Conformed Copy - C1921 - Mining Sector Rehabilitation Project - Amendment 1

Page 1 December 7, 1988 His Excellency Kwesi Botchwey The Provisional National Defense Council Secretary for Finance and Economic Planning Ministry of Finance and Economic Planning P.O. Box M-40 Accra Republic of Ghana Re: Credit No. 1921-GH (Mining Sector Rehabilitation Project) Amendments to the Development Credit Agreement and Project Agreement Dear Dr. Botchwey: We refer to the Development Credit Agreement (Mining Sector Rehabilitation Project), dated July 14, 1988, between the Republic of Ghana and the International Development Association (the Association), the Project Agreement of the same date between the Association and the State Gold Mining Corporation (SGMC), and the Supplementary Letter No. 2 of the same date regarding SGMC's Financing and Management Arrangements as Conditions of Effectiveness and Second Tranche Release. 1. The Association hereby proposes that the reference to "satisfactory progress in establishing management arrangements for the rehabilitation of the three mines" contained in Section 6.01 (b) of the Development Credit Agreement shall mean: (i) that SGHC has made arrangements satisfactory to the Association that at least ten of the line positions referred to in sub-paragraph 1 (b) of the Supplementary Letter No. 2, including the positions of General Mines Manager at Prestea, Tarkwa and Dunkwa as well as the positions of financial and procurement manager will be filled with skilled and experienced individuals acceptable to the Association after the expiration of the present CGM contract expected to be April 14, 1989; and (ii) that SGMC has furnished to the Association detailed plans for the filling of 14 of the remaining twenty positions (including all positions in Accra, technical headquarters Tarkwa and Prestea) listed in sub-paragraph 1 (b) of the Supplementary Letter No. 2 by April 14, 1989 (seven positions) and July 14, 1989 (seven positions), such plans to be acceptable to the Association. In this respect, the requirement of filling all thirty positions as set forth in sub-paragraph 1 (b) of the Supplementary Letter No. 2 is partially waived as an effectiveness condition. 2. The Association further proposes to amend the Project Agreement by adding the new section 3.06 to read as follows: "Section 3.06. SGMC shall fill the positions referred to in the plan submitted to the Association in fulfillment of the effectiveness conditions set forth in Section 6.01 (b) of the Development Credit Agreement with individuals to be employed pursuant to Section II of the Schedule to the Project Agreement and in accordance with the timetable set forth in the plan mentioned above." Page 2 3. The date of February 10, 1989, is hereby specified for the purposes of Section 12.04 of the General Conditions instead of December 12, 1988, which is at present the specified date. Please confirm the agreement of the Republic of Ghana and of State Gold Mining Corporation to these amendments by signing the enclosed copies of this letter on behalf of the Republic of Ghana and obtaining the signature of the Chief Executive of State Gold Mining Corporation and returning one copy to the Association. Sincerely yours, Caio K. Koch-Weser Director Western Africa Department CONFIRMED: REPUBLIC OF GHANA By Authorized Representative CONFIRMED: STATE GOLD MINING CORPORATION By Authorized Representative Date: December 19, 1988