[OPTIONAL: These provisions can be used where the Project includes processing facilities]

36.1 The Company shall use its best endeavours to ensure that it achieves the following (the Processing Targets);

(a) no later than [insert number] years from the Effective Date, at least [insert number]% of the total annual production of the Project is processed in the Host State;

(b) no later than [insert an increased number of years from paragraph (a)] years from the Effective Date, at least [insert an increased percentage from paragraph (a)] % of the total annual production of the Project is processed in the Host State; and

(c) no later than [insert an increased number of years from paragraph (b)] years from the Effective Date, at least [insert an increased percentage from paragraph (b)] % of the total annual production of the Project is processed in the Host State.

36.2 The Company shall report annually on the status of its achievement of the Processing Targets.

36.3 Where the Company fails to meet its annual Processing Targets, the Parties shall meet to discuss the reasons for such failure and to negotiate in good faith any necessary variations to the Agreement, including but not limited to:

(a) increases to the Rental Amount;

(b) [Insert other items as appropriate]

36.4 Where the Parties cannot agree as to any necessary variations in accordance with the previous paragraph, the Parties shall refer the matter to an Independent Expert for final determination in accordance with Section 61.

For more information: See generally IISD, 2014, Section 8.3 (Creation of Processing Facilities); UNIDROIT & IFAD, 2021, Chapter 4.II.C (Local Content and Processing); UNIDROIT, 2021; UNIDROIT & IFAD, 2021, Section 4.II.C (Local Content and Processing).