© GIZ / Dirk Ostermeier

EXAMPLES OF CONNEX SUPPORT

The CONNEX Support Unit keeps the names of supported countries anonymous for confidentiality reasons unless the countries concerned have expressly consented to the publication of their stories as examples of good practice.

 

The CONNEX Support Unit advises governments before, during and after the negotiation of large-scale contracts. During the early days of CONNEX until 2017, however, CONNEX focused more on the pre-negotiation phase and certain capacity development activities.

PRE-NEGOTIATION SUPPORT

 

Pre-negotiation support enables governments to make informed decisions before entering into negotiations with large-scale investors.

 

Examples

 

  • Guinea, Liberia and Tanzania: Review of financial models for resource projects, including capacity development in financial modeling for relevant government institutions.
  • Mali and Mozambique: Capacity development focusing on the planning and conduct of contract negotiations, using previous negotiations as case studies.
  • Mali: Hosting a technical workshop on mine closure as a basis for future support measures in-country.
  • Kyrgyzstan: Advising the government on basic aspects of tendering procedures.

DIRECT NEGOTIATION SUPPORT

 

Direct negotiation support is at the core of CONNEX activities. CONNEX experts work closely with government negotiating teams to determine the objectives to be achieved and to prepare the negotiations. They also provide ad hoc support during the negotiations. The scope of the assistance provided by the CONNEX Support Unit varies according to the needs of the government concerned.

 

Examples

 

  • Legal advice
    After starting to negotiate a mining agreement with a company that had already concluded a feasibility study, a country requested legal support from the CONNEX Support Unit. A legal team drew up a mining agreement that conformed with national, regional and international laws. The CONNEX experts advised on the optimal legal structure, drafted and prepared all auxiliary contracts and was involved in the negotiations.
  • Contract renegotiation and compliance monitoring
    A country requested advice on an existing contract with a leading global mining company, which is the single largest contributor to its gross domestic product. The company was not fulfilling its contractual financial and developmental (infrastructure) obligations and exploited deposits differently than agreed. The government requested that the contract be renegotiated and approached the CONNEX Support Unit for assistance with monitoring compliance and revising the financial model for the project.
  • Compliance review
    A country had to renegotiate the contracts for its largest mining project more than a decade after their initial negotiation and amendment. In the meantime, the governance landscape had changed significantly and the project had changed hands. The new contract needed to reflect new government policies and ensure that benefits would be shared on an equitable basis. As a first step, the CONNEX Support Unit provided assistance to the government with compliance review and then provided legal, financial, strategic and technical expertise for the pre-negotiation and negotiation rounds.
  • Tender support
    The CONNEX Support Unit provided advice to a country that was planning to issue a call for tenders on two exploration projects, one greenfield, one brownfield. An expert assisted with evaluating geological data and also reviewed and revised the tender specifications, prepared a financial model and helped to determine whether or not an international tender was a good move for the government at that point in time.
    For the brownfield project, the CONNEX Support Unit’s services included an analysis of the market conditions that would attract international investors to the project.

 

In one of these cases, a CONNEX financial expert assisted the team in a number of negotiations and renegotiations. Where necessary, he was joined by a mineralogist who was able to provide detailed technical information as the basis for the further discussions. Initial results showed that the advisor was able to identify hidden revenue options for the government through the adjustment of the financial model, amounting to an estimated USD 250 million when fully realized.