EX-10.18 Agreement For Sale of Concentrate Product

EX-10.18 3 l11655aexv10w18.txt EX-10.18 AGREEMENT FOR SALE OF CONCENTRATE PRODUCT Exhibit 10.18 COMMERCIAL CONTRACT No. CO/265/97 March 1997 Between: 1 LA GENERALE DES CARRIERES ET DES MINES a corporation duly incorporated under the laws of Zaire. And: OMG KOKKOLA CHEMICALS OY, a corporation duly incorporated under the laws of Finland (hereafter called "Buyer") of the second part. IT HAS BEEN AGREED AS FOLLOWS: 1 DEFINITION AND INTERPRETATION 1.1 DEFINITIONS Wherever used in this agreement unless the context otherwise requires: "Year" means calendar year commencing on 1 January and ending on 31 December that year. "Concentrate Co-Cu or "Concentrate" "means the material defined in Clause 4 hereafter. "Agreement" means this Agreement. "Business Day" means a day which is not a Saturday, Sunday or a public holiday in Finland or Zaire. "Delivered lot" means a lot of concentrate containing approximately 500 wmt from Kipushi or Luiswishi. "Received lot" means the concentrate received by OMG in Kokkola containing approximately 500 wmt. "Payable metals" are cobalt, copper or all other metals which are economically recoverable and agreed by both parties. "Month" means calendar month. "Quotational period" explained in Clause 8.2 hereunder. 2 "Project" defines Luiswishi project. "Average Cobalt Content" is defined in Clause 4 hereafter. "Average Copper Content" is defined in Clause 4 hereafter. "Ton" and "metric ton" means 2204,62 pounds avoirdupois "WMT" means wet metric ton. "DMT" means dry metric ton. "USD" shall mean lawful money of the United States of America 2 SUBJECT Gecamines will deliver to OMG the monthly quantity of concentrate, defined in article 6 hereinafter according to the specifications defined in articles 3 and 4 hereafter, to 0MG Kokkola Chemicals in Finland. 3 MATERIAL TO BE DELIVERED Cobalt and copper metal content in the concentrate are defined in article 4 hereinafter. 4 SPECIFICATIONS Gecamines agrees to sell and deliver and OMG agrees to purchase Co-Cu concentrate having the following characteristics assayed on a dry basis: ** The parties can agree to modify the characteristics and possible conditions and add other payable metals. 5 DURATION This agreement is in force for two years commencing on the date of starting the production and deliveries (Article 17). OMG has the option to continue the contract until this material can be replaced by cobalt smelter alloy. 6 QUANTITY Gecamines shall deliver to OMG and OMG shall purchase from Gecamines 300-400 t cobalt content in concentrate in accordance with the specifications in article 4, 7 DELIVERY The delivery term to OMG in Kokkola, Finland (DDU Incoterms edition 1990). Freight, charges, transportation and insurance to be charged from OMG. OMG will choose the transportation agent as well as the way of packing (big bags or bulk) after consulting Gecamines. ** Confidential treatment has been requested with respect to certain information contained within this document. Confidential portions are omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. 3 8 PRICE The price of concentrate is based on metal content and fixed according the following formulas 8.1 PRICE DETERMINATION OMG shall pay to Gecamines for the Cobalt and Copper in the concentrate. The price will be determined separately for each received Lot DDU Kokkola. 8.1.1 COBALT PRICE (PCO) Payable cobalt price for received lot is determined according the following formula: ** 8.1.2 Copper Price (PCu) Payable copper price for each received lot is determined according the following formula. ** 8.1.3 PRICE OF OTHER RECOVERABLE METALS ** 8.2 QUOTATIONAL PERIOD The applicable Quotational Period for cobalt, copper and other metals is the month of arrival in Kokkola. ** Confidential treatment has been requested with respect to certain information contained within this document. Confidential portions are omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. 4 8.3 PAYMENT After reception in Kokkola OMG will make the payment for received lots. Weighing and sampling is done according to the procedure described in article 9.2 for the quantities and that described in 8.1 and 8.2 for the currency in use. In any case the final payment shall be made in 30 days after QP. The title is passed from Gecamines to OMG at arrival in Kokkola. An advance net payment will be negotiated before the first shipments. 8.4 TAXES AND DUTIES Any and all taxes, and duties in Zaire relating to this Agreement shall be paid by Gecamines. Any and all taxes, and duties paid outside Zaire relating to this Agreement shall be paid by OMG. 8.5 ACCOUNT OMG will credit "Project Luiswishi" by opening an account at a bank approved by the parties of this project 9 WEIGHING, SAMPLING AND ASSAYING 9.1 WEIGHING, SAMPLING AND MOISTURE DETERMINATION IN KIPUSHI OR LUISWISHI To be used for transportation and insurance invoicing purposes, only: (a) OMG and Gecamines shall confer and, before the first shipment, shall adopt and record mutually acceptable methods of weighing, sampling and analysing. (b) The Co-Cu concentrate will be weighed, sampled and analysed in Kipushi or Luiswishi at Gecamines costs. The shipment shall be divided in lots of approximately 500 tons. Each lot shall form a separate and complete delivery for all purposes under this Agreement (c) Sampling and analysing will be made using mutually agreed methods. Such weight and moisture content will be provisional for all purposes of this agreement. After weighing, sampling and analysing Gecamines will pass the results to OMG by telecopy. 9.2. WEIGHING, SAMPLING AND MOISTURE DETERMINATION AT DISCHARGING PORT: (a) OMG and Gecamines shall mutually agree the methods of weighing, sampling and analysing before the first shipment. These shall be appropriate, based on internationally approved methods, defining exact weights, samples and analyses. (b) The Co-Cu concentrate will be weighed and sampled at the discharging port at OMG's cost. Each received lot means a separate and complete delivery under this agreement. 5 (c) Sampling and analyses are made according mutually agreed analytical methods. Weighing and moisture will be determined according this contract. In case of arbitration demanded by either of the parties the procedure will be according art. (9.3). A total of five sets of samples shall be drawn from each lot and distributed as follows: - one set of samples for the OMG - one set of samples for Gecamines - one set of samples for eventual umpire analysis kept by OMG - one set of samples for eventual umpire analysis kept by Gecamines one set of samples for reserve kept by OMG During these operations Gecamines shall have the right to be represented at its own expense. After getting results OMG and Gecamines shall exchange the assays. If the assays are not ready in 30 calendar days, the analysis that is at disposal will be used for final invoicing. The invoice will be sent by telecopy to OMG and the original by courier They shall be final and binding for both parties of this agreement. For each lot of 500 tonnes WMT Gecamines will calculate the amount of cobalt, copper and other elements applicable for each lot preparing an invoice in accordance with the shipment. The invoice shall be sent by telecopy to OMG and the original by courier. 9.3 UMPIRE ASSAYING This process is applicable for the samples taken at the port of arrival. The analyses should be made independently by OMG and Gecamines. The exchange of assays will be made by telecopy. If the difference of assays for Co, Cu and Ni of the two parties is not higher than 0.20 % the arithmetic mean of these two results will be accepted final. In the event of greater difference and if either of parties demand, an umpire assay may be made on the samples reserved by two independent laboratories, mutually approved. The reference assayers cannot act as representative agent of OMG or Gecamines at the weighing, sampling and moisture determination operations and/or carry out, for any or both parties, the analysis for the assay exchange. Should the umpire assay fall between the results of the two parties or coincide with either, the arithmetical mean of the umpire assay and the assay of the party which is the nearer one to the umpire shall be taken as the agreed assay. 6 Should the umpire assay be the exact mean. of the two parties then the umpire result shall be final. The cost of the umpire assay shall be borne equally by both parties when the umpire assay is the exact mean of the exchanged results. Should the umpire assay fall outside the exchanged results, the assay of the party which is nearer the umpire shall be taken as agreed assay. The cost of this assay shall be borne by the other party. 10 FORCE MAJEURE In the event of any strike, act of God, war, lockout, flood, accident, lack transport facilities or any other reason beyond the control of the parties which prevent the parties to fulfill the obligations of the agreement, the party involved should immediately inform the other party in writing of such event and of the estimated duration of fulfilling the obligations. If these circumstances or the Force Majeure situation should persist more than 3 months the parties shall meet and consider the cancelling this agreement. 11 FAIR CLAUSE In case or events not foreseen by the parties, regardless of the agreement, one of the parties may demand additional charge to be able to fulfil its obligation in accordance with this agreement, this party has to request in writing for a possible modification of this agreement. The demand should, without delay, include the reason for the request, explain the situation of the party and the economical consequences to this agreement. At default of notifying the party will loose the wright to present the request in accordance with this article. 12 NOTICES All notices, requests for information, complaints and other communication which are required or may be given under this Agreement shall be in writing delivered personally or sent by registered mail or telecopy at the following addresses or to other such address as a party may notify the other party in writing: If for Gecamines La Generale des Carrieres et des Mines Monsieur le President Delegue General B.P. 450 Lubumbashi Republic of Zaire Telephone: +32 2 67 68 045 Telceopy: + 32 2 67 68 047 Brussels Telephone: +32 2 67 68 983 Telecopy: +32 2 67 68 984 7 Or if for OMG Kokkola Chemicals Oy Att: The President P.O. Box 286, FIN-67101 Kokkola Finland Telephone: +35868280111 Telecopy: +358 6 8280 373 13 ASSIGNMENT OF THE AGREEMENT This agreement as well as all rights and obligations for each party arising thereof cannot be transferred, assigned, or pledged to a third party without written permission of the other party before notice with the exception where assigning company controls the majority. This permission cannot be withheld unreasonably 14 AMENDMENTS This present Agreement can only be modified by means of clauses duly signed by both parties. 15 GOVERNING LAW AND JURISDICTION Any dispute, occurred between the Parties and resulting from misinterpretation or execution of the present agreement, shall be preferably settled amicably. If it is not the case, it will be referred to the Commercial Arbitration court in Paris which will make a ruling based on French Law. 16 INTERPRETATION A) The titles of various articles and paragraphs have no effect in the interpretation of this agreement. B) If any period specified in this agreement shall expire in non business day, the expiring date is the following business day. 17 The agreement shall come into effect after the production has started, which should be November, 1997. In Lubumbashi 4 April, 1997 This agreement has been executed in two copies, one for each party. FOR GECAMINES YAWILI NYI ZONGIA UMBA KYAMITALA DELEQUE GENERAL ADJOINT PRESIDENT DELEQUE GENERAL FOR 0MG KOKKOLA CHEMICALS OY ANTTI AALTONEN PRESIDENT AMENDMENT NO 4 TO COMMERCIAL AGREEMENT NO CO/265/97 Between La GENERALE DES CARRIERES ET DES MINES, a state company organized and existing under the law of the Democratic Republic of Congo, registered to the nouveau registre de commerce de Lubumbashi au numero 453 and having its registered office 419, Boulevard Kamanyola, B.P. 450 Lubumbashi, Democratic Republic of Congo represented by Mr. NZENGA KONGOLO, General Director and Mr. ASSUMANI SEKIMONYO, Deputy General Director, hereinafter denoted as "GCM" and OMG Kokkola Chemicals Oy, a company organized and existing under the laws and the Republic of Finland, represented by Mr. JORAN SOPO, President (hereinafter denoted as "OMG") Preamble Whereas GCM and OMG has signed in April 1997 the Commercial Agreement CO/265/97 related to deliveries of Co Cu Concentrate. Whereas GCM and OMG has signed in March 1998 the amendment no. 1 to the Commercial Agreement related to deliveries of Co Cu Concentrate. Whereas GCM and OMG has signed the amendment no. 2 to the Commercial Agreement about the revision of certain terms of the aforesaid agreement entered into force on the 1st January 2000. Whereas GCM and OMG has signed on the 16th of June 2001 the amendment no. 3 to the Commercial Agreement related to duration of the aforesaid agreement. Whereas the development of the market price of Cobalt has prejudiced both OMG and the Lubumbashi project, and for this reason certain negotiations have been held between the parties to find solutions which satisfy both parties and permit the parties to continue with their cooperation. NOW THEREFORE IT HAS BEEN AGREED AS FOLLOWS: ARTICLE 1: DELIVERIES Article 1 of amendment no. 2 modifying article 4 of the Commercial Contract has been modified as follows: GCM shall sell and deliver, and OMG shall buy, Co Cu Concentrate complying having the following indicative characteristics (assayed on a dry basis): ** ** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on the Company's request for confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. The cobalt contents shall be evaluated ** and the payable value shall be determined as follow: ** ARTICLE 2: DURATION Article 5 of the commercial agreement as modified by article 4 of the Amendment no. 2 and the article 1 of the Amendment no. 3 shall read as follows "The parties agree to extend the commercial agreement up to **." ARTICLE 3: QUANTITY Article 6 of the commercial agreement is modified as follows: GCM shall deliver on an average monthly basis ** tons Cobalt contained and OMG undertakes to buy the following minimum annual quantities of Cobalt contained in the concentrate according to the specifications as per article 1 here above: ** OMG undertakes to increase these minimum purchase amounts to the extent the balance of the market permits it to do so. ARTICLE 4: As far as any additional concentrates (exceeding the minimum quantities defined in art 3 above) are concerned, ** ARTICLE 5: The other clause of the Commercial agreement and its amendments none concerned by the present amendment will remain applicable. ** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on the Company's request for confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. ARTICLE 6: In witness whereof the Parties have signed this amendment in drafted in the French Language and translated into English, the French version being binding, in three original copies, one for OMG, two for GCML, by their duly authorized representatives. For GECAMINES ASSUMANI SEKIMONYO NZENGA KONGOLO Deputy General Director General Director For OMG Kokkola Chemicals Oy JORAN SOPO President of Kokkola Chemicals Oy Signed August 27, 2003 ** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on the Company's request for confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. AMENDMENT NO. 5 TO COMMERCIAL AGREEMENT NO CO/265/97 BETWEEN La GENERALE DES CARRIERES ET DES MINES, a state company organized and existing under the law of the Democratic Republic of Congo, registered to the nouveau registre de commerce du Lubumbashi au numero 453 and having its registered office 419, Boulevard Kamanyola, B.P. 450 Lubumbashi, Democratic Republic of Congo represented by Mr. NZENGA KONGOLO, General Director and Mr. ASSUMANI SEKIMONYO, Deputy General Director hereinafter denoted as "GCM" AND OMG Kokkola Chemicals Oy, a company organized and existing under the laws of the Republic of Finland, represented by Mr. JORAN SOPO, President; hereinafter denoted as "OMG" Whereas GCM and OMG has signed in April 1997 the Commercial Agreement CO/265/97 related to deliveries of Co Cu Concentrate. Whereas GCM and OMG has signed in March 1998 amendment no. 1 to the aforesaid Commercial Agreement; Whereas GCM and OMG has signed an amendment no. 2 to the aforesaid Commercial Agreement, which amendment was entered into force on the 1st January 2000; Whereas GCM and OMG has signed in June 2001 amendment no. 3 to the aforesaid Commercial Agreement; Whereas GCM and OMG has signed in July 2003 an amendment no. 4 to the aforesaid Commercial Agreement; Whereas GCM and OMG has agreed to modify the terms of the Commercial Agreement related to the deliveries ** (as defined in this amendment) for the delivery of ** (as defined in this amendment) will be determined on the basis of **. NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS: ARTICLE 1 The definitions set out in Article 1 of the Commercial Agreement are amended as follows: ** the quantity of Co-Cu Concentrate that Seller plans to deliver to Buyer each month as detailed in Article 2 of this amendment. The specific quantity listed for each ** will be priced ** listed for that Price Unit in Article 2, even if the actual delivery does not meet the planned delivery schedule in whole or in part. ** ** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on the Company's request for confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. ARTICLE 2 Article 6 of the Commercial Agreement, modified by article 3 of the amendment no. 4 of the Commercial Agreement is amended as follows: Quantity ** Production Planned Delivery ** (tons of Co cont'd) Month Month ** The total deliveries ** as described above will total to a minimum of ** tons of Cobalt contained in Co Cu Concentrate. The material will be purchased in ** (corresponding to planned monthly deliveries) as defined above. The Buyer may elect to increase (but never to decrease) the quantity ** up to the maximum of ** tons by notifying the Seller at the latest on the 5th working day of the month prior to the concerned production month. The Buyer is aware that additional quantity should be limited because of the capacity of production and the sold quantities to another Customer. ARTICLE 3 It is understood by the Parties that while best efforts will be made to respect the planned delivery months for each **, the quantity, production and shipping issues may cause slight changes in the actual time of deliveries. The Buyer will prepare a monthly summary of the quantities received against each Planned Delivery and will provide this summary report to the Seller before the 10th of each subsequent month. ARTICLE 4 The article 8.3 of the Commercial Agreement is amended as follows: The Buyer will pay the Seller for the quantity of Co-Cu Concentrate delivered to the Buyer as follows: - - For any quantity delivered according to planned delivery (as set out in article 2 above) or earlier, the Buyer will credit the bank account of the Seller no later than **. - - For any quantity delivered later than the planned delivery, the Buyer will credit the bank account of the Seller no later than ** . ARTICLE 5: The other clause of the Commercial agreement and its amendments not concerned by the present amendment will remain applicable. ** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on the Company's request for confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934. ARTICLE 6: In witness whereof the Parties have signed this amendment in drafted as the French Language and translated into English, the French version being binding), in three original copies, one for OMG, two for GCM, by their duly authorized representatives. For GECAMINES ASSUMANI SEKIMONYO NZENGA KONGOLO Deputy General Director General Director For OMG Kokkola Chemicals oy JORAN SOPO President of Kokkola Chemicals Oy Signed August 27, 2003 ** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on the Company's request for confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934.