Clarification Statement from the Ministry of Energy and Mineral Resources Regarding the Copper Mining Agreement in the Abu Khushaibeh Area
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 between the Government of Jordan and the Turkish company Solvest Investment Solutions in 2022. Under this MoU, the company submitted the supporting technical and financial documentation, which was reviewed and evaluated, and the company was qualified to sign the Memorandum of Understanding in accordance with the Regulation on Projects for the Exploitation of Petroleum, Oil Shale, Coal, and Strategic Minerals No. (76) of 2020 and its amendments, as well as the instructions issued pursuant thereto, which stem from the Natural Resources Law No. (19) of 2018.
The MoU covered an area of only 48 square kilometers, and the company provided the required guarantees in accordance with the applicable legislation.
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, holding National Number (200204744). Its capital amounts to JD 1,428,000, fully paid, and its stated objectives explicitly include non-ferrous mineral mining, exploration, and technical support services for the mining and energy sectors.
Accordingly, the company enjoys a full legal personality and contractual capacity under the provisions of the Jordanian Companies Law.
Third: Direct Sponsor Agreement
The template of the Direct Sponsor Agreement, annexed to the executive agreement, regulates the relationship between the government and a direct sponsor if the developer wishes to engage one to obtain financial or technical support, subject to government approval. It is noted that Wadi Araba Minerals Company has not expressed any desire to contract with a direct sponsor, as it will implement and finance the works independently. This template has been included for approval in case the company decides to use it at any future stage of development.
Fourth: Financial Returns
- Royalties And Unexpected Profit Tax
Under Article 10/1 of the executive agreement, the company is obliged to pay a royalty to the government for copper extraction. The royalty rate is linked to the global copper prices and ranges from 3% (minimum) to 10% (maximum) of total revenue. Additionally, under Article 10/2, a progressive tax on unexpected profits of up to 50% will be imposed if the after-tax profit margin exceeds 40%, in line with international best practices for the exploitation of this mineral.
- 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 the rental value for the exploitation areas in accordance with the terms of the land lease agreement, to be signed with the authorized government entity as specified in Article 2/1/3.
Fifth: Applicable Law and Arbitration
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
The executive agreement also stipulates that disputes shall be settled through arbitration, which will be conducted in Arabic and in accordance with the Jordanian laws and regulations in force at the commencement of arbitration. Article 28/4/2 of the executive agreement provides:
"Arbitration shall be conducted in Arabic in accordance with the Jordanian laws and regulations in force at the commencement of arbitration, and these rules shall be deemed incorporated by reference into this agreement, with arbitration conducted by three independent arbitrators."
As for the venue of arbitration, it will be at the International Chamber of Commerce (ICC) in Paris, which is an internationally recognized practice. Article 28/4/4 of the executive agreement states:
"The seat of arbitration shall be at the International Chamber of Commerce, Paris. The parties may agree for the hearings to be held at any suitable location, in accordance with the laws and regulations of Jordan."
Sixth: Environment
During the Memorandum of Understanding phase, the company prepared an environmental study to assess the potential environmental impacts of mining operations in the concession area. During the pre-exploitation phase, the company will submit a comprehensive Environmental Impact Assessment (EIA) for the area in accordance with applicable environmental laws and regulations, and it must be approved by the Ministry of Environment. Article 18/1 states:
"The developer shall comply with all environmental laws during mining and extraction operations, and in the event of any violations of these laws, the developer shall be subject to the enforcement measures stipulated therein."
Additionally, under Article 23/2 of the agreement, the developer is required to provide a rehabilitation guarantee as stipulated in the license issued by the Energy and Minerals Regulatory Commission to carry out all necessary rehabilitation activities in the area after the completion of mining and extraction operations. Any failure by the company to perform all required rehabilitation activities constitutes a material breach of the agreement.