Guinea - Boke Extension Project : Loan 0766 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 766 GUI Loan Agreement (Boke Extension Project) BETWEEN REPUBLIC OF GUINEA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 25, 1971 CONFORMED COPY LOAN NUMBER 766 GUI Loan Agreement (Boke Extension Project) BETWEEN REPUBLIC OF GUINEA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 25, 1971 LOAN AGREEMENT AGREEMENT, dated June 25, 1971, between REPUBLIC OF GUINEA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) The Borrower has requested the Bank to assist in the financing of the foreign exchange cost of a Project (which as described in Part A of Schedule 2 to this Agreement constitutes part of the Boke Bauxite Extended Development) for the construction and operation of a railway, port and related facilities to be owned by the Office d'Am6nagement de Boke (hereinafter called OFAB), an agency of the Borrower; (B) By agreement of even date herewith (hereinafter called the Project Agreement) between the Bank and OFAB, OFAB has undertaken certain obligations regarding the carrying out of the Project, as provided in such Project Agreement; (C) By a loan agreement dated September 18, 1968, (hereinafter called the Prior Loan Agreement) between the Borrower and the Bank, the Bank granted to the Borrower a loan (hereinafter called the Prior Loan) in various currencies equivalent to sixty-four million five hundred thousand dollars ($64,500,000) to assist the Borrower in financing the foreign exchange cost of a project (hereinafter called the Prior Project) described in Part A of Schedule 3 to the Prior Loan Agreement; (D) By a project agreement dated September 18, 1968, (hereinafter called the Prior Project Agreement) between the Bank and OFAB, OFAB had undertaken certain obligations regarding the carrying out of the Prior Project; (E) The Project will be used principally in connection with a bauxite mining operation in the Boke area (hereinafter called the Mining Project) described in !art B of Schedule 3 to the Prior Loan Agreement and in Part B of Schedule 2 to this Agreement, to be constructed and operated by Compagnie des Bauxites de Guinde (hereinafter called CBG), a Delaware corporation registered in the Registry of Commerce of Conakry, Guinea, and owned by the Republic of Guinea (49%) and by Halco (Mining) Inc. (51%) (formerly named Harvey Aluminum Co. of Delaware, hereinafter called HALCO), a Delaware corporation; (F) The shares of HALCO are owned in various amounts by Alcan Aluminium Limited, a Canadian corporation, Aluminum Company of America, a 4 Pe,:nosylvania corporation, Harvey Aluminum (Incorporated), a California corporation, Pechiney Compagnie de Produits Chimiques et Electromdtallurgiques and Ugine Kuhlmann, French corporations, Vereinigte Aluminium Werke AG, a German corporation, and Montecatini Edison S.p.A., an Italian corporation (hereinafter collectively called the Stockholders and each individually a Stockholder); (G) Arrangements have been made between the Borrower, OFAB, CBG, HALCO and the Stockholders for the construction and operation of the Project and the Mining Project, the purchase and sale of bauxite mined from the Boke region and certain related matters under agreements hereinafter defined; (H) By agreement dated September 18, 1968, (hereinafter called the AID Loan Agreement), the Agency for International Development (hereinafter called AID) has agreed to make a loan (hereinafter called the AID Loan) to the Borrower in an aggregate principal amount not to exceed 5,200,045,000 Guinean francs; (I) Pursuant to the Financial Assurances Agreement (as that term is defined in Section 1.02 (c) of this Agreement), CBG, HALCO and the Stockholders have agreed to lend to the Borrower any amounts (hereinafter called the Overage Loans) required to finance the foreign exchange cost of the Project in excess of the amount of the Loan; WHEREAS the Bank, on the basis inter alia of the foregoing, has agreed to make a loan to the Borrower on the conditions hereinafter set forth; NOW THEREFORE it is hereby agreed as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions): (a) Section 5.01 is deleted; (b) Section 6.02 (i) is amended to read as follows: "Any event specified in paragraph (e) or (f) of Secti-ri 7.01 shall have occurred."; 5 (c) the words "and the Project Agreement" are added after the words "the Loan Agreement" in Sections 6.06 and 9.03 of the General Conditions. (d) the words "Consolidated Loan Account" are substituted for the words "Loan Account" wherever these words occur in the General Conditions. Section 1.02. Unless the context otherwise requires, the following terms wherever used in this Agreement have the following meanings: (a) The term "Basic Agreement" means the agreement dated October 1, 1963, between the Borrower and HALCO relating to the establishment of CBG, the exploitation of the bauxite reserves in the Boke area, the financing and construction by the Borrower of the facilities included in the Project; (b) The term "Statutes" means the statutes of OFAB as set forth in Decree No. 425/PRG of December 31, 1965, and the amendments thereto set forth in Decree No. 407/PRG of September 28, 1968; (c) The term "Financial Assurances Agreement" means the agreement dated September 18, 1968 between the Borrower, OFAB, CBG, HALCO, the Stockholders and Bank of America National Trust and Savings Association (hereinafter called the Trustee); (d) The term "Trust Agreement" means the agreement dated September 18, 1968 between the Borrower, OFAB, CBG, HALCO, the Stockholders, the Trustee, the Bank and the Agent (as that term is defined in such Trust Agreement); (e) The term "Railway-Port Project Agreement" means the agreement dated September 18, 1968 between the Borrower, OFAB and CBG; (f) The term "OFAB Technical Assistance Agreement" means the agreement dated September 18, 1968 between the Borrower, OFAB and HALCO; (g) The term "OFAB Training Agreement" means the agreement dated September 18, 1968 between the Borrower, OFAB, CBG and HALCO; (h) The term "CBG Technical Assistance and Training Agreement" means the agreement dated September 18, 1968 between the Borrower, CBG and HALCO; (i) The term "Participation Agreement" means the agreement dated September 18, 1968 between HALCO and the Stockholders; 6 (j) The term "Bauxite Contracts' means the agreements defined in Section 1.01 of the Financial Assurances Agreement and relating to the purchase of bauxite mined from the Boke region between the parties thereto; (k) The term "Construction Coordination Committee" means the Committee set up pursuant to Section 4.03 of the Financial Assurances Agreement for the coordination 'of the carrying out of the Project and the Mining Project; (1) The term "Terms of Reference of the Committee" means Exhibit D to the Financial Assurances Agreement setting forth the terms of reference of the Construction Coordination Committee; (m) The term "Mining Project Financial Arrangements" means the arrangements defined in Whereas H of the Financial Assurances Agreement for the financing or refinancing of the costs of the Mining Project. Whenever reference is made in this Agreement and the Project Agreement to any of the documents herein defined and to the AID Loan Agreement such reference includes all exhibits to any such document and any agreement supplemental thereto. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to nine million dollars ($9,000,000). Section 2.02. (a) The amount of the Loan and the Prior Loan may be withdrawn from the Consolidated Loan Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed under the Loan Agreement and the Prior Loan Agreement and in respect of interest and other charges on the Loan and the Prior Loan; provided, however, that, except as the Bank shall etherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. (b) The Bank shall withdraw from the Consolidated Loan Account and pay to itself, on behalf of the Borrower, amounts required from time to time 7 to pay interest and other charges on the Prior Loan and the Loan during construction of the Prior Project and the Project; provided, however, that such amounts in the aggregate shall not exceed the amount set forth in Category V of Schedule 1 to this Agreement. Section 2.03. Except as the Bank shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Loan, shall be procured on the basis of extensions to the existing contracts let in accordance with the provisions of the Prior Loan Agreement. Section 2.04. The Closing Date shall be March 31, 1974 or such other date as shall be agreed between the Borrower and the Bank. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of seven and one-quarter per cent (7-1/4%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on April 1 and October I in each year. Section 2.08. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section 2.09. If and as the Bank shall from time to time request, the Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in Article VIII of the General Conditions. Section 2.10. The Secrtaire d'Etat au Contr6le Financier of the Borrower and such other person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purposes of Section 8.10 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. Sections 5.01, 5.03, 5.04, 5.05, 5.06, 5.07 and 5.08 of the Prior Loan Agreement are hereby incorporated into this Agreement with the same 8 force and effect as if they were fully set forth herein; provided, however, that all references to the Project and the Project Agreement in such Sections or any of them shall be deemed to be references to the Project and the Project Agreement as herein defined. ARTICLE IV Other Covenavits Section 4.01. (a) It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan or the Bonds by way of a lien on governmental assets. (b) To that end the Borrower (i) represents that at the date of this Agreement no lien exists on any governmental assets as security for any external debt, and (ii) undertakes that if any such lien shall be created, it will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds and in the creation of any such lien express provision will be made to that effect. The Borrower shall promptly inform the Bank of the creation of any such lien. (c) The foregoing representation and undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (d) As used in this Section, the term "governmental assets" means assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision, including the Banque Centrale de la R6publique de Guinde or any institution performing the functions of a central bank for the Borrower. Section 4.02. Section 5.09 of the Prior Loan Agreement is hereby incorporated into this Agreement with the same force and effect as if it were fully set forth herein; provided, however, that the reference in that Section to Loan Regulations shall be deemed to be a reference to the General Conditions. Section 4.03. The Borrower shall adequately maintain the public highway between Conakry and Kalaboui and shall make promptly all necessa-y repairs thereof, and shall operate and maintain the ferry at Boffa so as to assure constant and regular service, all in accordance with sound engineering practices. 9 ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Bank shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, the Borrower and the Bank shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Loan Agreement, the performance by OFAB of its obligations under the Project Agreement, the administration, operations and financial condition of OVAB and, in respect of the Project, of the departments or agencies of the Borrower responsible for the carrying out of the Project or any part thereof, and other matters relating to the purposes of the Loan; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Bank all such information as the Bank shall reasonably request concerning the operations and financial condition, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower and the Bank shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan, the maintenance of the service thereof, the performance by either of them of its obligations under the Loan Agreement, the performance by OFAB of its obligations under the Project Agreement. (c) The Borrower (i) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the relations between the Borrower, CBG, HALCO and the Stockholders and the exercise of their respective rights and the carrying out of their respective obligations under the agreements specified in Section 5.08 (a) of the Prior Loan Agreement and any other agreements related thereto; and (ii) shall promptly inform the Bank of any failure by CBG, HALCO or any of the Stockholders to comply with their respective obligations under such agreements. 10 Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Bank to inspect all plants, installations, sites, works, buildings, property and equipment of OFAB and any relevant records and documents and to visit any part of the territories of the Borrower for purposes related to the Loan. ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories; provided, however, that the foregoing shall not apply to taxation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. Section 6.02. The Loan Agreement, any instrument made pursuant to Section 4.01 of this Agreement, the Project Agreement and the Bonds shall be free from any taxes on or in connection with the execution, issue, delivery or registration thereof imposed under the laws of the Borrower or laws in effect in its territories and the Borrower shall pay all such taxes, if any, imposed under the laws of any other country or countries. Section 6.03. The payment of the principal of, and interest and other charges on, the Loan and the Bonds shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. Section 6.04. The Borrower shall cause all goods imported by OFAB and contractors for the construction of the Project to be exempted from all import taxes and customs duties. ARTICLE VII Remedies of the Bank Section 7.01. If any event specified in Section 7.01 of the General Conditions or in Section 7.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Bank, at its option, may by notice to the Borrower declare the principal of the Loan and of all the Bonds then outstanding to be due and payable * 11 immediately together with the interest and other charges thereon and upon any such declaration such principal, interest and charges shall become due and payable immediately, anything to the contrary in the Loan Agreement or in the Bonds notwithstanding. Section 7.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) OFAB shall have failed to perform any covenant, agreement or obligation of OFAB under the Project Agreement. (b) Any event shall have occurred which shall have operated to suspend the right of the Borrower to withdraw amounts under the AID Loan Agreement. Section 7.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) the event specified in Section 7.02(a) of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and OFAB; (b) any event specified in paragraphs (a), (b), (c), (e), (f) or (g) of Section 6.02 of the Prior Loan Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and OFAB; (c) the event specified in paragraph (d) of Section 6.02 of the Prior Loan Agreement shall occur and shall continue for a period of thirty days after notice thereof shall have been given by the Bank to the Borrower and OFAB; (d) the event specified in paragraph (h) of Section 6.02 of the Prior Loan Agreement shall occur. ARTICLE VHI Effective Date; Termination Section 8.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 11.01 (c) of the General Conditions: (a) the execution and delivery of the Project Agreement on behalf of OFAB have been duly authorized or ratified by all necessary action of the Borrower and OFAB; 12 (b) all acts, consents and approvals of the Borrower, its political subdivisions or agencies or any agency of any such political subdivision in order to enable: (i) OFAB to perform all of the covenants, agreements and obligations set forth or referred to in the Project Agreement and the Financial Assurances Agreement; (ii) CBG to perform all the covenants, agreements and obligations set forth or referred to in the Financial Assurances Agreement and the Bauxite Contracts, with all necessary powers and rights in connection therewith, have been duly and validly performed or given; (c) the Financial Assurances Agreement, the Participation Agreement and the Bauxite Contracts, as amended, have become effective on terms and conditions satisfactory to the Bank; (d) all necessary acts, consents and approvals to be performed or given by any authority having jurisdiction to enable: (i) CBG, HALCO and the Stockholders to perform all of their respective obligations under the Financial Assurances Agreement and the Participation Agreement; and (ii) the Stockholders to perform all of their respective obligations under the Bauxite Contracts, have been performed or given; (e) Section 2 of the AID Loan Agreement has been amended to make reference to the Project as described in Schedule 2 to this Agreement. Section 8.02. The following are specified as additional matters, within the meaning of Section 11.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of OFAB, and constitutes a valid and binding obligation of OFAB in accordance with its terms; (b) that all acts, consents and approvals referred to in paragraph (b) of Section 8.01 together with all necessary powers and rights in connection therewith have been duly and validly performed or given; (c) the Financial Assurances Agreement, the Participation Agreement and the Bauxite Contracts, as amended, constitute a valid and binding obligation of each of the parties thereto in accordance with their terms. Section 8.03. The date September 28, 1971, is hereby specified for the purposes of Section 11.04 of the General Conditions. 13 ARTICLE IX Amendments to the Prior Loan Agreement Section 9.01. For the purposes of the Prior Loan Agreement: (a) The words "Consolidated Loan Account" are substituted for the words "Loan Account" wherever the same shall occur in Loan Regulations No. 3 of the Bank applicable thereto and in Article II of such Agreement; (b) Sections 2.02 and 8.01 are deleted and Sections 2.02 and 2.04 of this Agreement are respectively substituted therefor; (c) Section 2.03 is deleted; (d) Schedule I is deleted and Schedule 1 to this Agreement is substituted therefor; (e) Paragraph (c) of Section 5.02 of the Loan Regulations No. 3 of the Bank applicable thereto is hereby amended to read as follows: "(c) A default shall have occurred in the performance of any other covenant or agreement on the part of the Borrower under the Loan Agreement or the Bonds, or under the loan agreement dated June 25, 1971, between the Borrower and the Bank or the bonds therein provided for. "; (f) Paragraph (a) of Section 6.02 of the Prior Loan Agreement is hereby amended to read as follows: "(a) A default shall have occurred in the performance by OFAB of any covenant or agreement on its part under the Project Agreement or under the project agreement dated June 25, 1971, between the Bank and OFAB." The term "Loan Regulations" as used for the purposes of the Prior Loan Agreement means the Loan Regulations No. 3 of the Bank applicable thereto, as modified in the Prior Loan Agreement and as further araended hereby. 14 ARTICLE X Representative of the Borrower; Addresses Section 10.01. The Ministre du Developpement Economique of the Borrower is designated as representative of the Borrower for the purposes of Section 10.03 of the General Conditions. Section 10.02. The following addresses are specified for the purposes of Section 10.01 of the General Conditions: For the Borrower: Ministere du Ddveloppement Economique Conakry Guinea Cable address: MINIDEVELOP Conakry For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed 15 in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF GUINEA By /s/ Mory Keita Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ J. Burke Knapp Vice President 16 SCHEDULE 1 Withdrawal of the Proceeds of the Prior Loan and of the Loan 1. The table below sets forth the categories of imported items to be financed out of the proceeds of the Prior Loan and the Loan, and the allocation of amounts of the Prior Loan and the Loan to each category: Amount of the Prior Loan and the Loan Allocated (Expressed Category in Dollar Equivalent) I. Harbor works and equipment and provision of hydraulic fill 12,250,000 II. Kamsar townsite and railway and port buildings 12,350,000 III. Railway 20,900,000 IV. Engineering consultants and professional services 6,600,000 V. Interest and other charges on the Loan 6,100,000 VI. Refunding - Loan S.I. GUI 1,800,000 VII. Supervision during construction 1,150,000 VIII. Unallocated 12,350,000 TOTAL 73,500,000 2. The amount of the Prior Loan shall be withdrawn from the Consolidated Loan Account as provided in the Prior Loan Agreement and shall be applied to expenditures incurred under any Category until withdrawals and commitments in respect of such expenditures shall in the aggregate be the equivalent of $64,500,000. 17 3. The amount of the Loan may be withdrawn from the Consolidated Loan Account as provided under the Loan Agreement and shall be applied to expenditures incurred under any Category, provided, however, that no withdrawal shall be made until the amount of the Prior Loan shall have been fully withdrawn or committed. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures in the currency of the Borrower, or for goods produced in, or services supplied from, the territories of the Borrower; and (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. 5. Notwithstanding the allocation of an amount of the Loan set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Loan then allocated to such Category and no longer required therefor will be reallocated by the Bank by increasing correspondingly the unallocated amount of the Loan; and (b) if the estimate of the expenditures under any Category shall increase, a corresponding amount will be allocated by the Bank, at the request of the Borrower, to such Category from the unallocated amount of the Loan, subject, however, to the requirements for contingencies, as determined by the Bank, in respect of any other expenditures. 6. The Bank shall promptly notify HALCO and CBG of any reallocation made pursuant to paragraph 5 above. 18 SCHEDULE 2 Description of the Project The Extended Boke Bauxite Development is to expand the Boke Bauxite Development described in Schedule 3 to the Prior Loan Agreement by increasing the capacity of the railway and the port, and the size of the township at Kamsar together with necessary improvements to transport equipment, power supplies and other services required to increase the mining and export of bauxite ore to about 9,000,000 metric tons per annum. That part of the Extended Boke Bauxite development which for the purposes of this Agreement constitutes the Project is described in Part A below. Part B describes the extended Mining Project to be undertaken and financed by CBG. Part A - Description of the Project The basic design service capacity of the Prior Project is to be increased to at least 9,000,000 metric tons of bauxite per year. The Project consists of: (a) An increase in the length of track at each of two passing stations on the original railway to 1,700 m and provision of heavier rail for all track. (b) (i) Deepening alongside the existing loading wharf to enable vessels with a loaded draft of 36 ft to sail at mid-point between half and full tide; (ii) provision of a new waiting berth with similar depth of water and necessary breasting and mooring dolphins; (iii) provision of facilities to handle oil imports at the new berth; (iv) improvements to navigational aids; and (v) provision of a slipway and foundations for a heavy lift derrick. (c) Extensions to the roads and services at Kamsar township and to the permanent hospital; together with an increase in the capacity of the electrical distribution system. Drainage of the area around Kamsar and improvements of OFAB houses provided under Part A (c) of Schedule 3 to the Prior Loan Agreement. The Project is expected to be completed by April 1973 with initial shipments of bauxite in December 1972. 19 Part B - Description of the Mining Project The mining project described in Part B of Schedule 3 to the Prior Loan Agreement is being extended by appropriate increases in the size and capacity of the plant and equipment provided at the Sangaredi Mine site and at the Kamsar ore treatment plant to permit an increase in the mining and processing of metal grade bauxite to at least 9,000,000 metric tons per annum. Additional locomotives and ore cars to permit the carriage of the additional bauxite contracted for sale will be provided and the capacity of conveyors on the approach jetty and loading wharf and of the ship loader on the loading wharf will be increased for shipping such additional quantity. Additional power plant capacity and dry ore storage capacity will also be provided. Additional housing will be provided for employees at Kamsar. 21 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions or on the redemption of any Bond prior to its maturity pursuant to Section 8.15 of the General Conditions: Time of Prepayment or Redemption Premium Not more than three years before maturity 1-1/4% More than three years but not more than six years before maturity 2% More than six years but not more than eleven years before maturity 3-1/2% More than eleven years but not more than sixteen years before maturity 5-1/4% More than sixteen years but not more than nineteen years before maturity 6-1/4% More than nineteen years before maturity 7-1/4%