Document:

ex1027k123109.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
10.27

    

    

    

    State
registration No. 1949 as of 19 January 2006

    

    

    

    

    

    

    

    

    

    ADDENDUM
No. 2

    

    to
the Contract for mining of nickel-cobalt ore at Novo-Shandashinsk and
Kara-Obinsk deposits in Aktyubinsk oblast of the Republic of
Kazakhstan

     in accordance with the Licences
No.420 and No.426 as of 12.10.95

    

    between

    

    MINISTRY
OF ENERGY AND MINERAL RESOURCES

     of
the Republic of Kazakhstan

    

    (Competent
Body)

    

    and

    

    “Kyzyl
Kain Mamyt”LLP

     
 

     (Contractor)

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Astana,
2006

    

    

    (English
Translation)

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Present
addendum No. 2 to the Contract for mining of nickel-cobalt ore at
Novo-Shandashinsk and Kara-Obinsk deposits in Aktyubinsk oblast of the Republic
of Kazakhstan in accordance with the
Licenses No.420 and No.426 as of 12.10.95 was made on 19 January 2006
between the Ministry of Energy and Mineral Resources of the Republic of
Kazakhstan (hereafter referred to as “Competent Body”) and “Kyzyl Kain Mamyt”
Limited Liability Partnership (hereafter referred to as
“Contract”).

    

    PREAMBLE

    

    WHEREAS

    

    In view
of the absence of the marketing area, the Contractor intends to proceed with
construction of the nickel processing plant to provide for the nickel ore
production at the contract projects.

    

    The
expert commission for review of requests of the subsurface users to change the
conditions of the Licenses and Contracts (Minutes No. 16 as of 01 June 2005)
decided to introduce amendments into the Work Program of the Contract in
accordance with the perspective plans to construct the nickel processing
plant

     
 

    The
Competent Body and the Contractor have agreed as follows:

     

    
      	
              1.

            	
              Clause
      10 in Section 1 of the Contract “Definitions” shall be amended as
      follows:

            

    

     

    “10. The
Competent Body means the Ministry of Energy and Mineral Resources of the
Republic of Kazakhstan”

    

    
      	
              2.

            	
              Throughout
      the text of the Contract to change the words “Investment Agency of the
      Republic of
      Kazakhstan” to “Ministry of Energy and Mineral
      Resources of the Republic of
Kazakhstan”

            

    

    

    
      	
              3.

            	
              In
      clauses 5.4.-5.7 in Section 5 of the Contract “Title to assets and
      information” to change the words “Committee of Geology and Protection of
      Mineral Resourses under the Ministry of Natural Resources and
      Environmental Protection of the Republic of Kazakhstan” to “Committee of Geology and
      Protection of Subsurface Use  under the Ministry of Energy and
      Mineral Resources of the Republic of
  Kazakhstan”

            

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
              4.

            	
              To
      add clause 7.2.11 in Section 5 of the Contract “General rights and
      obligations of the Parties as follows: “Therewith, when the amount of
      funds under the obligation to train and retrain the personnel and
      computerization exceeds the real need to train the engaged personnel, the
      Contractor will use the remaining amount for financing of the secondary
      education system’s priority tasks in accordance with Agreement on
      Cooperation between the Ministry of Education and Science of the Republic of
      Kazakhstan and  the Ministry of Energy and Mineral
      Resources of the Republic of Kazakhstan. Information on the remaining part
      of funds will be submitted to the Competent Body upon approval of the
      annual Work Program and budget for the following year of the Contract
      term”.

            

    

     

    
      	
               
      

            	
              Section
      8 shall be added clause 8.4. “The Contractor shall finance 100 million USD
      for the construction of the mining-and-metallurgical integrated plant for
      the remaining period of the Contract
term.

            

    

    

    
      	
              5.

            	
              Clause
      31.2. in Section 31 of the Contract “Additional Provisions” shall be
      amended as follows:

            

    

    

    
      	
               
      

            	
              “29.2
      Notices and documents shall be delivered in hand or sent by post,
      registered airmail, fax, by telex at the following
    addresses:

            

    

    

    

    

    COMPETENT
BODY                                                                           CONTRACTOR

    

    Ministry
of Energy
and                                                                           “Kyzyl
Kain Mamyt” LLP

    Mineral
Resources of
the                                                                       Republic of
Kazakhstan

    Republic
of
Kazakhstan                                                                          469830,
Aktyubinsk oblast,

    473000,
Astana                                                                                         Kargalinsk
region,

    Kabanbay
batyr str.,
22                                                                       
    Badamninsk village

    Tel.:
8 (3172)
78-68-55                                                                        
   Lenin str., 20

    Fax:
8 (3172) 78-68-65

    

     

    
      	
              6.

            	
              To
      change the Work Program (Appendix 1a) to the Work
      Program to the Contract (Appendix 1c).

            

    

     

    

     

    Present
addendum No. 2 to the Contract was made on 19 January 2006 in Astana, Republic of
Kazakhstan and signed by the authorized representatives of the
Parties.

     

    

     

    

     

    

     

    SIGNATURES
OF PARTIES

     

    

     

    COMPETENT
BODY                                                                           CONTRACTOR

     

    

     

    

     

    

     

    __________________                                                                ____________________

     

    

     

    B.
Izmukhambetov                                                                           A.
Aleksandrov

     

    First
Vice-Minister                                                                           Director
of

    of
the Ministry of
Energy                                                                           “Kyzyl
Kain Mamyt” LLP

    and
Mineral Resources

     

    of
the Republic of Kazakhstanex1030k123109.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Exhibit
10.30

    

    
      

      

      

      

      

      THE
CONTRACT

      

      

      

      

      

      On
work on Extraction of brown coal on East - Ural a deposit

      (A
site East - Ural)

      Located
in the Aktyubinsk area

      Kazakhstan
Republic

      

      

      

      

      

      According
to the License of a series of MG No 9-Д

      Between

      Investment
Agency of Kazakhstan Republic (Competent organization)

      And

      The
limited liability company (LLC)

      «
Kyzyl Кain
Mamyt »

    

    (Contractor)

    

     

    

    

    

    

    Astana

    

    2000

    

    

    (English
Translation)

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      CONTENTS

      

      

      

    

    
                                 Preamble

      

      Section
1. Definitions

      Section
2. The purpose of the Contract

      Section
3. Duration of the Contract

      Section
4. Contract territory

      Section
5. The Proprietary right to property and the information

      Section
6. The right of the State to purchase and requisition of Mineral
resources

      Section
7. General laws and duties of the parties

      Section
8. The working program   

      Section
9. The period of Extraction

      Section
10. The account and the reporting

      Section
11. Measurement of brown coal

      Section
12. Performance of subcontract works

      Section
13. Financing

      Section
14. Taxes and payments

      Section
15. Book keeping

      Section
16. Insurance

      Section
17. Liquidation and liquidating fund

      Section
18. Protection of bowels and a surrounding environment

      Section
19. Safety of the population and the personnel

      Section
20. The responsibility of the parties for infringement of conditions of the
Contract

      Section
21. Force majeure

      Section
22. Confidentiality

      Section
23. Transfer of the rights and duties

      Section
24. The Applicable law

      Section
25. The order of the resolution of disputes

      Section
26. Guarantees of stability of the Contract

      Section
27. Conditions of  cessation and suspending of action of the
Contract

      Section
28. Language of the Contract

      Section
29. Additional positions

                       Appendices:

      

      The
appendix 1 Working program to the Contract

      The
appendix 2 License of a series MG No 9-Д

    

    The
appendix 3 Expert conclusions and coordinations

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

      3

      The
present Contract on work on Extraction of brown coal on East - Ural deposit
(East-Ural site) in the Aktyubinsk area of  Kazakhstan Republic is
concluded on October, 19th,
2000 between Investment Agency of  Kazakhstan Republic and LLC
« Kyzyl Кain
Мamyt » (further - the
Contractor), having the License  series МГ No9-Д on December, 11th
1995г.

      

    

    
      PREAMBLE.

    

    
      

      Considering,
that:

      1.
According to the Constitution of  Kazakhstan Republic, Bowels and
Mineral resources being them are a state ownership.

      2.
Kazakhstan Republic expresses desire rationally and effectively to use Mineral
resources, including to carry out works on Extraction of brown
coal.

      3. The
contractor has desire and financial opportunities rationally and effectively to
curry out works on Extraction of brown coal according to conditions of the
Contract.

      4. The
government of  Kazakhstan Republic has provided Competent organization
with the right to the conclusion and execution of the Contract.

      5. The
Competent organization and the Contractor have agreed that the Contract will
adjust their mutual rights and duties at work on Extraction of brown
coal.

      The
Competent organization and the Contractor agree as follows:

      

    

    
      SECTION
1. DEFINITIONS

      

    

    
      Definitions
and terms which explanations are not present in the given Section, have meaning,
corresponding to definitions and the terms  containing in the Decree
of the President of Kazakhstan Republic, having Law, from January, 27th, 1996 «
About bowels and bowel management » (further - the Decree « About bowels ») and
other acts for separate kinds of Mineral resources and for Technogenic mineral
formations.

      1. Compensated expenses - mean
expenses for work on the Extraction, defined according to conditions of the
Contract  and the Legislation of the State, a subject a deduction from
the cumulative income according to the Tax laws.

      2. The State (Republic) - means
Kazakhstan Republic

      3. The State organization - is the
central agency of the Republic Kazakhstan have provided by the competence to
carry out certain functions on behalf of the State,

      4. Mountain tap - means the
document applied on the Contract, defining spatial borders of the given site of
bowels within the limits of which realization of works on Extraction of brown
coal (the appendix 2) is allowed.

      5. Year of action of the Contract
- is the period, equal to 12 (twelve) consecutive months on a Gregorian
calendar, in a context of the Contract it begins from the date of the
introduction of the Contract by virtue of or in any anniversary of this
introduction.

      6. Date
of  introduction of the Contract by virtue -  means
the date specified in item З.1. of  Contract.

    

    7. Extraction - all complex of
works (operations) connected with extraction of Mineral resources from Bowels on
a surface, and also from the Technogenic mineral formations which are being a
state ownership, including provisional keeping of Mineral raw
materials.

    8. Legislation about bowels using
– means the Decree President of Kazakhstan Republic, having Law, from January,
27th, 1996 «About bowels and bowels using», Law of Kazakhstan Republic «About
including of changes and additions in some law acts of Kazakhstan Republic about
problems on  bowel management and curing out oil operations in
Kazakhstan Republic» from August, 11, 1999 and other law acts for separate kinds
of mineral resources and for Technogenic mineral formations.

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      4

      
 

      9. Commercial detection - means
detection in Contract territory of one

      Or
several Deposits, economically suitable for Extraction.

      10. The competent organization (the authorized state organization) – means
Investment Agency of Kazakhstan Republic under to which the rights directly
connected with the conclusion and execution of the Contract are
delegated.

      11. The contract - means the
present Contract on work on Extraction of brown coal on East - Ural deposit (a
site East - Ural) between Competent organization and the Contractor, and also
all Appendices to the present Contract.

      12. The contract territory - means
the territory defined by Mountain tap allocated for work on Extraction of brown
coal.

      13. The license - means the
License of a Series
MG No9-Д from the December, 11th, 1995, given out by the Government of Kazakhstan
Republic for the joint venture « Кемpirsаy ore
administration» and renewed for LLC « Kyzyl Kain Мамyt » according to the
Governmental decision of Kazakhstan Republic No24 from January, 6th, 2000
on geological studying and extraction of brown coal on Hromtau district of the
Aktyubinsk area of Kazakhstan Republic.

      14. The deposit - means East -
Ural deposit containing natural congestion of brown coal.

      15. The tax
laws - means
the Law of Kazakhstan Republic from April, 24th, 1995 No2235 « About taxes
and other obligatory payments in the budget », changes and additions to it,
others legislative and the statutory acts adjusting payment of taxes and
payments for date of conclusion the Contract.

      16. The bowels - mean the part of
an earth's crust located below a soil layer, and at its absence - below a
terrestrial surface and a bottom of the reservoirs, reaching up to the depths
accessible to carrying out of operations on bowels management in view of
scientifically - technical progress.

      17. Operations on bowels
management - mean the works concerning Extraction of brown coal, curried
out on Contract territory according to the Contract.

      18. The contractor - means bowels
user LLC «Kyzyl Каin Мамyt » concluded
the Contract with Competent organization.

      19. The government - means the
Government of Kazakhstan Republic.

      20. Passing mineral resources are
the components of the Mineral extracted together with them.

      21. A positive practice of development of
Deposits - practice which is usually applied by bowels users at
Investigation and Extraction in the countries of the world as rational, safe,
effective and necessary at carrying out of operations on bowels
management.

      22. The mineral resources - means
the brown coal containing on the Deposit.

      23. The working program - means
all kinds of the plans prepared for work on Extraction of brown
coal.

      24. Brown coal - Would mean coal
brown type Б, groups
Б2.

      25. The parties - are the
Competent Organization and the Contractor where they are certain in
aggregate.

      26. The subcontractor - means the
legal or physical person who has concluded with the Contractor the contract
about execution of any part of obligations of the Contractor under the
Contract.

      27. The Third party - means any
physical or legal person, except for the Parties under the
Contract.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5

     

    28. The approved stocks - mean the
geological state expert appraisal geological and taken stocks of Mineral
resources.

    
      29. The
legislation on sanitary-and-epidemiologic well-being of the population
-

      means the
Law of Kazakhstan Republic from July, 8th, 1994 « About
sanitary-and-epidemiologic well-being of the population».

      

    

    
      SECTION
2. THE PURPOSE OF THE CONTRACT.

       

    

    
      2.1. The
purpose of the Contract is definition according to acting on Date of the
introduction of the Contract by virtue of the legislation of the State and legal
registration of contractual mutual relations between Competent organization and
the Contractor.

      

    

    
      SECTION
3. DURATION OF THE CONTRACT

       

    

    
      3.1. The
contract inures from the moment of its signing and is registered by Competent
organization (the authorized state organization) with delivery of the
certificate on registration.

      3.2. Duration of
the Contract is finished on December, 11th, 2018 (last day actions of the
license of a series MG No9-Д).

      3.3.
Prolongation of term of the Contract probably only at performance of conditions
of the Contract.

      3.4. At
prolongation of duration of the Contract the conditions of the Contract can be
changed by the written agreement of the Parties.

      

    

    
      SECTION
4. CONTRACT TERRITORY.

      

    

    
      4.1. The
contractor performs works on Extraction of brown coal within the limits of Contract territory
according to conditions of the Contract.

      4.2. In
case of working off of stocks of coal within the limits of the Contract
territory defined

      Mountain
tap, the area 0,47 км2, the question on its expansion will be solved by change
of conditions of the contract without carrying out of competition (by
registration of new mountain tap when due hereunder).

    

    
      

      SECTION
5. THE PROPERTY RIGHT TO PROPERTY AND THE INFORMATION.

      

    

    
      5.1. All
the material and non-material actives got by the Contractor for work on
Extraction of brown coal are the property of the Contractor.

      5.2. The
property right to the property specified in p.5.1 of the Contract, can be
mortgaged or another way burdened it in favour of the Third party for
maintenance of financing of works on Extraction of brown coal according to the
legislation of the State.

      5.3. The
information on a geological structure of the Bowels containing in them of
Mineral resources, geological parameters of Deposits, size of stocks, conditions
of development, and also other features of the Bowels, containing in geological
reports, cards and other materials, is in a state ownership if it is received
from budgetary appropriations, and in the property of the Contractor if it is
received due to own means of the Contractor.

    

    5.4. The
information on Bowels on the Contract territory, being a state ownership, is got
by the Contractor in Committee of geology and protection of bowels, through RCGI
«Kazgeoinform» in established by the legislation of the State the order in
current of one month, but not later on July, 1st, 2000.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6

    
      

      5.5.
Geological and other information on the Bowels, received by the Contractor
during work on Extraction of brown coal, is passed without reward in obligatory
order under established standard in the Committee of geology and protection
bowels of the Ministry of natural resources and preservations of the environment
Kazakhstan Republic for storage, systematization and generalization.

      5.6. Use
in educational, scientific, commercial and other purposes of the geological
information on the Bowels, received due to means of the Contractor and passed by
it according to p.5.5 of the Contract, is defined on the basis of the separate
agreement between the Contractor and Committee of geology and protection of
bowels of the the Ministry of natural resources and preservations of the
environment Kazakhstan Republic

      5.7. At
cancellation of the Contract all geological information carries over the State.
The Contractor is obliged to pass without reward in Committee of geology and
protection of bowels, the Ministries of natural resources and preservations of
the environment Kazakhstan Republic, all documents and other material carriers
of the geological information, including primary.

    

    
      

      SECTION
6. THE RIGHT OF THE STATE TO PURCHASE AND REQUISITION

       OF
MINERAL RESOURCES.

    

    
      

      6.1. In
case of war, acts of nature or in other cases stipulated by the legislation on
extreme situations, the Government has the right of requisition of a part or all
Minerals resources, belonging the Contractor. Requisition can be carried out in
the sizes necessary for needs of the State during all period of an extreme
situation.

      6.2. The
state guarantees indemnification for requisitioned Mineral resources in kind or
payment of their cost under the prices of the world market, acting to day of
requisitions (for the foreign Contractor payment of monetary indemnification in
free - convertible currency, for the national Contractor - in national currency
of the State).

      6.3. The
State has the prime right to purchase at the Contractor of brown coal under the
prices which are not exceeding the prices of the world
market.

    

    
      

      SECTION 7. GENERAL LAWS AND DUTIES OF
THE PARTIES.

    

    
      

      7.1. The
Contractor has the right:

      7.1.1. To
curry out works on Extraction of brown coal in Contract territory on an
exclusive basis.

      7.1.2.
Independently to make any lawful actions on bowels using within the limits of
the Contract territory given to it according to conditions fixed in the
Contract.

      7.1.3. To
use at own discretion results of its activity, including brown
coal.

      7.1.4. To
construct in Contract territory, and in case of need on other ground areas,
allocated to the Contractor in established order, the objects of industrial and
social sphere necessary for realization of works on Extraction of brown
coal.

      7.1.5.
Under the arrangement with owners to use objects and communications of the
general using both in Contract territory, and outside of its
limits.

      7.1.6. In
the prime order to carry out negotiations about prolongation of duration of the
Contract according to the order established p.3.4 of the
Contract.                       

    

    7.1.7. To
involve Subcontractors for performance of separate kinds of the works connected
with work on Extraction of brown coal.

    
       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      7

      
 

      7.1.8. To
pass all or a part of the rights to other persons with observance of the
conditions established by the Contract and the legislation of the
State.

      7.1.9. To
stop the activity on the conditions certain by the Contract and the legislation
of the State.

      7.1.10.
In case of cessation of the Contract the Contractor has the right to dispose
independently of the property which is being its property.

      7.1.11.
The given list can be added under the agreement of parties if it does not
contradict the legislation of the State.

      7.2.
The contractor is obliged:

      7.2.1. To
start according to the Equipment design performance of the Working program
coordinated by the Parties, from the date of the conclusion of the
Contract.

      7.2.2. To
choose the most effective methods and technologies at work on
extraction

      the brown
coal, based on the standards accepted in a world practice.

      7.2.3. To
use Contract territory only with a view of stipulated by the
Contract.

      7.2.4. To
curry out the works on Extraction of brown coal in strict conformity with the
legislation

      of the
State and the Working program.

      7.2.5. To
not interfere with other persons freely to move within the limits of Contract
territory, to use objects and communications of the general using, or to curry
out any kinds of works, including investigation and extraction of other natural
resources, except for brown coal if it is not connected with special conditions
of safety and such activity does not stir to work on Extraction of brown
coal.

      7.2.6. To
observe coordinated in established order the technological schemes and projects
on

      curing
out the works on Extraction of the brown coal, providing rational use of bowels,
safety of the personnel and the population.

      7.2.7. It
is obligatory to use the equipment, materials and ready production, made in the
State if they are competitive on ecological, and to technical qualities, the
prices, working parameters and conditions of delivery.

      7.2.8. It
is obligatory to involve the enterprises and the organizations of the State for
performance of works and services when curing out the works on Extraction of
brown coal, including use air, railway, water and other type of transport if
these services are competitive at the price, efficiency and
quality.

      7.2.9. At
work on Extraction of brown coal to prefer the Kazakhstan staff.

      7.2.10.
To put to Competent organization the Working program and the information on
process of its realization.

      7.2.11.
Annually the Contractor provides on obligatory industrial training, preparation
of the personnel and a computerization assignment at a rate of 0,1 (one the
tenth)% from operational expenses.

      7.2.12.
Free to give necessary documents, the information and access to places of works
for control organizations of the State at performance of official functions by
them and in due time to eliminate the infringements revealed by
them.

      7.2.13.
To puss the information on Extraction of brown coal to the Third parties if
there is such necessity, only from the written approval of other
Party.

      7.2.14.
In due time to pay taxes and other obligatory payments.

      7.2.15.
During the activity to keep the objects located in Contract territory,
cultural-historical value.

    

    7.2.16.
To predict long-term ecological consequences of the activity on execution of the
Contract and to give these forecasts in Competent organization and the State
organizations of protection of a surrounding environment periodically every 5
years and the final forecast not later than 1 year prior to the ending of
duration of the Contract.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8

    
      7.2.17.
To leave Contract territory in a condition corresponding requirements of rules
about mountain and sanitary inspection, protection of bowels and a surrounding
environment.

      7.2.18.
To restore sites of the ground and other natural objects which condition has
been broken by activity of the Contractor under the Contract up to a condition,
suitable for further use according to requirements of the legislation of the
State.

      7.3.
Duties of Competent organization:

      7.3.1. To
provide execution and cancellation of the Contract by way of and on the bases
stipulated by the legislation of the State.

      7.3.2. To
promote in maintenance of granting to the Contractor of the ground area on the
right of land tenure according to the received License.

      7.4.
The Competent organization has the right:

      7.4.1. To
represent the State at negotiations with the Contractor on conditions of the
Contract.

      7.4.2. To
demand from the Contractor of the regular and selective reporting of performance
of conditions of the Contract.

      7.4.3. To
inspect carrying out by the Contractor of works on Extraction of brown coal,
including the documentation of the Contractor concerning activity on execution
of the Contract.

      7.4.4.
Access to any works in the Contract territory, concerning works on Extraction of
brown coal.

      

    

    
      SECTION
8. THE WORKING PROGRAM.

    

    
      

      8.1. The
Contractor carries out works on Extraction of brown coal according to the
Working program coordinated with Competent organization.

      8.2. The
working program is prepared on the basis of technical - economic calculations
and substantiations, an expert estimation of stocks of the Deposit (if it is
already opened and stocks are approved by corresponding State organization) or
Sites of bowels (blocks) and other materials in view of Positive practice of
development of Deposits.

      8.3. The
Contractor can make offers on change or addition of the coordinated Working
program. Changes, additions and amendments to the Working program are brought in
written form at the mutual consent of the Parties.

      

    

    
      SECTION
9. THE PERIOD OF EXTRACTION.

    

    
      

      9.1. The
exclusive right of Extraction in Contract territory during the term given by the
License and the Contract is given to the Contractor.

      9.2. The
Contractor will start Extraction from the date of the conclusion of the
Contract.

      

    

    
      SECTION
10. THE ACCOUNT AND THE REPORTING

    

    
      

      

      10.1. The
Contractor undertakes to keep account and keep during established term the
registration documentation, concerning Extractions of brown coal under the
Contract, according to the legislation of the State.

      10.2. The
Contractor gives to Competent organization the entire account about the activity
the last year prior to January, 25th of current year.

      10.3. The
Contractor gives the reporting about the activity in the State organizations in
terms and the order, the States established by the
legislation.

    

    10.4. The
Competent organization has the right to inspect observance by the Contractor of
conditions of the Contract and can be present through its representatives at
carrying out by the Contractor of works on Extraction of brown
coal.

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9

      
 

      SECTION
11. MEASUREMENT

    

    
      

      11.1.
Measurement and weighing of brown coal extracted in Contract
territory

       is
made by the Contractor according to methods and practice, applied in the
State.

       11
..2. The Contractor annually curries out with participation of representatives of
the authorized organization

      the test
of the equipment and the devices used for weighing and measurement brown
coal.

      11.3. If
at test or survey it will appear, that the equipment or devices have defects and
term of malfunction to establish impossibly, term of defect is defined as half
of time from the previous gauging about day of an establishment of
defect.

      11.4. In
case the Contractor considers necessary to make changes to an applied technique
or to replace the established measuring devices, it should notify on it the
authorized organization not later than 30 days to enable its representatives to
be present at performance of these changes or replacements.

      

    

    
      SECTION
12. PERFORMANCE OF SUBCONTRACT WORKS.

    

    
      

      12.1. The
Contractor in structure of the annual Working program represents Competent
organization the plan of subcontract works, the list of subcontracts on delivery
of materials, the equipment and services which are necessary for concluding in
following calendar to year with calculations of cost of subcontracts, and also
the list of potential Kazakhstan and foreign Subcontractors.

      12.2. At
the conclusion of all subcontracts the Contractor is obliged to give a priority
to services, equipment, materials and the finished products, made in the State
if they are competitive on ecological and technical qualities, to the prices,
working parameters and conditions of delivery.

      12.3.
Subcontractors are involved by the Contractor, as a rule, on a competitive
basis.

      12.4.
Contractor answers for performance of subcontracted contracts according to the
legislation of the State.

      

    

    
      SECTION
13. FINANCING.

      

    

    
      13.1. The
Contractor takes up the responsibility for full financing of the activity under
the Contract, according to the Working program coordinated by the
Parties.

      13.2. The
Contractor can freely receive credits in any currency in the State to behind its
limits for financing the activity if it does not contradict the legislation of
the State.

      13.3. The
Contractor can have accounts both in national, and in a foreign currency in
banks of the State and abroad for the purpose of performance of the Contract for
reception of the money resources representing receipts and incomes under the
Contract.

      13.4. All
kinds of accounts are made according to the Contract by way of, certain by the
legislation of the State.

    

    13.5. The
Contractor and Subcontractors realize the currency operations with the
legislation of the State on currency regulation.

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10

       

       

      SECTION
14. TAXES AND PAYMENTS.

      

    

    
      14.1. On
the activity which is carried out on the basis of the present Contract, the
Contractor undertakes to pay, at occurrence of the tax and payment
circumstances, following taxes and payments, according to the Legislation of
Kazakhstan Republic, including the Law of Kazakhstan Republic « About taxes and
other obligatory payments in the budget » from the April, 24th, 1995, No 2235, acting on
Date of the introduction of the Contract by virtue of (further-the Tax code) if
the International Contract which participant is the Republic Kazakhstan, does
not establish other rules.

      For the
purpose of account of taxes and payments on the activity which is carried out
under the present contract, the Contractor is considered as the uniform tax
bearer.

      14.2.
The contractor, at occurrence of obligations, pays following taxes and
payments:

      14.2.1. Surtax from legal
persons.

      The
contractor pays surtax according to Section of II Tax code.

      14.2.1.1.
Object of taxation by surtax is the assessed income estimated as a difference
between the cumulative revenue and deductions, stipulated by chapter 4 of the
Tax code, including the losses formed in connection with activity, carried out
under the Contract and are removed for the term of no more than seven
years.

      14.2.1.2.
The Contractor makes account of surtax from legal persons under the rates
specified in clauses 30-33 of the Tax code.

      14.2.1.3
Contractor grants on the budget of the sum of advance payments not later than 20
(twentieth) of each month according to the order established by clause 51 of the
Tax code.

      14.2.1.4.
The Contractor is obliged to present the declaration on the cumulative revenue
and the made deductions to organization of tax service in a place of tax
registration up to 31 (thirty first) March of the year following for
accounting.

      14.2.1.5.
The Contractor is obliged to make final account and payment of surtax after 10
days from the date of representation declaration about the cumulative revenue,
but not later than 10 (tenth) of April the year following for
accounting.

      14.2.1.6.1.
The Contractor bears the responsibility for completeness of deduction and
timeliness of transfer in the budget of the sums of surtax from the physical and
legal persons, kept at a source of payment, according to positions of the Tax
code.

      14.2.1.6.2.
Thus, the surtax at a source of payment is kept under rates of the Tax laws
acting on the moment of occurrence of tax obligations.

      14.2.1.7.1.
The charges made by bowels user on geological studying, investigation and a
spadework to extraction of mineral resources, including charges to estimate, to
arrangement, the general administrative charges and the charges connected with
payment of a subscription bonus and a bonus of commercial detection, form
separate group and are subtracted from the cumulative revenue in the form of
depreciation charges, from the moment of the beginning of extraction of minerals
on the norms defined under the discretion of bowels user, but not above a limit
rate of amortization at a rate of 25 (twenty five) percent.

    

    14.1.7.2.
The given charges are a subject to updating by way of  their reduction
by the sum of the incomes received by the Contractor on activity carried out
within the limits of present Contract during carrying out of geological studying
and a spadework to extraction of natural resources, except for the incomes
received at realization of mineral resources (except extracted for the
experimental - industrial purposes), the incomes which are a subject exception
of the cumulative revenue in conformity with clause 13 of the Tax code, and the
incomes released from the taxation in conformity with clause 34 of the Tax
code.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11

    
      

      14.2.2. The value-added
tax.

      The
Contractor pays the value-added tax according to Section of III Tax
code.

      14.2.2.1.
The Contractor makes calculation of the value-added tax under the rates
specified in clauses 58, 59, 61, 62 and 70-1 Tax codes

      14.2.2.2.1.
The accounting period by actual calculations with the budget on the value-added
tax is a calendar month.

      14.2.2.2.2.
If monthly average payments for quarter make less than 500 (five hundred)
monthly settlement parameters, the accounting period is quarter.

      14.2.2.3
..The Contractor pays the value-added tax for the accounting period not later
than day grantings of the Declaration under the given tax.

      14.2.2.4.
The Declaration on the value-added tax the Contractor is obliged to put to tax
service organizatoin in a place of tax registration not later than 15
(fifteenth) date of month, following the accounting period. 

      14.2.3. Excises.

      The
Contractor pays the excise tax according to Section of IV Tax code.

      14.2.3.1
The Contractor makes calculation and payment of excises in accordance with
positions of the Tax laws.

      14.2.3.2
The Declaration. on payment of excises the Contractor is obliged to present to
tax service organization in a place of tax registration not later than 15
(fifteenth) date of month, following the accounting period.

      14.2.3.3.
The goods on which excises are paied, are goods which are listed in clause 76 of
the Tax code exclusively.

      14.2.4. Gathering for registration of
issue of securities and assignment of national identification number of
issue of the actions which are
not a subject the state registration.

      14.2.4.1.
The Contractor pays gathering for registration of issue of securities and
assignment of national identification number of issue of the actions which are
not a subject the state registration, according to order, in terms and the sizes
established by Section V of the Tax code, acting at the moment of occurrence of
obligations on payment of the given kind of
payment.            

      14.2.4.2.
The Declaration on gathering for registration of issue of securities and
assignment of national identification number of issue of the actions which are
not a subject the state registration, the Contractor is obliged to present to
tax service organization in a place of tax registration up to 31 (thirty first)
March of the year following the accounting.

      14.2.5. Special taxes and payments of
bowels users:

      The
Contractor pays special payments of bowels users according to Section of VI Tax
code.

      14.2.5.1. Subscription
bonus.

      14.2.5.1.1.
The Contractor pays a subscription bonus at a rate of 5400 (five thousand four
hundred) US dollars not later than 30 (thirty) calendar days from the date of
the introduction of the Contract by virtue of.

      14.2.5.1.2.
The Contractor is obliged to present the declaration on a subscription bonus to
tax service organization in a place of tax registration up to 10 (tenth) date of
month following the accounting.

      14.2.5.2.
A bonus of commercial detection.

    

    14.2.5.2.1.
The Contractor pays a bonus of commercial detection for each commercial
detection in Contract territory, at a rate of 0.05 (five 100-th) percent from
cost of the approved taken stocks, not later than 30 (thirty) calendar days from
the date of the statement of stocks of commercial detection, according to the
established order.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12

    
      

      14.2.5.2.2.
The Contractor is obliged to present the declaration on a bonus of commercial
detection to the tax service organization in a place of tax registration up to
10 (tenth) of April the year following the year in which commercial detection
has been accomplished.

      15.2.5.3. A
royalty.

      The
royalty is paid by the Contractor by all kinds of mineral resources
separately.

      14.2.5.3.1.
The Contractor makes payment of a royalty under the rate 0.9 (nine tenth)
percent from volume of the extracted brown coal estimated in cost expression,
proceeding from the monthly average price of realization of brown coal for the
accounting period, without taking into account indirect taxes.

      14.2.5.3.2.
The royalty is paid monthly, not later than 15 (fifteenth) date of month
following the accounting.

      14.2.5.3.3.
If monthly average payments for quarter on a royalty make less than 1 000 (one
thousand) monthly settlement parameters, the accounting period is quarter, and
payment is made not later than 15 (fifteenth) months following accounting
quarter.

      14.2.5.3.4.1.
At absence of realization of brown coal in the accounting period, for
calculation of a royalty the data of last accounting period in which
registration of production took place are accepted.

      14.2.5.3.4.2.
At full absence of realization of brown coal during extraction for the average
price of realization actually developed expenses for extraction are accepted.
Thus the Contractor is obliged to make the subsequent updating of the sums of a
royalty on the realized volume of brown coal, proceeding from the actual price
of realization of brown coal.

      14.2.5.3.5.
The Contractor is obliged to present the declaration on a royalty to tax service
organization not later than 10 (tenth) date of month following the accounting
period.

      14.2.5.3.6.
The monetary form of payment of a royalty, in the order established by the
Legislation, may be replaced with the natural form with bringing the order of
payment up to the Contractor not less than for 60 (sixty) days till the moment
of replacement.

      14.2.5.3.7.
In case of extraction of customary mineral resources and underground waters, the
Contractor makes payment of a royalty under rates and by way of, established by
the Tax laws.

      14.2.5.4.
Historical expenses.

      14.2.5.4.1.
The historical expenses suffered by the State on geological studying of Contract
territory, at a rate of 37200 (thirty seven thousand two hundred) US dollars,
the Contractor pays in the income of the budget as follows:

      ---- a
payment for the right for using the geological information, that makes 0.5 (five
tenth) percent from the specified sum (i.e. 186 (hundred eighty six) US
dollars), the Contractor undertakes to pay till July, 5th, 2000, according to
item 1.2 of Agreements on purchase of the geological
information, 

      ---- the
remained sum, at a rate of 37014 (thirty seven thousand) US dollars the
Contractor undertakes to bring in the income of the budget and to extinguish
during 10 (ten) years quarterly equal shares, on 1000 (one thousand) US dollars,
since the moment of the conclusion of the Contract.

      14.2.5.4.2.
Payment of the sums of compensation of historical expenses is made according to
item 14.2.5.4.1 not later than 10 (tenth) date of month following the accounting
period.

      14.2.5.4.3.Account
on the sum of compensation of historical expenses is given by the Contractor to
tax service organization in a place of tax registration up to 31 (thirty first)
March of the year following the accounting year.

    

    14.2.5.4.4.
In case of infringement of the order and terms of payment in the budget of the
sums of compensation of historical expenses, the Contractor bears the
responsibility established by the Tax code for infringement of the order and
terms of payment of taxes and other obligatory payments in the
budget.

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      13

      14.2.5.5.
The excess profits tax.

    

    
      14.2.5.5.1.
The Contractor makes account of the excess profits tax, proceeding from the
reached level of internal rate of return on the end of accounting year under
following rates:

      

    

    
      	
              Internal
      rate of return (IRR), % 

            	
              The
      rate of the excess profits tax in % to the net profit for accounting year
      

            
	
              Less
      or it is equal 20 

            	
              0
      

            
	
              More
      than 20, but less or it is equal 22 

            	
              4
      

            
	
              More
      than 22, but less or it is equal 24 

            	
              8
      

            
	
              More
      than 24, but less or it is equal 26 

            	
              12
      

            
	
              More
      than 26, but less or it is equal 28 

            	
              18
      

            
	
              More
      than 28, but less or it is equal 30 

            	
              24
      

            
	
              More
      than 30 

            	
              30
      

            

    

    
      

      14.2.5.5.2.
Object of taxation of the excess profits tax  is the sum of the net
profit of the Contractor defined according to the Tax laws on activity, carried
out within the limits of the Contract in accounting year in which the Contractor
receives internal rate of return above 20 (twenty) percent.

      14.2.5.5,3.
The Contractor is obliged to present the declaration on the excess profits tax
to tax service organization in a place of tax registration up to 10 (tenth) of
April the year following the accounting.

      14.2.5.5.4.
The excess profits tax is paid not later than 15 (fifteenth) of April the year
following the accounting period.

      14.2.5.5.5.
The internal rate of return is estimated by way of, established in the Tax
laws.

      14.2.6.
The social tax.

      The
contractor pays the social tax according to Section УI- II of the Tax
code.

      14.2.6.1.
The social tax is paid under the rate 26 (twenty six) percent from wages fund of
the personnel of the Contractor.

      14.2.6.2.
The order of account and payment of the social tax is made in conformity with
clause 104-10.

      14.2.6.3.
The Contractor is obliged to present the declaration on the social tax to tax
service organization in a place of tax registration not later than 15
(fifteenth) date of month following the calendar quarter.

      14.2.7.
Gathering for travel of vehicles on territory of Kazakhstan
Republic.

      Gathering
for travel of vehicles on territory of Kazakhstan Republic is paid by the
Contractor according to the Legislation acting on the moment of occurrence of
obligations on payment of the given kind of payment.

      14.2.8.
The land tax.

      The
Contractor pays the land tax according to Section УII of the Tax
code.

      14.2.8.1.
The Contractor makes account of the land tax according to the base rates
established by the Tax code, in view of the factors, annually established by the
Government of Kazakhstan Republic.

      14.2.8.2.
Payment of the tax is made by way of, established by clause 125 of the Tax
code.                                                                           

    

    14.2.8.3.1.
The Contractor is obliged to present the declaration of a due tax on each ground
area to territorial tax organization in a place of its location not later than 1
on (first) of July current year.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    14

    
      

      14.2.9.
The vehicles tax.

      The
contractor pays the vehicles tax according to Section УIII of the Tax
code.

      14.2.9.1.
The Contractor makes account of the vehicles tax under the rates specified in
clause 128 of the Tax code.

      14.2.9.2.
Account and payment of the tax are made by the Contractor in conformity with
clause 130 of the Tax code.

      14.2.9.3.
The Contractor is obliged to present the vehicles tax to tax service
organization in a place of tax registration up to 31 (thirty first) March of
year, following the accounting, 

      14.2.10.
The property tax of legal persons.

      The
Contractor pays the property tax of legal persons according to section of IX Tax
code. 

      14.2.10.1.
The property tax is paid at a rate of 1 (one) percent from depleted cost of
depreciable assets, except for vehicles.

      14.2.10.2.
The Contractor makes account and payment the property tax of legal persons in
order, specified in clause 135 of the Tax code.

      14.2.10.3.
The Contractor is obliged to present the declaration on property tax of legal
persons to tax service organization in place of tax registration up to 31
(thirty first) March of the year following the
accounting.                                       

      14.2.10.4.
Payment of actually due tax or return of an overpayment is made within ten days
after representation of the declaration by results of tax year in terms 31
(thirty first) March of the year following the accounting. 

      14.2.11. Gathering for registration
of legal persons.

      The
Contractor pays gathering for registration of legal persons according to the
Legislation acting on the moment of occurrence of obligations on payment of the
given kind of payment.

      14.2.12. License gathering for the
right of employment by separate kinds of activity.

      The
Contractor pays license gathering for the right of employment by separate kinds
of activity according to the Tax laws acting on date of occurrence of
obligations on payment of the given kind of payment.

      14.2.13.
Gathering from auction sales.

      The
Contractor pays gathering from auction sales in order, terms and the sizes
established by the Legislation, acting on the moment of occurrence of
obligations on payment of the given kind of payment.

      14.2.14. Payment for use of a
radio-frequency resource of Kazakhstan Republic.

      The
payment for use of a radio-frequency resource of Kazakhstan Republic is made by
the Contractor in order, terms and the sizes approved by the Legislation, acting
on the moment of occurrence of obligations on payment of the given kind of
payment.                                           

      14.2.15.
Gathering for use of symbols of city Almaty in company names, service marks,
trade marks.

      Gathering
for use of symbols of city Almaty in company names, service marks, trade marks
is paid by the Contractor according to the Legislation acting on the moment of
occurrence of obligations on payment of the given kind of
payment.

    

    14.2.16. Gathering for use legal,
(except for the state enterprises, official institutes and noncommercial organizations) and physical persons
of words "Kazakhstan", "Republic", "National" (full, and also any derivative of them) in their
company names, service marks, trade marks.

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      15

    

    
      The
Contractor pays gathering for use by legal persons of words "Kazakhstan",
"Republic", "National" (full, and also any derivative of them) in their company
names, service marks, trade marks conformity with the Legislation acting on date
of occurrence of obligations on payment of the given kind of
payment.

      14.2.17.
Customs payments.

      The
Contractor pays customs payments according to the Law of Kazakhstan Republic «
About customs business in Kazakhstan Republic » from the July, 20th, 1995 No 2368, acting on
the day of acceptance of the customs declaration and other documents of customs
organizations of Kazakhstan Republic.

      14.2.18. A payment for using water
resources of superficial sources.

      The
Contractor brings a payment for using water resources of superficial sources
according to the Legislation acting on the moment of occurrence of obligations
on payment of the given kind of payment,

      14.2.19.
A payment for wood using (the wood income).

      The
Contractor brings a payment for wood using (the wood income) according to the
Legislation acting on the moment of occurrence of obligations on payment of the
given kind of payment.

      14.2.20. Payments for environmental
contamination. Penalties for infringement of the of nature protection legislation

      14.2.20.1.
The Contractor pays payments for environmental contamination according to the
Legislation acting on the moment of occurrence of obligations on payment of the
given kind of payment.

      14.2.20.2.
The Contractor pays penalties for infringement of the nature protection
legislation according to the Legislation acting on the moment of detection of
such infringements.

      14.2.21. Obligatory pension
payments.

      The
Contractor keeps obligatory pension payments at a rate of and the order
established by the Legislation regarding a wage fund of citizens of
Republic.

      14.2.22. A State
Tax.

      State Tax
the Contractor pays in order, terms and the sizes established by the
Legislation, acting on the moment of occurrence of circumstances on payment of
the given kind of payment.

      14.2.23. Deduction of taxes at a
source of payment. The responsibility.

      14.2.23.1.
The Contractor makes deduction of taxes at a source of payment in order, terms
and the sizes established by the Tax laws.

      14.2.23.2.
The Contractor bears the responsibility, according to norms of the Tax laws, for
completeness of deduction and timeliness of transfer in the budget of the taxes
kept at a source of payment.

      14.2.24.
The taxation of the personnel.

      The
personnel of the Contractor pay taxes and payments according to the Tax laws
acting on the moment of occurrence of circumstances on
payment.      

      14.3.1. The taxation of the
subcontractors.

      The
taxation of subcontractors and their personnel, rendering the Contractor of
service (work), is made according to the Tax laws acting on the moment of
occurrence of obligations on payment of taxes and payments.

      14.4. The taxation of retrocede the
rights.

      14.4.1
..Incomes, received from retrocede the rights, are a subject to the taxation
according to the Tax laws acting on the moment of retrocede.

    

    14.4.2.
Operations on retrocede the rights given by the Contract, are released from the
tax to the value-added tax.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    16

    
 

    
      14.5.
Transfer pricing.

      14.5.1.
The Contractor recognizes, that tax organizations has the right to supervise
correctness of application of the prices on commercial or financial operations
of the Contractor and to bear corresponding decisions for the purposes of
updating the income and charges of the Contractor for  the taxation
conformity with the order established by clause 138-1 and the Tax
code.

      14.5.2.
At acknowledgement of carrying out of such operations by tax service, the
Contractor bears the responsibility established by the Tax laws for infringement
of the order, term and the sizes of payment of taxes.

      14.6.
The general tax responsibility.

      Taxes and
the payments paid on conditions of the Contract, do not release the Contractor
from obligations to pay taxes and the payments established by Acts for date of
occurrence of tax obligations, for realization of the activity which has been
not stipulated by conditions of the Contract.

      14.7.
Tax border.

      The
Contractor, for the purposes of account of taxes and payments, cannot unite
incomes and deductions under the Contract with incomes and deductions on the
activity which is beyond the Contract.

      14.8. Payment and enlist of taxes and
payments.

      14.8.1.
All taxes, payments and duties are paid in tenge or the currency used
subsequently in Republic instead of it if other is not stipulated by the
Legislation.

      14.8.2.
Any taxes and payments are paid in order, terms and the sizes established by the
Legislation.

      14.8.3.
Taxes and payments are enlisted in order, established by the Legislation, on the
accounts specified by  tax or financial service organizations of
Republic.

      14.8.4.
In case of abolition of taxes, payments, gathering or the duties established for
Date of the conclusion of the Contract, owing to modification and additions in
the Legislation, the Contractor undertakes to continue payment of the given
taxes, gathering and the duties stipulated by the present Section of the
Contract. These given sums are brought, according to budgetary classification,
on a code (account) of a royalty if other is not underlined.

      Thus
given sums are not performance of obligations on payment of a
royalty.

      14.9. Penal
sanctions.

      14.9.1.1.
Penalties for infringement of the Tax laws are applied according to the Tax laws
acting on the moment of detection of infringements.

      14.9.1.2.
Fine for untimely entering into the budget of taxes and payments, are applied in
the sizes established by the Tax laws, operating on a day of payment of these
sums.

      14.9.2.
Penal sanctions on payments of non- tax character are applied in the sizes
stipulated by the Legislation, acting on the moment of detection of
infringements.

      14.10. Stability of a tax
mode.

      14.10.1.
The tax mode established by the Contract, operates invariable before the end of
terms of the Contract, except for cases, when:

      14.10.2.
Changes and-or additions in the Tax mode of the Contract are brought under the
written Agreement of the Parties of the Contract and do not attract change of a
parity of initial economic interests of Republic and the Contractor under the
Contract.

      14.11. Access to the
information.

    

    14.11.1.
The Contractor recognizes, that tax organizations of Kazakhstan Republic should
have access to the information, according to the Legislation, concerning to any
bank accounts of the Contractor, including opened in foreign banks outside
Republic.           

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    17

    

    
      14.11.2.
The Contractor is obliged to give, when carrying out of checks by workers of tax
and financial services of the Republic which are carried out within the limits
of their competence, all required and necessary information concerning activity,
carried out within the limits of the Contract.

      14.11.3.
The Contractor is obliged to give all necessary information on the basic
economic, accounting and tax parameters by electronic or a different way for
drawing up of a database within the limits of Monitoring that is curried out by
the Ministry of Finance.

    

    
      

      SECTION
15. BOOK KEEPING.

      

    

    
      15.1. The
Contractor undertakes to carry out full and exact book keeping of all incomes
and expenses in connection with realization of the Contract according to order
of conducting the book keeping, the established legislation of the
State.

      15.2. All
account books and registration documents of the Contractor are accessible to
check by Competent organization and the state bodies according to their
competence certain by the legislation of the State.

      

    

    
      SECTION
16. INSURANCE.

      

    

    
      16.1.
During 30 days after Date of the introduction of the Contract by virtue, the
Contractor develops and represents on the coordination to Competent organization
the program of insurance of risks, property and the responsibility connected
with works on Extraction of brown coal.

      16.2.
Insurance is provided for property risks and the risks of the responsibility
connected with: 

      --
transportation and warehousing of the cargoes delivered to a place of works on
extraction of brown coal; 

      --the
property of the Contractor used during work on Extraction brown coal, including
the property taken in rent or
used on leasing;

      --pollution
of a surrounding environment, including the ground, and charges on liquidation
of consequences of
the damage caused surrounding environment, including land reclamation and
restoration of the grounds;

      --the
general civil - legal responsibility before the Third parties.

      16.3. The
Contractor is obliged to carry out insurance of the workers from accidents on
manufacture, professional illnesses and poisonings.

      16.4. The
Contractor at own discretion chooses the insurance companies according to the
legislation of the State.

       

    

    
      SECTION
17. LIQUIDATION AND LIQUIVIDATING FUND.

      

    

    
      17.1. In
current of 2 years from the date of the beginning of operation of a deposit the
Contractor gives to Competent organization on the statement the program of
liquidation of consequences of the activity under the Contract, including the
estimate of expenses on liquidation.

      17.2.
Liquidation and preservation of activity is carried out according to the order
established by the Government.

      17.3. By
the program of liquidation removal .или liquidation of
constructions and the equipment, used during activity of the Contractor in
Contract territory should be stipulated.

    

    17.4. For
full financial maintenance of performance of the program of liquidation the
Contractor creates liquidating fund, at a rate of 1 % from the annual sum of
realization of production. Management of liquidating fund is carried out by the
Contractor in coordination with Competent organization and the authorized
organization on protection and use of bowels. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    18

    
      

      17.5.
Deductions in liquidating fund at a rate of 1 % are made by the Contractor
annually on the special depositary account. It is spent in coordination with
competent organization and is joined in structure of expenses on Extraction of
brown coal.

      17.6. If
actual expenses for liquidation will exceed the size of liquidating fund the
Contractor carries out additional financing of liquidation.

      17.7. If
actual expenses for liquidation will appear less size liquidating fund, the
surpluses of money resources are transferred the Contractor and are a subject to
inclusion in the taxable income.

      17.8. If
the State notice the decision on continuation of operation of all or parts of
the constructions, transferred to it by the Contractor after the end of terms of
the Contract under the responsibility, in this case the Contractor will not bear
any obligations on realization of the program of liquidation and transfers the
State all the rights to all the actual actives which have collected in
liquidating fund.

       

    

    
      SECTION
18. PROTECTION OF BOWELS AND ENVIRONMENTS.

      

    

    
      18.1.
During performance of the Contract the Contractor is obliged to observe the
legislation of the State, concerning protection of Bowels and surrounding
environment, and to undertake all necessary measures for the
purpose:

      -
protection of a life and health of the population;

      -
maintenance rational and complex uses of Mineral resources;

      -
preservations of natural landscapes and recultivation the broken grounds, other
geomorphological structures;

      -
preservations of properties of a power condition of parts of Bowels for
prevention of earthquakes, landslips, flooding,
subsidence of rock.

      18.2.
When works on Extraction of brown coal by the Contractor in the priority order
should be observed:

      I.
Ecological requirements:

      -
preservation of a surrounding environment;

      -
prevention technogenic conversion of the grounds into desert;

      -
prevention of a water and wind soil
erosion;    

      -
isolation of absorbing and fresh-water horizons for exception of their
pollution;

      -
prevention of an exhaustion and pollution of underground waters;

      - the
organization of a sanitary-protective zone (SPZ) according to sanitary
classification and calculations of  dispersion
of harmful substances in an atmosphere;

      -
maintenance of accomplishment SPZ;

      -
observance on border SPZ of ground concentration of the thrown out harmful
substances which are not exceeding
maximum concentration limit (MCL) for settlements in view of background
pollution; and
other requirements according to the Legislation about bowel using and protection
of a surrounding environment.

      II.
Requirements in the field of protection of bowels:

      -
maintenance of completeness of advancing geological studying Bowels for an
authentic estimation of size and
structure of stocks of brown coal, Deposits and Sites of the bowels presented in
bowel using,  including
for the purposes which have been not connected with Extraction;

      -
maintenance of rational and complex use of resources of Bowels at all stages of
work on Extraction;

      -
maintenance of completeness of extraction of brown coal;

    

    - the
authentic account of stocks of the basic both in common lying Mineral resources
taken and left in  Bowels,
and passing components of products of Processing of mineral raw material and
production wastes by
development of Deposits;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    19

    

    
      - use of
Bowels according to requirements of the legislation of the State on protection
of the surrounding environment,
protecting Bowels from displays dangerous technogenic processes at
Extraction;

      -
protection from water content of Bowels, fires, explosions, caving of leaning
thickness of rocks, and  also
other spontaneous factors reducing their quality or complicating

        operation
and development of Deposits;

      -
prevention of pollution of Bowels at work on Extraction;

      -
observance of the Contract of the order established by Section 27 of stay,
cessation of works on Extraction and
Section 17 of the Contract of the order of liquidation of objects development of
Deposits;

      -
maintenance of ecological requirements at warehousing and accommodation
industrial and household waste with a
view of prevention of their accumulation on the areas of a reservoir and in
places of bedding underground
waters. 

      The
Contractor provides completeness and reliability geological, hydro-geological,
ecological, engineering-geological and technological studying of objects
extractions of brown coal.

      18.3. The
Contractor prior to the beginning of activity on bowel management under the
present Contract should make an estimation of influence of planned activity on
surrounding environment and to receive the sanction on nature management at the
state nature protection organizations.

      18.4. The
Contractor should conduct monitoring of Bowels and surrounding environment with
the purpose of studying of influence on them as a result of the activity under
the present Contract and acceptances of measures on duly elimination of negative
influence.

      18.5. The
Contractor is obliged to liquidate the infringement has done by him of a
condition of a surrounding environment, to lead regenerative works and to
compensate in full volume damage caused the nature.

      18.6. The
State control over observance of the legislation on protection of Bowels and a
surrounding environment carry out the authorized state
organizations.

      18.7. The
Contractor performs works on preservation of a condition of a surrounding
environment of Contract territory.

      18.8.
After cancellation of the Contract or at stage-by-stage return of Contract
territory the Contractor transfers Contract territory in a condition, suitable
for further use on direct purpose, according to the legislation of the
State.

      18.9. Any
infringements (deterioration) of a condition of an environment, and also the
contract territory itself during action of the Contract, and also under the
accepted obligations of the former joint venture «Kempirsay ore administration»
are restored due to the contractor up to a condition, suitable for further use
on direct purpose.

      

    

    
      SECTION
19. SAFETY OF THE POPULATION AND THE PERSONNEL.

      

    

    
      19.1. At
carrying out by the Contractor of works on Extraction of brown coal according to
the Contract performance of rules and norms on safe conducting the works
stipulated by the legislation of the State, and also carrying out of actions
under the prevention and liquidations of failures and occupational diseases
should be provided.

      19.2.
Work on Extraction of brown coal if they are danger to a life and health of
people is prohibited.

    

    19.3. The
state control over observance of rules and norms on technical safety and
industrial sanitary at work on Extraction is carried out by the special
representative the State organization.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    20

    
 

    
      19.4. The
basic requirements on maintenance of safe work on Extraction are:

      - the
admission to works of the persons having special preparation and qualification,
and to a management of mountain works - the persons having corresponding
formation;

      - provide
of the persons employed at work on Extraction by special clothes and means of
individual and collective
protection;

      -
application of machines, the equipment and the materials corresponding safety
requirements and sanitary norms;

      -
registration, appropriate storage and expenditure of explosives and means of
detonation, and also correct and safe
their use;

      -
carrying out of a complex geological, mine survey and other supervision
necessary for maintenance of  technological
cycle of works and forecasting of dangerous situations;

      - duly
updating of the engineering specifications and plans of liquidation of failures
by the data specifying  borders
of zones of safe conducting of works; 

      -
observance of design systems of Development of Deposits;

      -
observance of sanitary-and-hygienic actions on maintenance of the normalized
working conditions of wors according
to the legislation of the State;

      -
realization sanitary-and-hygienic, anti-epidemic actions directed on the
prevention of diseases caused by industrial
conditions, professional diseases and poisonings;

      -
creation of conditions for strengthening health;

      -
organization of preliminary and periodic medical surveys of personal working in
harmful and adverse – conditions;

      -
organization of the laboratory control over a condition of the air environment
in a working zone and  harmful
adverse physical production factors on workplaces (noise, vibration, a level of
radiation, weight and
intensity of work); 

      - provide
of workers good-quality potable water in normative quantities and a hot
feed;

      - provide
workers by necessary sanitary-household premises;

      - provide
of radiating safety.

      19.5.
Officials of the Contractor at occurrence of direct threat of a life and to
health of workers or the population are obliged to suspend immediately works and
to provide transportation of people a safe place and to inform on it Competent
and local agencies.

      

    

    
      SECTION 20. THE RESPONSIBILITY OF THE
PARTIES FOR INFRINGEMENT OF CONDITIONS THE CONTRACT.

      

    

    
      20.1. The
transactions concluded by the Contractor in the direct or latent form, breaking
requirements of the Contract, are void.

      20.2. The
Contractor bears the full responsibility for consequences of the actions
specified in p.20.1 of the Contract, at Competent organization and the Third
parties.

      20.3. The
persons which are guilty for performance of specified transactions, and also
other infringements of the Legislation about bowel management, bear established
by the law disciplinary, material, administrative and the criminal
liability.

      

      SECTION
21. FORCE  MAJEURE.

      

    

    21.1. Any
of the Parties will not bear the responsibility for default or inadequate
execution of any contractual obligations if such default or inadequate execution
have been caused by obligations of irresistible force (force-majeure).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    21

     

    
      21.2.
Circumstances of irresistible force are extraordinary and unforeseen
circumstances under the given conditions, as for example: military conflicts,
natural accidents, acts of nature (fires, etc.). The resulted list
is  complete.

      21.3. In
case of occurrence circumstances of irresistible force the Party which has
suffered from them, immediately notifies on it other Party by delivery or
sending by mail the notice in writing specifying a date started and the
description of force-majeure circumstances.

      21.4.
When occurrence of force-majeure circumstances, the Parties immediately hold
meeting for search of the decision of an output from the developed situation and
use all means for minimizing consequences of such circumstances.

      21.5.
When full or partial suspension of works under the Contract, caused by
force-majeure circumstances, the period of carrying out of these works is
prolonged for the term of action of force-majeure and renews from the moment of
the end of force-majeure.

      

    

    
      SECTION
22. CONFIDENTIALITY.

    

    
      

      22.1. The
information received or got by any Party during performance of the Contract, is
confidential. The parties can use confidential information for drawing up of the
necessary reports stipulated by the legislation of the State.

      12.2. The parties have not the
right to transfer the confidential information to the Third parties without the
consent of other Party, except for cases:

      -  if
such information is used during conducting proceeding;

      -  when
the information is given, to the Third parties rendering services to
the Contractor provided that such Third
party incurs the obligation to consider such information as
confidential and to use it only in the purposes
established by the Parties and for the term certain by the Parties;

      - when
the information is given to bank or other financial organization from which the
Contractor receives financial
assets provided that such bank or other financial organization incurs the
obligation to consider such
information as confidential and to use it only for present
purposes.

      2.3. The
Parties, according to the legislation of the State, define terms of observance
of confidentiality under all documents, information and to the reports
concerning work on Extraction in Contract territory.

      

    

    
      SECTION
23. TRANSFER OF THE RIGHTS AND DUTIES.

    

    
      

      23.1.
Transfer of the rights and duties under the Contract to the Third party is
supposed only with the
written sanction of Competent organization (authorized state
organization).

      23.2. The
charges connected with transfer of the rights and duties under the Contract, the
Contractor bears and it
are not compensated by the State. 

      23.3.
Until the Contractor keeps any participation in the Contract, it and the Third
party, to which
it has transferred the rights and duties, bear a joint liability on the
contract.

      

    

    
      SECTION
24. THE APPLICABLE LAW.

      

    

    
      24.1. The
Law of the State of Kazakhstan Republic for the Contract and other agreements
signed on the basis of the Contract is applied. 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      22

      
 

      24.2. The
Contractor assumes liability to carry out of the international obligations of
the State in the field of preservation of the environment in Contract territory
and the sites interfaced by it.

      

    

    
      SECTION
25. THE ORDER OF THE RESOLUTION OF DISPUTES.

      

    

    
      25.1. The
Parties make all of a measure for the decision of all disputes and the
disagreements following from the Contract by negotiations.

      25.2. If
within 60 days from the moment of its occurrence the question at issue cannot be
solved by negotiations the Parties will transfer a question at issue for its
decision in the judicial organizations of the State authorized according to the
legislation to consider similar disputes.

      

    

    
      SECTION
26. GUARANTEES OF STABILITY OF THE CONTRACT.

    

    
      

      26.1.
Positions of the Contract remain constant during all action of the Contract,
except for cases when such changes are brought under the mutual written
agreement of the Parties.

      26.2.
Changes and additions of the legislation, worsening position of the Contractor,
accepted after the conclusion of the Contract, to the Contract are not
applied.

      26.3. In
case of such changes and the additions specified in p.26.2, the Parties will be
guided p.14.10. of present Contract.

      

    

    
      SECTION
27. CONDITIONS OF  CESSATION AND SUSPENDING OF ACTION THE
CONTRACT.

      

    

    
      27.1. The
Competent organization without fail suspends the Contract,
if: 

      - there
was a direct threat of a life or to health of the people working or living in a
zone of influence of works, connected
with action of the Contract.

      27.2. The
Competent organization has the right to suspend the Contract in
cases:

      -
realization by the Contractor of the activity which has been not stipulated by
the Working program; 

      -
infringements by the Contractor during the activity of the legislation of the
State regarding protection of the  bowels, a
surrounding environment and safe conducting
works;                                                           

      -
infringements by the Contractor during the activity of the order of payment of
taxes and other obligatory  payments
established by the Contract;

      -
announcements of the Contractor the bankrupt according to the legislation of the
State; 

      - the
list can be added under the agreement of
Parties.                                                                                                                                                                     

      27.3. In
case of suspending actions of the Contract the Competent organization in writing
notifies the Contractor on the reasons of such suspending and establishes
reasonable term for their elimination.

      27.4.
After the message of the Contractor on elimination of the reasons which have
caused suspending of action of the Contract, it renews.

      27.5. The
Contract ahead of schedule stops the action only in following
cases:

      - when
refusal of the Contractor to eliminate the reasons which have caused to make
decision about suspending
of action of the Contract, or non-elimination these reasons in terms established
by Competent organization;

      - when
recognition of the Contract void according to the Legislation about
Bowels;

      - when
establishment in the judicial order of the fact of infringement of the
legislation of the State during
signing and registration of the Contract;

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    23

    
 

    
      - when
establishment in the judicial order of the fact of essential deviations of
conditions of the Contract from conditions
of the License or competitive conditions on the basis of which the License has
been given out to the
Contractor;

      - when
transfer by the Contractor in full or in part the rights under the Contract to
the Third party with infringement
of Section 25 of the Contract;

      - when
establishment in the judicial order of the fact of the going granting by the
Contractor to Competent organization
or other State organization of a false information on work on Extraction in
Contract territory;

      - when
repeated realization by the Contractor of the actions which have caused earlier
suspending of action of  the
Contract;

      - when
interruption by the Contractor of manufacture within the limits of the Working
program for the term of from
above 90 days, except for the cases connected with circumstances of irresistible
force (force- majeure);

      - when
infringement of conditions about observance of confidentiality of the
information under the present Contract;

      27.6. The
Contract cessation the action for the reasons specified in p.27.5of the
contract, in 60 days after reception by the Contractor of the notice in writing
from Competent organization about before due cessation of the
Contract.

      27.7. The
Parties are not released from performance of current obligations which have
remained not executed by the moment of delivery of the notice to the Contractor
about cessation of the Contract.

      

    

    
      SECTION
28. LANGUAGE OF THE CONTRACT.

      

    

    
      28.1. The
text of the given Contract is made in the state and Russian languages and all
copies are identical.

      28.2. In
case of occurrence of disagreements or disputes between variants, Russian
variant has primary force.

      28.3. The
Parties agree, that the state and Russian languages will be used as languages of
dialogue. From the date of the introduction of the Contract by virtue the
engineering specifications and the information concerning work on Extraction of
brown coal is made in the state and Russian languages.

      28.4. The
documentation and the information, concerning administrative activity, is made
in state and Russian languages.

      

    

    
      SECTION
29. ADDITIONAL POSITIONS.

    

    
      

      29.1. All
notices and the documents demanded in connection with realization of the given
Contract, are considered presented and delivered properly by each of the Parties
under the present Contract only on the fact of their reception.

      29.2. The
notice and documents are handed over with own hand or send by mail, the ordered
air mail, a fax, by a telex or telegraph to following addresses:

      The address of Competent
organization:                             The Address of the
Contractor:

      Investments
Agency of Kazakhstan
Republic                     Limited
liability company «Kyzyl Kаin Мамyt»                                                                                                                            

      473000,
Astana                                                                          464830,
the Aktyubinsk region, Lenin district, 

       Zhenys
avenue,
33,                                                                 Batamshinsky
village, Lenin's street, 20,

      Факс/3172/118158                                                                     Fax/31342/21-301

      Ph./3172/118161                                                                        Ph./31342/21-301

      On behalf
of                                                                               On
behalf of

    

    Competent
organization                                                             of
the Contractor

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        24

      

    

    
       

      29.3.
When change of addresses under the present Contract each of the Parties should
present the notice in writing to other Party.

      29.4. All
appendices to the Contract are considered as its components. At presence of any
divergences between positions of appendices and the Contract, the Contract has
basic value.

      29.5.
Amendments or additions to the Contract are made out by the written agreement of
the Parties. Such agreement is a component of the Contract.

      The
present Contract is concluded 19 (day), October (month) 2000
year

    

    in Astana
city, the Kazakhstan Republic, by authorized representatives of the
Parties.

     

     

    Competent
organization:                                                                                        the
Contractor:

    

     signature
_____________
D.Kuanyshev                                signature
_____________
A.Raimbergenov             

    

    Chairman
of Investments Agency
of                                        Director
of  LLC « Кyzyl Каin Мамyt»

    Kazakhstan
Republic

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