Summary of contract

• Negotiation, representation, and other relevant context

  The parties to the memorandum of understanding (the agreement) are Rio Tinto Exploration PTY (Rio Tinto) and the Northern Land Council, represented by the Chief Executive Officer. The Northern Land Council has responsibilities as representative Aboriginal/ Torres Strait Islander body under the Native Title Act 1993 (Recital 1). Following notification from Rio Tinto of an application for the grant of a mining exploration license, the Northern Land Council will identify and use its best endeavors to consult with the Aboriginal communities that have or claim Native Title over the land to which the planned mining exploration license covers (Arts. 1, 3, 4). In doing the consultation, the Northern Land Council will recommend that the relevant Local Aboriginal Group accepts the Model Exploration and Mining Agreement, annexed to the agreement. The Northern Land Council will notify Rio Tinto of the outcomes of such consultations regarding each application and will invite Rio Tinto to participate in such consultations (Arts. 4, 5). The Northern Land Council and Rio Tinto will meet regularly to discuss the applications and to review the Model Exploration and Mining Agreement (Art. 6, 7, 9, and Annexure Art. 18). Any communication under the Model Exploration and Mining Agreement shall be in writing (Annexure Art. 19). Rio Tinto agrees not to take any action detrimental to the exercise and recognition of the Native Title of the Local Aboriginal Groups. The Local Aboriginal Groups agree to do all things to facilitate the grant of the exploration license and promote the efficient implementation of the mining project (Annexure Recitals E, D, I, Arts. 2.2, 4.1). If Rio Tinto is in compliance with the Model Exploration and Mining Agreement, the Local Aboriginal Groups agree to sign all documents, give all consents and do all things necessary to enable the grant of a license (Annexure Art. 4.1 (b)(ii)). The Local Aboriginal Group has the authority to speak for those persons who may hold Native Title, and if there is a claim by any member of the Local Aboriginal Groups, and such claim is inconsistent with this representation, the Local Aboriginal Group will indemnify Rio Tinto (Annexure Art. 4.2, 4.3).

• Governance, implementation, dispute resolution

  The signature page of the agreement provides that the agreement is a statement of intent made in good faith and is not intended to be legally binding. However, if the annexed Model Exploration and Mining Agreement is executed, it would be binding on Rio Tinto, the Northern Land Council, and the relevant Local Aboriginal Group who is party to the agreement. The relevant Local Aboriginal Groups may appoint the Northern Land Council or a different person, as their representative for the purposes of the agreement, and the representative will be authorized to receive sums of money and notices on behalf of the Local Aboriginal Groups (Annexure Art. 13). Either an appointed representative of the Aboriginal community or Rio Tinto may initiate a meeting to discuss a concern. If the meeting is not successful at resolving the dispute, then either party may serve notice on the other party requiring it to submit the dispute to arbitration in accordance with the Australian Commercial Arbitration Act, in Darwin, or another location agreed by the parties. The costs of the arbitration will be shared equally by both parties. Additionally, the appointed representative of the Aboriginal community may suspend the license until arbitration has occurred if Rio Tinto has damaged a sacred site. If Rio Tinto disagrees with the suspension, this dispute will be referred to one arbitrator appointed by an Aboriginal Land Commissioner (Annexure Art. 17). Rio Tinto agrees to provide the relevant Local Aboriginal Group with information about the exploration license, an annual report of each license, and a report on the completion of rehabilitation of areas disturbed by the exploration (Annexure Art. 6). If Rio Tinto makes an application for the grant of a Mineral Lease, the relevant Local Aboriginal Group, the Northern Land Council and Rio Tinto shall establish a committee and negotiate a deed of agreement on the terms on which the mineral lease can be granted. The mining agreement shall include, for the benefit of Traditional Owners, at least provisions giving effect to the Mining Principles listed in Annexure D to the Model Exploration and Mining Agreement (Annexure D). For the negotiations of the mining agreement, Rio Tinto shall provide the Local Aboriginal Group with a copy of the feasibility study and the environmental assessment. Rio Tinto shall meet the reasonable costs incurred by the Local Aboriginal Groups in connection with the negotiations of a mining agreement, including the required consultants and advisors, and apply the provisions in Annexure C “Budget and Payment Process” (Annexure Art. 11.11, Annexure C).

• Fiscal obligations: content

  Rio Tinto will pay to the representative of the Local Aboriginal Group, for accepting the responsibilities of assisting in the administration of the agreement, $1,000.00 indexed. This payment will apply to each license granted (Annexure Art. 13.2). Annexure C to the Model Exploration and Mining Agreement contains the provisions related to budget preparation, acceptance, and invoicing. The Annexed Model Exploration and Mining Agreement allows the parties to negotiate fiscal obligations and benefits and include such benefits as Annexure B “Community Benefits” to the agreement (which at Art 5.1 provides for reimbursement of costs incurred by the representative of the Local Aboriginal Group). Annexure B of the Annexed Model Exploration and Mining Agreement requires that community benefits be listed for each year of the project.

• Community development obligations: Local content

  Rio Tinto shall, in the course of conducting the project, give preference, and maximize the employment, training, contracting, and other opportunities for the members of the Local Aboriginal Groups and Local Aboriginal businesses. Rio Tinto shall ensure that as many members of the Local Aboriginal Groups and Local Aboriginal businesses as is practicable are employed or contracted where they are capable of carrying out satisfactorily the particular work required. Rio Tinto shall nominate from time to time an employee to be responsible for identifying areas in which members of the Local Aboriginal Groups and Local Aboriginal businesses might successfully be employed or contracted for the supply of goods and services, which employee will assist such person or body in the preparation and submission of their application or tender (Annexure Art. 8). Annexure B notes that the community benefits may take any form and may include employment, training, or business opportunities.

• Environmental and social protection

  Rio Tinto will minimize social and environmental impacts and pollution and ensure the maintenance of local biological diversity, so far as reasonably practicable regarding, amongst other things, what is cost-effective to conduct the project (Annexure Arts. 2(b), 9). Rio Tinto will follow good exploration and mining industry practice, including Best Practicable Technology, and comply with the Standards ISO 14000 Series (Annexure Art. 4.4). Rio Tinto shall provide the relevant Local Aboriginal Groups with a work program including maps, terms, amounts of water, timber, and other resources to use, and activities with adverse impact upon the environment. The relevant Local Aboriginal Group will consult the work program with its members and will inform Rio Tinto if the areas proposed in the work program are cleared by the Local Aboriginal Groups, meaning that there are no sacred sites or objects in those cleared areas. If the area is not cleared, the Local Aboriginal Group will inform if an archaeological survey or field inspection accompanied by members of the Local Aboriginal Groups is needed. Rio Tinto will pay or reimburse the relevant Local Aboriginal Group its reasonable costs of holding the consultations of the work program or the archaeological survey. The payments will be made under Annexure C “Budget and Payment Process”. If there is disagreement concerning a cleared area, the parties will follow the provisions of the Northern Territory Sacred Sites Act (Annexure Art. 5). If Rio Tinto deliberately or negligently damages a sacred site, Rio Tinto will take remediation action and pay compensation to the Local Aboriginal Group for any distress or injury caused to any member (Annexure Art. 7). Rio Tinto agrees to take all reasonably practical steps to rehabilitate those parts of the application area disturbed by the project (Annexure Art. 9).

• Transparency or confidentiality

  The Local Aboriginal Group, the Northern Land Council and Rio Tinto may not divulge information about the exploration, sacred sites or objects, or information about the executed Model Exploration and Mining Agreement or how it was negotiated. This obligation continues for Rio Tinto Exploration after the termination of the Model Exploration and Mining Agreement (Annexure Art. 16).

• Other noteworthy clauses

  A process summary of the mining exploration license agreement is attached to the agreement (last page).