The signing of the Convention came seven months
after the signing of the significant Key Terms which
took place on 26 April 2012. Cameroon’s Prime
Minister was represented by the Secretary General of
the Prime Minister’s Office, the Honourable Mr Louis
Paul Motaze, who discussed and settled the key
terms with Sundance and Cam Iron senior executives.
The Mbalam Convention agreed terms include:
Government Equity.
The Government will have
10 per cent free-carried equity as required by its
Mining Code and take a further 5 per cent loan-
carried equity in each of the three companies
that are to be formed to develop and operate the
Project (Rail Co, Port Co, and Mine Co).
Term of Convention and Mining Permit.
parties confirmed the 25-year term of the mining
permit (when granted) and the terms for any related
extensions. With respect to the Rail and Port
infrastructure it has been agreed that ownership of
those assets will belong to Rail Co and Port Co and
be transferred to the Government after 25 years or
30 years in certain circumstances. The Convention
also included provisions dealing with third party
commercial users getting access to capacity.
The parties agreed to a royalty fee of
2.5 per cent on the sale price of ore.
Fiscal Terms.
The parties agreed a range of fiscal
incentives including:
• A five-year tax holiday during the exploitation
phase of the Project
• A maximum income tax rate of 25 per cent from
the end of the tax holiday
• A maximum of 5 per cent tax on dividends after
the tax holiday
• No Capital Gains Tax payable on the
restructuring of the entity for the purposes of
progressing the development of the Project
These fiscal terms are consistent with the terms
assumed in the Definitive Feasibility Study for the
Project which was completed in April 2011.
Exchange Control.
Cam Iron and the project
companies will be able to hold foreign currency
bank accounts outside Cameroon and transact on
these accounts freely.
A Labour Agreement was signed with
the Ministry of Labour as part of the Convention.
The parties agreed to training budgets for the
construction and operations phases and on
non-binding quotas of Cameroon nationals
specifically for the operations phase. While priority
will be given to the employment of nationals
(subject to their availability, required qualification
and experience), the Government of Cameroon
recognised the importance of facilitating the
issuance of immigration documents to non-
national workers.
On the same day as the signing of the Convention,
Cam Iron and six of Cameroon’s Labour Union
Associations signed the Mbalam Collective Bargaining
Agreement. This Agreement is the first to be reached
in the mining sector in Cameroon and will set the
benchmark for future agreements.
In terms of the tenement holdings, the EP92
Exploration Permit in Cameroon hosting the Mbarga,
Metzimevin and South Mbarga Deposits was officially
renewed for a further two years of exploration
research works in July, 2012. Once the Mbalam
Convention is given effect to by the passing of a law
by the Cameroon National Assembly, and subject
to the satisfaction of a number of other conditions,
the Mining Permit over EP92 will be processed for
The Mbalam-Nabeba Iron Ore Project will be the
foundation of a regional iron ore mining industry
for Central Africa and will act as a catalyst for other
developments in the highly prospective iron ore
Sundance Chairman meeting with the
President of Cameroon, Paul Biya
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