Welcome to the September 2012 edition of Unearthed. In this issue, we feature legal updates and articles relevant to the global mining industry. Drawn from Norton Rose members around the world we invite you to read about recent developments affecting the mining industry, including budget proposals and new and proposed legislation affecting the mining sector in various countries, resource nationalism issues, corporate governance and anti-corruption challenges, tips for dealing with departing employees who have confidential information and advice on how to best prepare for international arbitration.
Recently Norton Rose has been named the global Mining Law Firm of the Year for 2012 by Who’s Who Legal. Fifteen members of Norton Rose’s global mining team from nine different offices appear in the Who’s Who Legal mining rankings. More Norton Rose lawyers were selected for inclusion than any other firm in Who’s Who Legal global research.
Norton Rose is also pleased to report that we received the Africa Investor Legal Advisor of the Year award from Africa Investor Group. The award recognizes achievements across the main infrastructure sectors in Africa, and rewards the institutions and personalities driving transactions and improving the continent's infrastructure investment climate. In addition, the awards are a platform for investors, financiers and advisors to measure their performance and achievements.
Of interest to the mining industry, Norton Rose Canada recently launched its new Canadian North and Arctic group providing clients with experienced and expert advice on the legal and economic challenges of investing in and carrying on business in Canada’s North and Arctic.
Denver Gold Forum - Denver, 9-12 September 2012
Norton Rose is a sponsor of the Denver Gold Forum which presents precious metal producers, developers and explorers to the world's leading fund and portfolio managers, sovereign wealth funds, institutional investors and equities analysts. Norton Rose Canada partners Pierre Dagenais and Michael Sabusco will represent Norton Rose at this event.
Women in Mining Monthly Lunch Series – Toronto, 12 September and 10 October 2012
Norton Rose Canada is sponsoring the Women in Mining Toronto monthly lunch series. The series is a lively and informal group of more than 400 women who work across the spectrum of the mining industry. They meet monthly from September to June, usually over lunch, sometimes with a speaker, sometimes just to chat on a selected topic.
Mining in Peru – Toronto, 19 September 2012
This event, organized by the Peruvian-Canadian Chamber of Commerce, aims to provide guidance on dealing with some of the challenges that mining companies may face when operating in Peru. Pierre Dagenais of Norton Rose Canada will chair the event.
Risk Mitigation & CSR Seminar – Toronto, 16 October 2012
This full-day seminar will explain how companies can mitigate their risk in all mining jurisdictions around the world - from Northern Ontario to South Africa and Peru through the implementation of effective CSR programs. The program features expert speakers, questions and answers, case studies by successful Canadian companies and excellent networking opportunities. Janne Duncan and Elizabeth DeMarco of Norton Rose Canada will be speaking at this event.
mineLatinAmerica – Toronto, 7 November 2012
Norton Rose Canada is sponsoring mineLatinAmerica, which will feature updates by public and private mining companies on their Latin American projects and technical presentations on doing business in Latin America's mining industry (legislation, financing mining projects, risk mitigation, CSR, etc.) by expert advisors and service providers to the mining industry (banks, law firms, engineering firms) as well as country specific overviews. Richard Lachcik of Norton Rose Canada will Co-Chair this event.
Litigation and dispute resolution: An international market – Astana, 30 May 2012
Deirdre Walker, Patricia Nacimiento, Yaroslav Klimov and Batyr Adaibayev of Norton Rose LLP gave a half-day seminar for our clients in Kazakhstan on developments in the global litigation and dispute resolution market. Presentations from our team of specialists examined some of the regional trends and advised attendees on how to choose the best strategic options for managing both domestic and international disputes.
Mining and Finance Law, Vancouver, 29 – 31 May 2012
Avril Cole of Norton Rose Canada gave a presentation on “Corporate Social Responsibility (CSR) Standards: Benchmarks for Due Diligence and Risk Management in Emerging Market Resource Transactions” at the Mining and Finance Law conference. Her presentation covered the mitigation of political, operational and transactional risk by effective CSR due diligence and CSR program management.
Global Perspectives: Mining 2012 – Singapore, Perth, Melbourne, Brisbane, Sydney, South Africa, Toronto, London and Tokyo
Norton Rose Group recently held a series of round table events around the world at which industry leaders met to discuss current issues facing the mining industry. Round tables were held in Singapore, Perth, Melbourne, Brisbane, Sydney and South Africa. Norton Rose partners, including Raj Karia, Nick Merritt, Simon F.T. Cox and Martin McCann, led discussions with key industry representatives. A detailed report of the findings gleaned from such round tables will be produced by Norton Rose and made available to participants.
Canadian Institute of Mines & Metallurgy Monthly Luncheon Series – Toronto, 7 June 2012
Janne Duncan of Norton Rose Canada spoke on “Best Laid Plans: Charting Your CSR Strategy, from Board Vision to On the Ground Implementation.” The presentation was part of a monthly luncheon series held by the Canadian Institute of Mines & Metallurgy held at the Toronto National Club.
Risk Mitigation and CSR Seminar – Vancouver, 7 June 2012
Michael Torrance of Norton Rose Canada spoke on “Corporate Social Responsibility: Business Imperative with Legal Implications” at the 7th Risk Mitigation and CSR Seminar held by the Canada-Southern Africa Chamber of Business.
Resource Exploration and Development Summit – Toronto, 11 June 2012
Jean Piette and Pierre-Christian Labeau attended the Resource Exploration and Development Summit and presented on sustainable mining in Quebec and reconciling mining and First Nations issues.
Women in Mining Monthly Lunch Series – Toronto, 13 June 2012
Diana Borowski, Director of Philanthropy for the Canadian Red Cross, spoke at a monthly lunch speaking series held by Women in Mining at the Norton Rose Toronto office. The Canadian Red Cross is partnering with Ontario First Nations communities to build capacity for disaster response and abuse prevention. Diana discussed how the mining industry and their stakeholders can assist, participate and demonstrate CSR.
Energy Africa Seminar – Toronto, 19 June 2012
Trent Mercier of Norton Rose Canada spoke on “Mitigating Risk - Legal Tools to Maximizing the Success of African Petroleum Investments” at a seminar organized by Mine Africa. The half-day seminar featured updates by companies on their African oil and gas projects and technical presentations on doing business in Africa's oil and industry by expert advisors. The half-day conference was hosted by Chris Wolfenberg and Janne Duncan of Norton Rose Canada.
58th Annual Rocky Mountain Mineral Law Institute – Newport Beach, CA, 19 – 21 July 2012
The Annual Rocky Mountain Mineral Law Institute is organized by the Rocky Mountain Mineral Law Foundation. The event brings together leading natural resource attorneys and other professionals that address a broad range of important legal and investment-related issues for attorneys, companies, governments, and others involved in international mining and energy development. Janet Howard of Norton Rose Canada attended this event.
Australia - Canada Economic Leadership Forum - Toronto, 23 – 25 July 2012
Norman Steinberg and Niko Veilleux of Norton Rose Canada attended the 2012 Australia-Canada Economic Leadership Forum. The 2012 Forum, co-chaired by the Honourable Mike Rann and Thomas d'Aquino, considered a wide variety of pressing economic concerns that both Australia and Canada need to address: competitiveness and international trade priorities; approaches to the global economic recovery following a devastating economic and financial crisis; responses to immense opportunities and transformational change in the Asia-Pacific region; and leading-edge policies for harnessing technological innovation and change. The Australian and Canadian governments have shown much interest in the Forum as the pre-eminent vehicle for Australia-Canada cooperation in political, economic, and foreign security matters.
Focus Kenya – Toronto, 16 August 2012
Organized by the Canada-Kenya Chamber of Business, Focus Kenya is a platform for Corporate Investments, Securities, Mergers and Acquisitions, exploring opportunities in East and Central Africa and learning about resources still largely untapped in the region. Darryl Levitt of Norton Rose Canada was the keynote speaker.
Managing the complexities of undertaking & funding resources infrastructure projects in Queensland - Brisbane, Australia, 23 August 2012
Norton Rose Australia hosted a seminar with the International Project Finance Association (IPFA) on the challenges of funding mining projects in one of Australia's resource rich states, Queensland. The event featured speakers from Norton Rose Australia, Wiggins Island Coal Export Terminal (WICET), Brookfield Financial, ANZ, Control Risks Asia Pacific and the head of the newly formed Projects Queensland, the entity which manages the state’s infrastructure policy and investment pipeline. IPFA is the largest and the only international, independent, not-for-profit association dedicated to promoting and representing the interests of private companies and public sector organisations in Project Finance and Public Private Partnerships (PPPs) throughout the world.
Africa Down Under Conference - Perth, Australia, 28 - 31 August 2012
A contingent of partners from Norton Rose’s global offices participated in this year’s Africa Down Under Conference in Australia. The conference attracted over 2,000 delegates including mining company executives, Government officials and representatives, investors and financiers and brokers and is the premier event in Australia for companies interested in doing business in Africa.
- Norton Rose Canada acted for TSX-listed Banro Corporation in connection with its US$175 million debt offering. Banro Corporation is a Canadian gold mining company focused on production from its Twangiza oxide mine and development of four additional major, wholly-owned gold projects, each with mining licenses, along the 210-kilometre Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the Democratic Republic of the Congo.
- Norton Rose Canada acted for TSX and AIM-listed gold and copper mining, exploration and development company Rambler Metals & Mining plc in connection with a two-stage strategic investment by Tinma International Ltd., a wholly-owned subsidiary of a China-based investor.
- Norton Rose is advising Allied Gold Limited on its A$1 billion sale to UK resources giant St. Barbara Group.
- Norton Rose Australia has advised Industrea Limited, an Australian mining services company, on a cash offer by US conglomerate, General Electric Company (GE) by way of scheme of arrangement. GE has offered to acquire 100% of Industrea’s issued shares at A$1.27 cash per share. The acquisition price represents a 48% premium to the previous close and implies a fully diluted value for Industrea of approximately A$470 million. In addition, the Industrea Board has negotiated the ability to sell Industrea Mining Services (IMS) separately, in which case Industrea shareholders will be entitled to receive any net proceeds from the sale of the division above an agreed value in addition to the $1.27 per share offered by GE.
- Norton Rose Australia advised Electric Power Development Co., Ltd. on its acquisition of a 10% interest in the Maules Creek Coal Mine, in New South Wales, from Whitehaven Coal Limited for A$370 million. The Maules Creek Coal Mine is one of the largest major undeveloped and significant multi-seam coking and thermal coal deposits in NSW, and is currently being developed by Whitehaven Coal Limited.
- Norton Rose Australia is advising Linyi Mining Group Co., Ltd, a subsidiary of Shandong Energy Group Co, Ltd (Shandog Energy), on its takeover bid for Rocklands Richfield Limited (RCI) under which Linyi has agreed to make an off-market cash takeover offer for all the issued shares in RCI at a price of $0.52 per share. The Offer values RCI at approximately A$206 million.
- The Norton Rose Hong Kong office has advised UBS AG Hong Kong Branch, China International Capital Corporation Hong Kong Securities Limited (CICC) and J.P.Morgan Securities Limited Ltd in relation to the global offering and Hong Kong HK$2.4 billion IPO of China Nonferrous Mining Corporation Limited. Norton Rose’s Hong Kong, Johannesburg and Beijing offices worked together on this transaction.
- Norton Rose Canada acted for North American Palladium Ltd. in an underwritten offering of C$35 million of flow-through shares. The proceeds from the offering will be used for eligible exploration activities and mine expansion expenditures at the Company’s Lac des Iles palladium mine and property in Ontario.
- Norton Rose LLP advised RBC Capital Markets, Canaccord Genuity Limited, Mirabaud Securities LLP and J&E Davy in their roles as joint bookrunners on the recent US$60 million fundraising by Kenmare Resources plc (Kenmare). Kenmare is a FTSE 250 company, with its primary listing on the Main Market of the London Stock Exchange and a secondary listing on the Irish Stock Exchange. Kenmare's principal activity is the operation of the Moma mine, located on the north east coast of Mozambique, which contains reserves of titanium minerals.
Maritime and energy leader Wylie Spicer joins Norton Rose Canada
July 16, 2012
Maritime law and energy lawyer Wylie Spicer, Q.C., has joined Norton Rose Canada. Wylie has more than 30 years experience in all aspects of the offshore energy industry and is a recognized authority on Arctic law. He will be based in our Calgary office.
Read the press release
Top-flight mining and China lawyers join Norton Rose Canada
July 9, 2012
David McIntyre, Janet Lee, Janet Howard, Robert Mason, Yufei Luo and Lei Huang have joined Norton Rose Canada. These six new lawyers are focused on mining and China. They also bring a great deal of strength in M&A, corporate financing, inbound and outbound investment to Canada and international business throughout Asia and globally.
Read the press release
An international director's challenge in managing corruption risks
Corruption continues to undermine economies and impede progress in the world, distorting markets and preventing aid from reaching those who need it most. Countries and companies in the Asia-Pacific region face considerable challenges in managing the corruption risks posed by the way business is traditionally done. By inference, the boards of directors and senior management are often confronted by leadership dilemmas in ethical decision-making. They also run the risk of incurring personal liability.
Read the full article
New South Wales EPA provides further guidance on environmental incident response obligations
Felicity Rourke and Rebecca Pleming
The New South Wales Environment Protection Authority (EPA) has released information providing guidance on new environmental incident response obligations which commenced in February and March 2012. This legal update analyses this new material and examines in detail the requirements for incident response plans, and for the publication of monitoring data.
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Peter Norman, Adrienne F. Oliver and Andrew Wellsted
While political uncertainty is a risk factor the mining sector is accustomed to managing, companies must engage in discussions with governments on the potential for higher or new taxes on resources, while ensuring that they understand the laws and taxes that apply to them currently in the jurisdictions in which they operate.
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International business transactions in Ghana
Steve Abraham and Nick Prowse
On 16 May 2012, the Ghanaian Supreme Court gave its judgment, in what had then become known as The Attorney General v Balkan Energy Ghana Ltd, Balkan Energy LLC and Mr Philip David Elders. The judgment is of fundamental importance to any non-Ghanaian companies or individuals and Ghanaian companies with foreign sponsors who have entered into, or are considering entering into, any contracts with the State or Government of the Republic of Ghana. The decision centred around the meaning of an “international business transaction” under Article 181(5) of the Ghanaian Constitution.
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Conflicts over commodities – the coal seam gas balancing act
Rebecca Hoare and Susan Rose
Australian governments are responding to increased pressure to address land use conflicts through the introduction of new legislation and policy initiatives that seek to manage competing interests. The coal seam gas industry illustrates the current challenges faced by government to balance the interests of agricultural landholders and other stakeholders, including petroleum and mining companies, seeking access to land, in the context of growing awareness and concern over environmental impacts, such as water.
The Commonwealth, New South Wales and Queensland Governments have all introduced legislation and outlined land use policies, demonstrating the measures being taken. Further, the Standing Council on Energy and Resources (which comprises the Commonwealth, State, Territory and New Zealand Ministers responsible for energy and resources) agreed on 9 December 2011 to develop and implement a harmonised framework for coal seam gas to address key areas of community concern based on four key themes: water management, multiple land use framework, best practice standards and co-existence.
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New tax on Australian mining projects
Liz Allnutt and Sarah Lilly
The controversial Minerals Resource Rent Tax (MRRT) has now become law in Australia and will come into effect on 1 July 2012. The MRRT is a tax on profits made from extracting iron ore and coal in Australia, as well as gas extracted as a necessary incident of coal mining and gas produced by the in situ combustion of coal.
The MRRT will apply in full to those miners whose profits exceed AUD$125 million per year. Miners with mining profits of less than AUD$75 million per year will have their MRRT liability reduced to nil. To reduce distortions, the MRRT liability for miners with profits between AUD$75 million and AUD$125 million will be phased in.
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Protect your business from departing employees
Sarah C. Crossley
This article originally appeared in the Canadian Mining Journal on June 1, 2012
Companies spend significant amounts of time and capital investing in their employees and business relationships. Such an investment may be greatly compromised when an employee leaves to join a competitor. A company’s operations may be further compromised, and become particularly vulnerable, if the departing employee takes confidential information or employees with them.
In these circumstances, the company is well advised to act quickly to take steps to protect its interests. A company’s response to a departing employee may depend, in part, on whether there is an employment contract in place concerning them.
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Dispute resolution involving international mining transactions
Stephen L. Drymer, Martin J. Valasek and Robert I. Frank
This article originally appeared in the Canadian Mining Journal on June 4, 2012
When Canadian mining companies are involved in international projects with multiple parties and jurisdictions, the legal challenges may be difficult to navigate. In a dispute, the courts of more than one country may assert jurisdiction and the laws of more than one legal system may apply. For mulit-jurisdictional mining transactions, international arbitration is the most appropriate dispute resolution mechanism. For parties to protect themselves and get the maximum benefits from the process, it is important to pay careful attention to arbitration provisions early in the negotiations, rather than at the 11th hour. This will help ensure the arbitration provisions are enforceable and that any arbitration proceeds in a timely and cost effective.
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Ontario and Quebec Canada propose changes to the respective mining legislation and regulations
J.M. Madeleine Donahue and Jean Piette
Ontario and Quebec, provinces of Canada, recently proposed significant changes to their respective mining legislation. This briefing describes the proposed changes to both Ontario and Quebec mining law. Note however, that since publication of the article originally in July 2012, the Quebec government has called a provincial election, and the future of the proposed changes in Quebec remain uncertain.
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Australia approves first Enterprise Migration Agreement (EMA) in midst of skills shortage
With a significant number of large mining and energy projects in development, many in isolated locations lacking community infrastructure and an accessible labour-supply, Australian project owners face significant challenges in sourcing skilled workers to construct, develop and operate projects. In this climate, the Australian Federal Government recently launched a controversial new scheme to allow workers from outside Australia to be brought in to work on 'significant' resources projects.
In May 2012, the Australian Federal Government announced a new temporary immigration initiative: Enterprise Migration Agreements (EMAs) aimed at addressing the skills shortage in the resources sector. EMAs can be negotiated between the project owner and Federal Government to allow for foreign workers to be employed on significant resources projects. The use of an EMA will allow the project owner certainty in terms of workforce planning and the ability to access overseas workers.
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