IISD Handbook on Mining Contract Negotiations for Developing Countries

The IISD Handbook on Mining Contract Negotiations for Developing Countries (Volume 1) outlines a strategic framework for host governments to move from a 'win-lose' to a 'win-win-win' negotiating paradigm involving the state, companies, and local communities. It emphasizes the critical importance of the pre-negotiation phase, including resource valuation, interdepartmental coordination, and the establishment of a 'social license to operate.' The guide analyzes the legal interplay between domestic law, investment contracts, and international treaties, while cautioning against stabilization clauses that may hinder future sustainable development regulations. It also provides detailed advice on maximizing economic linkages through local purchasing, employment, and downstream processing, as well as managing social and environmental risks, including climate change adaptation.

• The handbook advocates for a shift from 'rents-based' negotiations, which focus solely on money, to 'interest-based' negotiations that seek a 'win-win-win' result for the investor, the government, and local communities.
• Effective negotiations are largely determined before they begin; the author suggests that approximately 90 per cent of negotiations are won or lost during the preparatory phase rather than during the actual sessions.
• Mining investments are governed by three primary sources of law: domestic law, mining contracts, and international investment treaties. In cases of conflict, international law generally prevails, particularly when Investor-State Dispute Settlement (ISDS) mechanisms are used.
• Stabilization provisions, common in sub-Saharan African contracts, can be detrimental to sustainable development by freezing laws or requiring compensation for new regulations, thereby limiting a government's ability to modernize environmental, labour, and human rights standards.
• Governments are encouraged to move away from a 'beggar' mentality for investment and instead act as responsible owners of natural resources, recognizing that the quality of investment is more important than the quantity.
• The 'social license to operate' is a critical non-legal requirement granted by the community. It applies not only to the mining company but increasingly to the government, as bottom-up democratization and international standards make it impossible to ignore community interests.
• To maximize economic value, governments should look beyond taxes and royalties to a broader 'value pie,' including local purchasing of goods and services, employment maximization, and downstream value-added processing.
• The handbook recommends that governments maintain the primacy of generally applicable law over contracts to avoid corruption, non-transparent governance, and inconsistencies that could trigger most-favoured-nation treatment disputes under investment treaties.
• Climate change presents material risks to mining investments, requiring governments to ensure that operational plans include climate risk assessments for adaptation and resilience, as well as obligations to reduce CO2 emissions.
• The International Bar Association's Model Mining Development Agreement (MMDA) is highlighted as a key resource that integrates sustainable development into the core of the agreement rather than as ancillary or voluntary provisions.

APA

Mann, H. (2015). IISD Handbook on Mining Contract Negotiations for Developing Countries. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/iisd-handbook-mining-contract-negotiations-for-developing-countries-volume-1.pdf

Chicago

Mann, Howard. IISD Handbook on Mining Contract Negotiations for Developing Countries. International Institute for Sustainable Development, 2015. https://www.iisd.org/system/files/publications/iisd-handbook-mining-contract-negotiations-for-developing-countries-volume-1.pdf.

Wikipedia

{{cite report |last1=Mann |first1=Howard |title=IISD Handbook on Mining Contract Negotiations for Developing Countries |publisher=International Institute for Sustainable Development |date=April 2015 |url=https://www.iisd.org/system/files/publications/iisd-handbook-mining-contract-negotiations-for-developing-countries-volume-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mann2015iisd, author = {Mann, Howard}, title = {{IISD Handbook on Mining Contract Negotiations for Developing Countries}}, institution = {International Institute for Sustainable Development}, year = {2015}, month = apr, url = {https://www.iisd.org/system/files/publications/iisd-handbook-mining-contract-negotiations-for-developing-countries-volume-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }