The Ministry of Energy issued an explanatory statement on Monday regarding the copper mining agreement in the Abu Khushaiba area. The full text is as follows:
اضافة اعلان
First: From a Non-Binding Memorandum of Understanding to an Executive Agreement Requiring Ratification by Law
The copper mining project began with the signing of a non-binding memorandum of understanding (MoU) between the Jordanian government and the Turkish company Solvest Investment Solutions in 2022. The company submitted supporting technical and financial documents, which were reviewed and evaluated, and the company was qualified to sign the MoU in accordance with the Regulation on Petroleum, Oil Shale, Coal, and Strategic Minerals Exploitation Projects No. (76) of 2020 and its amendments, issued pursuant to the Natural Resources Law No. (19) of 2018.
During the MoU period, the company carried out exploration and prospecting programs and submitted a preliminary economic feasibility study. Based on this, the company appointed a specialized consulting firm to estimate copper reserves in line with international best practices and the JORC system. Based on the study results, the company decided to move to the next phase by signing an executive agreement. To that end, it established a Jordanian company, Wadi Araba Minerals Company, to sign the executive agreement, which must be ratified by a special law pursuant to Article 117 of the Constitution. The Ministry of Energy and Mineral Resources signed the agreement on behalf of the Jordanian government, and a ratification bill was prepared and submitted to Parliament, in accordance with applicable Jordanian legislation.
Second: Legal Status of the “Developer” Company
Wadi Araba Minerals Company is a Jordanian company duly registered with the Companies Control Department on 03/04/2025 under national number (200204744). Its fully paid-up capital amounts to JOD 1,428,000. Its stated objectives explicitly include non-ferrous metal mining, exploration, and technical support services for the mining and energy sector.
Accordingly, the company enjoys full legal personality and contractual capacity under the provisions of the Jordanian Companies Law.
Third: Direct Sponsor Agreement
The Direct Sponsor Agreement model annexed to the executive agreement regulates the relationship between the government and a direct sponsor should the developer wish to engage one for financial or technical support, subject to government approval. Wadi Araba Minerals Company has not expressed any intention to contract with a direct sponsor, as the works will be executed and financed directly by the company. The model was included for adoption should the company decide to do so at any future development stage.
Fourth: Financial Returns
1. Royalties and Windfall Profit Tax
Under Article 10/1 of the executive agreement, the company is obligated to pay royalties to the government for copper extraction. The royalty rate is linked to global copper prices and ranges from a minimum of 3% to a maximum of 10% of total revenue. In addition, pursuant to Article 10/2, a progressive tax on unexpected profits will be imposed, reaching up to 50% if the post-tax profit margin exceeds 40%, in line with global best practices for exploiting this mineral.
2. Taxes
The government will collect all other taxes in accordance with applicable legislation, including income tax and the national contribution, while exemptions apply only as provided under the Investment Environment Law in force.
3. Land Lease
Pursuant to Article 22/1, the developer is required to pay rent for exploitation areas in accordance with the terms of the land lease agreement to be signed with the competent government entity under Article 2/1/3.
Fifth: Applicable Law and Arbitration
The agreement confirms that Jordanian law is the governing law. Article 28/1 of the executive agreement states:
“This agreement shall be governed by and construed in accordance with Jordanian laws.”
The agreement also provides for arbitration to settle disputes, with arbitration conducted in Arabic and in accordance with Jordanian laws and legislation in force at the commencement of arbitration, as stipulated in Article 28/4/2:
“Arbitration shall be conducted in the Arabic language in accordance with the Jordanian laws and legislation in force at the commencement of arbitration, and shall be deemed incorporated by reference to this agreement, by three independent arbitrators.”
As for the seat of arbitration, it shall be the International Chamber of Commerce (ICC) in Paris, a practice widely recognized internationally. Article 28/4/4 states:
“The seat of arbitration shall be the International Chamber of Commerce in Paris, and the parties may agree to hold hearings at any appropriate location in accordance with the laws and legislation in Jordan.”
Sixth: Environment
During the MoU phase, the company prepared an environmental study to assess potential environmental impacts of mining operations in the concession area. During the pre-conditions phase prior to actual exploitation, the company will submit a comprehensive Environmental Impact Assessment (EIA) in accordance with applicable environmental laws and regulations, subject to approval by the Ministry of Environment. Article 18/1 states:
“The developer shall comply with all environmental laws when carrying out mining and extraction operations, and any violations shall be subject to the enforcement measures stipulated in such laws.”
Additionally, under Article 23/2 of the agreement, the developer is required to provide a rehabilitation bond as stipulated in the license issued by the Energy and Minerals Regulatory Commission, to ensure the implementation of all site rehabilitation activities after the completion of mining and extraction operations. Any failure by the company to carry out all required rehabilitation activities constitutes a material breach of the agreement.
