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Western Australia



Iron Ore (Rhodes Ridge) Agreement

Authorisation Act 1972



As at 11 Sep 2010



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Western Australia



Iron Ore (Rhodes Ridge) Agreement

Authorisation Act 1972

Contents

1.

2.

3.

4.



Short title

Execution of agreement authorised

Executed agreement to operate and take effect

Variation of Agreement to alter rates of royalty



1

1

1

1



Schedule — Iron Ore (Rhodes Ridge)

Agreement

Notes

Compilation table



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Western Australia



Iron Ore (Rhodes Ridge) Agreement

Authorisation Act 1972

An Act to authorise the execution on behalf of the State of an

agreement with Rhodes Ridge Mining Co. Ltd., Hancock Prospecting

Pty. Ltd., Wright Prospecting Pty. Ltd., and Texas Gulf Inc. relating

to the exploration for, and the development and treatment of, iron

ore and for incidental and other purposes.

1.



Short title

This Act may be cited as the Iron Ore (Rhodes Ridge)

Agreement Authorisation Act 1972 1.



2.



Execution of agreement authorised

The execution by the Premier of the State of Western Australia

acting for and on behalf of the State of an agreement in or

substantially in accordance with the form set out in the Schedule

is authorised.



3.



Executed agreement to operate and take effect

When the agreement referred to in section 2 is duly executed by

all the parties thereto, the agreement shall, subject to its

provisions, operate and take effect as though those provisions

were enacted in this Act.



4.



Variation of Agreement to alter rates of royalty

(1)



In this section —

Agreement means the agreement referred to in section 2 as

varied from time to time in accordance with its provisions.



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Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972



s. 4



(2)



Section 21.01 of the Agreement is varied —

(a) in paragraph (b) by deleting “seven and one half percentum

(7½%)” and inserting —

5.625%



(b)



in paragraph (c) by deleting “fifteen cents ($0.15) per ton.”

and inserting —

5% of the FOB revenue (computed as aforesaid).



(c)



in paragraph (d)(ii) by deleting “fifteen cents ($0.15) per

ton.” and inserting —

5% of the FOB revenue (computed as aforesaid).



(3)



Section 21.01(b), (c) and (d)(ii) of the Agreement as varied by

subsection (2) operate and take effect despite —

(a) any other provision of the Agreement; and

(b) any other agreement or instrument; and

(c) any other Act or law.



(4)



Nothing in this section affects the amount of royalty payable

under section 21.01 of the Agreement in respect of any period

before the commencement of the Iron Ore Agreements

Legislation Amendment Act 2010 Part 9.

[Section 4 inserted: No. 34 of 2010 s. 21.]



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Schedule

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Schedule — Iron Ore (Rhodes Ridge) Agreement

[s. 2]

[Heading amended: No. 19 of 2010 s. 4.]

AN AGREEMENT MADE and executed this

day of

One thousand nine hundred and seventy-two

BETWEEN THE HONOURABLE JOHN TREZISE TONKIN, MLA, THE

PREMIER OF THE STATE OF WESTERN AUSTRALIA acting for and on

behalf of the said State and its instrumentalities from time to time (hereinafter

called “the State”) of the first part RHODES RIDGE MINING CO. LTD. a

company incorporated in the State of Delaware in the United States of America

and having its executive offices situate at the 55th Floor, 200 Park Avenue New

York in the United States of America and registered in the State of Western

Australia and having its registered office there situate at the 2nd Floor,

7 Havelock Street West Perth, HANCOCK PROSPECTING PTY. LTD. a

company incorporated in the State of Western Australia and having its

registered office situate at the 14th Floor Lombard House, 251 Adelaide Terrace

Perth in that State and WRIGHT PROSPECTING PTY. LTD. a company

incorporated in the State of Western Australia and having its registered office

situate at the 14th Floor Lombard House, 251 Adelaide Terrace Perth aforesaid

(hereinafter called “the Joint Venturers” which expression shall where the

context so admits or requires extend to and include the Joint Venturers jointly

and each of them severally their and each of their successors and permitted

assigns and appointees) of the second part and TEXAS GULF INC. a company

incorporated in the State of Texas in the United States of America and having

its executive offices situated at the 55th Floor, 200 Park Avenue, New York

aforesaid and having an address for the service of notices in the State of

Western Australia at the 2nd Floor, 7 Havelock Street, West Perth aforesaid

(hereinafter called “the Guarantor” which expression shall where the context so

admits or requires extend to and include the Guarantor and also its successors

and assigns) of the third part being the Agreement referred to in Section 2 of the

enabling Act.

WHEREAS:

(a) For some time prior to the execution hereof exploration and

investigations have been carried out as to the possibility of the mining

areas hereinafter defined containing large deposits of iron ore and as a

result of such exploration and investigation the parties hereto believe

that in the mining areas there are substantial deposits of iron ore

having an average grade of 60% Fe or better and certain lesser

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deposits of limited size of higher grade that may after further study be

found to be useable as blending ore in conjunction with lower grade

iron ores which may exist within the mining areas or elsewhere.

(b) Research has been and is still being conducted by the Joint Venturers

in both Australia and the United States of America with the object of

establishing satisfactory ore crushing screening upgrading and

pelletising procedures that could be used in the treatment of iron ore

from the said deposits.

(c) The Joint Venturers have also prior to the execution hereof caused

preliminary engineering studies to be made as to the construction of a

railway between the mining areas and a port site in or in the vicinity of

the area between Dampier and Cape Lambert and the development of

such a port site.

(d) The said Rhodes Ridge Mining Co. Ltd. is a wholly owned subsidiary

of the Guarantor which as the parent company has agreed to guarantee

to the State performance by the said Rhodes Ridge Mining Co. Ltd. of

its obligations hereunder upon and subject to the terms and conditions

of the guarantee hereinafter contained.

THEREFORE IT IS MUTUALLY AGREED between the State and the Joint

Venturers as follows: —

PART I

Preliminary

CLAUSE I

SECTION 1.01 DEFINITIONS In this Agreement unless the context

otherwise admits or requires each of the following words has the meaning

hereby respectively assigned to that word namely —

“apply”, “approve”, “approval”, “consent”, “certify”, “direct”,

“notify”, “require” or “request” means apply, approve, approval,

consent, certify, direct, notify, require or request in writing, as the

case may be;

“assignee” means an associated company or a third party in whose

favour the Joint Venturers jointly have or any of them has

executed an assignment subletting or other disposition pursuant to

paragraph (a) of Section 25.04 and includes an associated

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company or third party in whose favour an appointment has been

made pursuant to paragraph (b) of Section 25.04.

“associated company” means —

(a) any company notified in writing by the Joint Venturers or

any of them to the Minister which has a paid-up capital of

not less than two million dollars ($2,000,000) and is

incorporated in the United Kingdom, the United States of

America, or the Commonwealth of Australia and

which —

(i) is promoted by the Joint Venturers or any of them

for all or any of the purposes of this Agreement

and in which the Joint Venturers or any of them

hold not less than twenty percentum (20%) of the

issued ordinary share capital or —

(ii) is related within the meaning of the term

“subsidiary” in section (6) of the Companies

Act 1961 to any company in which the Joint

Venturers or any of them hold not less than

twenty percentum (20%) of the issued ordinary

share capital and —

(b) any other company which is nominated by the Joint

Venturers or any of them and of which the Minister

approves as an associated company for the purposes of

this Agreement.

“commencement date” means the date on which this Agreement is

executed by all parties hereto;

“Commonwealth” means the Commonwealth of Australia and

includes the Government thereof for the time being;

“direct shipping ore” means iron ore which has an average pure iron

content of not less than sixty percentum (60%) which will not

pass through a one half (½) inch mesh screen and which is sold

without concentration or other beneficiation other than crushing

and screening;

“enabling Act” means the Act of Parliament of the said State entitled

“Iron Ore (Rhodes Ridge) Agreement Authorization Act 1972”;

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“export date” means the date on which the ship carrying the first

shipment of iron ore products shipped by the Joint Venturers

under this Agreement (other than iron ore shipped solely for

testing purposes) sails from the port at which it has been loaded;

“financial year” means a year commencing on and including the

1st day of July;

“fine ore” means iron ore which has an average pure iron content of

not less than sixty per cent (60%) which will pass through a one

half (½) inch mesh screen and which is sold without

concentration or other beneficiation other than crushing and

screening;

“fines” means iron ore (not being direct shipping ore or fine ore)

which will pass through a one half (½) inch mesh screen;

“f.o.b. revenue” means the sum of money remaining after deducting

from the amount of the gross purchase price (net of any amounts

which the purchaser is entitled to deduct from the gross purchase

price by way of penalty or otherwise for any defect in quality

quantity or delay in delivery) payable to the Joint Venturers or an

associated company by a purchaser thereof in respect of a

specified quantity of iron ore products sold by the Joint Venturers

or the associated company to the purchaser for shipment beyond

the Commonwealth the following items of cost namely — all

export duties and export taxes payable on the iron ore products

sold and shipped and all other costs and charges properly incurred

and payable in respect of the iron ore products by the Joint

Venturers or the associated company to the State or a third party

between the point in time when the iron ore products are placed

on ship at the Joint Venturers’ wharf and the point in time when

the iron ore products are delivered to and accepted by the

purchaser there being included in such other costs and charges —

(1) ocean freight;

(2) marine insurance;

(3) port and handling charges at port of discharge;

(4) costs of delivery from port of discharge to a smelter

nominated by the purchaser;



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(5) weighing, sampling, assaying, inspection and

representation costs incurred on discharge or delivery;

(6) shipping agency charges;

(7) import taxes payable to the country of the port of

discharge;

(8) demurrage incurred after loading and at port of discharge;

(9) such other costs and charges as the parties (having regard

inter alia to such matters as the parties to and the bona

fide nature of the transaction as the result of which the

cost or charge was incurred) shall mutually agree to

include or failing agreement as fixed by arbitration as

hereinafter provided.

For the purpose of this definition —

(a) the Minister may from time to time in respect of any of

the costs or charges mentioned in items (1) to (8)

(inclusive) above incurred in relation to any particular

shipment or sale notify the Joint Venturers in writing that

he does not regard the cost or charge as being properly

incurred and in that event should the Joint Venturers

disagree with the Minister’s decision they may refer the

matter in question to arbitration as hereinafter provided

but unless and until it is otherwise determined such cost

or charge shall be treated as being not properly incurred

and if otherwise determined the State will refund to the

Joint Venturers any royalty paid by the Joint Venturers

on the basis that the charge was not properly incurred;

(b) unless and until the Minister determines that the same is a

cost or charge coming within the category of those

mentioned in item (9) above a cost or charge mentioned

in any of the said items (1) to (8) (inclusive) which is

directly or indirectly imposed upon or incurred by the

Joint Venturers or an associated company pursuant to an

arrangement entered into between the Joint Venturers and

the State shall be treated as being not properly incurred;

(c) in the event of the parties failing to agree to the inclusion

of a cost or charge which might be included pursuant to

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item (9) and referring the same to arbitration then unless

and until it is otherwise determined such cost or charge

shall be excluded but if it is determined that the same

should be included the State will refund to the Joint

Venturers any royalty paid by reason of the same having

been excluded.

“iron ore” means iron ore from the mineral lease;

“iron ore concentrates” means products (whether in pellet or other

form) resulting from secondary processing but does not include

metallised agglomerates;

“iron ore pellets” means iron ore in pellet or other form produced by

pelletisation or a more advanced reduction or other treatment or

process from iron ore mined on the mineral lease;

“iron ore products” is an inclusive term covering iron ore of all grades

obtained from the mineral lease and also all products produced by

secondary processing any part of such iron ore;

“Joint Venturers’ wharf” means any wharf utilised by the Joint

Venturers for the purpose of shipping iron ore products produced

as the result of the operation of this Agreement and whether the

same be a wharf constructed by or on behalf of the Joint

Venturers a wharf used by the Joint Venturers in conjunction with

another or others (including the State) or any temporary structure

approved by the Minister as the Joint Venturers’ wharf for the

time being for the purposes of this Agreement;

“Land Act” means the Land Act 1933;

“locally used ore” means iron ore used by the Joint Venturers or an

associated company within the Commonwealth for secondary

processing or in an integrated iron and steel industry or any plant

for the production of steel;

“metallised agglomerates” means products resulting from the

reduction of iron ore or iron ore concentrates by any method

whatsoever and having an iron content of not less than eighty-five

percent (85%);

“mineral lease” means the mineral lease referred to in Section 9.01

and includes any renewal thereof and according to the

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requirements of the context shall describe the area of land

demised as well as the instrument by which it is demised;

“mine townsite” means a townsite or townsites established by the Joint

Venturers on or near the mining areas pursuant to this Agreement

and may include any existing townsite approved by the Minister;

“Mining Act” means the Mining Act 1904;

“mining areas” means the land described in the “particulars of mining

areas” appended to Section 3.02;

“Minister” means the Minister of the Government of the said State for

the time being responsible for the administration of this

Agreement;

“Minister for Mines” means the Minister in the Government of the

said State for the time being responsible for the administration of

the Mining Act and includes any other Minister in the said

Government for the time being temporarily undertaking such

responsibility;

“Minister for Works” means the Minister for Works in the

Government of the said State or such other member of the

Executive Council as the Governor may appoint to administer the

Rights in Water and Irrigation Act 1914;

“month” means calendar month;

“mortgagee” means an associated company or a third party in whose

favour the Joint Venturers jointly have or any of them severally

has executed a mortgage or charge pursuant to paragraph (a) of

Section 25.04;

“notice” means notice in writing;

“ore” means iron ore;

“parties” means the parties to this Agreement of the first and second

parts;

“person” or “persons” includes bodies corporate;

“the port” means and is primarily used to designate the new port to be

established in implementation of proposals made by the Joint

Venturers pursuant to Clause V whether the same be established

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by the Joint Venturers exclusively or by them in conjunction with

another or others (including the State) and should no such new

port be established the term means any existing port developed or

used by the Joint Venturers for the purposes of this Agreement by

arrangement with another or others (including the State) and in

either case the term extends to and includes as well as the land

upon which the Joint Venturers’ wharf is erected also the adjacent

land serving the Joint Venturers’ wharf and the adjacent land on

which it is proposed to locate or on which could be located or in

fact is located secondary and tertiary processing plants crushing

grinding and screening facilities stockpiling yards electric power

generating plant petroleum storage and other ancillary facilities;

“port townsite” means the townsite to be expanded or developed near

the port;

“said State” means the State of Western Australia;

“secondary processing” means the concentration or other beneficiation

of iron ore otherwise than by crushing or screening and includes

thermal electrostatic magnetic and gravity processing and the

production of pellets iron ore concentrates metallised

agglomerates and sponge iron;

“tertiary processing” means the production of pig iron by blast furnace

smelting and the production of steel by any means whatsoever;

“this Agreement” “hereof” and “hereunder” includes this Agreement

as from time to time added to varied or amended;

“ton” means a ton of two thousand two hundred and forty (2,240) lbs.

net dry weight;

“Transfer of Land Act” means the Transfer of Land Act 1893;

“wharf” includes any jetty structure;

“Year 1” means the year next following the export date and “year”

followed immediately by any other numeral has a corresponding

meaning.

SECTION 1.02 CAPTIONS

(a) The captions of the Parts into which this Agreement is divided

and the Schedule to this Agreement and each plan or other

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document referred to in this Agreement which is marked by the

parties for identification are part of this Agreement.

(b) The Table of Clauses included in this Agreement and the captions

of the Clauses and any headings to sections are for convenience

only and do not constitute part of this Agreement and the same

are not to be deemed to define or limit any of the terms of this

Agreement nor to be construed as giving any indication as to how

such terms are to be construed or interpreted.

SECTION 1.03 CONSTRUCTION

(a) References to money are to be construed as referring to

Australian currency.

(b) References to an Act are to be construed as referring to the

amendments to such Act for the time being in force and also to

any Act passed in substitution therefor or in lieu thereof and also

to the regulations for the time being in force thereunder.

(c) Where any provision of this Agreement constitutes an agreement

or undertaking by one of the parties to make a payment or to

perform some act or to carry out some obligation or to assume

some responsibility or liability or to grant some right concession

or advantage that party by its execution hereof will be deemed to

have covenanted and agreed with the other party accordingly.

(d) By virtue of Section 3 of the enabling Act this Agreement

operates and takes effect as from the commencement date

according to the tenor of the provisions thereof notwithstanding

the provisions of any other relevant existing Act of the said

Parliament and of any rule or law to the contrary.

(e) The State and the Minister will be deemed to have power and

authority to exercise all such powers and discretions and to do all

such other acts matters and things as may be required or be

necessary to be exercised or done in order to carry out and give

effect to the provisions of this Agreement and in particular the

State and the Minister will be deemed to have power —

(i) to close or vary the alignments or boundaries of any

public road and —

(ii) to resume as and for a public work any land or other

estate right or interest in land.

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SECTION 1.04 EXISTING ACTS For the purposes of this Agreement

(and for those purposes only) the provisions of any relevant existing Act will be

deemed to be modified or amended to the extent necessary to enable this

Agreement to be given full force and effect and in particular without limiting

the generality of the foregoing the Acts mentioned in Sections 1.05 to 1.08

inclusive shall be deemed to be amended to the extent indicated therein.

SECTION 1.05 MINING ACT The Mining Act will be deemed

amended as if Sections 277 and 282 thereof were both deleted therefrom.

SECTION 1.06 LAND ACT The Land Act will be deemed amended as

if —

(a) subsections (1) and (2) of Section 45A thereof were deleted

therefrom and the following substituted therefor —

45A (1) Notwithstanding anything contained in the

last preceding Sections of this Part (Part IV) of this Act the

Governor may dispense with the requirements thereof as to

the sale of town or country lands and may approve of any lot

being offered for sale or for leasing in the manner prescribed

in subsection (2) of this Section.

(2) Upon the Governor signifying approval pursuant to

subsection (1) of this Section in respect of any such lands the

Minister may offer the said lands or any part thereof for sale

or may grant leases or licences thereof for such price or

prices and for such period or periods (including rights of

renewal) and upon and subject to such other terms and

conditions and in such form as the Minister may think fit

provided that the price period or other terms and conditions

shall not be inconsistent with the provisions of any

agreement executed by the Premier of the State of Western

Australia acting for and on behalf of the said State pursuant

to the authority in that behalf given by an Act of the

Parliament of the said State. ;

(b) the proviso to Section 116 thereof was deleted therefrom;

(c) Sections 135 and 143 thereof were deleted therefrom.

SECTION 1.07 PUBLIC WORKS ACT The Public Works Act will be

deemed amended as if subsections (2) to (7) inclusive of Section 17 thereof and

also the whole of Section 17A thereof were all deleted therefrom.

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SECTION 1.08 FLOATING CHARGES Section 82 of the Mining Act

and Section 81D of the Transfer of Land Act will be deemed not to apply to a

mortgage or charge in the form commonly known as a floating charge given by

the Joint Venturers or an associated company pursuant to Section 25.04 or to a

transfer or assignment in exercise of a power of sale contained in any such

mortgage or charge.

SECTION 1.09 PARTITION No lease sub-lease licence or other title or

right granted or assigned under or in pursuance of this Agreement shall be

subject to or capable of partition and accordingly the provisions of Part XIV of

the Property Law Act 1969, will be deemed not to apply thereto.

PART II

Feasibility Studies and Preparation of Proposals

CLAUSE II

SECTION 2.01 INVESTIGATIONS AND STUDIES Beginning as soon

as practicable after the commencement date the Joint Venturers will diligently

and expeditiously explore and investigate the mining areas hereinafter

mentioned (which operations are herein referred to as “the investigations”) with

the view to preparing and submitting to the State as soon as practicable

feasibility studies (herein referred to as “the studies”) as to the various aspects

of the development of the mining areas for the mining of iron ore and the

treatment and processing thereof and also with a view to making to the State

detailed proposals as to such development as hereinafter provided.

SECTION 2.02 STATE ASSISTANCE The State will afford the Joint

Venturers all such reasonable assistance as they may require during the course

of the investigations and the studies to enable them to complete the same and to

that end will furnish such advice and commentaries as the Joint Venturers may

require and as may be reasonably practicable for the State so to do.

CLAUSE III

SECTION 3.01 ENTRY ON CROWN LANDS To the extent reasonably

necessary for the purpose of the investigations and studies and subject to the

adequate protection of the environment (including flora and fauna) the State will

permit the Joint Venturers to enter into and upon Crown land other than the

mining areas (including the lands the subject of a pastoral lease) and to survey

possible sites for their proposed operations under this Agreement.



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SECTION 3.02 RIGHT OF OCCUPANCY As soon as practicable after

the commencement date the State will cause the Minister for Mines in exercise

of the power in that behalf conferred by Section 276 of the Mining Act to

temporarily reserve from occupation the land more particularly described in the

“particulars of mining areas” appended to this Section and with the approval of

the Governor to authorise the Joint Venturers to temporarily occupy such land

(the right of the Joint Venturers so to do pursuant to such authority being

hereinafter referred to as “the right of occupancy”) for the period and upon and

subject to the terms and conditions hereinafter mentioned.

PARTICULARS OF MINING AREAS

ALL those pieces of land (containing in the aggregate an area of

322 square miles or thereabouts) being those portions of the land the

subject of Temporary Reserves 4192H, 4193H, 4266H, 4267H,

4737H, 4881H, 4882H, 4883H, and 4884H, as are delineated and

coloured green in the plan marked ‘A’ signed by or on behalf of the

parties hereto for the purpose of identification.

SECTION 3.03 SURRENDER OF EXISTING RIGHTS The right of

occupancy will be granted subject to the condition precedent that the Joint

Venturers acquire by transfer all existing rights of occupancy in to or in respect

of the mining areas and surrender the same to the Crown.

SECTION 3.04 SURVEY

(a) The Location boundaries and other dimensions of the mining

areas other than Temporary Reserves 4193H, 4881H and 4884H

have been ascertained and fixed by and the area thereof

calculated following upon a survey of such land made on behalf

of the Joint Venturers at their cost and expense prior to the

commencement date which said survey has been approved by the

State for the purposes of this Agreement and used in the

preparation of the plan marked ‘A’ mentioned in Section 3.02.

(b) The location boundaries and other dimensions of the land

comprised in Temporary Reserves 4193H, 4881H and 4884H will

be ascertained and fixed by and the area thereof calculated

following upon a survey of such land made by or on behalf of the

State at the cost and expense of the Joint Venturers as soon as

practicable after the commencement date.



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SECTION 3.05 OCCUPANCY PERIOD Subject as provided in

Section 3.06 the period of the right of occupancy will be a fixed period expiring

twelve months after the commencement date or on the date of the granting of

the mineral lease pursuant to Section 9.01 (notwithstanding that the instrument

of such lease may not be issued) whichever is the earlier date.

SECTION 3.06 OCCUPANCY RENEWAL If at any time within one (1)

month prior to the expiration of the period of the right of occupancy (whether

the period be that mentioned in Section 3.05 or any renewed period granted

pursuant to this Section) the Joint Venturers make a written request to the State

that the said period be renewed the State will cause the Minister for Mines to

renew the same for such period (not exceeding twelve months on any one

occasion) and upon and subject to the same terms and conditions but (unless the

State shall otherwise agree) the period of the right of occupancy will not be

renewed beyond the fifth anniversary of the commencement date and will expire

at noon on that date.

SECTION 3.07 CONSIDERATION FOR OCCUPANCY The Joint

Venturers will on the commencement date and thereafter on the first and every

subsequent anniversary of the commencement date during the continuance of

the period of the right of occupancy pay to the State as consideration for the

right of occupancy in advance an annual fee of $1,000 for each Temporary

Reserve comprised in the mining areas and also $26.00 for each square mile or

part of a square mile of the mining areas for the time being subject to the right

of occupancy.

SECTION 3.08 OTHER CONDITIONS OF OCCUPANCY Subject as

otherwise provided in this Clause (Clause III) the right of occupancy may be

granted or renewed upon and subject to such terms and conditions not

inconsistent with the provisions for the time being of the Mining Act as the

parties mutually agree and of which the Governor may approve.

SECTION 3.09 DETERMINATION OF OCCUPANCY The right of

occupancy will forthwith cease and determine on the happening of any of the

following events namely —

(a) upon the Joint Venturers by notice to the Minister relinquishing

the same; or

(b) upon the initial or any renewed period thereof expiring by

effluxion of time; or



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(c) upon the State granting to the Joint Venturers a mineral lease

pursuant to section 9.01 (notwithstanding that the instrument of

such lease may not be issued); or

(d) upon the Joint Venturers making default in the due and punctual

payment of any annual fee payable pursuant to Section 3.07 and

failing to comply with a notice from the State specifying such

default and calling upon the Joint Venturers to remedy the same

within a period of fourteen (14) days of the service of such

notice, or

(e) upon the Joint Venturers making default in the due performance

or observance of any of the other of the terms and conditions

upon and subject to which the right of occupancy was granted

and failing to comply with a notice from the State specifying such

default and calling upon the Joint Venturers to remedy the same

within a period of fourteen (14) days of the service of such

notice.

CLAUSE IV

SECTION 4.01 JOINT VENTURERS INVESTIGATIONS In the

course of the investigations and the studies the Joint Venturers will insofar as

they have not already done so to the reasonable satisfaction of the Minister

commence forthwith and carry out at their expense (with the assistance of

experienced consultants where appropriate) the following —

(a) a thorough geological and (as necessary) geophysical

investigation and proving of the iron ore deposits in the mining

areas and the testing and sampling of such deposits;

(b) a reconnaissance of sites of the operations proposed pursuant to

this Agreement together with the preparation of suitable maps

and drawings;

(c) an engineering investigation of the route for a railway from the

mining areas to the port or (in consultation with the owner) to

connect with any existing or proposed railway operated or to be

operated by any other party under an agreement with the State;

(d) a general survey and preliminary engineering investigation of

possible port sites in the general Cape Lambert-Dampier area

including Legendre Island;

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(e) a study of the technical and economic feasibility of the mining

transporting handling and shipping of iron ore from the mining

areas;

(f) the planning and development of a suitable mine townsite and a

suitable port townsite in consultation with the State having due

regard as to the possible or probable use of the same by others as

well as the Joint Venturers;

(g) the investigation, in areas indicated by the Minister of suitable

water supplies for mining industrial and mine townsite purposes;

(h) metallurgical and market research;

(i) a thorough assessment of the environmental impact likely to

result from operations pursuant to this Agreement together with

details of the measures proposed for the treatment of such effects;

SECTION 4.02 PORT INVESTIGATIONS After consultation with the

Minister concerning the result of the investigations and surveys mentioned in

Section 4.01(d) the Joint Venturers will employ or retain experienced consultant

engineers acceptable to the State to investigate report upon and make

recommendations as to the best overall development of a port at such location as

appears to be the location most suitable as the subject of the investigations

report and recommendations contemplated by this Section 4.02. The Joint

Venturers will require such engineers when making such report and

recommendations to have full regard for the general development of the port

with a view to its reasonable use by others and the Joint Venturers will furnish

to the State copies of such reports and recommendations. When submitting to

the Minister pursuant to Section 5.02 detailed proposals in regard to the matters

mentioned in this Section 4.02 the Joint Venturers will so far as reasonably

practicable ensure that the detailed proposals —

(a) do not materially depart from the reports and recommendations of

such engineers;

(b) provide for the best overall development of the port so far as the

same relates to the Joint Venturers’ activities;

(c) disclose any conditions of user; and

(d) where alternative proposals are submitted the Joint Venturers’

preferences in regard thereto.



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SECTION 4.03 REPORTS TO STATE The Joint Venturers will

collaborate with and keep the State fully informed as to the progress and results

of the investigations and studies and in particular as to the carrying out of the

operations as to the matters mentioned in Sections 4.01 and 4.02. For that

purpose the Joint Venturers will at least once in every quarter submit to the

State a comprehensive report of such progress and results and if and when the

Minister may reasonably require furnish the Minister with copies of all relevant

reports made by consultants and of all findings and conclusions made by the

Joint Venturers as the result of the consultants reports and consequent upon the

progress made in the investigations and studies and in the said operations but

the Joint Venturers will not be required to disclose to the State any information

findings conclusions or reports concerning or touching the economic feasibility

of any of the matters mentioned in paragraph (e) of Section 4.01 which are of a

financial nature and which the Joint Venturers consider are private and

confidential to themselves and if revealed could prejudice them or otherwise

react to their detriment in their dealings with third parties.

SECTION 4.04 STATE INVESTIGATIONS If the State concurrently

carries out its own investigations and reconnaissances in regard to all or any of

the matters mentioned in Sections 4.01 and 4.02 the Joint Venturers will

co-operate with the State therein and so far as it is reasonably practicable so to

do will consult with the representatives or officers of the State and make full

disclosures and give expressions of opinion regarding the matters mentioned in

Sections 4.01 and 4.02.

CLAUSE V

SECTION 5.01 INITIAL PORT PROPOSAL As soon as practicable

after the completion of the investigations mentioned in Section 4.02 the Joint

Venturers will submit to the Minister proposals as to the location and an outline

in sufficient detail to enable the Minister to satisfy himself as to the suitability

technical feasibility and practicability of the proposed development of the port

(having regard to the matters mentioned in paragraph (a) of Section 5.02) and

the Minister will within two (2) months after such submission notify the Joint

Venturers whether he approves or otherwise of such proposals or the Minister

may within that time himself suggest an alternative proposal. If the Minister

does not approve of the Joint Venturers’ proposals or if he himself submits an

alternative proposal the Minister will disclose his reasons for so doing by

specifying the same in the said notice and afford the Joint Venturers ample

opportunity to consult with him and themselves to submit further or alternative

proposals and to consider any alternative proposal suggested by the Minister.

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When considering any of the Joint Venturers’ proposals and in making his own

proposal the Minister will have regard to the possible future requirements of

others (including the State) and no preference or other priority will be given to

the Joint Venturers or their proposals by reason only that the proposals were

submitted for consideration first before proposals from any other party.

SECTION 5.02 DETAILED PROPOSALS Subject to the proposals or

any alternative proposals as to the location and development of the port being

approved the Joint Venturers will on or before the fifth anniversary of the

commencement date or on or before such later date as the Minister may approve

submit to the Minister detailed proposals (herein referred to as “the said

proposals”) which shall include (where practicable) appropriate plans and

(where reasonably required by the Minister) appropriate specifications in

respect of the mining of iron ore on and the future development of the mining

areas (or so much thereof as is comprised in the mineral lease mentioned in

Section 9.01) and detailed particulars as to the measures proposed to be taken

for the protection of the environment should the same be approved or be

deemed to be approved and also (to the fullest extent reasonably practicable)

detailed particulars as to the location area layout design number materials to be

used in and time programme for the commencement and completion of the

construction or the provision (as the case may be) of each of the following

matters —

(a) (to the extent not already covered by the proposals mentioned in

Section 5.01) the port and port development including the

dredging thereof and the disposal and depositing of the spoil the

provision of navigational aids the Joint Venturers’ wharf the

berth and swinging basin proposed in connection with the Joint

Venturers’ use thereof and the port installations facilities and

services to be available all of which are to be of such nature and

extent as to be capable of and suitable for adaption to permit use

of the Joint Venturers’ wharf by ships having a capacity to carry

60,000 tons of iron ore.

(b) the railway from the mining areas to the port or to connect with

an existing railway and its proposed operation including joint

user conditions (if any) fencing (if any) crossing places and grade

separation or other forms of acceptable protection at intersections

with public roads;

(c) the development of the mine townsite and the port townsite

including services and facilities in relation thereto;

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(d) housing;

(e) water supply;

(f) roads;

(g) generation transmission and distribution of electricity;

(h) airfields;

(i) the leases licenses or other tenures of land (if any) required from

the State;

(j) disposal of waste materials;

(k) drainage;

(l) dust control measures; and

(m) any other works, services or facilities proposed or required by the

Joint Venturers.

SECTION 5.03 SUBJECT OF PROPOSALS Initially the said proposals

may with the approval of the Minister and if so required by the State will be

submitted as to the matter or matters mentioned in one or more of

paragraphs (a) to (m) of section 5.02 and in that event submission of the said

proposals as to the matter or matters mentioned in the other or others of the said

paragraphs will be deferred but in any event will be finally submitted within the

time mentioned in Section 5.02.

SECTION 5.04 USE OF EXISTING INFRASTRUCTURE The said

proposals relating to any of the matters mentioned in Section 5.02 may with the

approval of the Minister and that of any third parties concerned instead of

providing for the construction of new facilities of the kind therein mentioned

provide for the use by the Joint Venturers upon reasonable terms and conditions

of any existing facilities of such kind.

SECTION 5.05 MINISTER TO BE SATISFIED At the time when the

Joint Venturers submit the said proposals they will be required to show to the

reasonable satisfaction of the Minister that the investigations and the studies in

so far as the same are relevant to the said proposals have been completed. In

order to be so satisfied the Minister may require the Joint Venturers to produce

to him acceptable evidence of —



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(a) marketing arrangements demonstrating the Joint Venturers’

ability to sell iron ore and iron ore products in accordance with

the said proposals;

(b) the availability of finance necessary for the fulfilment of the

operations to which the said proposals refer; and

(c) the readiness of the Joint Venturers to embark upon and proceed

to carry out the operations referred to in the said proposals.

SECTION 5.06 PORT LOCATION The Minister’s determination in

respect of the Joint Venturers’ proposals relating to the location of the port and

in respect of proposals relating to the overall development of the port and the

location of the port townsite will be conclusive final and binding on all parties

and the same shall not be referable to arbitration.

CLAUSE VI

SECTION 6.01 CONSIDERATION OF PROPOSALS On receipt of the

said proposals the Minister may —

(a) defer consideration of or decision upon the same until such time

as the Joint Venturers submit a further proposal or proposals in

respect of some one or more of the other matters mentioned in

one or more of the paragraphs (a) to (m) of Section 5.02 not

covered by the said proposals; or

(b) approve of the said proposals either wholly or in part without

qualification or reservation; or

(c) require as a condition precedent to the giving of his approval to

the said proposals that the Joint Venturers make such alteration

thereto or comply with such conditions in respect thereto as he

(having regard to the circumstances including the overall

development of and the use by others as well as the Joint

Venturers of all or any of the facilities proposed to be provided)

thinks reasonable and in such case will disclose to the Joint

Venturers the reasons for requiring such conditions precedent.

SECTION 6.02 MINISTER’S DECISION The Minister will within

two (2) months after receipt of the said proposals give notice to the Joint

Venturers of his decision in respect to the same and will disclose to the Joint

Venturers by such notice the reasons for such decision.



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SECTION 6.03 CONSULTATION WITH MINISTER If the decision of

the Minister is as mentioned in either of paragraphs (a) or (c) of Section 6.01 he

will afford the Joint Venturers full opportunity to consult with him and should

they so desire to submit new proposals either generally or in respect of some

particular matter.

SECTION 6.04 MINISTER’S DECISION SUBJECT TO

ARBITRATION If the decision of the Minister is as mentioned in

paragraph (c) of Section 6.01 and the Joint Venturers consider that such

decision or any condition precedent imposed is technically financially

economically or otherwise unreasonable the Joint Venturers may within two (2)

months after receipt of the notice mentioned in Section 6.02 elect to refer to

arbitration in the manner hereinafter provided the question of the reasonableness

of such decision or of the condition precedent.

SECTION 6.05 REASONABLENESS OF MINISTER’S DECISION In

addition to any other matter to which the arbitrator is required (whether

pursuant to the provisions of Section 32.01 or otherwise) to have regard in

considering the reasonableness of any decision of the Minister made pursuant to

Section 6.01 the Minister will not be regarded to have acted unreasonably if he

shall defer his decision on a proposal made in relation to the matters mentioned

in paragraph (i) of Section 5.02 until the said proposals in relation to the matters

mentioned in the other paragraphs of Section 5.02 have become or deemed to

have become approved proposals.

SECTION 6.06 ARBITRATING AWARD An award made on an

arbitration pursuant to Section 6.04 shall have force and effect as follows —

(a) if by the award it is adjudged that the condition precedent is

reasonable then the decision of the Minister in respect to the said

proposals shall stand; or

(b) if by the award it is adjudged that the condition precedent is

unreasonable then the said proposals shall be deemed to have

been approved by the Minister in the form in which the same

were submitted.

SECTION 6.07 APPROVED PROPOSALS DEFINED Proposals which

are approved by the Minister as provided in paragraph (b) of Section 6.01 and

those (if any) which are deemed to have been approved as provided in

paragraph (b) of Section 6.06 are hereinafter referred to as “approved

proposals”.



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CLAUSE VII

SECTION 7.01 ADDITIONAL PROPOSALS If the Joint Venturers at

any time during the continuance of this Agreement desire to expand their

activities beyond those specified in any approved proposals they will give notice

of such desire to the Minister and within two (2) months thereafter will submit

to the Minister detailed proposals in respect of all matters covered by such

notice and such of the other matters mentioned in paragraphs (a) to (m) of

Section 5.02 as the Minister may require. The provisions of Clauses V and VI

shall mutatis mutandis apply to detailed proposals submitted pursuant to this

Section save that the provisions of Section 5.05 shall not apply.

SECTION 7.02 BASIS OF SUBMISSION In the event of the Joint

Venturers submitting detailed proposals pursuant to Section 7.01 or if as a

consequence of their submitting detailed proposals pursuant to Section 23.01 the

Minister requires further detailed proposals to be submitted on any of the said

matters mentioned in paragraphs (a) to (m) of Section 5.02 (which said detailed

proposals and said further detailed proposals are herein referred to as

“additional proposals”) then subject as provided in Section 7.03 the additional

proposals will be submitted on the basis that should the same become approved

proposals the provisions of Clause XVIII will apply mutatis mutandis in respect

of any increase in the extent of the services and facilities mentioned in

Section 18.01 and also in respect of the provision of the additional services or

facilities (whether of the kind mentioned in Section 18.01 or not) occasioned in

either case by the additional proposals becoming approved proposals.

SECTION 7.03 DETERMINATION OF JOINT VENTURERS’

OBLIGATIONS The extent of the Joint Venturers’ responsibilities under

Clause XVIII to provide the capital cost of and to maintain any increased or

additional services and facilities of the kind mentioned in Section 18.01

occasioned by the additional proposals or any of them becoming approved

proposals will be determined by the Minister after discussion and negotiation on

such matters with the Joint Venturers and in making such determination the

Minister will have regard (inter alia) to the current and anticipated composition

of any mining or other town affected and the extent to which the State’s current

capital resources will permit of its undertaking its responsibilities ordinarily to

provide the capital cost of and maintain such services and facilities.

CLAUSE VIII

SECTION 8.01 DETERMINATION BEFORE

IMPLEMENTATION In any of the following events namely —

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(a) if the right of occupancy ceases and determines pursuant to

Section 3.09; or

(b) if the Joint Venturers give to the State notice of their intention to

abandon or discontinue the investigations and the studies; or

(c) if the Joint Venturers fail within the time (or any extension

thereof) limited by Section 5.02 to submit any proposals and fail

to satisfy the Minister that they are then diligently and actively

conducting the necessary investigations and studies incidental to

the preparation of the proposals; or

(d) if the effect of an award made upon an arbitration under

Section 6.04 is that the decision of the Minister is to stand and the

Joint Venturers fail within three (3) months after the making of

the award to give notice that they accept the same and propose

forthwith to implement the proposals in respect of which the

award was made —

the State may give to the Joint Venturers one month’s notice determining this

Agreement and on the expiration of such notice this Agreement will cease and

determine and neither party will have any claim against the other in respect of

any matter or thing arising out of or done or performed or omitted to be done or

performed under this Agreement except as provided under Clause XXVI.

PART III

Implementation of Proposals

CLAUSE IX

SECTION 9.01 MINERAL LEASE As soon as practicable after the said

proposals become approved proposals the State will in accordance with the

relevant approved proposal on the application of the Joint Venturers cause to be

granted to them a mineral lease in the form set out in the Schedule to this

Agreement for the mining of iron ore from such part or parts of the land

comprised in the mining areas as is or are then subject to the right of occupancy

and referred to in the said proposals. The following provisions will apply to the

mineral lease —

(a) the total area of the land the subject thereof will not exceed three

hundred (300) square miles;



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(b) the boundaries of the land comprising such area will be so located

as to form either a single parallelogram or a number of

parallelograms;

(c) the rent reserved thereby will be that fixed in Section 9.04;

(d) the Joint Venturers will therein covenant to pay to the State in

addition to the said rent the royalties fixed in Section 21.01;

(e) subject to the due payment by the Joint Venturers of the said rent

and royalties and to the due performance and observance by them

of their other obligations thereunder and of their obligations

under this Agreement the term thereof will be twenty one (21)

years as from the date of the granting thereof but the Joint

Venturers will during the continuance of this Agreement have the

right to take successive renewals of the said term each for a

period of twenty one (21) years upon the same terms and

conditions subject to the sooner determination of the said term

upon the cessation or determination of this Agreement. The said

right will be exercisable by the Joint Venturers making written

application for any such renewal not later than one month before

the expiration of the current term of the mineral lease;

(f) subject to paragraphs (a) to (e) inclusive of this Section and as in

this Agreement otherwise provided all relevant provisions of the

Mining Act and the Regulations thereunder will apply but subject

to their discharging and carrying out their obligations under this

Part (Part III) of this Agreement the Joint Venturers will not be

required to comply with the labour conditions imposed by the

said Act in respect of mineral leases.

SECTION 9.02 SURVEY The State will cause to be made any survey

necessary to define the area and boundaries of the land to be comprised in the

mineral lease and the Joint Venturers will upon demand made on or after the

completion of such survey pay to the State the cost thereof. The Minister for

Mines may decline to issue the instrument for the mineral lease until such

survey is completed.

SECTION 9.03 SURRENDER OF PORTIONS Notwithstanding the

provisions of paragraph (e) of Section 9.01 the Joint Venturers may from time

to time (with abatement of future rent in respect to the area surrendered but

without any abatement of rent already paid or any rent which has become due



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and has been paid in advance) surrender to the State all or any portion or

portions (of reasonable size and shape) of the mineral lease.

SECTION 9.04 RENTAL The rent payable by the Joint Venturers under

the mineral lease will be an annual rent (payable annually in advance) of a sum

equal to seventy cents ($0.70) per acre per annum calculated on the total area of

land for the time being the subject of the mineral lease. The said rent will run as

from the date of the granting of the mineral lease on which date the first

payment of rent will become due and payable notwithstanding that the survey

mentioned in Section 9.02 may not have been commenced or completed or the

instrument for the mineral lease may not have been issued.

SECTION 9.05 OTHER LEASES The State will to such extent as may

be reasonably practicable on the application of the Joint Venturers from time to

time grant to the Joint Venturers or assist them in obtaining the grant of leases

and other rights for limestone, dolomite, granite, diorite, silica sand and other

minerals and substances reasonably required by the Joint Venturers for the

purposes of this Agreement.

SECTION 9.06 EXCLUSIVE MINING RIGHTS The State will not

during the continuance of this Agreement register any claim or grant any lease

or other mining tenement under the Mining Act or otherwise whereby any

person other than the Joint Venturers might under the laws relating to mining or

otherwise obtain any rights to mine or take natural substances (other than

petroleum as defined by the Petroleum Act 1967) from within the mineral lease

unless the Minister reasonably determines that the registration or grant is not

likely unduly to prejudice or interfere with the Joint Venturers’ operations

hereunder.

SECTION 9.07 ACCESS OVER MINERAL LEASE The Joint

Venturers will at all times permit the State and third parties (with or without

stock vehicles and rolling stock) to have access to and to pass over the mineral

lease (by separate route, road or railway) so long as that access and passage

does not unduly prejudice or interfere with the operations of the Joint Venturers

under this Agreement.

SECTION 9.08 LAND RESUMPTION The State will as and for a

public work under the Public Works Act 1902 resume any land required for the

purposes of this Agreement and will if it considers it expedient so to do sell

lease or otherwise dispose of the land to the Joint Venturers.



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CLAUSE X

SECTION 10.01 LEASES FOR OTHER PURPOSES The State will in

compliance on its part with the approved proposals as and when required by the

Joint Venturers so to do cause to be granted to the Joint Venturers such other

leases of Crown lands as the parties may consider reasonable and necessary for

all or any of the following purposes namely town sites, private roads, railway

lines and sidings, tailing areas, over-burden areas, water pipelines, pumping

installations and reservoirs, airport, power transmission lines and stockpile areas

and for any other of the purposes of this Agreement. Such leases will be

granted for such periods at such rentals and upon and subject to such other

terms and conditions as shall be reasonable having regard to the obligations of

the Joint Venturers under this Agreement.

SECTION 10.02 SPECIAL LEASES Pursuant to Section 10.01 the State

will in particular when required by the Joint Venturers so to do cause to be

granted to it —

(a) a special lease (or special leases) of Crown land at the mine

townsite for residential, professional, business, commercial and

industrial purposes and for the purpose of providing communal

facilities. Such special lease will be granted upon all usual terms

and conditions and in particular will contain the following

provisions —

(i) the term thereof (unless sooner determined) will expire

on the same date as that on which the term of the mineral

lease or any renewal thereof terminates or is determined;

(ii) the rental payable thereunder will be one peppercorn per

annum payable if and when demanded;

(iii) the Joint Venturers will have the right during the

continuance thereof to purchase (for a price comparable

with that charged by the State for other Crown land

released for freehold sale in similar towns in the general

region of the Joint Venturers’ operations) the fee simple

of any parcel or lot being part of the land thereby

demised on which the Joint Venturers have erected

buildings or structures (not being dwellings) costing at

least ten thousand dollars ($10,000) or dwellings costing

at least seven thousand dollars ($7,000);



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(b) a special lease (or special leases) of Crown land at or near the

port for industrial stockpiling, ship loading, power generation and

other similar purposes. Such special lease will be granted upon

all usual terms and conditions and in particular will contain the

following provisions —

(i) the term thereof will (unless sooner determined) expire

on the same date as that on which the term of the mineral

lease or any renewal thereof terminates or is determined;

(ii) the rental payable thereunder will be an annual rental of

two dollars ($2.00) per acre payable in advance;

(c) notwithstanding the provisions contained in the mineral lease or

any other lease granted pursuant to either of paragraphs (a) or (b)

of this Section 10.02 whereby the rent payable thereunder and the

times at which such rent is so payable are fixed the Joint

Venturers will during the continuance of this Agreement from

and after the commencement of Year 16 pay to the State as and

by way of an additional annual rent to that payable under such

one or more of such leases as the Joint Venturers may from time

to time at their option in a notice to the State designate a sum

equal to 25 cents per ton on all iron ore products in respect of

which a royalty is payable under this Agreement in the ensuing

financial year. The said additional rent shall be paid within

three (3) months of the shipment sale use or production as the

case may be of the said iron or products being included in a

return to the State under Section 21.03.

CLAUSE XI

SECTION 11.01 NO RESUMPTION Subject to the performance by the

Joint Venturers of their obligations hereunder the State will not resume or suffer

or permit to be resumed by any instrumentality or by any local or other

authority of the said State any portion of the land the subject of any special lease

mentioned in Section 10.02 the resumption of which would unduly prejudice or

interfere with the Joint Venturers’ works and activities conducted or reasonably

likely or contemplated to be conducted thereon or any portion of the land the

subject of the mineral lease whereon any of the Joint Venturers’ works are

situate or are reasonably likely or contemplated to be situate the resumption of

which would unduly prejudice or interfere with the Joint Venturers’ mining or

other activities including mining or other activities conducted or reasonably

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likely or contemplated to be conducted thereon nor will the State create or grant

or permit or suffer to be created or granted by an instrumentality or authority of

the said State any road right of way or easement of any nature or kind

whatsoever over or in respect of the land comprised in the said leases whereon

any of the Joint Venturers’ works are situate or are reasonably likely or

contemplated to be situate without the consent in writing of the Joint Venturers

first had and obtained which consent the Joint Venturers agree they will not

arbitrarily or unreasonably withhold.

SECTION 11.02 NO DISCRIMINATORY RATES Except to the extent

provided by this Agreement the State will not impose or permit or suffer any

instrumentality of the said State or any local or other authority to impose

discriminatory taxes, rates or charges of any nature whatever on or in respect of

the titles, property or other assets, products, materials or services used or

produced by or through the operations of the Joint Venturers required to be

carried out under this Agreement and the State will not take or permit any such

instrumentality or any local or other authority to take any other discriminatory

action that would deprive the Joint Venturers of the rights granted or intended to

be granted to them under this Agreement.

SECTION 11.03 ZONING The State will ensure that land the subject of

the mineral lease or any other lease licence or easement granted under or

pursuant to this Agreement and all freehold land or land of any other tenure

used or occupied by the Joint Venturers for any of the purposes of this

Agreement will not except as provided in this Agreement be made subject to

any such restriction as to its use as would prevent or unreasonably hinder the

Joint Venturers carrying out any of the operations required or permitted to be

carried out under this Agreement whether the restriction be by way of zoning

regulation, by-law or other exercise of statutory power by the State or any local

or other authority.

SECTION 11.04 VALUATION BASIS The State will ensure that

notwithstanding the provisions of any Act or anything done or purported to be

done under any Act the valuation of all land (whether of a freehold or leasehold

nature) the subject of this Agreement (except any part upon which for the time

being a permanent residence is erected or which for the time being is occupied

in connection with that residence and except also any part upon which for the

time being there stands any improvements that are used in connection with a

commercial undertaking not directly connected with the operations of the Joint

Venturers under this Agreement) will for rating purposes be deemed to be on

the unimproved value thereof and no such land will be subject to any

discriminatory rate but the Joint Venturers will be at liberty should they so

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desire to make the election provided for by Section 533B of the Local

Government Act 1960.

CLAUSE XII

SECTION 12.01 IMPLEMENTATION OF PROPOSALS The Joint

Venturers will within four (4) years next following the date on which all the

said proposals required to be submitted pursuant to Section 5.02 have become

approved proposals at a cost of not less than sixty million dollars

($60,000,000) construct install provide and do all things necessary to enable

them to mine from the mineral lease to transport by rail to the Joint

Venturers’ wharf and to commence shipment therefrom in commercial

quantities at an annual rate of not less than one million (1,000,000) tons of

iron ore and without lessening the generality of this provision the Joint

Venturers shall within the aforesaid period or extended period as the case

may be —

(a) construct install and provide upon the mineral lease or in the

vicinity thereof or at the port (as the case may be) mining plant

and equipment crushing screening stockpiling and car loading

plant and facilities power house workshop and other things of a

design and capacity adequate to enable the Joint Venturers to

meet and discharge their obligations hereunder and to mine

handle load and deal with not less than three thousand (3,000)

tons of iron ore per diem such capacity to be built up

progressively to not less than ten thousand (10,000) tons of iron

ore per diem within three (3) years next following the export

date;

(b) actually commence to mine transport by rail and ship from the

Joint Venturers’ wharf iron ore from the mineral lease so that the

average annual rate during the first two years after export date

shall not be less than one million (1,000,000) tons.

CLAUSE XIII

SECTION 13.01 CONSTRUCTION OF RAILWAY Subject to the State

assuring to the Joint Venturers all necessary rights in or over Crown lands

available for the purpose the Joint Venturers will in a proper and workmanlike

manner and in accordance with recognised standards for railways of a similar

nature operating under similar conditions construct along the route specified in

the approved proposals (but subject to the provisions of the Public Works

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Act 1902, to the extent that they are applicable) the railway having a four feet

eight and one-half inch (4 ft. 8½ in.) gauge specified in the approved proposals

and will also construct inter alia any necessary deviations loops spurs sidings

crossings points bridges signalling switches and other works and appurtenances

and provide for crossing places and (where appropriate and required by the

Minister) flashing lights boom gates grade separation or other protective devices

at places where the specified railway crosses or intersects with major roads or

existing railways (all of which together with the specified railway being

hereinafter referred to as “the said railway”) and will operate the said railway

with sufficient and adequate locomotives freight cars and other railway stock

and equipment to haul at least one million (1,000,000) tons of iron ore per

annum.

SECTION 13.02 OPERATION OF RAILWAY The Joint Venturers will

during the continuance of this Agreement operate the said railway in a safe and

proper manner and where they can do so without unduly prejudicing or

interfering with their other operations hereunder they will provide crossing

places for livestock and also for any roads or other railways which now exist or

in the future may be constructed and which cross or may be required to cross the

said railway.

SECTION 13.03 OTHER PASSENGERS AND FREIGHT Where they

can do so without unduly prejudicing or interfering with their operations

hereunder and subject to the payment to them of the charges prescribed by and

for the time being payable under any by-laws made by the Joint Venturers in

respect of the transporting of passengers and the carriage of freight over the said

railway and subject to the due compliance with the other requirements and

conditions prescribed by such by-laws (or should there be no such by-laws for

the time being in force then subject to the payment of such charges and the due

compliance with such requirements and conditions as in either case are

reasonable having regard to the cost to the Joint Venturers of the construction

and operation of the said railway) the Joint Venturers will if and when

reasonably required so to do by the State transport passengers and carry the

freight of the State and third parties over the said railway but in relation to the

carriage of such freight the Joint Venturers will not be deemed to be a common

carrier at law or otherwise.

CLAUSE XIV

SECTION 14.01 ROAD CONSTRUCTION Subject to the State

assuring to the Joint Venturers all necessary rights in or over Crown lands

available for the purpose the Joint Venturers will at their own cost and expense

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construct such new roads as they may reasonably require for the purposes of this

Agreement, such roads to be of such widths, of such materials, with such gates

crossings (level or grade separated where required) and pass-overs for cattle

sheep and other livestock and along such routes as the parties mutually agree

after consideration of the requirements of the Commissioner of Main Roads.

Except to the extent that the Joint Venturers’ relevant approved proposal

otherwise provides, the Joint Venturers will allow the public to use free of

charge any roads constructed or upgraded pursuant to or for the purposes of this

Agreement so long as such use will not unduly prejudice or interfere with the

Joint Venturers’ operations hereunder.

SECTION 14.02 USE OF PUBLIC ROADS The Joint Venturers will

have the right to use any public roads that may from time to time exist in the

area of their operations under this Agreement both prior to the commencement

date and also in the course of their operations hereunder. If the exercise by the

Joint Venturers of such right results in or is likely to result in intensive use of

any public road whereby excessive damage or deterioration is caused thereto or

whereby the road becomes inadequate for use by the Joint Venturers and the

public the Joint Venturers will upon demand (except where and to the extent

that the Commissioner of Main Roads agrees to bear the whole or part of such

cost) pay to the State or the local authority concerned or other authority having

control of such road the cost of preventing or making good such damage or

deterioration or of upgrading the road to a standard commensurate with the

increased traffic.

SECTION 14.03 ROAD UPGRADING If required by the Joint

Venturers the State will at the Joint Venturers’ cost and expense (except where

and to the extent that the Commissioner of Main Roads agrees to bear the whole

or any part of the cost) widen upgrade or realign any public road existing from

time to time which the Joint Venturers desire to use for their operations

hereunder.

SECTION 14.04 LIABILITY FOR USE OF ROADS

(a) For the purpose of determining whether and the extent to

which —

(i) the Joint Venturers are liable to any person or body

corporate (other than the State) or

(ii) an action is maintainable by any such person or body

corporate



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in respect of the death or injury of any person or damage to any

property arising out of the use of any of the roads for the

construction or maintenance of which the Joint Venturers are

responsible hereunder and for no other purpose the Joint

Venturers shall be deemed to be a municipality and the said roads

shall be deemed to be streets under the care control and

management of the Joint Venturers.

(b) For the purposes of this Section the terms “municipality” “street”

and “care control and management” shall have the meanings

which they respectively have in the Local Government Act 1960.

CLAUSE XV

SECTION 15.01 COASTAL WATER REQUIREMENTS The Joint

Venturers will give to the State not less than two (2) years notice of the

estimated amount of water likely to be required for consumption at the port and

at the port townsite and of the rate or rates at which the same in each case will

be required to be supplied. The said estimated amounts or such other amounts

as the parties may agree in that connection are hereinafter called “the Joint

Venturers’ coastal water requirements”.

SECTION 15.02 COASTAL WATER SEARCH Upon receipt of such

notice the State will in collaboration with the Joint Venturers and in accordance

with a mutually agreed programme and budget at the expense of the Joint

Venturers search in areas agreed to by the parties for subterranean water sources

sufficient to supply the Joint Venturers’ coastal water requirements.

SECTION 15.03 DEVELOPMENT OF WATER SOURCES In the

event of the search mentioned in Section 15.02 identifying and proving

subterranean water sources which the parties mutually agree are adequate to

satisfy the Joint Venturers’ coastal water requirements the State will in

accordance with a mutually agreed programme and budget develop the said

water sources by constructing or arranging to have constructed at the Joint

Venturers’ expense all bores valves pipelines meters tanks equipment and

appurtenances (in this Clause called “water works”) necessary to produce a

water supply capacity sufficient to satisfy the Joint Venturers’ coastal water

requirements.

SECTION 15.04 PROGRAMME AND BUDGET If —



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(a) within six (6) months after receipt of the notice mentioned in

Section 15.01 the parties fail to produce a mutually agreed

programme and budget for the purposes of Section 15.02 or —

(b) within six (6) months after identifying and proving the

subterranean water source the parties fail to produce a mutually

agreed programme and budget for the purpose of

Section 15.03 —

then the latest proposal of the State in respect of such programme and budget

will in either case be deemed to be the mutually agreed programme and budget

for the purposes of Section 15.02 or Section 15.03 (as the case may be) unless

the Joint Venturers within the time fixed in the paragraph (a) or paragraph (b) of

this Section 15.04 (as the case may be) refer the matter to arbitration under

Section 32.01 but nothing contained in this Section will effect the obligation of

the State at the Joint Venturers’ expense to comply with Section 15.02.

SECTION 15.05 ADDITIONAL CAPACITY The State may in its

discretion further develop the said water sources by constructing water works

capable of achieving a capacity greater than that needed to meet the Joint

Venturers’ coastal water requirements and in that event the Joint Venturers will

pay to the State a sum or sums to be mutually agreed as being the Joint

Venturers’ fair share of the cost of constructing the same.

SECTION 15.06 STATE TO SUPPLY WATER To the extent that the

water sources developed by the State pursuant to Sections 15.02 and 15.03 are

hydrologically capable so to do the State shall supply the Joint Venturers’

coastal water requirements from such sources up to an amount and at a rate not

less than that set out in the notice given pursuant to Section 15.01 but should

such sources prove hydrologically inadequate of meeting the Joint Venturers’

coastal water requirements the State may limit the amount of water which may

be taken from such sources at any one time or from time to time to the

maximum which such sources are hydrologically capable of meeting.

SECTION 15.07 INLAND WATER REQUIREMENTS. The Joint

Venturers will give to the State not less than six (6) months notice of the

estimated amount of water likely to be required for consumption at the mine

townsite and also elsewhere within or near the mineral lease in order to enable

them to implement their obligations hereunder and of the rate or rates at which

the same in each case will be required to be supplied. The said estimated

amounts or such other amounts as the parties may agree in that connection are

hereinafter called “the Joint Venturers’ inland water requirements”.



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SECTION 15.08 INLAND WATER SEARCH The Joint Venturers will

in collaboration with the State search for and make investigations to establish

the availability of suitable subterranean water sources within the mineral lease

or at other locations approved by the Minister as the parties mutually agree and

will employ and retain experienced groundwater consultants where appropriate

and will furnish the Minister with copies of the consultants’ reports or

alternatively if so requested by the Joint Venturers the State will carry out the

said search and investigations at the Joint Venturers’ expense.

SECTION 15.09 WATER WORKS CONSTRUCTION In the event of

the search mentioned in Section 15.08 identifying and proving subterranean

water sources which the parties agree are adequate to satisfy the Joint

Venturers’ inland water requirements the Joint Venturers will provide and

construct at their own expense to standards and designs satisfactory to the

reasonable requirements of the said Minister and in accordance with their

relevant proposals all water works necessary to draw transport use and dispose

of water drawn from such sources in accordance with the licences issued to the

Joint Venturers pursuant to Section 15.10.

SECTION 15.10 LICENCE

(a) The Joint Venturers will make application under the provisions of

the Rights in Water and Irrigation Act 1914 to the Minister for

Works for a licence to draw water up to an amount and at a rate

not less than that set out in the notice given pursuant to

Section 15.07 from the subterranean water sources mentioned in

Section 15.09 and the State will ensure that the said Minister will

grant to the Joint Venturers such licence;

(b) Should such water sources subsequently be found to be

hydrologically inadequate to meet the Joint Venturers’ inland

water requirements the said Minister may limit the amount of

water which may be taken from such water sources at any one

time or from time to time to the maximum which the same are

hydrologically capable of meeting.

SECTION 15.11 REVOCATION OF LICENCE If during the currency

of a licence granted under Section 15.10 the Minister is of the opinion that it is

desirable that the water sources from which the Joint Venturers are licensed to

draw water and the water works constructed by the Joint Venturers pursuant to

Section 15.09 be made available to the State for such purposes, (inter alia) as

water conservation water management utilisation of unused hydrological



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capacity supply of water to third parties (where such supply will not unduly

prejudice or interfere with the Joint Venturers’ operations hereunder) and the

establishment of a regional water supply system incorporating the area of

operations of the Joint Venturers the Minister will (after first affording the Joint

Venturers an opportunity to consult with him) so notify the Joint Venturers and

the Joint Venturers will after the expiration of 6 months from the date of such

notice relinquish the ownership control and operation of the said water works to

the State and thereupon the State will assume the ownership control and

operation of the same and will cause the Minister for Works to revoke all

relevant licences to draw water previously issued to the Joint Venturers. The

State will not be liable to pay the Joint Venturers compensation in respect of the

water works so relinquished or the licences so revoked. Immediately after the

revocation of such licences the State will (subject only to the continued

hydrological availability of water from the water sources previously the subject

of such licences) commence and thereafter continue to supply water to the Joint

Venturers up to the same amount and at the same rate as that which the Joint

Venturers would have been entitled to draw under such revoked licences and

paragraph (b) of Section 15.10 will apply as if included in this Section.

SECTION 15.12 REGIONAL WATER SUPPLY The State may in its

discretion develop any district or regional water supply and for the purposes

thereof construct water works to a greater capacity than that required to supply

the Joint Venturers’ inland water requirements but in that event the cost of the

water works so constructed shall be shared by the parties in such manner as they

mutually agree to be fair in all the circumstances.

SECTION 15.13 NON-POTABLE WATER The Joint Venturers will so

design and construct their plant and facilities for the mining handling processing

and transportation of iron ore that as far as practicable non-potable water may

be used therein.

SECTION 15.14 CHARGES FOR WATER The Joint Venturers will

pay to the State for water supplied by it pursuant to this Clause a fair price to be

mutually agreed between the parties but such rate will not be less than the actual

cost incurred by the State in supplying the water to the Joint Venturers including

operating maintenance and overhead costs and a provision for replacement of

the necessary water works. Notwithstanding the foregoing provision the Joint

Venturers will pay to the State in respect of water supplied by the State to the

Joint Venturers for domestic purposes such charges as are levied from time to

time pursuant to the provisions of the Country Areas Water Supply Act 1947.



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SECTION 15.15 ADDITIONAL WATER SEARCH Should the State at

any time pursuant to Section 15.06 or paragraph (b) of Section 15.10 limit the

amount of water to be taken from the water sources therein mentioned to the

maximum amount which such water sources are hydrologically capable of

meeting the Joint Venturers will collaborate with the State in a search at the

Joint Venturers’ expense for new or additional subterranean water sources with

a view to restoring the full quantity or quantities of water required by the Joint

Venturers and such search will (if necessary and agreed between the parties)

extend to and include investigations into surface water resources made pursuant

to Section 15.16.

SECTION 15.16 SURFACE WATER Without prejudice to the

provisions of Sections 15.02 and 15.08 the Joint Venturers will collaborate with

the State in an investigation of surface water catchments storage dams and

reticulation facilities should water supplies from available underground sources

prove insufficient to meet the Joint Venturers’ coastal water requirements and

the Joint Venturers’ inland water requirements and the Joint Venturers will if

they propose to utilise such water catchments and/or storage dams pay to the

State a sum or sums to be mutually agreed towards the cost of such

investigation and of constructing any water storage dam or dams and

reticulation facilities required but nevertheless the State may in its sole

discretion elect to construct a water storage dam or dams and reticulation

facilities having a capacity in excess of that required to supply the Joint

Venturers’ needs and in that event the Joint Venturers’ contribution to the cost

thereof will be limited to a fair and reasonable proportion of the total cost of

constructing such water storage dam or dams and reticulation facilities.

SECTION 15.17 RIGHTS IN WATER AND IRRIGATION ACT The

provisions of the Rights in Water and Irrigation Act 1914 relating to water

rights and licences will except where inconsistent with the provisions of this

Agreement apply to any water sources developed by the Joint Venturers for the

purposes of this Agreement.

CLAUSE XVI

SECTION 16.01 ELECTRICITY FACILITIES The Joint Venturers will

in accordance with the approved proposals construct without cost or expense to

the State the necessary plant equipment and systems (in this Clause called

“electricity facilities”) for the generation and transmission of electricity needed

to enable the Joint Venturers to carry out their obligations hereunder. The Joint

Venturers will so design and construct the electricity facilities as to facilitate the

ultimate connection of the same with similar electricity facilities owned by the

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State Electricity Commission (in this Clause called “the Commission”) or other

third parties.

SECTION 16.02 PURCHASE OF ELECTRICITY Notwithstanding the

provisions of Section 16.01 (and for the purpose of facilitating integration of

electricity generation and transmission facilities in areas where the Joint

Venturers operate) the Joint Venturers will be at liberty to purchase electricity

from the Commission and third parties or to negotiate with the Commission or

third parties for the augmentation of the electricity facilities of the Commission

and such third parties to enable them to supply the Joint Venturers in lieu of the

Joint Venturers providing their own electricity facilities pursuant to the said

Section.

SECTION 16.03 ACQUISITION OF FACILITIES The State may at any

time give the Joint Venturers twelve (12) months notice of its intention to

acquire and may thereafter acquire the Joint Venturers’ electricity facilities or

any part thereof up to the first point of voltage breakdown or such other

appropriate point as may be agreed at a price to be agreed between the parties

and the Joint Venturers will take all such steps as may be necessary to effect the

acquisitions. The State undertakes that in such event the Joint Venturers will for

their purposes hereunder have first call on the power generated by such

electricity facilities or such part thereof as may be transmitted by the same and

that (subject only to its inability to supply power for any of the reasons set out

in Section 25.02) it will supply to the Joint Venturers with electrical power for

all their purposes hereunder up to the normal continuous full load capacity of

such electrical facilities and that (in the event of such inability occurring) it will

take all possible steps to restore such supply regardless of the time or day when

such inability arises and may call upon the Joint Venturers to provide

employees for that purpose.

SECTION 16.04 CHARGES FOR ELECTRICITY In the event of the

State acquiring the Joint Venturers’ electricity facilities the Joint Venturers will

pay to the Commission for all electricity supplied to the Joint Venturers by the

Commission at a rate equal to the standard tariff applying from time to time in

respect to the supplying of electricity by the Commission less the difference (if

any) between the Commission’s standard tariff in force at the time of the State’s

acquisition of the said electricity facilities and the Joint Venturers’ costs of

operating the same (including (inter alia) appropriate capital charges) at the time

of the acquisition. The said rate will apply only in respect of an amount of

electricity equal to the continuous full load capacity of the electricity facilities

so acquired and the Joint Venturers will pay for all electricity in excess of such



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amount supplied to them by the Commission from other sources at the

Commission’s standard tariff from time to time.

SECTION 16.05 BULK SUPPLY TO STATE Should the Joint

Venturers’ relevant approved proposal provide for the Commission to reticulate

electricity to houses occupied by the Joint Venturers’ workforce (including their

dependants) and by any other persons (including their dependants) connected

directly with Joint Venturers’ operations whether employees or not and to

commercial establishments directly connected with such operations the Joint

Venturers will sell to the Commission in bulk electricity in sufficient quantities

to meet the needs of such workforce persons and establishments at a price equal

to the Joint Venturers’ actual cost of generating and transmitting such electricity

including inter alia appropriate capital charges.

CLAUSE XVII

SECTION 17.01 PORT DEVELOPMENT

(a) The Joint Venturers will develop the port, construct the Joint

Venturers’ wharf and carry out all necessary dredging of

approach channels, swinging basin and berth at the Joint

Venturers’ wharf and provide all necessary buoys beacons

markers navigational aids lighting equipment and services and

facilities in accordance with the Joint Venturers’ relevant

approved proposal.

(b) Notwithstanding the provisions of paragraph (a) of this Section

the parties recognise that it could be to their mutual advantage if

the State provided all or some of the said works mentioned in the

said paragraph and accordingly the State will confer with the

Joint Venturers and the others users and potential users of the

port as to the manner in which and the terms and conditions upon

which the State should provide such works. The Joint Venturers

will pay to the State such sum or sums as the parties agree (not

exceeding the amount that would have been payable had the Joint

Venturers carried out the said works) towards the cost of each of

the said works as are provided by the State.

SECTION 17.02 USE OF WHARF

(a) Subject to the payment to them of the charges prescribed by and

for the time being payable under any by-laws made by the Joint

Venturers in respect of the use by others of the Joint Venturers’

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wharf and subject to the due compliance with the other

requirements and conditions prescribed by such by-laws or

should there be no such by-laws for the time being in force then

subject to the payment of such charges and the due compliance

with such requirements and conditions as in either case may be

reasonable having regard to the cost to the Joint Venturers of the

construction and operation of the Joint Venturers’ wharf the Joint

Venturers will permit the State and third parties to use the Joint

Venturers’ wharf and the port installations wharf machinery and

port services and facilities constructed or provided by the Joint

Venturers in connection therewith if and for so long as such user

does not unduly prejudice of interfere with the operations of the

Joint Venturers under this Agreement.

(b) Subject to the provisions of Section 17.03 nothing in this

Agreement shall be construed to limit the application of the

Shipping and Pilotage Act 1967.

SECTION 17.03 NO CHARGE FOR CARGOES Subject to the Joint

Venturers at their own expense providing all works buildings dredging and

things of a capital nature reasonably required for their operations hereunder at

or in the vicinity of the port the State will not (and ensures that a State agency or

authority or instrumentality will not) make any charge or levy on the Joint

Venturers in relation to the loading of outward or the unloading of inward

cargoes from the Joint Venturers’ wharf whether much cargoes be the property

of the Joint Venturers or of a third party but the State will be under no

obligation to undertake such loading or unloading and will be at liberty to make

all statutory charges from time to time prevailing in respect of services rendered

by the State or by any State agency authority or instrumentality or by any local

or other authority on behalf of the State and to charge vessels using the Joint

Venturers’ wharf ordinary light conservancy and tonnage dues.

CLAUSE XVIII

SECTION 18.01 TOWNSITES

(a) Should the approved proposals provide for the establishment of a

new town at the port townsite or at the mine townsite or of new

towns at both places the Joint Venturers will at their own cost and

in accordance with the approved proposals —

(i) provide at the townsite or at each townsite (as the case

may be) such housing accommodation services and

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works (including sewerage reticulation and treatment

works water supply works and main drainage works and

also educational hospital medical police fire and other

services and social recreational cultural and civic

facilities) as may be reasonably necessary in order to

provide for the needs of persons (and the dependants of

those persons) connected directly with the Joint

Venturers’ operations under this Agreement, whether or

not such persons are employed by the Joint Venturers;

(ii) provide at the townsite or at each townsite (as the case

may be) all necessary public roads public buildings and

other public works; and

(iii) provide all equipment required for the operation and

proper functioning of the services and works mentioned

in paragraph (i) above established in such new town or

new towns;

(iv) service maintain and where necessary repair and renovate

the housing accommodation services and works

mentioned in the said paragraph (i);

(v) (subject to and in accordance with by-laws from time to

time to be made and altered by the Joint Venturers which

include provisions for fair and reasonable prices rentals

or charges or if no such by-laws are made or in force then

at such prices rentals or charges and upon and subject to

such terms and conditions as are fair and reasonable)

ensure that the said housing accommodation services and

works are at all times readily available to persons

requiring the same being employees licensees or agents

of the Joint Venturers or persons engaged in providing a

legitimate and normal service to or for the Joint

Venturers or their employees licensees or agents

including the dependants of such persons; and

(vi) ensure that the roads buildings and other works

mentioned in paragraph (ii) above and the equipment

mentioned in paragraph (iii) above are readily available

free of charge to those desiring to use the same.



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(b) Nothing contained in Section 18.01(a) shall be construed as

placing on the Joint Venturers an obligation to provide and pay

for personnel required to operate the educational hospital medical

or police services mentioned in such Section.

SECTION 18.02 EQUIPMENT The Joint Venturers shall at their own

cost equip all the buildings mentioned in Section 18.01(a) to the extent and of a

standard at least equal to that normally adopted by the State in similar types of

buildings used for similar purposes in comparable townsites.

SECTION 18.03 STAFF HOUSING The Joint Venturers will at their

own cost provide adequate housing accommodation for married and single staff

directly connected with the educational hospital medical and police services

mentioned in paragraphs (i) and (iii) of Section 18.01(a).

SECTION 18.04 EXISTING TOWNS If the approved proposals provide

for the assimilation into any existing town of the whole or part of the Joint

Venturers’ workforce (including their dependants) and any other persons

(including their dependants) connected directly with the Joint Venturers’

operations (whether employees of the Joint Venturers or not) whereby the

population of such existing town is increased then the Joint Venturers will

subject to the provisions of Section 7.03 bear the cost of the provision and

maintenance at that existing town of additional housing accommodation

services works and equipment of the kind mentioned in paragraph (i) of

Section 18.01(a) to the extent necessary in order to provide for the needs of the

said increase in population of such existing town. The said additional housing

services works and equipment may be provided by the State or by another party

under an agreement with the State and in either case will be to the extent and of

a standard at least equal to that normally adopted by the State in similar types of

buildings used for similar purposes in comparable towns. The Joint Venturers

will pay to the State or such other party such proportion of the cost of such

additional housing services works and equipment as is fair and reasonable

having regard to the extent of the said increase in the population of such

existing town.

SECTION 18.05 STATE PROVIDED SERVICES Should the approved

proposals place an obligation on the State itself to provide any services or

facilities of the kind mentioned in paragraph (i) of Section 18.01(a) or require

the State to procure and accept the responsibility of the provision of any such

services and facilities the State will provide or procure the provision of the same

but (unless the approved proposals otherwise provide) subject to the following

conditions namely —

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(a) that the State is satisfied that the need to provide such services

and facilities results solely from or is reasonably attributable

solely to the Joint Venturers’ operations under this Agreement;

and

(b) the Joint Venturers agree to bear the capital cost involved and

thereafter to pay reasonable charges for the maintenance and

operation of the said services or facilities other than the operation

charges in respect of education hospital medical and police

services.

CLAUSE XIX

SECTION 19.01 ENVIRONMENTAL PROTECTION Nothing in this

Agreement will be construed to exempt the Joint Venturers from compliance

with any requirement in connection with the protection of the environment

arising out of or incidental to the operations of the Joint Venturers hereunder

that may be made by the State or any State agency or instrumentality or any

local or other authority or statutory body of the State pursuant to the

Environmental Protection Act 1971 or any other Act for the time being in force

relating to environmental protection.

CLAUSE XX

SECTION 20.01 COMPLIANCE WITH STATE LAWS The Joint

Venturers will in the construction operation maintenance and use of any work

installation plant machinery equipment service or facility provided or controlled

by them comply with and observe the provisions of this Agreement and subject

thereto the laws for the time being in force in the said State.

SECTION 20.02 INSTALLATIONS TO BE KEPT IN GOOD REPAIR

The Joint Venturers will at all times keep and maintain in good repair and

working order and where necessary replace all such works installations plant

machinery and equipment railways wharfs roads (other than public roads unless

and to the extent otherwise provided herein) and water and power supplies for

the time being the subject of this Agreement.

SECTION 20.03 LOCAL LABOUR AND SUPPLIERS The Joint

Venturers will as far as it is reasonably and economically practicable for them

so to do —

(a) use the labour for the time being available within the said State;



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(b) when calling for tenders and letting contracts for works materials

plant equipment and supplies ensure that Western Australian

suppliers manufacturers and contractors are given reasonable

opportunity to tender or quote —

(c) give proper consideration and where possible preference to

Western Australian suppliers manufacturers and contractors when

letting contracts or placing orders for works materials plant

equipment and supplies and where price quality delivery and

service are equal to or better than that obtainable elsewhere.

SECTION 20.04 COMMONWEALTH CONSENTS

(a) The Joint Venturers will from time to time make application to

the Commonwealth or to the Commonwealth constituted agency,

authority or instrumentality concerned for the grant to them of

any licence or consent under the laws of the Commonwealth of

Australia necessary to enable or permit them to enter into this

Agreement and/or to perform any of their obligations hereunder;

(b) On request by the Joint Venturers the State will make

representations to the Commonwealth or to the Commonwealth

constituted agency authority or instrumentality concerned for the

grant to the Joint Venturers of any licence or consent mentioned

in Section 20.04(a).

CLAUSE XXI

SECTION 21.01 ROYALTY The Joint Venturers will during the

continuance of this Agreement pay to the State a royalty on all iron ore products

at the rates herein specified in respect of each particular class of iron ore

product namely —

(a) on iron ore products (being direct shipping ore and fine ore and

fines not sold or shipped separately as such) sold and shipped

beyond the Commonwealth — at the rate of seven and one half

percentum (7½%) of the FOB revenue (computed at the rate of

exchange prevailing on date of receipt by the Joint Venturers of

the purchase price of such iron ore products) PROVIDED

NEVERTHELESS that subject as provided in paragraph (a) of

Section 21.02 the total royalty payable under this paragraph will

not be less than the sum ascertained by multiplying sixty cents

($0.60) by the total tonnage of such iron ore products.

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(b) On iron ore products (being fine ore and fines so sold or shipped

separately as such) sold and shipped beyond the

Commonwealth — at the rate of seven and one half percentum

(7½%) of the FOB revenue (computed as mentioned in

paragraph (a) of this Section) PROVIDED NEVERTHELESS

that subject as provided in paragraph (b) of Section 21.02 the

total royalty payable under this paragraph shall not be less than

the sum ascertained by multiplying thirty cents ($0.30) by the

total tonnage of such iron ore products.

(c) on iron ore products (being such as are produced by secondary

processing locally used ore) sold and shipped beyond the

Commonwealth — at the rate of fifteen cents ($0.15) per ton.

(d) on any other iron ore products of whatsoever kind —

(i) where the same are sold and shipped beyond the

Commonwealth — at the rate of seven and one half

percentum (7½%) of the FOB revenue (computed as

aforesaid) without any minimum royalty;

(ii) where the same are not so sold and shipped — at the rate

of fifteen cents ($0.15) per ton.

SECTION 21.02 FURTHER ROYALTY PROVISIONS The following

provisions will also apply in relation to the payment of the royalty —

(a) if the amount ascertained by multiplying sixty cents ($0.60) by

the total tonnage of direct shipping ore shipped or sold (and liable

to royalty under paragraph (a) of Section 21.01) in any financial

year is less than the total royalty which would be payable in

respect of that ore but for the operation of the proviso to that

paragraph then that proviso shall not apply in respect of direct

shipping ore shipped or sold in that year and at the expiration of

that year any necessary adjustments shall be made;

(b) if the amount ascertained by multiplying thirty cents ($0.30) by

the total tonnage of fine ore and fines shipped or sold separately

as such (and liable to royalty under paragraph (b) of

Section 21.01) in any financial year is less than the total royalty

which would be payable in respect of that ore but for the

operation of that proviso to that paragraph then that proviso shall

not apply in respect of fine ore and fines shipped or sold

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separately as such in that year and at the expiration of that year

any necessary adjustments shall be made;

(c) the rate of royalty of fifteen cents ($0.15) per ton mentioned in

paragraphs (c) and (d) of Section 21.01 will be adjusted up or

down (as the case may be) as at the first day of January 1969 and

as at the beginning of every fifth year thereafter in accordance

with any variation in the average of the basic prices of foundry

pig iron CIF Australian capital city ports as announced by BHP

from time to time during the calendar year immediately preceding

the date at which the adjustment is required to be made as

compared with such average for the calendar year 1963;

(d) where iron ore products produced from secondary

processing hereunder are so produced from an admixture

of iron ore from the mineral lease and other iron ore a

portion (and a portion only) of the iron ore products so

produced (being that part of the whole of the iron ore

prducts so produced as bears to that whole the same ratio as

the amount of iron in the iron ore from the mineral lease used

in the production of those iron products bears to the total

amount of iron in the iron ore so used) will be deemed to be

iron ore products within the meaning of that term as defined

in Section 1.01.

SECTION 21.03 ROYALTY PAYMENT The Joint Venturers

will during the continuance of this Agreement within fourteen (14) days

after the following quarter days namely the last days of March June

September and December in each year (commencing with the quarter

day next following the export date) furnish to the Minister a return

showing the quantity of all iron ore and/or iron ore products on which

royalty is payable hereunder and shipped sold or used (as the case may be)

during the quarter immediately preceding the due date of the return and

shall not later than two (2) months after such due date pay to the Minister

the royalty payable in respect of such of the iron ore products mentioned in

Section 21.01 as are locally used and will also pay to the Minister in

respect of such of the said iron ore products as are shipped or sold a

sum on account of the royalty payable hereunder calculated on the

basis of the invoices or provisional invoices (as the case may be)

therefore rendered by the Joint Venturers to the purchaser (which invoices

the Joint Venturers shall render without delay and simultaneously will

furnish copies thereof to the Minister) and will from time to time when the

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f.o.b. revenue realised in respect of the shipments has been ascertained in

the next following appropriate return and payment (in the return and by

cash) make all such necessary adjustments and give to the Minister full

details thereof.

SECTION 21.04 INSPECTION OF RECORDS The Joint Venturers will

throughout the continuence of this Agreement permit the Minister or his

nominee at all reasonable times to inspect the books of account and records of

the Joint Venturers relative to any shipment sale or use of iron ore products

hereunder including sales contracts and to take copies or extracts therefrom and

for the purpose of determining the f.o.b. revenue payable in respect of any

shipment or sale of iron ore products hereunder the Joint Venturers will take

reasonable steps (either by the certificate of a competent independent party

acceptable to the Minister or otherwise to the Minister’s reasonable satisfaction)

to satisfy the State as to the correctness of all relevant weights assays and

anaylses and will give due regard to any objection or representation made by the

Minister or his nominee as to any particular weight assay or analysis that may

affect the amount of royalty payable hereunder. The information obtained by the

Minister or his nominee as a result of any such inspection shall be used only for

the purposes of verifying the amount of royalty payable by the Joint Venturers

and for no other purpose and shall not be disclosed by the State the Minister or

his nominee to any other party for any other purpose.

CLAUSE XXII

SECTION 22.01 OFFLOADING WITHIN COMMONWEALTH Subject

to Section 22.03 the Joint Venturers will not at any time during the continuance

of this Agreement unless the Minister otherwise permits offload or permit to be

offloaded any iron ore products shipped pursuant to this Agreement at a place

within the Commonwealth.

SECTION 22.02 NOTICE OF OFFLOADING Where iron ore products

are off-loaded in breach of Section 22.01 the Joint Venturers will forthwith after

becoming aware of that event give notice of the same to the Minister and will

without prejudice to any other rights or remedies of the State by reason of the

breach on demand pay to the State by way of additional royalty such sum as the

Minister may determine but not more than a sum representing one dollar ($1.00)

per ton on the quantity of iron ore products off-loaded.

SECTION 22.03 PERMISSIBLE OFFLOADING The Joint Venturers

will not be deemed to have committed a breach of Section 22.01 if iron ore



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products are off-loaded at a place within the Commonwealth in any of the

following circumstances —

(a) where the iron ore products are shipped in a vessel that is not

owned by the Joint Venturers or an associated company and the

Joint Venturers have taken appropriate steps to ensure that iron

ore products will not again be off-loaded in breach of

Section 22.01; or

(b) because the vessel in which the iron ore products are being

carried is diverted for necessary repairs or because of a force

majeure or other unforeseeable cause and the Joint Venturers

satisfy the Minister that because of any such event they could not

take or be reasonably expected to have taken steps to prevent the

off-loading; or

(c) where the iron ore products off-loaded are locally used ore and

the tonnage of ore of that kind which has been off-loaded in any

part of the Commonwealth in any year does not exceed fifty

percentum (50%) (or such other percentage as the Minister

approves) of the tonnage of locally used ore consumed used or

otherwise applied in the said State.

PART IV

Secondary Processing

CLAUSE XXIII

SECTION 23.01 SECONDARY PROCESSING PROPOSALS The

Joint Venturers will from time to time renew the investigations already

commenced by them as to the feasibility of establishing within the said State a

plant or plants for secondary processing of iron ore from the mineral lease and

will by the end of Year 10 (or within such extended time as the Minister may

allow) submit to the Minister detailed proposals for the establishment of such a

plant or plants on the following basis —

(a) the plant or plants to be of such design and dimensions that will

progressively have the capacity to process annually —

(i) by the end of Year 12 — not less than two million

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(ii) by the end of Year 21 — not less than four million

(4,000,000) tons of iron ore,

(iii) by the end of Year 30 — not less than six million

(6,000,000) tons of iron ore.

(b) the capital cost involved to be not less than eighty million dollars

($80,000,000) unless the Joint Venturers utilize a less expensive

but at least equally satisfactory method of secondary processing

of iron ore than any at present known to either party.

SECTION 23.02 CONSIDERATION OF PROPOSALS If such detailed

proposals are submitted by the Joint Venturers to the Minister within the time

mentioned in Section 23.01 the Minister will within two months of the receipt

thereof give to the Joint Venturers notice either of his approval of the said

proposals or of any objections he has or alterations he desires thereto. In the

latter case the Minister will afford the Joint Venturers an opportunity to consult

with and to submit new or further proposals to him and if within thirty (30) days

after receipt of such notice agreement is not reached as to the said proposals the

Joint Venturers may within a further period of thirty (30) days by notice to the

State elect to refer to arbitration under Section 32.01 any question as to the

reasonableness of the Minister’s decision. If by the award on the arbitration the

question is decided in favour of the Joint Venturers the Minister will be deemed

to have approved of the said proposals as submitted by the Joint Venturers.

SECTION 23.03 FAILURE TO SUBMIT PROPOSALS If such detailed

proposals are not submitted by the Joint Venturers to the Minister within the

time mentioned in Section 23.01 or if such proposals are so submitted but are

not approved by the Minister within two months of receipt thereof (or within

such further time as the Minister may desire to take before delivering his

decision) or if upon an arbitration under Section 23.02 the question is decided

against the Joint Venturers then the following provisions shall apply —

(a) subject as provided in paragraph (c) of this Section the Joint

Venturers shall not after the end of the Year 12 export iron ore

hereunder at an annual rate in excess of five million (5,000,000)

tons unless prior to Year 10 the Minister has already approved of

proposals by the Joint Venturers involving the export of iron ore

at an annual rate in excess of five million (5,000,000) tons,

and —

(b) if by the end of Year 13 the State gives to the Joint Venturers

notice that some other company or party (hereinafter referred to

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as “the Third Party”) has agreed to establish within the said State

a plant for secondary processing of iron ore from the mineral

lease on terms not more favourable on the whole to the Third

Party than those proposed by or available to the Joint Venturers

hereunder then this Agreement will (subject as hereinafter

provided) cease and determine at the end of Year 21 or at the date

on which the Third Party substantially establishes the said plant

in accordance with terms agreed between the State and the Third

Party whichever date is the later;

(c) if by the end of Year 13 the State has not given to the Joint

Venturers a notice pursuant to the provisions of paragraph (b) of

this Section then the provisions of paragraph (a) of this Section

shall as from the end of Year 13 cease to operate and have effect.

SECTION 23.04 SUBMISSION OF PROPOSALS AFTER YEAR 10

Notwithstanding the provisions of Section 23.03 the Joint Venturers may

nevertheless at any time after the end of Year 10 submit proposals for the

establishment of the said plant if at the time they have not received a notice

pursuant to the provisions of paragraph (b) of Section 23.03 and the provision of

Section 23.02 will apply to such proposals but the Joint Venturers may not

submit such proposals between the end of Year 10 and the end of Year 21 if by

the end of Year 13 they receive such a notice and the same is not subsequently

withdrawn. In the event of negotiations between the Minister and the Third

Party being terminated the Minister will withdraw such notice.

SECTION 23.05 FAILURE NOT A DEFAULT The failure by the Joint

Venturers to submit proposals to the Minister pursuant to Section 23.01 or the

non-approval by the Minister of any proposals so submitted shall not constitute

a breach of this Agreement by the Joint Venturers but subject as herein

otherwise provided the only consequence arising from such failure or

non-approval will be that set out in Section 23.03.

SECTION 23.06 PROVISIONS APPLYING TO PROPOSALS Subject

as in this Clause (Clause XXIII) otherwise provided the provisions of

Clauses V, VI and VII shall apply mutatis mutandis to detailed proposals made

under this Clause.

SECTION 23.07 “SUBSTANTIALLY ESTABLISHED” For the

purposes of this Clause a plant for secondary processing will be deemed to have

been substantially established when and not before such plant has a capacity to

process not less than two million (2,000,000) tons of iron ore per annum and the



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Minister is satisfied that the party establishing the plant will proceed bona fide

to operate and develop the same.

SECTION 23.08 “TERMS NOT MORE FAVOURABLE” When

considering for the purposes of this Clause whether or not the terms agreed by

the State for the establishment of a plant for secondary processing are not more

favourable on the whole to the party establishing the same than those proposed

by or applicable to the Joint Venturers regard will be had (inter alia) to the

following —

(a) the obligations which would have devolved on the Joint

Venturers had their proposals for the establishment of a plant for

secondary processing been approved by the State and the Joint

Venturers had proceeded to the substantial establishment of such

plant;

(b) the obligations of the Joint Venturers to mine and transport by

rail and ship iron ore mined from the mineral lease and the

restrictions relating thereto;

(c) the obligations of the Joint Venturers to pay rent and royalty

hereunder;

(d) the possible loss of rights under this Agreement by reason of the

same ceasing and determining pursuant to the provisions of this

Clause;

(e) the need for the Third Party to pay on a fair and reasonable basis

for or for the use of property made available by the State to them;

and

(f) the equivalent or additional obligations to the State assumed by

the Third Party.

SECTION 23.09 SUPPLIES TO FOURTH PARTY If at any time after

Year 15 or such earlier date as the parties may mutually agree the Minister shall

give to the Joint Venturers notice that some other company or party (hereinafter

referred to as “the Fourth Party”) has agreed to establish tertiary processing

facilities within the said State the Joint Venturers will upon being requested by

the Minister so to do (he having had due regard to the obligations of the Joint

Venturers under existing sales contracts) at any time after Year 17 after

reasonable notice supply to the Fourth Party at the rate of five million

(5,000,000) tons per annum iron ore of a grade equal to the average grade of

direct shipping ore which at the time is being sold and shipped by the Joint

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Venturers or if the parties shall mutually agree then such quantity per annum of

iron ore products produced by the Joint Venturers by secondary processing as

shall contain the same quantity of iron as would be contained in five million

(5,000,000) tons of such direct shipping ore. The Joint Venturers will charge the

Fourth Party for all iron ore or iron ore products so supplied a fair and

reasonable price to be mutually agreed between them and the Fourth Party (or in

default of agreement as fixed by arbitration in accordance with the provisions of

the Arbitration Act 1895).

CLAUSE XXIV

SECTION 24.01 PROTECTION FOR CURRENT CONTRACTS If this

Agreement should cease and determine pursuant to any provision contained in

Clause XXIII and if at the date of such cessation or determination the Joint

Venturers are under an obligation arising under a current contract or contracts

with some other party originally entered into by them pursuant to proposals

approved by the Minister to supply iron ore to that other party the Joint

Venturers may give notice of that fact to the Minister and request the State to

ensure that the Third Party agrees itself to take over and assume liability for the

due and punctual discharge of the Joint Venturers said obligations or

alternatively agrees to supply iron ore to enable them to discharge their said

obligations and the State will forthwith upon receipt of such notice or as soon as

possible or practicable thereafter do or cause to be done all such acts matters or

things as may be fair and reasonable in the circumstances to comply with the

Joint Venturers’ said request.

PART V

General Provisions

CLAUSE XXV

SECTION 25.01 GENERAL APPLICATION The provisions of this Part

(Part V) shall have application throughout this Agreement.

SECTION 25.02 DELAYS This Agreement is deemed to be made

subject to any delays in the performance of the obligations hereunder and to the

temporary suspension of the continuing obligations hereunder that may be

caused by or arise from circumstances beyond the power and control of the

party responsible for the performance of those obligations including delays or

any temporary suspension caused by or arising from an act of God force

majeure floods storms tempest washaways fire (unless caused by the actual fault

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or privity of the Joint Venturers) act of war act of public enemies riots civil

commotions strikes lockouts stoppages restraint of labour or other similar acts

(whether partial or general) shortages of labour or essential materials reasonable

failure to secure contractors delays of contractors and inability profitably to sell

iron ore products or factors due to overall world economic conditions or factors

due to action taken by or on behalf of any government or governmental

authority (other than the State or any authority of the State) or factors that could

not reasonably have been foreseen but the party whose responsibility it is to

perform the obligations the performances of which are so delayed or suspended

will minimise the effect of the cause thereof as soon as possible after its

occurrence.

SECTION 25.03 NOTICE OF DELAYS On the happening of any event

mentioned in Section 25.02 that in the opinion of the Joint Venturers may delay

the performance by them of any of their obligations hereunder within a

specified time the Joint Venturers will promptly give notice to the Minister of

that event and of any likely delay and in that case the Minister will grant such

extension of time for the performance of the obligation as shall in all the

circumstances be fair and reasonable and where the Joint Venturers object to the

decision of the Minister as to what is a fair and reasonable extension the matter

will be referred to arbitration hereunder.

SECTION 25.04 ASSIGNMENT AND MORTGAGE The Joint

Venturers jointly or any one of them severally may at any time —

(a) by an assignment mortgage charge subletting or other disposition

assign mortgage charge sublet or otherwise dispose of to an

associated company as of right or to any third party with the

consent of the Minister the whole or any part of their or its rights

(including their or its rights to or as the holder of any lease

licence easement grant or other title) and obligations hereunder;

or

(b) by appointment in writing appoint an associated company as of

right or any third party with the consent of the Minister to

exercise for and on their or its behalf all or any of the powers

functions and authorities that are or may be conferred on them

hereunder;

subject however to the assignee (as hereinbefore defined) executing in favour of

the State a Deed of Covenant in a form to be approved by the Minister to

comply with observe and perform the provisions of this Agreement by or on the



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part of the Joint Venturers to be complied with observed or performed in regard

to the subject of such assignment subletting or other disposition or appointment.

SECTION 25.05 JOINT VENTURERS TO REMAIN LIABLE

Notwithstanding anything contained in or anything done under or pursuant to

Section 25.04 but subject as provided in Section 25.06 the Joint Venturers and

each of them will at all times during the currency of this Agreement be and

remain liable for the due and punctual performance and observance of all the

covenants and agreements on their part contained herein and in any lease

licence easement grant or other title the subject of an assignment mortgage

charge subletting or other disposition or appointment under Section 26.04 but

the Minister may however agree to release the Joint Venturers or any of them

from any such liability where he considers such release will not be contrary to

the interests of the State.

SECTION 25.06 JOINT VENTURERS MAY BE DISCHARGED

Where any agreement that is not inconsistent with the terms of this Agreement

is entered into by the Joint Venturers with some other company or person and

results in that other company or person discharging all or any of the obligations

undertaken by the Joint Venturers under this Agreement or renders it

unnecessary for the Joint Venturers to discharge any obligation undertaken by

them hereunder the Minister may discharge or temporarily relieve the Joint

Venturers from such part of their obligations as is reasonable having regard to

the extent of and the period during which the other company or person actually

effects the discharge of those obligations.

SECTION 25.07 BY-LAWS The Governor in Executive Council may

upon the recommendation of the Joint Venturers make alter and repeal by-laws

for the purpose of enabling the Joint Venturers to fulfil their obligations under

Sections 13.02, 13.03, 16.05 and 17.02 and (unless and until the townsite

concerned is declared a townsite pursuant to Section 10 of the Land Act) under

item (v) of Section 18.01(a) upon terms and subject to conditions (including

terms and conditions as to user charging and limitation of the liability of the

Joint Venturers) consistent with the provisions hereof. If at any time it appears

that any by-law made hereunder has as a result of altered circumstances become

unreasonable or inapplicable then the Joint Venturers will recommend to the

Governor that he makes such alteration or repeal thereof as the State may

reasonably require or (in the event of there being any dispute as to the

reasonableness of such requirement) as may be decided by arbitration as herein

provided.



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CLAUSE XXVI

SECTION 26.01 DETERMINATION In any of the following events

namely —

(a) if the Joint Venturers make default in the due performance or

observance of any of their obligations or responsibilities

hereunder (including the breach of any covenant agreement or

condition contained in any lease licence easement grant or other

document of title and by or on their part to be performed or

observed) and fail to remedy such default within a reasonable

time after notice specifying the default is given to them by the

State (or if the alleged default is contested by the Joint Venturers

and promptly submitted to arbitration within a reasonable time

fixed by the arbitration award where the question is decided

against the Joint Venturers and the arbitrator finds that there was

a bona fide dispute and that the Joint Venturers had not been

dilatory in pursuing the arbitration); or

(b) if all of the Joint Venturers and all assignees who have executed

or are bound by a Deed of Covenant mentioned in Section 25.04

abandon their operations or repudiate their obligations under this

Agreement and fail to resume such operations or resume such

performance within a reasonable time after notice specifying in

what respects they have failed to resume operations or resume

performance of their obligations is given to them by the State or

(if the alleged failure is contested by the Joint Venturers or any

such assignees and promptly submitted to arbitration) within the

time fixed by the arbitration award where the question is decided

against the Joint Venturers and the arbitrator finds that there was

a bona fide dispute and that the Joint Venturers or such assignees

had not been dilatory in pursuing the arbitration; or

(c) if all the Joint Venturers still bound by any of the terms of this

Agreement and all assignees who have executed and are still

bound by a Deed of Covenant mentioned in Section 25.04 go into

liquidation (other than a voluntary liquidation for the purpose of

reconstruction); or

(d) if the Joint Venturers surrender the entire mineral lease —

then and in any of such events the State may by notice to the Joint Venturers

determine this Agreement and the rights of the Joint Venturers hereunder and

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under any lease licence easement or right granted hereunder or pursuant hereto

will thereupon cease and determine.

SECTION 26.02 FORM OF NOTICES A notice given by the State

pursuant to paragraph (a) of Section 26.01 or pursuant to paragraph (b) of that

Section shall specify the nature of the default or other ground (if any) on which

the State claims to be entitled to exercise the right to determine this Agreement

and the time within which the default is required to be remedied and (where

appropriate and possible for the State so to do) shall name the party or parties

whose responsibility it is to remedy the same. Such notice shall be given to the

Joint Venturers and to any assignee or any mortgagee of whose name and

address for service the State has had previous notice in writing.

SECTION 26.03 ASSIGNEE OR MORTGAGEE MAY REMEDY

DEFAULT Any assignee or any mortgagee will be at liberty to remedy any

default specified in any notice given pursuant to paragraph (a) of Section 26.01

or pursuant to paragraph (b) of Section 26.01 within the time specified in such

notice and such remedying shall be accepted by the State as and in lieu of a

remedying of the default by the Joint Venturers.

SECTION 26.04 STATE MAY REMEDY DEFAULT Instead of

determining this Agreement as provided in Section 26.01 the State may itself

remedy or cause to be remedied any default on the part of the Joint Venturers

for which purpose the State will have full power and authority by its agents or

workmen or otherwise to enter into and upon land occupied by the Joint

Venturers and to use all of any plant machinery equipment and installations

thereon and all costs and expenses incurred by the State in remedying such

default or causing the same to be remedied will be a debt due by the Joint

Venturers to the State and be payable on demand.

SECTION 26.05 EFFECT OF DETERMINATION Upon the cessation

or determination of this Agreement —

(a) the rights of the Joint Venturers and those of any assignee or

mortgagee of the Joint Venturers under this Agreement or under

the mineral lease or any other lease, licence, easement or right

granted hereunder or pursuant hereto and all the right title and

interest of the Joint Venturers and of any such assignee or

mortgagee in and to any land wherever situated granted to the

Joint Venturers or to such assignee for any other of the purposes

of this Agreement will except as otherwise agreed by the Minister

thereupon cease and determine, but without prejudice to the



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liability of either of the parties in respect of any antecedent

breach or default under this Agreement or in respect of any

indemnity given hereunder and the Joint Venturers will without

further consideration at the request and cost of the State transfer

or surrender to the State or the Crown all land the subject of any

Crown Grant issued under the Land Act pursuant to this

Agreement;

(b) the Joint Venturers will forthwith pay to the State all monies that

may then have been payable or accrued due hereunder; and

(c) the Joint Venturers will forthwith furnish to the State complete

factual statements of the work research surveys and

reconnaissance carried out under Clause IV if and in so far as the

statements may not have been furnished; and

(d) except as provided in Section 26.06 or otherwise provided in this

Agreement neither of the parties will have any claim against the

other of them in respect to any matter or thing contained in or

arising out of this Agreement.

SECTION 26.06 PROPERTY PASSES TO STATE Upon the cessation

of this Agreement all buildings erections and other improvements erected on

any land then occupied by the Joint Venturers or any associate company or

assignee of the Joint Venturers under the mineral lease or any other lease

licence easement, right or grant made hereunder for the purposes hereof

(including the said railway and the appurtenances constructed pursuant to

Section 13.01 and including also the Joint Venturers’ wharf) shall become and

remain the absolute property of the State without the payment of any

compensation or consideration to the Joint Venturers or any other party and

freed and discharged from all mortgages and other encumbrances and the Joint

Venturers will do and execute all such deeds documents and other acts matters

and things (including surrenders) as the State may reasonably require to give

effect to the provisions of this Section.

SECTION 26.07 STATE OPTION TO PURCHASE In the event of the

Joint Venturers immediately prior to the cessation or determination of this

Agreement or subsequently thereto desiring to remove any of their locomotives

rolling stock, or their electricity facilities or any of their other fixed or movable

plant and equipment (excluding the said railway and appurtenances and the

Joint Venturers’ wharf) from any part of the land occupied by them at the date

of such cessation or determination they will give to the State notice of such



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desire and thereby will grant to the State the right or option exercisable within

three (3) months thereafter to purchase at a valuation in situ the said

locomotives rolling stock electricity facilities and other fixed or movable plant

and equipment or any part thereof. Such valuation will be such as is mutually

agreed or in default of agreement shall be made by a competent valuer mutually

appointed by the parties or in default of agreement by two valuers, one to be

appointed by each party and an umpire appointed by such valuers should they

fail to agree.

CLAUSE XXVII

SECTION 27.01 INDEMNIFICATION The Joint Venturers will

indemnify and keep indemnified the State and its servants agents and

contractors in respect of all actions suits claims demands or costs of third parties

arising out of or in connection with any work carried out by or on behalf of the

Joint Venturers pursuant to this Agreement or relating to their operations or

arising out of in connection with the construction maintenance operation or use

by them or their servants agents contractors appointees or assignees of the

works or services constructed maintained operated or used by them under this

Agreement or the plant apparatus or equipment installed in connection

therewith.

CLAUSE XXVIII

SECTION 28.01 VARIATION The parties may from time to time by

agreement in writing add to substitute for cancel or vary all or any of the

provisions of this Agreement or of any lease licence easement or right granted

hereunder or pursuant hereto for the purpose of implementing or facilitating any

of the purposes and objects of this Agreement.

SECTION 28.02 VARIATIONS TO BE TABLED IN PARLIAMENT

Where in the opinion of the Minister an agreement made under Section 28.01

constitutes a material or substantial alteration of the rights or obligations of

either party hereto, the agreement will contain a declaration to that effect and

the Minister will cause the agreement to be laid before each House of the

Parliament of the said State for the twelve (12) sitting days of that House next

following the execution of the Agreement. If within that time neither House

passes a resolution disallowing the same, the agreement shall have effect as and

from the last day on which the agreement might have been disallowed.



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CLAUSE XXIX

SECTION 29.01 MINISTER MAY GRANT EXTENSION OF TIME

Notwithstanding any other provision of this Agreement the Minister may at the

request of the Joint Venturers from time to time extend or further extend any

period or vary or further vary any date referred to in this Agreement for such

period or to such later date as the Minister thinks fit whether or not the period to

be extended has expired or the date to be varied has passed.

CLAUSE XXX

SECTION 30.01 NOTICES Any notice consent or other writing required

by this Agreement to be given or sent by the State to the Joint Venturers will be

deemed to have been duly given or sent if the same be signed by the Minister or

by a senior officer of the Civil Service of the said State acting by the direction

of the Minister and forwarded by pre-paid post to the Joint Venturers at their

principal place of business for the time being in Perth in the said State or at the

registered office or address for the time being in the said State and any notice

consent or other writing required by this Agreement to be given or sent by the

Joint Venturers to the State will be deemed to have been duly sent if the same

be executed by the Joint Venturers or signed for and on behalf of the Joint

Venturers by any person or persons authorised by the Joint Venturers in that

behalf or by the solicitors for the time being appointed to act on their behalf (of

whose appointment the State has had previous notice) and forwarded by

pre-paid post to the Minister at his office in Perth in the said State and every

such notice consent or writing will be deemed to have been duly given or sent

on the day on which it would be delivered to the addressee in the ordinary

course of post.

CLAUSE XXXI

SECTION 31.01 STAMP DUTY EXEMPTION The State will cause all

of the following documents to be exempted from any stamp duty which but for

the operation of this Section would or might be chargeable thereon —

(a) this Agreement;

(b) any instrument executed by the State pursuant to this Agreement

granting to or in favour of the Joint Venturers or any associated

company or permitted assignee of the Joint Venturers any

tenement lease easement licence or other right or interest;



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(c) any assignment sublease or disposition (other than by way of

mortgage or charge) and any appointment to or in favour of the

Joint Venturers or an associated company of any interest right

obligation power function or authority made pursuant to the

provisions of this Agreement.

SECTION 31.02 EXEMPTION TIME LIMIT Section 31.01 will not

apply to any instrument or other document executed or made after Year 7.

SECTION 31.03 REFUND If prior to the commencement date stamp

duty has been assessed and paid on any instrument or other document referred

to in Section 31.01 the State will after the passing of the enabling Act refund the

stamp duty paid on any such instrument or other document to the person by

whom it was paid.

CLAUSE XXXII

SECTION 32.01 ARBITRATION Except where otherwise specifically

provided in this Agreement to the contrary any dispute or difference between

the parties in respect to any act matter or thing arising out of or in connection

with this Agreement or any agreed amendment or variation thereof or addition

thereto and particularly as to the construction of this Agreement or any such

amendment variation or addition or as to the rights duties or liabilities of either

party hereunder or thereunder or as to any matter left to be agreed upon between

the parties shall in default of agreement between the parties be referred for

decision to two (2) arbitrators one to be appointed by each party and an umpire

appointed by the arbitrators before proceeding in the reference and every such

arbitration shall be conducted in accordance with the provisions of the

Arbitration Act 1895.

SECTION 32.02 ARBITRATOR MAY EXTEND TIME If when

hearing a reference made pursuant to this Clause it shall appear or be made to

appear to the arbitrators and the umpire that in consequence of the reference

having been made or because of any delay in the issuing of the award made

thereon either party to the reference had been or is likely to be prevented from

doing performing or carrying out within a time prescribed by this Agreement

some act matter or thing required by this Agreement to be done performed or

carried out by that party within that time whereby the rights of that party

hereunder have been or could be put in jeopardy and the arbitrators and the

umpire consider it reasonable in order to protect such rights that the prescribed

time be extended the arbitrators and the umpire shall have and are hereby

granted full power and authority for and on behalf of the Minister on the

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application of the party concerned to grant such extension of the prescribed time

as they in the circumstances considered reasonable and by their award to order

accordingly.

CLAUSE XXXIII

SECTION 33.01 APPLICABLE LAW This Agreement will be

interpreted according to law for the time being in force in Western Australia.

AND THEREFORE THE GUARANTOR AGREES WITH THE STATE as

follows —

CLAUSE XXXIV

SECTION 34.01 GUARANTEE The Guarantor will and hereby

guarantees to the State the due and punctual performance by the said Rhodes

Ridge Mining Co. Ltd (hereinafter in this Clause referred to as “the Subsidiary”)

of all the covenants agreements and obligations of the Subsidiary under this

Agreement notwithstanding any time or indulgence granted to the Subsidiary or

any addition to or amendment of or variation of the provisions of this

Agreement or the cancellation thereof.

THE SCHEDULE

WESTERN AUSTRALIA

Mining Act 1904-1970

MINERAL LEASE

LEASE No.



MINERAL FIELD



ELIZABETH THE SECOND, by the Grace of God of the United Kingdom,

Australia and Her other Realms and Territories Queen, Head of the

Commonwealth, Defender of the Faith.

TO ALL TO WHOM these presents shall come, GREETING: KNOW YE

that —

WHEREAS by an Agreement made the

day of

1972 between the Honourable JOHN

TREZISE TONKIN, MLA the Premier of the State of Western Australia

acting for and on behalf of the said State and its instrumentalities for the

time being (hereinafter called “the State”) of the first part RHODES

RIDGE MINING CO. LTD a company incorporated under the laws of the

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State of Delaware in the United States of America and having its executive

offices situate at the 55th Floor, 200 Park Avenue, New York in the United

States of America and registered in the State of Western Australia and

having its registered office in the said State situate at the 2nd Floor,

7 Havelock Street, West Perth, HANCOCK PROSPECTING PTY

LIMITED a company incorporated in the State of Western Australia and

having its registered office at the 14th Floor, Lombard House, 251 Adelaide

Terrace, Perth in that State and WRIGHT PROSPECTING PTY LIMITED a

company also incorporated in the said State and having its registered office

situate at the 14th Floor, Lombard House, 251 Adelaide Terrace, Perth

aforesaid (in the said Agreement and herein called the “Joint Venturers”

which expression shall where the context so admits or requires extend to and

include the Joint Venturers jointly and each of them severally their and each

of their successors and permitted assigns and appointees) of the second part

and TEXAS GULF INC. a company incorporated under the laws of the State

of Texas in the United States of America and having its executive offices

situate at the 55th Floor, 200 Park Avenue, New York aforesaid of the third

part (being the Agreement referred to in Section 2 of “Iron Ore (Rhodes

Ridge) Agreement Authorization Act 1972”) the State agreed to cause to be

granted to the Joint Venturers a mineral lease of a portion or portions of the

land referred to in the said Agreement as the mining areas (being the land

hereinafter described)

AND WHEREAS the said Agreement was executed by the State pursuant to the

authority granted by the Iron Ore (Rhodes Ridge) Agreement Authorization

Act 1972 and the same operates and takes effect as provided in the said Act.

NOW WE in consideration of the rents and royalties reserved by and of the

provisions of the said Agreement and in pursuance of the said Act DO BY

THESE PRESENTS GRANT AND DEMISE unto the Joint Venturers as

tenants in common in the following shares that is to say —

as to one undivided half share the said Rhodes Ridge Mining Co. Ltd.

and as to the remaining one undivided half share the said Hancock

Prospecting Pty. Ltd. and the said Wright Prospecting Pty. Ltd. as

tenants in common in equal shares —

subject to the said provisions ALL THOSE pieces and parcels of land situated in

the

Mineral Field containing by admeasurement

acres

(be the same more or less) and particularly described and delineated on the plan

in the Schedule hereto and all those mines, veins, seams, lodes and deposits of

iron ore in on or under the said land (hereinafter called “the said mine”) together

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with all rights, liberties, easements, advantages and appurtenances thereto

belonging or appertaining to a lessee of a mineral lease under the Mining

Act 1904, including all amendments thereof for the time being in force and all

regulations made thereunder for the time being in force (which Act and

regulations are hereinafter referred to as “the Mining Act”) or to which the Joint

Venturers are entitled under the said Agreement TO HOLD the said land and

mine and all and singular the premises hereby demised for the full term of

twenty-one years from the

day of

19

with

the right to renew the same from time to time for further periods each of

twenty-one years as provided in (but subject to) the said Agreement for the

purposes of the said Agreement but upon and subject to the terms covenants and

conditions set out in the said Agreement and to the Mining Act (as modified by

the said Agreement) YIELDING and paying therefor the rent and royalties as

set out in the said Agreement. AND WE do hereby declare that this lease is

subject to the observance and performance by the Joint Venturers of the

following covenants and conditions, that is to say —

(1) The Joint Venturers shall and will use the land bona fide

exclusively for the purposes of the said Agreement.

(2) Subject to the provisions of the said Agreement the Joint

Venturers shall and will observe, perform, and carry out the

provisions of the Mines Regulation Act 1946, and all amendments

thereof for the time being in force and the regulations for the

being in force made thereunder and (subject to and as modified

by the said Agreement) those of the Mining Act in so far as the

same affect or have reference to this lease.

PROVIDED THAT this lease and any renewal thereof shall not be

determined or forfeited otherwise than under and in accordance with the

provisions of the said Agreement.

PROVIDED FURTHER that all mineral oil on or below the surface of the

demised land is reserved to Her Majesty with the right to Her Majesty or any

person claiming under her or lawfully authorised in that behalf to have access to

the demised land for the purpose of searching for and for the operations of

obtaining mineral oil in any part of the land under the provisions of the

Petroleum Act 1967.

IN WITNESS whereof we have caused our Minister for Mines to affix his

seal and set his hand hereto at Perth in our said State of Western Australia and



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the common seals of the Joint Venturers have been affixed hereto this

day of

19

.

IN WITNESS WHEREOF this Agreement has been executed the day and year

first hereinbefore written.



SIGNED by the said THE

HONOURABLE JOHN TREZISE

TONKIN, MLA in the presence of —

Minister for Development

and Decentralisation

Minister for Mines



THE COMMON SEAL OF RHODES

RIDGE MINING CO. LTD was hereunto

affixed with the authority of a resolution of

the Board of Directors and in the presence

of —

Secretary



THE COMMON SEAL OF HANCOCK

PROSPECTING PTY LTD. was hereunto

affixed with the authority of a resolution of

the Board of Directors and in the presence

of —

Director

Secretary



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THE COMMON SEAL OF WRIGHT

PROSPECTING PTY LTD. was hereunto

affixed with the authority of a resolution of

the Board of Directors and in the presence

of —

Director

Secretary

THE COMMON SEAL OF TEXAS GULF

INC. was hereunto affixed with the

authority of a resolution of the Board of

Directors and in the presence of —

Secretary



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Notes

1



This is a compilation of the Iron Ore (Rhodes Ridge) Agreement Authorisation

Act 1972 and includes the amendments made by the other written laws referred to

in the following table. The table also contains information about any reprint.



Compilation table

Short title



Number

and year



Assent



Commencement



Iron Ore (Rhodes Ridge)

Agreement Authorization

Act 1972



36 of 1972



16 Jun 1972



16 Jun 1972



Reprint 1: The Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 as

at 7 Nov 2003

Standardisation of

Formatting Act 2010 s. 4



19 of 2010



28 Jun 2010



Iron Ore Agreements

Legislation Amendment

Act 2010 Pt. 9



34 of 2010



26 Aug 2010 1 Jul 2010 (see s. 2(b)(ii))



2



11 Sep 2010 (see s. 2(b) and

Gazette 10 Sep 2010 p. 4341)



A notice published in Gazette 29 September 1972 p. 3957 reads as follows:





It is hereby notified for public information that the following are alterations

made to the Agreement scheduled to the above Act as printed that have been

approved by all parties for incorporation in the final document engrossed for

execution: —

Section 10.02: Third line, the word “it” altered to “them”.

Section 12.01: Tenth line, the word “shall” altered to “will”.

Section 15.06: Third line, the word “shall” altered to “will”.

Section 18.02: First line, the word “shall” altered to “will”.

Section 21.02(d): Sixth line, the word “prducts” altered to “products”.

Section 21.03: Fifteenth line, the word “therefore” altered to “therefor”.

Section 21.04: Second line, the word “continuence” altered to “continuance”.

The Schedule (Mineral Lease):

First recital, twelfth line, the word “LIMITED” altered to “LTD”.

First recital, fifteenth line, the word “LIMITED” altered to “LTD”.

Exhibit — Mining Areas: The plan marked “A” tabled in Parliament has been

revised to show more detail. A copy of the plan may be sighted at the

Department of Mines, Perth.

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”.



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Defined terms



Defined terms

[This is a list of terms defined and the provisions where they are defined.

The list is not part of the law.]



Defined term

Provision(s)

Agreement........................................................................................................ 4(1)



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