Bauxite Industry (Declaration of
Recognized Producer) (St. Ann Bauxite Limited) Order 2004, which order shall, except as provided
herein, continue to be in effect for the term of this Agreement, provided that amounts payable to
the Government in lieu of restoration shall be as provided in the Mining Regulations, as amended
from time to time.




          (j) As long as any St. Ann Mining Lease remains in force, St. Ann Bauxite and the Partnership,
and their contractors, servants and agents shall, subject to the provisions of




-8-









 




the Mining Act, be
entitled, with or without workmen, vehicles, equipment or machines, to free access and entry to any
or all of the Lands and shall be at liberty to survey the whole or any part thereof, to sink shafts
and drill holes thereon, to prospect thereon and to take and remove all such samples of ore and/or
soil as they may deem necessary to test the mineral bearing qualities of such Lands. In the event
that they drill holes or shafts, they shall fill such holes or shafts upon completion.




          (k) St. Ann Bauxite and the Partnership shall be entitled, without being required to make any
application under Section 59 of the Mining Act to all rights of passageway as it may consider
necessary or desirable for or incidental to any of its mining operations over any or all of the GOJ
Lands or Agency Lands.




     3.04 Acquisition and Disposition of Lands.



          (a) During the term of this Agreement, and subject to the other provisions of this Agreement
and to the Agency Agreement, St. Ann Bauxite and JBM shall have the right, at their or the
Partnership’s cost and expense, to acquire, lease and dispose of lands for the purposes of the
activities and operations in Jamaica of the Partnership, including Lands and other lands as may be
necessary or desirable for roadways, passageways, cableways and other infrastructure and support
facilities or for housing and recreational facilities for employees.




          (b) All Lands acquired by the Partners or the Partnership for mining and related purposes,
such as access roads and cableways shall be acquired for and in the name of the Government, in
accordance with the Agency Agreement; it being understood that Lands being acquired solely for
immediate assignment or other conveyance to third parties or resettlement purposes, for support
facilities or for housing and recreational facilities for employees shall not be so acquired under
the Agency Agreement.




          (c) None of the Partners nor the Partnership shall have any authority to dispose of any GOJ
Lands or Agency Lands. The foregoing prohibition shall not be construed as affecting the parties
rights and obligations under Section 3.03(b).




          (d) The Government shall cooperate with the Partners and the Partnership to such extent as may
be or become necessary in any proceeding required to be taken by or taken against them or the
Partnership in connection with or arising out of the use by the Partnership of GOJ Lands or Agency
Lands made available by the Government pursuant to Section 3.03(a), but all costs and expenses,
including legal fees, and damages, to the extent of St. Ann Bauxite’s liability therefor, if any,
shall be paid and borne by St. Ann Bauxite, and St. Ann Bauxite hereby agrees to indemnify and save
harmless the Government from all liability for the payment of such costs, expenses and all other
outgoings which may from time to time be incurred or imposed on the Government in respect thereof.



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ARTICLE IV




EXPANSION BY THE GOVERNMENT




     4.01 Expansion by the Government.



          (a) The Government will be entitled to expand production of bauxite by the Partnership. It,
however, will be responsible for providing all funds necessary to finance any necessary acquisition
of additional facilities and for obtaining mining leases for bauxite reserves for the expanded
production. The Government will take for its own use or sale all bauxite produced as a result of
such expansion of production at a mining charge determined in the same manner as the mining charge
paid by St. Ann Bauxite. If the Government expands production of the Partnership, the Government
will pay St. Ann Bauxite an annual charge for use of St. Ann Bauxite’s share of the Partnership’s
assets computed in the same manner as the charge paid by St. Ann Bauxite to JBM under the
Partnership Deed, in proportion to the total amount of bauxite produced.




          (b) In the event that the Government expands production, this Agreement and the Implementing
Documents will be revised as necessary to reflect the agreement between the Government and St. Ann
Bauxite with respect to expansion.




ARTICLE V




INCOME TAX




     5.01 Tax Rate; Application.



          (a) St. Ann Bauxite shall be subject to income tax and shall make provisional and final
payment of any amounts owed in accordance with the Income Tax Act of Jamaica, save and except as
otherwise provided in this Article V.




          (b) The fiscal regime in this Agreement is agreed to on the basis that the maximum rate of
income tax applicable to St. Ann Bauxite shall be 33.3%.




          (c) The Partnership shall not be treated as a taxpayer nor as having profits subject to income
tax.




          (d) St. Ann Bauxite shall submit certified copies of financial statements, balance sheets and
operating statements of the Partnership for each calendar year to the Commissioner responsible for
Income Tax within sixty (60) days after the end of such calendar year.




     5.02 Sales Revenue.



          (a) For the purpose of arriving at taxable income, (i) St. Ann Bauxite’s revenues from sales
and shipments of bauxite to customers that are not Affiliates of St. Ann Bauxite shall be
recognized at the actual contract price for such sales; and (ii) St. Ann Bauxite’s revenues from
sales and shipments of bauxite to customers that are Affiliates of St. Ann Bauxite shall be
recognized at the market price for such sales (the “Market Price”).




          (b) For purposes of clause (ii) of Section 5.02(a) above, the parties have agreed that the
market price for sales of bauxite from and after the Effective Date through December 31, 2005 is
US$[***] per dry MT. Starting no later than July 1, 2005, the parties will negotiate in good faith
to agree on the applicable Market Price for periods after December 31,




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2005. If ninety (90) days
after commencement of any such negotiations the parties are unable to agree on an applicable price,
they will jointly appoint an independent expert to determine the price, based on the parties’
respective proposals. In the absence of agreement as to an independent expert, either party may
request that such expert be appointed by the President for the time being of the International
Chamber of Commerce. Until the Market Price for periods after
December 31, 2005 is determined in
accordance with the foregoing, such Market Price shall be deemed to be US$[***] per dry MT
escalated or reduced by the percentage that an increase or decrease has occurred in the U.S.
Department of Labor Bureau of Labor Statistics U.S. Producers Price Index for Industrial
Commodities (“Index”) for the average of the monthly Indices of the calendar year in which
shipments of bauxite are made, as compared to the average of the monthly Indices which were in
effect for the calendar year 2004.




     5.03 Expenses.



     For the purpose of arriving at taxable income for any calendar year, St. Ann Bauxite’s
deductible expenses shall be the total of (a) (i) all of its operating costs for mining and related
purposes, including all direct land acquisition, rental, mining, reclamation, resettlement,
transportation, railroading, processing, drying, shipping and administrative costs, plus (ii)
depreciation (being initial and annual allowances determined in accordance with the First Schedule
to the Income Tax Act), for that year, which amounts in this clause (a) shall include the total
amount of mining charges charged to St. Ann Bauxite by the Partnership under the Mining Agreement
(including the Land Lease Fees component thereof); and (b) all other costs, charges and expenses
incurred in connection with St. Ann Bauxite’s bauxite mining and related activities, which shall be
deemed to include, but shall not be limited to, bauxite royalties, the
asset usage fee under Section 17.03 of the Partnership Deed, demurrage, and such management
fees and other expenses incurred in respect of services provided by Affiliates of St. Ann Bauxite,
but subject to the proviso in Section 8.05 of the Management Agreement.



     5.04 Form of Payment of Taxes.



     The income tax payable by St. Ann Bauxite in Jamaica shall be payable in United States dollars
to such bank or banks in the United States of America or Jamaica as may be designated by the
Government, and accordingly all books, records and statements, including computations for income
tax, shall be kept and made in United States dollars and shall be open to inspection by the
Commissioner responsible for Income Tax.



     5.05 Tax on Dividends and other Payments.



     Notwithstanding any other provision in this Article V, no withholding tax of any nature will
be required on dividends or other branch profit remittances by St. Ann Bauxite to the recipient
thereof to the extent such dividends or other remittances are not taxable by the jurisdiction where
such recipient is domiciled or resident.



     5.06 Connected Persons.



          (a) Any St. Ann Bauxite connected person (as defined in the Income Tax Act) which engages in
any transactions or dealings with St. Ann Bauxite or the Partnership which give rise to business
profits in Jamaica shall not be subject to any Jamaican income tax so long as




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such connected person
does not have a permanent establishment (as defined in any of the Treaties referred to in Section
5.06(b) below) in Jamaica.




          (b) For the purpose of this Agreement, the term “business profits” shall have the same meaning
as that contained in Article 7 of the Double Taxation Treaty between Jamaica and the United States
of America dated December 29, 1981, as in effect for taxable years beginning on or after January 1,
1982 (hereinafter referred to as the “U.S. Treaty”).




          (c) Notwithstanding the preceding Section 5.06(b), both parties agree that in no event shall
the occurrence of any acts, transactions or dealings by or on behalf of a St. Ann Bauxite connected
person in pursuance of this Agreement or any Implementing Document, while the fiscal provisions of
this Agreement are in effect, solely by themselves cause any such St. Ann Bauxite connected person
to be treated as having a permanent establishment in Jamaica.




     5.07 Double Taxation.



     In the event of double taxation arising from actions by Jamaica or any other jurisdiction with
respect to any of the matters covered by this Agreement, then St. Ann Bauxite may, subject to the
provisions of any applicable income tax treaty which includes provisions for relief from double
taxation, request a review and discussion of the action giving rise to such double taxation and the
Government shall take such reasonable action as the parties hereto may deem proper and appropriate
in the circumstances to endeavour to avoid or reduce such double taxation. Nothing
contained in this Section shall expressly or by implication create any obligation on the part
of the Government to waive, reduce or remit in whole or in part any tax provisions which St. Ann
Bauxite shall have paid or shall be liable to pay under the fiscal regime provisions of this
Agreement.



ARTICLE VI




PRODUCTION LEVY




     6.01 Production Levy.



          (a) St. Ann Bauxite will pay to the Government an extraction tax to be known as the bauxite
production levy (the “Production Levy”) in respect of its share of all bauxite or laterite
extracted or won from the St. Ann Mining Lease in each calendar year, but for administrative
convenience, the amount of Production Levy payable shall be determined on the basis of the bauxite
actually shipped (i.e. exported) expressed in MT as hereinafter provided for the calendar year. To
the extent that bauxite mined is transferred or sold to the Government, Production Levy shall be
paid by the party on whose behalf the bauxite is actually being shipped (exported). The Production
Levy payable by St. Ann Bauxite shall be calculated and paid in U.S. Dollars.




          (b) As used in this Section 6.01:





               (i) The term “Bauxite Shipments” shall mean the bauxite actually shipped in such
calendar year expressed in MT determined by using methods verifiable to the Government.



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               (ii) The term “LMEP” shall mean the average of the three months seller price for 99.7
percent purity aluminum in U.S. Dollars per Metric Ton quoted by the London Metal Exchange
as published in Metal Bulletin under the caption “Metal Bulletin (month) Averages” in the
section “London Metal Exchange high, low and average (month) (days)” in the column “(month)
Average” for the calendar year in question. In the absence of an LMEP, St. Ann Bauxite and
the Government will negotiate toward agreeing on a mutually acceptable alternative pricing
mechanism. In the event the parties fail to reach an agreement within sixty (60) days of
either party having notified the other to enter into discussions to agree to an alternative
pricing mechanism, then the Chairman of the London Metal Exchange in London, U.K. or his
nominee shall be requested to select a suitable reference in lieu thereof and/or appropriate
amendment to the terms of this Section 6.01(b)(ii). The decision of the Chairman or his
nominee shall be final and binding on the parties.



          (c) Production Levy Formula:





               (i) The Production Levy payable with respect to each calendar year that this Section
6.01 is in effect shall be an amount equal to the LMEP Price multiplied by Bauxite
Shipments.




               (ii) The minimum Production Levy per MT is determined at an LMEP of U.S. $[***] per
Metric Ton and shall escalate from U.S. $[***] per Metric Ton in direct proportion to
increases in LMEP.



          (d) St. Ann Bauxite shall have no obligation to pay any minimum amount of Production Levy with
respect to any calendar year except as required pursuant to, and subject to the terms of this
Section 6.01 with respect to actual Bauxite Shipments.




          (e) Except as hereinafter provided, St. Ann Bauxite will pay the Production Levy on all
bauxite and laterite extracted or won by St. Ann Bauxite in each calendar year in monthly
installments within fifteen (15) days after the end of each calendar month. However, for
administrative convenience, such Production Levy installments will be calculated (1) on the basis
of total bauxite shipped by St. Ann Bauxite during the period from January 1 of each calendar year
to the end of the month (during such calendar year) for which the payment is due, (2) using a
provisional Production Levy rate equivalent to the basic rate referred to in the Bauxite
(Production Levy) Act as gazetted from time to time, and (3) after subtracting the sum of all
monthly installments of Production Levy previously paid with respect to such calendar year period.




          (f) The quarterly statements of prices for primary aluminum required to be filed by St. Ann
Bauxite under Section 4(2) of the Bauxite (Production Levy) Act, shall be prepared in aggregate
form (reflecting gross sales revenues and tonnages) consistent with the definition of LMEP in
Section 6.01(b)(ii) above.




     6.02 Notwithstanding the foregoing, the Government agrees that it shall, given the special
circumstances herein, temporarily grant to 

St. Ann Bauxite a [***]% waiver of the



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payment of any
and all such Production Levy for the period from the Effective Date through December 31, 2007.




ARTICLE VII




ROYALTIES




     7.01 Royalties.



     During the term hereof the total royalty payable under the Mining Act or the Mining
Regulations, as amended from time to time, by St. Ann Bauxite to any Person for the mining of
bauxite shall be at the rate of U.S. $1.50 per dry MT of monohydrate bauxite shipped and U.S. $2.00
per dry MT of trihydrate bauxite shipped; provided that during any period when the Production Levy
is payable by St. Ann Bauxite, the royalty shall be at the rate of U.S. $0.50 per dry MT. Such
royalty shall be paid in United States dollars.



     7.02 Monohydrate Levels.



     For the purposes of this Article VII, an MT of monohydrate bauxite shall be deemed to mean an
MT of bauxite whose monohydrate content is 3% or higher whereas an MT of trihydrate bauxite shall
mean an MT of bauxite whose monohydrate content is less than 3%. It is however agreed that
verification of bauxite monohydrate content, for the purposes of this provision, shall
be conducted on a shipment basis and certified in accordance with the procedures set out in
Schedule 7.02 hereto.



ARTICLE VIII




OTHER TAXES AND CHARGES




     8.01 Other Taxes and Charges.



     During the term of this Agreement, the Government shall indemnify and save St. Ann Bauxite
harmless from any obligation to pay or liability for any further taxes or other government
impositions of whatever kind or nature on, or in connection with, St. Ann Bauxite’s and the
Partnership’s bauxite mining enterprise in Jamaica, either directly or indirectly, except that St.
Ann Bauxite shall be liable to pay all taxes or other government impositions of whatever kind or
nature, which are now or may hereafter be imposed and which are of general application in Jamaica
and are not applied in a discriminatory manner to St. Ann Bauxite as a recognised bauxite producer,
provided however that this provision shall not apply to those taxes or other government impositions
for which specific and separate limitations are contained elsewhere in this Agreement.



     8.02 Property Tax.



          (a) For the purposes of property tax, the valuation of lands containing minerals which belong
to the Government by virtue of the Minerals (Vesting) Act or any other present or future Act shall
not take into account the presence of the said minerals.




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          (b) Neither St. Ann Bauxite nor the Partnership shall be liable to pay a higher rate of
property tax on lands owned by St. Ann Bauxite or the Partnership or leased to either of them, nor
shall the value of any property so owned or occupied by either of them for the purposes of its
bauxite mining operations be assessed on a basis different from that used for other land owners
engaged in industrial or commercial operations.




          (c) The Partners or the Partnership shall be liable to pay such property taxes, rates and
other outgoings in respect of the Lands that, under applicable law, are payable with respect to
periods during which they or it are in possession thereof.




     8.03 Customs Duties and Other Similar Impost.



          (a) No tonnage tax, consumption duty, customs duty or other similar impost shall be payable by
St. Ann Bauxite or the Partnership or, pursuant to Section 4(3) of the Encouragement Act by the
holder of a contract with St. Ann Bauxite, in respect of any of the articles referred to in
Sections 4 and 7 of the Encouragement Act, any items necessary for the repair, maintenance or
restoration of those items specified in Part 1 of the Schedule to the said Act, during applicable
periods mentioned in said Act, or in respect of any such articles or items imported during such
period or any extension thereof; and




          (b) No excise duty shall be payable by St. Ann Bauxite or the Partnership or, pursuant to
Section 8(3) of the said Act by the holder of a contract with St. Ann Bauxite or the Partnership,
on any of the articles referred to in Section 8 Subsections (1) and (3) of such Act during the
period described in Section 15.01(a) or any extension thereof.




          (c) All documents used in connection with the importation into Jamaica of any of the articles
referred to in Subsection 1 of Sections 4 and/or 7 of the Encouragement Act shall be exempt from
additional Stamp Duty.




          (d) St. Ann Bauxite shall pay and advance to the Government and its agencies all taxes,
duties, charges or similar imposts, including but not limited to transfer taxes, stamp duty, and
registration fees, which are payable under applicable laws in respect of its acquisition of Kaiser
Bauxite’s undivided interest in the assets, property and in the Original Partnership under the
terms of the Asset Purchase Agreement. St. Ann Bauxite will indemnify JBM against the payment of
any such taxes, duties, charges or similar imposts which may be raised against it by virtue of
being a member of the Original Partnership or the Partnership.




     8.04 Consultation on Extension of Fiscal Regime.



     The provisions of Articles V, VI, VII and VIII shall become effective as of the Effective Date
and shall govern the period from the Effective Date through December 31, 2005. Starting not later
than July 2005 and during succeeding months, the Government and St. Ann Bauxite will have further
discussions with a view to establishing an appropriate fiscal regime for such period or periods
commencing January 1, 2006 as may be agreed between the parties; provided, however, that in the
event such a fiscal regime is not agreed upon by the parties, the provisions of Articles V, VI, VII
and VIII, as same may be amended from time to time by agreement between the parties, shall be
extended unless and until the parties shall have reached agreement on such a fiscal regime.



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ARTICLE IX




(INTENTIONALLY OMITTED)




ARTICLE X




MINIMUM PRODUCTION REQUIREMENTS




     10.01 Minimum Production Requirements.



     The minimum production requirements for St. Ann Bauxite set forth in the Bauxite (Production
Levy) Act and the Mining Act for each calendar year shall be subject to the following exceptions:




          (a) If force majeure conditions, as defined in Section 14.01, occur which affect operations of
the Partnership or St. Ann Bauxite, or an Affiliate of the Partnership or St. Ann Bauxite, and
which prevent, curtail or delay the Partnership or St. Ann Bauxite from meeting the yearly minimum
tonnage requirements for any such calendar year, St. Ann Bauxite shall be relieved from the
obligation to meet such yearly minimum production requirements to the extent necessary as a result
of the occurrence of such conditions. St. Ann Bauxite will promptly inform the Government by
written notice of the occurrence of such conditions, which notice shall also include St. Ann
Bauxite’s best estimate at that time of the probable extent to which St. Ann Bauxite will be
prevented from meeting the minimum tonnage requirements for such calendar year. In such case, St.
Ann Bauxite will keep the Government fully informed and submit revised or confirmatory estimates
from time to time as the case may require.




          (b) If, at any time, market conditions require a world-wide or regional reduction in
requirements of bauxite or alumina by St. Ann Bauxite, Century Aluminum Company or Noranda
Aluminum, Inc. in any calendar year, then, after written notice to that effect from St. Ann
Bauxite, Century Aluminum Company or Noranda Aluminum, Inc. is given to the Government, the parties
will promptly begin discussions concerning the minimum tonnage to be established by the Government
and made applicable to the Partnership for such year, taking into account Jamaica’s actual share of
the supply of bauxite or alumina for the Century Aluminum Company system or Noranda Aluminum, Inc.
system, as applicable, from all sources.




ARTICLE XI




GOVERNMENT OPTION FOR UNUSED CAPACITY




     11.01 Option to Government.



          (a) Subject as hereunder provided, the parties hereto agree that mining operations of the
Partnership shall at all times be operated at the full capacity of the Bauxite Reserves
Requirement. Compliance by St. Ann Bauxite with its obligations under Section 11.01(b) below shall
be deemed to constitute compliance with this Section 11.01(a).




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          (b) Recognising the economic advantages of conducting mining operations at the highest
effective operating rate, the parties agree that the Partnership shall direct the Managing Partner
to achieve such highest effective operating rate as is consistent with operating considerations
including safety, quality, environment, consumption of raw material and operating supplies and
other similar factors and conditions as they exist from time to time.




          (c) The Government or any of its agencies shall have the right from time to time to any unused
capacity, paying to St. Ann Bauxite therefor the amount provided in Section 11 .02(b)(i) hereof.




          (d) Production at the mining facility may be reduced if:





               (i) production is not required by St. Ann Bauxite; and




               (ii) the Government has not elected to purchase the unused capacity as hereinafter
provided.



     11.02 Establishing and Paying for Shortfall.



          (a) St. Ann Bauxite shall declare to the Government or its appropriate agency not later than
the 10th day of October in each year during the continuance of this Agreement the then capacity of
the mining operations and the quantity of bauxite which it does not require for the succeeding
calendar year. The Government shall be entitled at any time up to and including the 31st of
December in such year to notify St. Ann Bauxite in writing of the amount of such excess capacity
which it requires. Subject to force majeure, St. Ann Bauxite shall be obliged to produce the
amount so required and the Government shall be entitled to such amount and required to take the
same during the succeeding calendar year. The Government shall be entitled to take the same
quantity for each year of a three year contract if it reasonably demonstrates to the satisfaction
of St. Ann Bauxite that a three year contract is necessary for it to sell such bauxite. If at any
time whether before or after the Government notifies St. Ann Bauxite of the amount of the excess
capacity which it requires, St. Ann Bauxite informs the Government that it considers it can sell or
otherwise utilise what it had previously designated as excess capacity or any part thereof and if
at such time Government has not sold such amount or is not then negotiating for the sale thereof
and has not reached a stage that it cannot resile therefrom, the excess capacity notification
previously given by St. Ann Bauxite will be deemed not to have been given, but if St. Ann Bauxite
requires less than the amount of the tonnage that it had previously designated as excess capacity
then the Government shall have the absolute right to accept or reject St. Ann Bauxite’s request.




          (b) The terms upon which any excess capacity is taken by the Government shall be as follows:





               (i) The price payable by the Government to St. Ann Bauxite per MT of bauxite shall be
equal to the total of the direct mining costs plus depreciation for that year, divided by
the number of MTs of bauxite produced by the Partnership during that year.





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               (ii) All other terms of sale and purchase for the quantity accepted by the Government
for delivery shall be in accordance with the provisions, mutatis mutandis, of the Mining
Agreement, as if the Government was named therein in the place of St. Ann Bauxite.



     11.03 Annual Capital Charge.



     St. Ann Bauxite shall pay the asset usage fee required by Section 17.03 of the Partnership
Deed notwithstanding that any bauxite mined by the Partnership is sold to the Government as herein
provided.



     11.04 Further Assurances.



     St. Ann Bauxite agrees to do all acts and to conduct all operations in a timely manner to
efficiently carry out and discharge all of its obligations under this Article.



ARTICLE XII




APPROVALS AND AGENTS




     12.01 Permits and Approvals.



     The Government will, where the power to do so is vested in the Government and where the
Government has expressly or impliedly undertaken to do so in this Agreement or any Implementing
Document, grant to St. Ann Bauxite and the Partnership in a timely manner all licenses, permits,
authorizations, orders or such other approvals as are necessary or appropriate to enable St. Ann
Bauxite and the Partnership to perform their obligations and to exercise their rights under this
Agreement or any Implementing Document. In those cases where such power is not vested in the
Government, the Government will give to St. Ann Bauxite and the Partnership all assistance
necessary for St. Ann Bauxite and the Partnership to obtain in a timely manner all such licenses,
permits, authorizations, orders or such other approvals.



     12.02 Agents and Contractors.



     Without being relieved of any of their respective obligations hereunder, St. Ann Bauxite and
its Affiliates shall have the right to exercise their respective rights and to perform their
respective obligations under this Agreement through the use of such agents and contractors as they
may designate.



ARTICLE XIII




SETTLEMENT OF DISPUTES




     13.01 Settlement of Disputes.



          (a) Any disputes between the parties which may arise from or in consequence of this Agreement
or an Implementing Document, including a breach of any provision of this Agreement or an
Implementing Document, other than disputes described in Section 13.01(b)




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shall, unless settled by
mutual agreement of the parties or by conciliation or arbitration procedures agreed to by the
parties, be referred to Jamaican courts having jurisdiction thereof or to other procedures under
Jamaican law for determination in accordance with the laws of Jamaica.




          (b) Any disputes between the parties hereto which may arise from or in consequence of Article
V, VI, VII, VIII, X or XI or Section 2.02 or 2.05, including a breach of any provisions of any of
such Articles or Sections, and from any other provisions hereof or thereof which are related to
such Articles, or which involve the validity or binding effect of this
Agreement or any Implementing Document (which validity and binding effect shall be
conclusively presumed), shall, unless settled by mutual agreement of the parties or by conciliation
procedures otherwise agreed to by the parties, be referred for settlement by arbitration in
accordance with Section 13.02 to the exclusion of any other remedy and as a condition precedent to
any action in any court.




          (c) For purposes of this Article the term “parties” shall include the Government and any
agency, instrumentality or subdivision thereof and St. Ann Bauxite and any Affiliate having rights
or obligations under this Agreement or an Implementing Document.




     13.02 Arbitration Procedures.



          (a) Any dispute described in Section 13.01(b) which shall be referred for settlement by
arbitration shall be referred to an Arbitral Tribunal consisting of three (3) arbitrators, one
arbitrator appointed by each party hereto and the third arbitrator, who shall be Chairman of the
Arbitral Tribunal, appointed by agreement of the parties. The Chairman shall not be closely
connected with, or have been in the public service of, or be a national of Canada, the United
States of America or Jamaica, and shall be a person of recognized standing in jurisprudence.




          (b) Either party wishing to institute an arbitration proceeding under this Section shall
address a written notice to that effect to the other party. Such notice shall designate the place
of arbitration and shall contain a statement setting forth the nature of the dispute and the nature
of the relief sought. The date of such notice shall determine the date of institution of
arbitration under this Section. Pending a decision or award of the Arbitral Tribunal, continuance
of operations or activities shall not prejudice the claim of either party to the dispute.




          (c) If, within forty-five (45) days after the date of institution of arbitration under this
Section, the parties have not agreed upon the arbitrator who will be the Chairman, or if either
side shall have failed by written notice to appoint an arbitrator, then such arbitrator or
arbitrators or the Chairman shall be appointed by the President, for the time being, of the Law
Society of England and Wales.




          (d) In case any arbitrator appointed in accordance with this Section shall fail to accept his
appointment, resign, die, otherwise fail or be unable to act, a successor arbitrator shall be
appointed in the same manner prescribed for the appointment of the arbitrator or Chairman whom he
succeeds, and such successor shall have all powers and duties of his predecessor.




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          (e) The place of arbitration shall be that designated in the notice of the instituting party
referred to in Section 13.01(b) unless the other party, within forty-five (45) days thereof, shall
by written notice object to the place so designated. In the event of such objection, the place of
arbitration shall be Hamilton, Bermuda. The Arbitral Tribunal shall convene at such times as shall
be fixed by the Chairman.




          (f) The Arbitral Tribunal shall decide all questions relating to its jurisdiction and
competence and, subject to the provisions of this Section and except as the parties shall
otherwise agree, shall determine its procedure. All decisions of the Arbitral Tribunal shall
be by majority of the votes of all of its members.




          (g) The failure of a party to appoint an arbitrator, to appear or to present its case shall
not prevent or hinder the Arbitral Tribunal from dealing with the questions submitted to it or from
rendering an award. The Arbitral Tribunal shall, if requested by a party to the dispute, determine
any incidental or additional claims or counterclaims arising out of the subject matter of the
dispute or grant provisional relief or issue interlocutory orders to mitigate damages or prevent
irreparable injury.




          (h) The Arbitral Tribunal shall decide all disputes, other than those covered by Section
13.01(a), in accordance with all applicable rules of law, including international law, so as to
give full force and effect to the spirit as well as the letter of the applicable provisions of this
Agreement and the Implementing Documents and the intent of the parties as expressed therein.




          (i) An award in writing signed by a majority of the Arbitral Tribunal shall constitute the
award of such Arbitral Tribunal. The award shall deal with the questions submitted to the Arbitral
Tribunal and shall state the reasons upon which it is based. In the event the decision or award of
the Arbitral Tribunal recognizes that a complainant was justified, provision may be made in such
decisions or award for such reparation as may appropriately be made in favor of the complainant.
Signed counterparts of the award shall be transmitted by the Arbitral Tribunal to each party. The
Arbitral Tribunal shall not publish its award to third parties without the consent of the parties
hereto.




          (j) Each party shall, in good faith, abide by and comply with any award rendered by the
Arbitral Tribunal in accordance with this Section. An award rendered in accordance with this
Section shall be final, conclusive and legally binding upon the parties to this Agreement and the
Implementing Documents. If, within sixty (60) days after counterparts of the award are transmitted
to the parties, the award shall not be complied with, any party may enter judgment upon, or
institute proceedings to enforce, the award in any court of competent jurisdiction against any
other party, may enforce such judgment by execution or may pursue any other appropriate remedy or
proceeding against such other party for the enforcement of the award and the provisions of this
Agreement and the Implementing Documents, and the parties, to the extent legally permitted,
expressly and irrevocably waive the right to invoke or avail themselves of any privilege of or
immunity from jurisdiction or the execution or enforcement of such award or judgment.




          (k) Each party to the dispute shall defray its own expenses in the arbitral proceedings. The
Arbitral Tribunal shall determine the fees and expenses of its members, the




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costs of the arbitral
proceedings and how and by whom such fees, expenses and costs are to be paid. Such decision shall
form a part of the award.




     13.03 Continued Effectiveness.



     Notwithstanding the termination or expiration of this Agreement, the provisions of this
Article shall continue in full force and effect with respect to any arbitration proceedings
instituted prior to the expiration of two (2) years following such termination or expiration.



ARTICLE XIV




MISCELLANEOUS




     14.01 Force Majeure.



          (a) A failure by the Government, or any of its agencies, instrumentalities or subdivisions, or
by St. Ann Bauxite or any of its Affiliates to carry out any of its or their obligations or to
exercise any of its or their rights under this Agreement shall not be deemed a breach of contract
or waiver of rights if such failure is caused by force majeure. If any activities or other
performance contemplated by this Agreement are delayed, curtailed or prevented by force majeure,
then, anything in this Agreement to the contrary notwithstanding, the time for carrying out the
obligations or exercising the rights thereby affected shall be extended for a period equal to a
total of the periods during which such causes or their effects were operative.




          (b) For purposes of this Agreement, force majeure shall mean, to the extent beyond a party’s
reasonable control, war, revolution, invasion, insurrection, civil disorders, acts of God,
compliance with laws and orders of the Jamaican Government or any subdivision thereof, labour
disputes or strikes, or any other condition or circumstance of a similar character or any other
cause beyond the reasonable control of the party whose ability to exercise its rights or perform
its obligations is affected.




          (c) It is understood and agreed that the Government may invoke an act of its governmental
authority, including the adoption or issuance of laws and orders, as force majeure only if such act
does not have as one of its principal purposes the frustration of any right or obligation under
this Agreement.




          (d) The party whose ability to exercise its rights or to perform its obligations is affected
by force majeure shall notify the other party in writing, stating the cause, and the parties shall
use their commercially reasonable efforts to remove such cause; provided, however, that no party
shall be obligated to resolve or terminate any disagreement with third parties, including labor
disputes, except under conditions acceptable to it or pursuant to the final decision of any
arbitral, judicial or statutory agency having jurisdiction finally to resolve the disagreement.




     14.02 Notices.



     All notices and other communications given pursuant to this Agreement shall be in writing and
shall be personally delivered or mailed, postage prepaid, by registered mail or by



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certified mail
return receipt requested (airmail if from one country to another), or sent by reputable
international overnight courier service, addressed as follows:



	 	 	 	 	 
	 

	 	If to the Government:
	 	Office of the Prime Minister
	 

	 	 	 	Jamaica House
	 

	 	 	 	Hope Road
	 

	 	 	 	Kingston 10
	 

	 	 	 	Jamaica
	 

	 	 	 	Attention: Cabinet Secretary
	 
	 	 	 	 
	 

	 	with copy to:
	 	Financial Secretary
	 

	 	 	 	Ministry of Finance and Planning
	 

	 	 	 	30 National Heroes Circle
	 

	 	 	 	Kingston 4 Jamaica
	 
	 	 	 	 
	 

	 	 	 	Permanent Secretary
	 

	 	 	 	Ministry of Development
	 

	 	 	 	Jamaica House
	 

	 	 	 	1 Devon Road
	 

	 	 	 	Kingston 10 Jamaica
	 
	 

	 	 	 	Managing Director
	 

	 	 	 	Jamaica Bauxite Mining Limited
	 

	 	 	 	36 Trafalgar Road
	 

	 	 	 	Kingston 10 Jamaica
	 
	 	 	 	 
	 

	 	If to St. Ann Bauxite:
	 	St. Ann Bauxite Limited
	 

	 	 	 	c/o Myers, Fletcher & Gordon
	 

	 	 	 	Park Place, 21 East Street
	 

	 	 	 	Kingston, Jamaica W.I.
	 

	 	 	 	Attn: Patrick Rousseau
	 
	 	 	 	 
	 

	 	with copy to:
	 	Century Aluminum Company
	 

	 	 	 	2511 Garden Road
	 

	 	 	 	Building A, Suite 200
	 

	 	 	 	Monterey, CA 93940
	 

	 	 	 	United States of America
	 

	 	 	 	Attn: General Counsel
	 
	 	 	 	 
	 

	 	 	 	Noranda Aluminum, Inc.
	 

	 	 	 	Five Corporate Centre
	 

	 	 	 	801 Crescent Centre Drive
	 

	 	 	 	Suite 600
	 

	 	 	 	Franklin, TN 37067
	 

	 	 	 	Attn: President






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or to
such other address as a party may from time to time notify the others. Any notice or other
communication personally delivered or send by overnight courier shall be deemed to have been
effectively given at the time of delivery, and any notice mailed as aforesaid shall be deemed to
have been effectively given on the seventh (7th) day after the date of posting if being sent to an
address within the same country and if being sent to another country, on the fourteenth (14th) day
after the date of posting.




     14.03 Assignment.



     The terms, covenants and conditions of this Agreement shall inure to the benefit of, and shall
be legally binding upon, the parties hereto and their respective successors. The rights and
obligations of the parties hereunder may not be transferred or assigned in whole or in part.



     14.04 Integration, Modification and Waiver.



          (a) This Agreement and the Implementing Documents, together with the other exhibits and
Schedules hereto constitute the entire agreement between the parties hereto, and supersede all
previous negotiations, commitments, writings and agreements among the parties, with respect to the
subject matter hereof.




          (b) No release, amendment, alteration, modification or interpretation of this Agreement shall
be binding upon the parties hereto unless in writing and executed by a duly authorized officer or
representative of each of the parties hereto.




          (c) The failure of any party hereto to enforce at any time any of the provisions of this
Agreement, or to exercise any option, election or right which is herein provided, shall in no way
be construed to be a waiver of such provisions nor in any way to affect the validity of this
Agreement or any part thereof or the right of any party to thereafter enforce each and every such
provision and to exercise any such option, election or right. No waiver of any breach of this
Agreement shall be held to be a waiver of any other breach. No waiver of any provision of this
Agreement will be effective as against any party hereto unless in writing and executed by a duly
authorized officer or representative of such party.




     14.05 Headings.



     The titles and headings appearing in this Agreement have been inserted as a matter of
convenience of reference only and in no way define, limit or describe the scope and intent of this
Agreement or otherwise control or affect this Agreement.



ARTICLE XV




TERM AND EFFECTIVENESS OF AGREEMENTS




     15.01 Effective Date and Term of this Agreement.



     The term of this Agreement shall commence on October 1, 2004 (the “Effective Date”), and
except for those provisions of this Agreement which expire after a period of time specified in such
provision, this Agreement, as amended from time to time, and all rights and obligations set



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forth herein shall continue in full force and effect until the expiration of the last to expire of the
St. Ann Mining Leases.



     15.02 Execution and Effectiveness of Implementing Documents.



     Exhibits A through H shall be executed in the form attached hereto, and shall become
effective, as of the Effective Date.



     15.03 Rights and Obligations Surviving Expiration.



     The following rights and obligations under this Agreement and each Implementing Document shall
continue in effect after the expiration of this Agreement:



          (a) rights and obligations relating to the transfer of funds and properties which have not yet
been completed at the time of termination, but only for the time necessary or appropriate to
exercise such rights and perform such obligations; and




          (b) rights and obligations of the parties under and pursuant to Article XIII of this
Agreement.




[REMAINDER OF PAGE INTENTIONALLY BLANK — SIGNATURE PAGES FOLLOW]




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     SIGNED BY THE PARTIES HERETO on the day and year first above written.



	 	 	 	 	 
	ST. ANN BAUXITE LIMITED

	 	THE GOVERNMENT OF JAMAICA
	 	 
	 	 	 
	By: 	/s/ William H. Brooks

	 	By: 	/s/ Omar Davies
	 	 

	 	 	 
	 	Name: William H. Brooks

	 	 	Minister of Finance and Planning
	 	Title: Vice President
	 	 	 
	 	 
	 	 	 
	By: 	/s/ Peter C. McGuire

	 	By: 	/s/ Paul Robertson
	 	 

	 	 	 
	 	Name: Peter C. McGuire

	 	 	Minister of Development
	 	Title: Assistant Secretary
	 	 	 






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Exhibits and Schedules to Establishment Agreement




	 	 	 	 	 
	Exhibit A-1

	 	—
	 	Special Mining Lease
	 
	 	 	 	 
	Exhibit A-2

	 	—
	 	Special Reserves Map
	 
	 	 	 	 
	Exhibit B

	 	—
	 	Deed of Partnership
	 
	 	 	 	 
	Exhibit C

	 	—
	 	Management Agreement
	 
	 	 	 	 
	Exhibit D

	 	—
	 	Mining Agreement
	 
	 	 	 	 
	Exhibit E

	 	—
	 	Agency Agreement
	 
	 	 	 	 
	Exhibit F

	 	—
	 	Century Aluminum Company Undertaking
	 
	 	 	 	 
	Exhibit G

	 	—
	 	Noranda Aluminum, Inc. Undertaking
	 
	 	 	 	 
	Exhibit H

	 	—
	 	Government of Jamaica Undertaking
	 
	 	 	 	 
	Schedule 3.03(a)

	 	—
	 	GOJ Lands
	 
	 	 	 	 
	Schedule 3.03(a)(i)

	 	—
	 	Rental Lands Formula
	 
	 	 	 	 
	Schedule 7.02

	 	—
	 	Monohydrate Certification






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Schedule 7.02

Monohydrate Certification





	1.	 	SAMPLING
	 
	a)	 	St. Ann Bauxite shall take a representative shipment sample in accordance with the standard
practice at the loading port for each shipment of bauxite. Three sub-samples shall be
prepared for the sample, one for St. Ann Bauxite, one for the Jamaica Bauxite Institute
(“JBI”) and one sealed and retained by St. Ann Bauxite for independent referee analysis. St.
Ann Bauxite shall dispatch JBI’s sub-sample to JBI in accordance with its instructions.
	 
	b)	 	The cost of sampling at the loading port and the cost of dispatch to JBI shall be for the
account of St. Ann Bauxite. JBI shall have the right to appoint a representative to be present
at the loading port of sampling at JBI’s expense and at JBI’s risk.
	 
	2.	 	ANALYSIS
	 
	a)	 	St. Ann Bauxite shall analyze the sub-sample obtained at the loading port for each shipment
of bauxite within two (2) days of the ship’s sailing of such sample in accordance with the
relevant standard producer practice. St. Ann Bauxite shall email JBI with the results of the
analysis promptly after they are known. St. Ann Bauxite shall issue a certificate of analysis
stating its results and shall at its cost deliver such certificate to JBI as early as
practicable and in any event within fifteen (15) days after each vessel’s departure from the
loading port for that shipment. It will be presumed that the entire shipment from which the
sample was taken conforms to the analysis.
	 
	b)	 	Within thirty (30) days from receipt of the sample dispatched to JBI, JBI may notify St. Ann
Bauxite that the bauxite does not conform to the specifications set forth in the certificate
of analysis and the extent of that non-conformity. If JBI does notify St. Ann Bauxite within
this time St. Ann Bauxite shall advise JBI within ten (10) days after such notification is
received whether or not St. Ann Bauxite agrees with JBI’s analysis. If St. Ann Bauxite does
not agree, the referee sample will be analyzed as soon as possible by a referee laboratory
acceptable to JBI and St. Ann Bauxite (neither party shall unreasonably withhold or delay its
acceptance of a laboratory). In the event that JBI and St. Ann Bauxite are unable to agree on
the identity of such referee laboratory then SGS SA with head offices at 1 Place des Alpes,
1211 Geneva, Switzerland shall be the accepted independent referee laboratory. The referee
laboratory will analyze the referee sample in accordance with the applicable analytical
procedures adopted under Clause 2a hereof and a copy of its analysis shall be made available
to both parties. Such analysis shall be final and binding on the parties and the monohydrate
content of the bauxite contained in the relevant shipment shall be deemed to be the same as
that of the referee sample. St. Ann Bauxite and JBI will share the cost of any referee
analysis equally.





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