Martabe Gold Project

SCOPE OF WORKS
FOR

THE PROVISION OF
TRANSPORT AND LOGISTICS
MANAGEMENT

SS1.7/2011
1. Introduction .....................................................................................................................................3
1.1. General........................................................................................................................... 3
1.2. Site Background ............................................................................................................. 3
2. Scope of Works .............................................................................................................................5
2.1 General........................................................................................................................... 5
2.2 Industry Standards and Regulations ............................................................................... 5
3. Scope of Services Work Included ...............................................................................................6
3.1 General requirements ..................................................................................................... 6
3.2 Mobilisation and Demobilisation ..................................................................................... 6
3.3 Safety Health Environment and Community (SHEC) ...................................................... 7
3.4 Safety ............................................................................................................................. 7
3.5 Emergency Response and Incident Management ........................................................... 7
3.6 Occupational Health and Safety ..................................................................................... 8
3.7 Route Risk Assessment .................................................................................................. 8
3.8 Traffic Management Plan ................................................................................................ 8
3.9 Environment ................................................................................................................... 9
3.10 Community and Government .......................................................................................... 9
3.11 Contractor Personnel and Communication ................................................................... 10
3.12 Vehicles and Mobile Equipment .................................................................................... 11
3.13 Key Performance Indicators and Reporting .................................................................. 12
4. Specific Services .........................................................................................................................13
4.1. Overall General Services – Contractors Scope of Works .....................................................13
5. Contractors Responsibilities Inbound Cargo - International & Domestic ............................14
5.1. Inbound International – Specific ................................................................................................15
5.2. Inbound Hazardous Cargo .........................................................................................................16
6. Contractor Responsibilities Outbound Cargo - .......................................................................17
International & Domestic ......................................................................................................................17
6.1. Outbound International – Specific.............................................................................................18
6.2. Outbound Hazardous Cargo ......................................................................................................18
7. Permits / Import and Export Clearance ....................................................................................19
8. Consolidation Hub .......................................................................................................................20
8.1. General requirements .................................................................................................................20
8.2. Hub Receival Process ................................................................................................................22
9. On Site Services/Local Transport Mode Management deliveries ........................................23
10. PTAR Responsibilities ................................................................................................................24
10.1. General .........................................................................................................................................24
10.2. Inbound Cargo .............................................................................................................................24
10.3. Outbound Cargo ..........................................................................................................................25
10.4. Orders ...........................................................................................................................................25
11. Cost Structure ..............................................................................................................................26
12. Schedule of Service – Milestone Dates ...................................................................................27
13. Material Supply ............................................................................................................................27
14. Appendices ...................................................................................................................................28
Appendix A – SHEC and Government Relations Policy and Commitment Statements .............28
Appendix B – Major Consumables Volume ............................................................................ 32
Appendix C – TEU Table ....................................................................................................... 33
1. Introduction

1.1. General

The services under this contract include the provision by the Contractor of all necessary
supervision, labour, expertise, and materials to carry out the Transport and Logistics Services on
a “door to door” basis for G-Resources PTAR Martabe Project.

1.2. Site Background

PTAR is a wholly owned Indonesian registered subsidiary of G-Resources Limited, a company

listed on the Hong Kong Stock Exchange. The Company presently owns 100% of the Martabe
Operation, which is located next to the township of Batangtoru in the Kabupaten of Tapanuli
Selatan, in the Province of North Sumatra.

The Martabe Project is located in the western side of Sumatra in the province of Northern
Sumatra, close to Sibolga (Figure 1). Sumatra has an unbroken mountain chain running down its
centre, ranging in height from 1,575 m to 3,805 m. On the western side, the mountains plunge
steeply into the sea. On the eastern side, they slope gently down to an area of plains and
swamps.

The topography is steep and rugged, with very few areas of flat ground of significant area. The
Purnama deposit comprises a north-south ridge which rises 250 m above a colluvium-filled valley
to its west and 100 m above rugged hills to the east. Currently, vehicular access is being
constructed to the deposit and plant site area. Typically equipment for exploration drilling is either
hand-carried or transported to location by helicopter. Walking tracks pervade the area, as there
is a small population of inhabitants in the immediately surrounding area. Due to the ruggedness
of the terrain there is very little agricultural activity within the actual mine area. The project site is
located approximately 10 km west of the Sumatran Fault.

In Operations there will be an open cut pit mining, which will be mined using a mining Contractor.
The ore generated will be processed through a conventional Carbon in Leach circuit, before the
slurry is detoxified and placed into a tailings storage facility.
Figure 1 - Martabe Project Location
2. Scope of Works

2.1 General

a) This Scope of Works defines in detail the services to be performed and the standard of
service required under the Contract. The Scope of Works defines the standards that are to
be established and maintained for the duration of the Contract and establishes the
responsibilities of the Contractor for the performance of the works pursuant to the Contract.

b) The Contractor shall ensure that all the responsibilities of the Contract and any other works
directed by the Company Representative, are carried out professionally and efficiently at all
times and are always in accordance with the terms of the Contract.

c) The Contractor shall ensure that all supervision, labour, expertise, and materials,
consumables and equipment, necessary to perform the services specified are available at
the times required.

d) It is the Contractor's responsibility to ensure that works and services are performed in
accordance with all relevant statutory and industry standards including all PTAR
procedures and standards.

e) The Contract is for the provision of all necessary services, facilities and personnel required
to carry out the works as described and specified herein. The Contractor will supply both
on-site and off-site, all management, supervision, labour, plant, mobile equipment,
equipment, materials, tools, consumables, transport, off site loading and unloading,
permits, taxes, insurances and all things necessary (unless noted otherwise) necessary to
complete the works and for the successful performance and operation of the Contract. This
will be as directed by the Supply Chain Management Department (SCM) for PTAR Martabe
Gold Project. The Contact for PTAR will be PTAR Supply Chain Management Department.

f) On occasion specific projects may require a subsequent agreement to be entered into, and
the Contractor will be asked to cost these as required on a lump sum or rates based format.
Alternatively it may be deemed appropriate at the time that a variation to the contract for
extra works be raised.

g) Prior to commencement of the services the Contractor will provide current Standard
Operating Procedures for core operating activities and develop Standard Operating
Procedures for contract and site specific activities.

2.2 Industry Standards and Regulations

The relevant statutory and industry standards applicable to work performance, provisions of
services and quality of supply under this contract specification are, but not limited as follows:
a) Republic of Indonesia (ROI) Road Regulations,

b) Occupational Safety and Health Regulations (relevant to Indonesian),

c) Dangerous Goods Regulations (Storage and Handling) (relevant to Indonesia),

d) International Maritime Regulations,

e) International Maritime Dangerous Goods Code and IMDG,

f) International Cyanide Management Code,

g) Indonesian Import and Export Regulations and/or Procedures,

h) International Civil Aviation Organization Technical Instructions for the Safe Transport of
Dangerous Goods By Air (ICAO).

i) International Air Transport Association Dangerous Goods Regulations (IATA).

j) All relevant PTAR Procedures and Standards.

The Contractor shall confirm prior to the awarding of the Contract that these statutory regulations
are acknowledged as a minimum and perform to the standards and regulations contained within
the various documents, as applicable to the Contract and in relation to the Scope of Works.

3. Scope of Services Work Included

3.1 General requirements

PTAR Supply Chain Management Department (SCM) will have varying levels of requirement
and instruction for the Contractor’s services. Each section of SCM – Materials Management,
Logistics, and Procurement, will liaise with the Contractor via both verbal and written
instruction. Contractor shall actively participate in regular SCM meetings and
communications to ensure all aspects of the supply chain are properly coordinated.

The work will include (but not limited to) those items as listed below.

The Contractor shall, after the completion of the works, prepare and submit to PTAR for
review and approval a single consolidated monthly invoice. The invoice shall be lodged with
the appropriate and fully completed supporting documentation.

3.2 Mobilisation and Demobilisation

The Contractor is to include everything necessary for the Contract Establishment.

Included with their tender submission Contractor must prepare a Preliminary Contract Execution
Plan clearly detailing the steps required and milestones to be achieved to ensure timely
mobilisation for contract commencement date. Prior to commencement of services Contractor
must prepare a Final Contract Execution Plan for PTAR review and approval.

3.3 Safety Health Environment and Community (SHEC)

The Contractor shall incorporate in their work a SHEC programme conforming to the
requirements of PTAR’s SHEC Policies.

The Contractor SHEC programme shall be submitted to PTAR twenty days (21) prior to the
commencement date for review and acceptance.

Copies of the Safety Health Environment and Community commitment statements form
Appendix A to the Scope of Works document.

An allowance to cover the cost of this programme shall be included in the Contractor’s schedule
of rates.

3.4 Safety

The Contractor shall ensure that its workers, subcontractors and other personnel engaged in
the performance of the contract, observe at all times a high standard of safe working practise,
no lower than that laid down by PTAR and by all relevant Acts, Regulations or By-laws. This
must include but is not limited to;

a) The Contractor shall provide all PPE for its employees or subcontractors.

b) The Contractor shall provide instruction in the proper use for all workers engaged in the
performance of the Scope of Works correct PPE for the work being conducted. (At a
minimum hard hat, safety boots, safety glasses, gloves and long trousers and long
sleeved shirts with reflective striping).

c) It is the responsibility of the Contractor to enforce the wearing of correct PPE at those
times it is required.

d) The Contractor will provide fresh clean water, sunscreen and insect repellent.

3.5 Emergency Response and Incident Management

a) The Contractor shall detail and have in place immediately on commencement of the
Contract an Emergency Response and Incident Management Plans and capability to
ensure the appropriate level of Emergency Response and Incident Management support
taking into consideration the environment in which the Contractor will be conducting the
services, transport mode and route, and the type and nature of the goods being
transported.
b) The Plans shall be submitted to PTAR twenty days (21) prior to the commencement date
for review and acceptance.
c) Emergency Response and Incident Management Plans shall include how the Contractor
intends to address emergencies and incidents that involve actual or potential (“near
misses”) loss or damage to people or property either through the spilling of cargo during the
loading, unloading, carriage and in transit to and from the Martabe site, or through other
means related to the services being provided by Contractor under this Contract.

3.6 Occupational Health and Safety

a) Prior to the commencement of the services Contractor shall specific to the services
being provided under this Contract:

1) Provide a detailed preliminary Safety Management Plan;

2) Provide Job Safety Analysis documents;

3) List and identify potential hazards in the Contractor’s work environment and
potential hazards that may exist during the course of providing the services;

4) Ensure Contractors personnel complete a pre-employment medical to standards

acceptable to PTAR if they are working on site for any length of time.

b) Within six (6) weeks of the commencement of the services Contractor provide a final
Safety Management Plan for review and approval by PTAR.

3.7 Route Risk Assessment

Prior to commencement of the services Contractors are required to conduct a route risk
assessment of the route from the point or location at which the Contractor assumes
responsibility for the goods on behalf of PTAR to the Martabe mine site. The assessment is
to include each major transport route for all major commodities and general cargo and shall
draw particular attention to the risks associated with each major type of hazardous materials
being transported. Further the Route Risk Assessment shall also include a risk mitigation
register and how the Contractor intends mitigating the risks.

3.8 Traffic Management Plan

a) Prior to commencement of the services Contractors are required to submit a proposed

Traffic Management Plan for review by PTAR that takes into consideration how the
Contractor will conduct its daily operations with respect to managing sea, road, and air
traffic to and from the Martabe Project site and in the immediate vicinity of Martabe (i.e.
within a one hundred (100) kilometre radius).

b) As part of the Plan details shall be provided of the approach to be taken in conjunction
with PTAR Community Relations Department personnel of the socialisation and
 implementation process with the communities that are directly impacted by the services
provided by the Contractor on behalf of PTAR.

c) Contractor shall nominate and detail the resources that will be provided to undertake
this process and ongoing management.

d) Contractor as part of the Traffic Management Plan provide on a daily basis to the
Supply and Logistics Manager and the Logistics Superintendent a report on road and
traffic conditions.

e) Contractor shall provide on a quarterly basis as an update to the Traffic Management

Plan and as an adjunct to the Route Risk Assessment a report that details
improvements and deterioration of road and traffic conditions on the routes used by the
Contractor to complete the services.

3.9 Environment

The Contractor shall ensure that at all times the Scope of Work will be performed strictly in
accordance with PTAR’s Environmental Policy and procedures and the requirements of all
Indonesian Acts, Regulations, By-Laws and the like.

a) Prior to the commencement of the services Contractor shall specific to the services
being provided under this Contract:

1) Provide a detailed preliminary Environmental Management Plan;

2) List and identify potential environmental hazards in the Contractor’s work

environment and potential environmental hazards that may exist during the course
of providing the services;

b) Within six (6) weeks of the commencement of the services Contractor provide a Final
Environmental Management Plan for review and approval by PTAR.

3.10 Community and Government

As one of the first large scale mining operations in Sumatra PTAR is committed to achieving a
high standard of community relations and development through application and continuous
improvement of our management system and performance.

a) Contractors are to adhere to PTAR’s policy and procedures for Community and
Government Relations in conjunction with PTAR’s Community Relations Department and
PTAR’s Government Relations Department. Any contact made or discussions conducted
with local communities or government departments that are connected to or are part of the
Services should be communicated to the relevant PTAR Department within 24 hours of first
contact.
b) Given the close community contact and interaction related to the services particularly within
the immediate vicinity of the Martabe site Contractors are to allow for and establish an
annual financial provision/fund for each year of the contract that can be made available to
support transport and logistics activities (including but not limited to road maintenance and
ongoing upgrades) within the South Tapanuli District. This provision/fund shall only be
provided to affected villages or communities under the agreement, guidance and
supervision of the PTAR Community Relations Manager or his delegate and in consultation
with the nominated community officials from South Tapanuli District.

3.11 Contractor Personnel and Communication

a) Contractor’s Project Manager (PM) is responsible for the overall Service delivery and
performance of the Contractor and for the consistent implementation across all freight
consolidation points of the Contractor and PTAR procedures and processes and should
ideally be located and based in the Asia Pacific region, and most preferably in Indonesia.
The PM’s primary focus should be to ensure the organization chart is complete and
performing to PTAR standards at all times, with all positions filled with employees of
suitable skills, motivation and experience. The PM shall ensure that all key positions have a
suitably skilled and trained back up position to assist during times of absence or periods of
heavy workload. The PM is also responsible for performance of Contractor against the
agreed performance measures and monthly reporting of same.
The PM is required to visit site for a minimum of two to three days every 3 months for a KPI
review meeting with PTAR and for detailed on site review and attendance of quarterly
review meetings .The PM shall ensure that the Contractor’s On Site Representative (Site
Rep) has the necessary resources, support, and authority across all freight consolidation
points and shall direct, coordinate and liaise within Contractors global organization to
ensure all Service requirements are properly being met.
b) The On Site Representative (Site Rep) position is vital to delivering satisfactory Services to
PTAR. The Site Rep is responsible for the successful implementation and ongoing delivery
of the Services throughout the term of the Contract. The position shall not be filled without
PTAR’s review and approval of the proposed candidate. The position description for the
Site Rep is included as Attachment B. During times when the Site Rep is absent from Site,
Contractor shall ensure a suitable replacement is available to undertake the Site Rep’s
duties., The Site Rep shall also work as an integrated PTAR Supply Chain Management
team member and operate seamlessly with PTAR’s personnel and user departments.
c) The Site Rep shall be an expatriate for a minimum of the first twenty four (24) months of the
Contract. The Site Rep shall also be responsible for training the Contractor national
 personnel as capable support staff and ultimate succession and replacement of the Site
Rep role. Succession shall not take place without PTAR approval.
d) Contractor is required to provide all necessary tools and equipment to allow the Site Rep to
perform this critical role.
e) The Contractor shall in addition to the PM and Site Rep have dedicated staff located at the
Consolidation Hubs. The Consolidation Hub shall have adequate personnel to process the
physical unloading, item checking, receiving, and recording of the warehouse functions and
to process the documentation control and data entry to the standards and timeliness
described herein.
f) The work load and performance of the person operating in the various consolidation points
shall be reviewed regularly and adjustments made as may be required to either the
personnel or the level of service / ability to service based on work load and performance, or
processes and procedures being utilised in carrying out the service requirements.
g) The Site Rep must have a relevant senior authority level within Contractor’s organization to
execute the services. In general all day to day communications between Contractor and
PTAR should be through the Site Rep in the first instance. Incidences of non-response or
unsatisfactory responses should be referred to the PM for the Contractor and the Supply
Chain Manager or his delegate for the PTAR.

3.12 Vehicles and Mobile Equipment

a) All vehicles and mobile equipment entering the Martabe site, being used or intended to be
used in the provision of the services must be fit for purpose and meet PTAR standards.
These standards (attached to this ITT) include but are not limited to:
1) PTAR – Mobile Equipment Inspection and Approval
2) PTAR – Light Vehicle Inspection and Approval
3) PTAR - Light Vehicles and Road Safety

If the standards set are not met during the inspection process the Contractor may be charged the
cost of any failed re-inspection.

b) Throughout the engagement period the Contractor must ensure all vehicles and Mobile
Equipment are kept up to standard through:
1) Pre-start inspection (equivalent to PTAR Standard)
2) Normal servicing and preventative maintenance
3) Corrective servicing to repair any faulty items

All costs associated with the on-going or corrective works will be at the Contractors own
expense.
c) If requested Contractor will provide PTAR with all documentation relating to licensing of its
equipment operators as proof of competence in operating equipment required to service
this contract. Contractor’s equipment operators shall be required to obtain PTAR site
certification in addition to any required Contractor, industry or regulatory certifications.
d) Light vehicles and equipment used for transportation of people beyond the PTAR site
designated lowlands area require a Roll Over Protection System (ROPS) certified to a
design standard acceptable to PTAR (such as Australian Design Requirement or
equivalent).

3.13 Key Performance Indicators and Reporting

a) PTAR have identified Key Performance Indicators (KPI’s). The KPI’s shall be agreed with
the Contractor prior to the implementation of the services. The KPI’s will be measured and
reported on a monthly basis in accordance with the agreed suite of KPI’s. PTAR and
Contractor shall work together to implement a system of recording and reporting data to
ensure all KPI’s are accurately measured, reported against and are used to drive
performance and improvement.
b) In addition to KPI reporting the Contractor shall provide a monthly report that details;
1) Safety statistics including Reportable Incidents, “Near Misses” and Safety
interventions,
2) Noteworthy Community and/or Government relations contacts, including updates of
any meetings held,
3) Number of staff within Contractors organisation employed and working directly and
indirectly to complete the Services,
4) Proposed annual leave for key personnel (OM, Site Rep and others as applicable)
within the Contractors organisation and the proposed coverage of those personnel
during absences,
5) Inbound freight movements by mode in tonnes or TEU’s, and freight cost.
6) Percentage utilisation of loading of TEU’s
7) Inbound freight movements by country of origin in tonnes or TEU’s, and freight cost.
8) Outbound freight movements by mode in tonnes for goods and number of TEU’s, and
freight cost
9) Outbound freight movements by country destination in tonnes for goods and number of
TEU’s, and freight cost
10) Masterlist Realisation Report that clearly details the monthly and year to date
cumulative activity, quantity listing the value of imported goods for each separate
Master Import List line item.
 11) Complete equipment listing, together with availability and utilisation of trucks and
loading equipment
12) Other reporting as required from time to time

4. Specific Services

4.1. Overall General Services – Contractors Scope of Works

a) The Contractor shall provide or produce for PTAR the Services as specified in Section 5
Contractor Responsibilities Inbound Cargo – International and Domestic, Section 6
Contractor Responsibilities Outbound Cargo International and Domestic, Section 7
Permit/Clearance, Section 8 Consolidation Hubs and Section 9 On Site Services, and all
work not specifically detailed or described therein but which is necessary to enable the
Services to be completed in a sound and workmanlike manner in compliance with the intent
of this Agreement.

b) Except as otherwise expressly provided under this Agreement, the Contractor, at its sole
expense, shall furnish all supervision, labour, insurance, transportation, materials, supplies
and other such items, and shall obtain all necessary permits, bonds, approvals, notices and
other documents as may be required to perform the services.

c) The Contractor must at all times provide Equipment that is in a mechanically safe and
sound condition, meeting such standards as are determined by PTAR or its nominated
representative and, in compliance with all Laws and applicable standards.

d) Failure of the Contractor to maintain the safety and or reliability of any Equipment in
accordance with the Contract will render the Equipment liable to immediate suspension
from performing any further Work. Any cost or loss incurred by the Contractor as a result of
this suspension will be at the Contractor’s cost.

e) Such suspension will not be lifted until the relevant Equipment has been reinstated to the
satisfaction of PTAR or its nominated representative.

f) The Contractor must ensure no vehicle is loaded beyond its safe working load, safe axle
load or laws and regulations in all countries where the work is being conducted.

g) As further described in PTAR standard terms and conditions Contractor shall provide
Commercial General Liability, Umbrella Liability, and Freight Forwarder Liability Insurance;
with a limit of not less than five million United States Dollars (US$5,000,000) each
occurrence. PTAR shall provide Cargo Insurance covering actual loss or damage to PTAR
owned goods or equipment while being transported.
h) The Contractor shall work in a safe, efficient manner, taking due cognisance of the
expected climatic conditions and in particular manage timely delivery of Cargo according to
PTAR requirements.

i) PTAR has the requirement for Cargo services both as inbound and outbound Cargo, with
the points of origin of the Cargo being global. PTAR are seeking a “single point of contact”,
seamless “Door to Door” Transport and Logistics Management solution. Inclusive of Sea,
Road and Air freight.

5. Contractors Responsibilities Inbound Cargo - International &

Domestic
The Contractor shall:

a) Register record and track for delivery all Purchase Orders placed by PTAR.
b) Review Purchase order details to determine and respond according to the required or
nominated Incoterm and mode of transport.
c) For “Ex Works” nominated delivery terms receive supplier Pre-alert notification and respond
accordingly.
d) For delivery terms that specify “Deliver to PTAR’S logistics provider” receive and check the
goods upon delivery
e) For delivery requirements that specify the transport mode of Air Cargo, make the most
timely and cost effective bookings to ensure the direct arrival of Cargo at the PTAR
Martabe site.
f) Make arrangements for non-urgent Air Cargo consignments to be consolidated on a weekly
basis.
g) Upon receipt of all goods perform goods receipt and checking process.
h) Providing timely advice on any and all discrepancies of Cargo that do not meet the
requirement for documentation, packing, marking, or transportation, as well as reports on
any damage that may have occurred.
i) Collect, consolidate, haul, stow, ship, fumigate where necessary, transfer and transport
container and break bulk Cargo, including arrangement of suitable lifting equipment, during
transport to Site.
j) Supply all materials, tools, equipment, lashings, transport, fuels and maintenance
necessary for the handling and transfer of Cargo to Site within specified time periods and in
accordance with the contract specifications.
k) Obtain any applicable approvals for “Special” cargo, including but not limited to over
dimensional and heavy loads from Supplier to the Inbound Port, including provision of
necessary escorts, pilots and police service.
l) Provide PTAR unlimited access to and maintain an accurate and interactive Internet based
Cargo tracking system. The tracking shall detail the progress and location of all Cargo on a
daily basis.
m) Coordinate and report to PTAR on progress throughout all supply and transit activities.
n) Make all necessary arrangements and ensure the proactive management of Containers
(ISO-Tainers, Shipping etc), to minimise the demurrage charges to PTAR.
o) Ensure the security of Cargo when it is in the direct control of the Contractor or
Subcontractor.
p) Arrange for Storage of Cargo required at trans-shipment points en route to the Supply Port
or the Inbound Port. Containers used for transport shall be suitable for stacking in the open
and exposed to severe weather conditions.
q) Transport hazardous goods, including attending to any required specialised packing,
handling, storage, permits, authorisations, notices and documentation.
r) Ensure vehicles carrying hazardous cargo are tracked utilising GPS technology (or a
mutually agreed alternative) and store traffic movement reports for all Hazardous Cargo
movements for a period of 3 months. This is specific to the movement of Cargo within
Indonesian.
s) Ensure compliance with all marine and transit insurance requirements.
t) Where practicable and economical supervise and coordinate FCL container booking for
direct loading by Suppliers

5.1. Inbound International – Specific

The Contractor in addition to complying with all the requirements detailed in Section 5 shall;
a) Review PTAR’s Purchase Orders to ensure a Masterlist Item Number and/or Harmonised
Tariff Codes is recorded for each line item on the Purchase Order.
b) Supply and submit all documentation to enable expeditious export and import of goods
including payment of statutory fees.
c) On behalf of PTAR pay applicable taxes and duties for goods subject to the relevant or
statutory taxes and duties.
5.2. Inbound Hazardous Cargo

The Contractor in addition to complying with all the requirements detailed in Section 6 and 6.1
shall;
a) Perform a safety check of all vehicles, equipment and emergency response equipment
prior to utilisation (check is to include, but is not limited to, maintenance of the vehicle and
trailer and any escort vehicles, technical condition of the vehicle and trailer and any escort
vehicles, training of the driver, driver credentials, safety equipment of the vehicles)
b) Provide emergency response management for transport, storage and handling of iso-
containers of hazardous goods including but not limited to; Sodium Cyanide, Hydrogen
Peroxide and Hydrochloric Acid.
c) Be subjected, to and co-operate with PTAR and PTAR’s hazardous goods suppliers to
conduct an annual assessment for transportation and storage compliance requirements.
d) Maintain details of the approved route/s utilised and advise PTAR and PTAR’s hazardous
goods suppliers of changes to the route/s and route conditions in accordance with Section
3.8 d) and e).
e) Ensure security of the iso-containers at all times by the use of Sodium Cyanide Convoy
Management procedures and arrange for safe and secure storage and handling en-route to
site in line with Sodium Cyanide Convoy Management procedures.
f) Obtain all necessary permits, authorisations and the like in accordance with all relevant
Indonesian legislation, regulations, local by-laws and other government requirements
necessary to ensure Contractor is approved to transporter, store and handle hazardous
cargo en-route to the site (including the provision of necessary escorts, pilots and police
services).
g) Ensure the Security and Transportation of Sodium Cyanide will be conducted in
accordance with the International Cyanide Management Institute Cyanide Management
Code.
h) Compliance with or be a signatory to the International Cyanide Management Institute
Cyanide Management Code (ICMC).
i) If the Contractor is not already a signatory to the ICMC then within the first twelve (12)
months of the contract period the Contractor shall be a signatory to the ICMC, or at a
minimum be able to demonstrate documented progress toward signatory status.
j) Provide dedicated Emergency Response Management of all Hazardous Cargo in
accordance with Section 3.6
k) Ensure documentation is in place to verify iso-containers movement details; e.g. container
numbers, seal numbers, condition, etc as part of the chain of custody and issue reports to
PTAR and cyanide supplier.
6. Contractor Responsibilities Outbound Cargo -

International & Domestic

The Contractor shall:

a) Register record and track for delivery all Purchase Orders by PTAR.

b) Expedite and update status on purchase orders through until delivery to site.

c) Arrange for the sea transport of Cargo from Supply Port to Inbound Port (Belawan).

d) Where directed by PTAR, arrange for the Cargo to be collected from the Supplier, including
arranging for the loading of Cargo onto suitable vehicles for transport to Supply Port.

e) Ensure the security of Cargo when it is in the direct control of the Contractor or
Subcontractor.

f) Prepare packing list, commercial invoices and Cargo manifest for Outbound Cargo.

g) Arrange customs clearances for all Cargo on behalf of the PTAR.

h) Obtain all necessary permits, authorisations, permissions and the like, and arrange for
compliance with all relevant legislation, regulations, by-laws and other government
requirements necessary to transport over dimensional and heavy loads from Supplier to the
Outbound Port, including provision of necessary escorts, pilots and police service.

i) Arrange for Storage of Cargo required at transshipment points en route to the Supply Port or
the Outbound Port. Containers used for transport shall be suitable for stacking in the open
and exposed to severe weather conditions.

j) Liaise with all Suppliers to ensure shipping space bookings and ISO container requirements
are satisfied and the most cost-effective/fit for purpose container allocation, method of
packing and marking are employed.

k) Oversee container control, coordination with view to minimizing demurrage.

l) Manage and report to PTAR as to logistics and forwarding activities.

m) Transport hazardous goods, including attending to any required specialised packing, permits,
authorisations, notices and documentation.

n) Transport Cargo that is designated “Non-Container Cargo” as break bulk or abnormal Cargo
and subject to transport conditions similar to here specified.

o) Attend to payment of Ocean Freight.

p) Attend to Transshipment between shipping ports, Cargo vessels and various modes of
transport.
q) Ensure prompt payment of terminal and port wharfage, handling and miscellaneous costs.

r) Ensure compliance with all marine and transit insurance requirements.

s) Coordinate and report on progress throughout all supply and transit activities.

t) Provide “in survey” registered shipping containers as required.

u) If requested by the PTAR, supervise FCL container loading by Suppliers.

v) Arrange packing of containers at consolidation depots; this will include use of dunnage and
strapping to ensure bundles do not shift during transport. Container weights should not
exceed any legislated restrictions for road and or ports in transit to the customer.

w) Arrange re-packing of Cargo if necessary.

6.1. Outbound International – Specific

The Contractor in addition to complying with all the requirements detailed in Section 6 shall;
a) Review PTAR’s Purchase Orders to ensure a Masterlist Item Number and/or Harmonised
Tariff Codes is recorded for each line item on the Purchase Order.
b) Supply and submit all documentation to enable expeditious export and import of goods
including payment of statutory fees.
c) On behalf of PTAR pay applicable taxes and duties for goods subject to the relevant or
statutory taxes and duties.
d) Obtain all necessary Export and Import and border clearances including paying all cost
associated with waiting times, providing the waiting not caused by PTAR.

6.2. Outbound Hazardous Cargo

The Contractor in addition to complying with all the requirements detailed in Section 6 and 6.1
shall;
a) Perform a safety check of all vehicles, equipment and emergency response equipment
prior to utilisation (check is to include, but is not limited to, maintenance of the vehicle and
trailer and any escort vehicles, technical condition of the vehicle and trailer and any escort
vehicles, training of the driver, driver credentials, safety equipment of the vehicles)
b) Provide emergency response management for transport, storage and handling of empty
iso-containers as required for hazardous goods including but not limited to; Sodium
Cyanide, Hydrogen Peroxide and Hydrochloric Acid.
c) Maintain details of the approved route/s utilised and advise PTAR and PTAR’s hazardous
goods suppliers of changes to the route/s and route conditions.
d) Ensure security of the iso-containers at all times by the use of Sodium Cyanide Convoy
Management procedures and arrange for safe and secure storage and handling en-route to
point of egress in line with Sodium Cyanide Convoy Management procedures.
e) Obtain all necessary permits, authorisations and the like in accordance with all relevant
Indonesian legislation, regulations, local by-laws and other government requirements
necessary to ensure Contractor is approved to transporter, store and handle hazardous
cargo en-route to the site (including the provision of necessary escorts, pilots and police
services).
f) Ensure the Security and Transportation of Sodium Cyanide will be conducted in
accordance with the International Cyanide Management Institute Cyanide Management
Code.
g) Ensure documentation is in place to verify iso-containers movement details; e.g. container
numbers, seal numbers, condition, etc as part of the chain of custody and issue reports to
PTAR and cyanide supplier.
h) Ensure vehicles are tracked utilising GPS technology (or a mutually agreed alternative) –
movement reports to be supplied for each movement.
i) Liaise with PTAR to ensure shipping space is booked and return iso-container
requirements are satisfied in accordance with the Sodium Cyanide Supply Agreement.

7. Permits / Import and Export Clearance

PTAR require the Contractor to perform all necessary permitting and clearance activities to
ensure expeditious clearance of the Cargo.
The Contractor shall;
a) Compile all necessary documentation required for import declaration, including:
1) export clearance documentation from point of origin
2) purchase order
3) commercial invoice
4) manifests, container and waybill information
5) MSDS and other relevant Dangerous Goods documentation
b) Prepare, supply and submit all documentation to enable expeditious customs clearances
including payment of statutory fees.
c) Ensure correct assignment of Tariff Codes and Masterlist categories. Ensure preparation of
all documentation in the format and manner acceptable to Indonesian Customs Authorities.
d) Establish a Funding Account on behalf of PTAR. This account is to be used exclusively for
the costs and charges associated with the payment of import duties and taxes. This
account is to be reconciled by the Contractor and will be reimbursed by PTAR on a monthly
basis. The Contractor must ensure complete and accurate supporting documentation.
e) Transport hazardous goods, including attending to any required specialised packing,
permits, authorisations, notices and documentation. Coordinate with PTAR on
documentation required from suppliers.
f) Present import documents and obtain customs clearances for all Cargo on behalf of the
PTAR.
g) Arrange for pre-clearance (green line) of Cargo wherever possible. Identify goods requiring
special clearance (red line) and ensure all appropriate documentation is prepared in a
timely manner to facilitate importation or exportation of goods.
h) When requested by PTAR provide advice and assistance in obtaining and processing
special importation permits.
i) Ensure all shipping instructions issued by Contractor will include a shipping
number/reference that will be used for tracking purposes. This shall be a waybill number or
manifest generated by the Contractor’s Consolidation Hub(s) after the off-site receipt is
processed.
j) Prepare a Masterlist Realisation Report that clearly details the monthly and year to date
cumulative activity, quantity listing the value of imported goods for each separate Master
Import List line item.
k) Prepare and present all necessary documentation for the export of goods (items to be
returned to supplier, items for repair, empty containers etc.) as instructed by PTAR.

8. Consolidation Hub
The Contractor shall establish a Consolidation Hub in an Australian state capital or its nearest
port; the same shall apply in Indonesia. The Hubs are a critical link in the PTAR Supply Chain
and shall be fully resourced to carry out the Services in accordance with the Scope detailed in
this section. The Contractor as a minimum in both Hubs shall:

8.1. General requirements

a) Provide a secure warehouse facility that is adequately sized and equipped to manage
PTAR’s cargo.
b) Ensure storage practices comply with all relevant legislation, regulations, by-laws and other
government requirements.
c) Ensure that the storage warehouse is enclosed and protects all goods stored from severe
weather conditions.
d) Provision of an office for Contractor personnel and 1 office for use by PTAR personnel.
Note: this requirement is for the Indonesian Hub only.
e) Supply all materials, labour, tools, equipment, lashings, transport, fuels and maintenance
necessary for the handling and transfer from the Consolidation Hub within specified time
periods and in accordance with the contract specifications.
f) Provision of all suitable materials handling equipment (forklifts, crane and the like) to
ensure safe and efficient materials handling,
g) Compliance Checking shall be conducted at every consolidation location to ensure that
Suppliers are providing shipment documentation and packaging in accordance with the
PTAR’s Purchase Order requirements, applicable Laws, and international freight forwarding
and shipping industry standards.
h) Provide PTAR unlimited access to and maintain an accurate and interactive Internet based
Cargo tracking system. The tracking shall detail the progress and location of all Cargo on a
daily basis.
i) With respect to the Contractors Internet based Cargo tracking system, goods are to be
logged or entered into the system immediately upon arrival at the respective Consolidation
Hubs. This shall include goods that may be deemed to have been supplied incorrectly,
short supply or damaged or have been rejected for acceptance by the Contractor on behalf
of PTAR.
j) PTAR require constant visibility to all movement of goods and it is deemed critical that the
goods are acknowledged as early in the Supply Chain as possible.
k) For goods that are to be transported by sea freight, shipment should be on the next
consolidated shipment, unless directed otherwise by PTAR.
l) For goods that are regarded by PTAR as “small” (items generally less than five (5)
kilograms and less than 0.125 cubic metres) than the Contractor shall advise PTAR and
seek approval to consolidate the goods for Airfreight.
m) Ensure most the most efficient routing of Cargo and coordination of Bills of Lading to
minimise transhipment and transit time and costs (including use of through Bills of Lading
wherever practical).
n) Provide “in survey” registered shipping containers as required.
o) Arrange packing of containers at consolidation depots; this will include use of dunnage and
strapping to ensure bundles do not shift during transport. Container weights should not
exceed any legislated restrictions for road and or ports in transit to the customer
p) Any out of gauge shipments shall be quoted separately and agreed by PTAR prior to
dispatch of the goods.
q) Include in cost proposal for all dunnage, blocks, chain, clamps, strapping and load binders
used to secure the cargo inside 20’ and 40’ containers or flat racks into rates. These items
will not be invoice or billed as separate line items and should be inclusive of pricing unless
otherwise asked for by PTAR.
r) Contractor may after assessing the packaging of goods delivered from a supplier, or goods
that have been transhipped and consolidated, deem that some of the goods may need re-
packing or packaging for safe on-forwarding upon consultation with PTAR.
s) Ensure the proactive management of Containers (ISO-Tainers, Shipping etc), to minimise
the demurrage charges to PTAR.
t) For each consolidated shipment a detailed packing list is to be generated. This list is to be
by Waybill. Upon completion of each container stuffing; a detailed packing list per container
is to be generated and attached to the inside of each container door prior to shipping. The
Contractor shall then transport the consolidated shipment to the nominated port of export in
preparation for loading.
u) Ensure that all goods are correctly manifested and under no circumstances are goods to be
delivered to site without being manifested.
v) Ensure consolidation hubs receive, pack and document materials in accordance with
PTAR, country of export and Indonesian regulations.

8.2. Hub Receival Process

a) Upon materials arrival at the Contractors Consolidation Hubs the material shall be item
checked. The goods must be physically checked by the Contractor against the Purchase
Order, with the suppliers packing list/invoice and perform the following;
1) An item piece count checking the goods physically against the Purchase Order and
Suppliers packing list. Making sure to check the following;
2) Purchase Order number and line item number,
3) Line item quantity,
4) Description of the goods including part number,
5) The Stock Code number if applicable.
b) Item view to check completeness, any damage, and quality of the goods supplied, match
against the PO and packing list.
c) All discrepancies shall be reported on a daily basis to PTAR in accordance with PTAR
format, a photo taken and forwarded to the PTAR responsible buyer.
d) A Goods Received Report shall be developed and provided to PTAR for all goods received
and shall identify Supplier, PTAR’s Purchase Order number, line item, quantity and shall be
utilised to record all shipments for PTAR giving measurable milestones from pre-alert
through to container packing and target vessel information. The Goods Received Report
shall be updated and published on a daily basis or as directed by PTAR.
9. On Site Services/Local Transport Mode Management deliveries
PTAR require the Contractor to establish a presence at the Martabe site by way of the Site Rep
and if required adequate support personnel, and all other necessary items to manage an On Site
Service including but not limited to:
a) Coordinate and manage the day to day performance of the services including the
operations of the Contractors deliveries and associated delivery vehicles that enter the
Martabe Project site. This will include the detailed management of all goods arrival,
handling, consolidation, and local transport conducted within 100 kilometres of site.
b) Ensure that all Contractor personnel or those engaged by the Contractor comply with all
policies and procedures while on site with particular emphasis on;
1) the wearing of appropriate PPE
2) presenting at the site with 0.00 BAC in accordance with the PTAR Fitness for Work
Policy
3) abiding by all PTAR site traffic rules.
c) For delivery terms that specify “Deliver to PTAR’S Martabe Mine Site” by Suppliers own
means, no action is required. For all other goods delivered to site the Contractor shall
monitor progress and coordinate with PTAR in all aspects of the shipment and delivery.
d) Obtain any applicable approvals for “Special” cargo, including but not limited to over
dimensional and heavy loads from Supplier to the Inbound Port, including provision of
necessary escorts, pilots and police service.
e) Ensure the proactive management of Containers (ISO-Tainers, Shipping etc), to minimise
the demurrage charges to PTAR.
f) Oversee container control, coordination with view to minimizing demurrage.
g) Provide detailed management of transport traffic into local ports and along local roads
including all necessary community and local regulatory authority liaison and coordination.
h) Ensure preparation, readiness, and execution of emergency response plans when required.
i) Ensuring that containers are clean and free from any contaminants that may affect
shipments, and repair costs.
j) Contractor is responsible for all costs associated with airfares for personnel required to
perform the services, specifically the Site Rep and personnel required to cover the Site Rep
whilst on leave or rostered time off and the PM site visits.
k) Ensure all parties are kept informed of the delivery status of all incoming materials
l) Compile and distribute all requested reports in a timely manner
m) Ensure a good working knowledge of the Port Operations and Purchasing Department
procedures and objectives, along with the relevant Government regulations pertaining to
import and export of materials.
n) Attend major SCM departmental weekly coordination meetings on a regular basis to ensure
current PTAR priorities relating to material movements are known.
o) Witness the de stuffing of ocean freight deliveries on a regular basis and issue written
reports back to the concerned Consolidation Hubs of any issues and/or concerns relating to
the deliveries.
p) Assist and advise PTAR in arranging the most effective means of material movement to
and from site. Provide prompt response for shipment options for urgent materials.

10. PTAR Responsibilities

10.1. General

PTAR shall;

a) Provide shared office space on site at the Martabe Operations Supply Chain Management
Department for the Contractor to operate and maintain control of activities at site, this shall
include limited telephone access and Internet access.

b) All necessary equipment to facilitate and complete the unloading and destuffing of goods
and equipment, including materials handling equipment.

c) PTAR shall furnish or cause to be furnished to Contractor, without cost to Contractor, all
PTAR required documents, licenses, permits, etc. necessary for Contractor to initiate the
proper performance of its Work.

d) PTAR will provide on-site medical services, single accommodation, meals and laundry.

10.2. Inbound Cargo

PTAR shall:

a) Inform the Contractor as soon as possible of any purchase, acquisition, request for supply
or the like it has made with or to any Supplier, including by providing the Contractor with a
copy of all purchase orders issued to Suppliers.

b) Procure the Cargo on the most effective delivery basis to suit PTAR requirements and to
maximise inbound and outbound efficiencies.

c) Destuffing of General Cargo consolidated containers and bulk Cargo at the Site.

d) Arrange insurance of actual Cargo Liability insurance related to handling and transportation
is Contractors responsibility
e) Reimburse all duties and taxes imposed by Indonesian Government and any other country
applicable to importation of Inbound Cargo.

10.3. Outbound Cargo

PTAR shall:

a) Provide Contractor with copies of shipping documents issued to PTAR related

departments, their agencies, servants, assignees, associated entities or other consignees
for purpose of clearing customs.

b) Arrange insurance of all Cargo. Liability insurance related to handling and transportation is
Contractors responsibility

c) Reimburse any duties and taxes or royalty in relation to the Cargo imposed by reason of
law of the Republic of Indonesia or any other countries.

d) Arrange other documents (e.g. Certificate of Origin) for customs clearance upon special
request for certain shipments

10.4. Orders

10.4.1. Form of Orders

PTAR shall submit request for the transport of Cargo to and from the Site to the Contractor in the
form of a Contract Purchase Order, PTAR reference number or written instruction which complies
with either clause 10.4.2 or 10.4.3 as applicable.

10.4.2. Requirements of Valid Inbound Work order

A valid inbound Work Order shall be made by provision to the Contractor of PTAR’s purchase
order to a Supplier or written instruction. PTAR’s Purchase Order shall detail:

a) Origin of Cargo

b) Supplier name and contact details

c) Full description of Cargo

d) Date by which the Cargo is to be delivered to the Site, such date being a reasonable
amount of time to permit the transport to take place.

10.4.3. Requirements of Valid Outbound Work Order

A Work Order requesting the transport of Cargo from the Site shall be by email to the Contractor.
If the Work Order, PTAR reference number or written instruction is for the transport of Cargo from
site to a Customer or supplier. It will not be a valid Work Order unless it contains the following
information:
a) Destination of Cargo

b) Customer or supplier name and contact details

c) Full description of Cargo

d) Tonnage of Cargo

e) Date by which the Cargo is available to the Contractor at the Site

f) Date by which the Cargo is to be delivered to the Customer, such date being a reasonable
amount of time to permit the transport to take place.

11. Cost Structure

a) The Cost Structure as listed in Attachment A is a guide only on the basis of the forecast
tonnages and most likely modes/routes to and from PTAR’s site given anticipated supply
arrangements. For example with regard to inbound goods PTAR currently sees two logical
mode/route options as described in Attachment A:
1) Port-MES-MTB: This option requires goods to be shipped via ocean freight from port
of origin to Medan (which may make a logical Indonesian Consolidation Hub), then
trucked to site via Tebing Tinggi, Kota Pinang, and Padang Sidimpuan.
2) Port-JKT-PDG-SIB-MTB: This option requires goods to be shipped via ocean freight
from port of origin to Jakarta (which may make a logical Indonesian Consolidation
Hub), then trans-shipped to site via Padang and into Sibolga Port, then trucked to site
through Sibolga to Batang Toru.

The option Port-MTB included in Attachment A allows the submission of a further alternative to
these options based on Contractors recommendation.

b) Contractors are to breakdown the costs into fixed costs such as management overheads,
profits and to list the variable costs associated with providing the service. All cost to
complete the services are to be detailed and included.
c) Contractors must price each module separately. The intent is to award a Total Transport
and Logistics Management Contract package, however PTAR reserves the right to award
separate modules as it recognises that the total package may be too specialist in nature for
this to occur.
d) All values are to be in US Dollars.
e) The tonnages are forecasts based on metallurgical and engineering modelling accordingly
tonnages may change during the term of the contract.
12. Schedule of Service – Milestone Dates
The following key milestones are applicable to the Scope of Work covered under this
Specification:

a) Expected Commencement; Quarter 4 2011

b) Services Completion Date; Plus 5 years from Commencement Date

13. Material Supply

The Contractor must seek permission from PTAR to bring any hazardous material to site for
Contractors own use. Chemicals must be stored in an approved manner and affected personnel
must be trained in their safe use. All chemicals in the Contractor’s possession must have a
MSDS in both English and Indonesian languages. The above is required prior to the chemical
being allowed on site.
14. Appendices

Appendix A – SHEC and Government Relations Policy and Commitment Statements

Appendix B – Major Consumables Volume

(Information only)

Nominal Consumption for Major Consumables

Product 2012 2013 2014 2015 2016
Sodium Cyanide 2,948 6,480 6,480 6,480 6,480
Quicklime 4,000 8,415 8,415 8,415 8,415
Hydrated Lime 5,000 11,038 11,038 11,038 11,038
SAG Mill Grinding Media 2,295 3,105 3,105 3,105 3,105
Ball Mill Grinding Media 2,677 2,700 2,700 2,700 2,700
SMBS 4,454 6,750 6,750 6,750 6,750
Caustic 900 972 972 972 972
Hydrochloric Acid 800 855 855 855 855
Activated Carbon 110 135 135 135 135
Tailings Flocculant 229 270 270 270 270
Water Treatment Floc 56 96 96 96 96
Water Treatment Coag 21 29 29 29 29
Water Treatment Peroxide 600 680 680 680 680
Total Per Annum 24090 41524 41524 41524 41524
Appendix C – TEU Table

(Information only)

TEU Table
Scope of Work
Origin/Port to Volume Tonnes Nominal weight (tonnes) Frequency required to
Martabe Mine Site Type Unit Product Per Annum Yr 2 of product per TEU Martabe Commentary

PTAR will use their own "fleet" of 85 isotainers. The isotainers will be in a continuous circuit
FCL Isotainer Sodium Cyanide 6,480 22 Continual Circuit
Brisbane between Yarwun Queensland - Martabe - Yarwun. They are shipped from Brisbane port
FCL TEU General Consolidated 2,000 16 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Fremantle FCL TEU Flocculants/Coagulants 400 20 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Jakarta FCL TEU General Consolidated 3,000 16 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Padang FCL TEU Hydrated and Quicklime 19,500 20 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Laem Chabang FCL TEU SMBS/Caustic Soda 7,700 20 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Johor FCL Isotainer Hydrochloric Acid 800 20 Continual Circuit A "fleet" of isotainers will be leased and will be in a circuit between Johor - Martabe - Johor
Laem Chabang FCL Isotainer Hydrogen Peroxide 700 20 Continual Circuit A "fleet" of isotainers will be leased and will be in a circuit between LC - Martabe - LC
Colombo FCL TEU Activated Carbon 135 10 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Shanghai FCL TEU Grinding Media 5,800 20 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks
Danang FCL TEU Activated Carbon 135 10 Minimum every two weeks Shipping Line 20 foot containers, Delivery of a minimum of two weeks stock every two weeks