MARCH 28, 1935.

MEMORANDUM OF PROVISIONS COVERING CURTAILMENT AND PRODUCTION CONTROL OF AFRICAN, SOUTH AMERICAN, AND EUROPEAN PRODUCERS

Recital.---The purpose of the above mentioned producers in participating in this memorandum is to bring about better conditions in the production, distribution and marketing of copper throughout the world outside of the United States, and it is specifically provided that none of the terms hereof shall apply to the United States. Accordingly:

Article 1.---Mine production shall be curtailed from agreed basic tonnage as set out in Schedule "A" hereto attached and made a part hereof to the extent of 20% effective not later than May 1, 1935. For example, a co-operating producer whose basic production is 10,000 tons shall not produce more than 8,000 tons in the month May 1935. The foregoing is subject to the exceptions stated in Schedule "A".

Article 2.---Mine production shall be curtailed from agreed basic tonnage to extend of 30%, effective not later than June 1, 1935, and shall continue at that rate until changed by the Control Committee hereinafter provided for. For example, a co-operating producer whose basic production is 10,000 tons shall not produce more than 7,000 tons in the month of June 1935 and following months subject to modification as herein provided. The foregoing is subject to the exceptions stated in Schedule "A".

Article 3.---If curtailment in excess of 30% of the basic production tonnage is decided upon by the Control Committee herein provided for, such further curtailment shall not become effective in any event prior to October 1, 1935, unless an earlier date is satisfactory to all participants. Any curtailment in excess of 30% shall be conditioned upon participants having contracts for which they have insufficient copper being able to make equitable arrangements to supply their commitments. Curtailment in excess of 40% shall be voluntary. Increases in production above basic tonnages shall be a matter to be considered by all participants.

The curtailment and production control shall take into account the consumptive demand.

Article 4.---In the event that any participant has a partial or complete cessation of production during the period of this agreement, said participant shall have the right to make up any production so lost.

Article 5.---A Control Committee shall be set up and the voting thereof shall be conducted in accordance with Schedule "C" hereto attached. The functions of this Committee shall be:

(a) To arrange for the gathering and distribution of statistics;

(b) To arrange for increases or decreases in production, in accordance with Article 2 and 3 and Schedule "A";

(c) To receive, consider and decide questions relating to interpretations of this memorandum;

(d) To consider and advise upon any matters arising under this memorandum submitted to it by any of the participants;

(e) To hear complaints relative to alleged breaches of this memorandum. If the Committee, after a hearing and after full consideration, is of the opinion that any participant has committed a breach it shall give notice to the offending participant to remedy the breach within a reasonable time fixed by the Committee. The participants agree to abide by the decision of the Committee. No representative of a participant against whom a complaint of breach of this memorandum is made shall sit upon the Committee that decides whether such breach has been made.

Article 6.---A Committee consisting of five member (to be made up in accordance with Schedule "D" hereto attached) shall be appointed to supervise and enforce the trade practices herein agreed upon and set forth in Schedule "B" in the markets to which this memorandum applies. Such Committee shall undertake a study of the entire problem of the co-operative marketing of copper in such markets and shall make a final report of its recommendation of the participants as soon as practicable, for acceptance by all participants. The basic quotas of production herein respectively agreed upon by the participants, and the rate of production fixed from time to time in the manner herein provided shall continue until July 1, 1938, provided there has been a unanimous acceptance of the report specified herein not later than April 1, 1936. This memorandum, however, may on unanimous consent be extended for a further period beyond July 1, 1938, and for the purpose of considering such extension a meeting of the participants shall be called not later than six months prior to the expiration date.

The trade practices and the marketing report of said Committee on its acceptance, except as may be modified by the unanimous consent of the parties affected, shall run as to term contemporaneously with the said production curtailment and control as herein provided.

Article 7.---If in the opinion of any participant a case of force majeure has arisen which renders this memorandum in its present form inequitable or unworkable such participant shall report the fact to the Control Committee which shall promptly investigate and make recommendations. If, after discussion, all the participants do not accept such recommendations the Committee shall declare the arrangement at an end.

SCHEDULE "A"

PRODUCTION SCHEDULE FOR MEMBERS OF THE COOPERATING GROUP, FIRST PERIOD ENDING DECEMBER 31,1936

(Production in Short Tons Per Month)

MEMORANDUM

Conditioned upon the acceptance by the co-operating group of the respective positions defined in this Schedule "A", the Bor Company, through Mr. Bellanger, stated that its maximum production would be as follows:

For the calendar years 1935……………………………………………………….. 39,000 metric tons;

For the calendar years 1936 and 1937 respectively……………………………….. 38,000 metric tons;

In the event of a curtailment of 40% by the co-operating producers, Bor will curtail to 37,000 metric tons

as a maximum production for the calendar years 1936 and 1937.

Mr. Bellanger presented the following schedule of production for the Bor Company:

SUPPLEMENTAL SCHEDULE "A"

NET RELATIVE PRODUCTIONS—SECOND PERIOD, JANUARY 1, 1937 TO SEPTEMBER 30, 1937

(Production in Short Tons Per Month)

TABLE SHOWING COMPUTATION OF TONNAGE’S CONTRIBUTED BY PRODUCERS TO OFFSET MUFULIRA TONNAGE INCREASE IN SECOND PERIOD, JANUARY 1, 1937 TO SEPT. 30, 1937

(Short Tons Per Month)

SUPPLEMENTAL SCHEDULE "A"

NET RELATIVE PRODUCTIONS--- THIRD PERIOD, OCTOBER 1, 1937 TO JUNE 30, 1938

(Production in Short Tons Per Month)

TABLE SHOWING COMPUTATION OF TONNAGE’S CONTRIBUTED BY PRODUCERS TO OFFSET MUFULIRA TONNAGE INCREASE IN THIRD PERIOD, OCTOBER 1, 1937 TO JUNE 30, 1938

(Short Tons Per Month)

SCHEDULE "B".—Committee Functions and Trade Practices

1. Copper To Be Included:

(a) Ore, concentrates, matte or other crude material produced for sale or sold as such,

excluding scrap;

(b) Blister and Rough;

(c) Fire Refined;

(d) Electrolytic or other copper of whatever grade (cathodes and shapes);

(e) Rods.

2. Statistical clearing houses for the gathering and dissemination of all pertinent statistical data shall be located at points approved by the Committee.

The Clearing Houses shall make:

A.

(1) A complete survey of all marketable stocks as at the date hereof and monthly thereafter;

(2) A complete survey of the sales position, for which purpose members shall report to the Clearing House as

soon as practicable after the date hereof and monthly thereafter all contracts made and deliveries thereunder,

setting out in each case the grade of copper, duration of contract (up to end of 1936 only), price and whether

sold to ultimate consumer or not.

B.

Members shall report sales daily to the Clearing Houses showing prices, differentials, tonnage’s, ports and

countries of destination, and month of delivery. Sales in home markets not accessible to other members shall

only be reported as to tonnage.

Clearing Houses shall issue to the membership a summary of surveys (1) and (2) as soon as completed and every month thereafter, and in the case of daily sales they shall issue a summary to the membership each business day.

3. In addition to the above-mentioned functions of the Committee, close daily contact should be maintained between the various selling organisations with a view to eliminating destructive price cutting and bringing about stable market conditions.

4. Uniformity of sales contracts to be established by the Committee so far as possible under existing circumstances.

Sales shall be made as far as possible to consumers only or, if to merchants for account of consumers, with the intent to prevent speculation by dealers, except that sales of copper in unfinished form and requiring further processing may be made to Custom Smelters or refineries regularly engaged in such business.

Merchants to whom sales as above are made should be asked to report sales to ultimate consumers the same as members of the co-operating group.

Sales may be made through agents on customary commission basis and on the European Metal Exchanges for hedging only.

5. Electrolytic brands at seller’s option wherever acceptable.

6. Sales to be on C.I.F. basis for usual ports of destination with differentials for other delivery points; or F.A.S. seaboard ports of shipment.

7. It is agreed that the members, insofar as possible, will endeavour to make available to customers copper of the grades which they have been customarily receiving.

8. Liberal exchange arrangements should be made between sellers.

SCHEDULE "C"

The Control Committee to be established under Article 5 shall consist of one representative from each of

the following participants:

Union Minière du Haut Katanga;

Rhokana Corporation, Ltd;

Roan Antelope Copper Mines, Ltd;

Group consisting of Chile Exploration Co., Andes Copper Mining Co., Greene Cananea Copper Co.

Braden Copper Company.

In cases of difference of opinion amongst members of the Committee respecting points (a) (b) (c) (d) or

(e) of Article 5, decision in the matter shall be by the concurring vote of not less than 4 of the 5 members

of the Committee. Should one or more members of the Committee be disqualified as provided under

Article 5 (e) the other members of the Committee shall appoint from the representatives of the co-

operating group who are not involved in the controversy, an additional member or members to take their

place.

It is understood that one representative each from the Compagnie Francaise des Mines de Bor and the Rio

Tinto Company, Ltd., shall have the right to attend (without vote) all meetings of the Committee and to

receive copies of all minutes of such meetings and of decisions made by the Committee, as well as any

other information concerning matters related to Schedule "A" which may be discussed from time to time

by the Committee.

SCHEDULE "D"

Under Article 6 is provided that a Committee consisting of five members shall be appointed to supervise

and enforce the trade practices as set forth in Schedule "B".

It is agreed that this Committee of five shall consist of a representative from each of the following

participants:

Rhokana Corporation, Ltd;

Union Minière du Haut Katanga;

Group consisting of Roan Antelope Copper Mines, Ltd.; Mufulira Copper Mines, Ltd.

Group consisting of Chile Exploration Co., Andes Copper Mining Co., Greene Cananea Copper Co.

Braden Copper Company.

The representatives who shall initially serve on this Committee shall be: Mr.S.S.Taylor (Chairman);

Mr.Fernand Pisart; Mr.B.N.Zimmer; Mr. E.Mosehauer; Mr.C.T.Ulrich; with the further understanding that

one representative each from the Compagnie Francaise de Mines de Bor, the Rio Tinto Company, Ltd., and

Roan Antelope Copper Mines, Ltd., shall have the right to attend (without vote) all meetings of the

Committee and to receive copies of all minutes of such meetings and of decisions made by the Committee

as well as any other information concerning matters related to Schedule "B" which may be discussed

from time to time by the Committee.