1 DE AGOSTO DE 1997

1340-(215)

d) :

/) The first period of commercial production referred to in subparagraphs a) and c) shall commence in the first accounting year of commercial production and terminate in the accounting year in which the contractor's development costs with interest on the unrecovered portion thereof are fully recovered by his cash surplus, as follows: in the first accounting year during which development costs are incurred, unrecovered development costs shall equal the development costs less cash surplus in that year. In each subsequent accounting year, unrecovered development costs shall equal the unrecovered development costs at the end of the preceding accounting year, plus interest thereon at the rate of 10 per cent per annum, plus development costs incurred in the current accounting year and less contractor's cash surplus in the current accounting year. The accounting year in which unrecovered development costs become zero for the first time shall be the accounting year in which the contractor's development costs with interest on the unrecovered portion thereof are fully.recovered by his cash surplus. The contractor's cash surplus in any accounting year shall be his gross proceeds less his operating costs and less his payments to the Authority under subparagraph c);

ii) The second period of commercial production shall commence in the accounting year following the termination of the first period of commercial production and shall continue until the end of the contract;

e) "Attributable net proceeds» means the product of the contractor's net proceeds and the ratio of the development costs in the mining sector to the contractor's development costs. If the contractor engages in mining, transporting polymetallic nodules and production primarily of three processed metals, namely, cobalt, copper and nickle, the amount of attributable net proceeds shall not be less than 25 per cent of the contractor's net' proceeds. Subject to subparagraph n), in all other cases, including those where the contractor engages in mining, transporting polymetallic nodules, and production primarily of four processed metals, namely, cobalt, copper, manganese and nickel, the Authority may, in its rules, regulations and procedures, prescribe appropriate floors which shall bear the same relationship to each case as the 25 per cent floor does to the three-metal case;

f) «Contractor's net proceeds» means the contractor's gross proceeds less his operating costs and less the recovery of his development costs as set out in subparagraphj);

gross proceeds» means the gross revenues from the sale of the processed metals and any other monies deemed reasonably atributable to operations under the contract in accordance with the financial rules, regulations and procedures of the Authority;

k) In all cases other than those specified in subparagraphs g), i), and n), ui), «con-tractor's gross proceeds» means the gross revenues from the sale of the semi-processed metals from the polymetallic nodules recovered from the area covered by the contract, and any other monies deemed reasonably attributable to operations under the contract in accordance with the financial rules, regulations and procedures of the Authority;

h) «Contractons development costs» means:

i) All expenditures incurred prior to the commencement of commercial production which are directly related to the development of the productive capacity of the area covered by the contract and the activities related thereto for operations under the contract in all cases other than specified in subparagraph n), in conformity with generally recognized accounting principles, incluiding, inter alia, costs of machinery, equipment, ships, processing plant, construction, buildings, land, roads, prospecting and exploration of the area covered by the contract, research and development, interest, required leases, licences and fees; and

ii) Expenditures similar to those set forth in i) above incurred subsequent to the commencement of commercial production and necessary to carry out the plan of work, except those chargeable to operating costs;

/) The proceeds from the disposal of capital assets and the market value of those capital assets which are no longer required for operations under the contract and which are not sold shall be deducted from the contractor's development costs during the relevant accounting year. When these deductions exceed the contractor's development costs the excess shall be added to the contractor's gross proceeds;

j) The contractor's development costs incurred prior to the commencement of commercial production referred to in subparagraphs h), i), and «), iv), shall be recovered in 10 equal annual instalments from the date of commencement of commercial production. The contractor's development costs incurred subsequent to the commencement of commercial production referred to in subparagraphs h), ii), and n), iv), shall be recovered in 10 or fewer equal annual instalments so as to ensure their complete recovery by the end of the con tract;

k) «Contractons operating costs» means all expenditures incurred after the commencement of

i) If the contractor engages in mining, transporting polymetallic nodules and production of processed metals, «contractor's

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