EX-10.16






EXHIBIT 10.16









Confidential



February 14, 2006


Dr. Carlton Davis

Cabinet Secretary
Jamaica House

Hope Road

Kingston 10

Jamaica



Re: St Ann Bauxite Limited (“SABL”)



Dear Dr. Davis:



We agree to the proposed revision of Section 5.02 of the Establishment Agreement that was
emailed to us by Sonia Mitchell on February 7, 2006 that maintains the $[***]/DMT transfer price
through December 31, 2008 on condition that SABL maintains the agreed capital expenditure
threshold. We have trust that without the need to make it explicit, SABL and the Government
would certainly confer on an appropriate adjustment to this schedule should there be any
unforeseen change in business conditions. We greatly appreciate the consideration shown SABL by
you and your colleagues and look forward to a successful future for SABL in partnership with
Jamaica.




Very truly yours

St. Ann Bauxite Limited




Parviz Farsangi

President





			
	Cc:	 	Dr. Vincent Lawrence

Chairman

Jamaican Bauxite Mining Ltd

36 Trafalgar Road

Kingston 10

Jamaica




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




 









 





Attachment




     5.02 Sales Revenue



     (b) For purposes of clause (ii) Section 5.02(a) above, the parties have agreed that the Market
Price for sales of bauxite from and after January 1, 2006 through December 31, 2008 is US $[***]
per dry DMT subject to St. Ann Bauxite spending cumulative capital expenditures of up to $[***]
during the three-year period, January 1, 2006 through December 31, 2008 as follows: $[***] by
December 31, 2006, $[***] by December 31, 2007 and $[***] by December 31, 2008 (the cumulative
amount required to have been expended by the end of each calendar year being the “Capital
Expenditure Threshold” for such calendar year). Starting no later than July 1, 2008, the parties
will negotiate in good faith to agree on the applicable Market Price for the period after December
31, 2008. 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,
2008 is determined in accordance with the foregoing, and in each of the calendar years 2006, 2007
and 2008 if St. Ann Bauxite does not meet the Capital Expenditure Threshold for such calendar year,
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 Commodities (“Index”) for the average of monthly Indices
of the calendar year in which shipments for bauxite are made, as compared to the average of the
monthly Indices which were in effect for the calendar year 2004.



     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, 2008. Starting not later than
July 2008 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, 2009 as may be 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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