Western Australia: Iron Ore (FMG Chichester Pty Ltd) Agreement Act 2006 (WA)

Western Australia Iron Ore (FMG Chichester Pty Ltd) Agreement Act 2006 Western Australia Iron Ore (FMG Chichester Pty Ltd) Agreement Act 2006 Contents 1. Short title 2 2. Commencement 2 3. Terms used in this Act 2 4. Ratification and authorisation 2 5. State empowered under clause 22 2 6. Effect on other laws 2 Schedule 1 — Iron Ore (FMG Chichester Pty Ltd) Agreement Notes Compilation table 67 Defined terms Western Australia Iron Ore (FMG Chichester Pty Ltd) Agreement Act 2006 An Act to ratify, and authorise the implementation of, an agreement between the State and FMG Chichester Pty Ltd and Fortescue Metals Group Ltd relating to the development of a project for the mining of iron ore in the Pilbara region of the State. The Parliament of Western Australia enacts as follows: 1. Short title This is the Iron Ore (FMG Chichester Pty Ltd) Agreement Act 2006. 2. Commencement This Act comes into operation on the day on which it receives the Royal Assent. 3. Terms used in this Act In this Act — scheduled agreement means the agreement of which a copy is set out in Schedule 1; the Agreement means the scheduled agreement or, if it is varied in accordance with its terms, that agreement as varied from time to time. 4. Ratification and authorisation (1) The scheduled agreement is ratified. (2) The implementation of the Agreement is authorised. 5. State empowered under clause 22 The State has power in accordance with clause 22 of the Agreement. 6. Effect on other laws (1) The Agreement operates and takes effect despite any enactment or other law. (2) If a provision of the scheduled agreement expressly or by implication purports to modify or exclude the application or operation of an enactment for a purpose or in relation to a person or thing, the application or operation of the enactment is modified or excluded for that purpose, or in relation to that person or thing, to the extent or for the period mentioned in the provision or necessary for the provision to have effect. (3) To avoid doubt, it is declared that the provisions of the Public Works Act 1902 section 96 do not apply to any railway constructed pursuant to the Agreement. (4) This section does not limit or otherwise affect the application of the Government Agreements Act 1979. Schedule 1 — Iron Ore (FMG Chichester Pty Ltd) Agreement [s. 3] 2005 THE STATE OF WESTERN AUSTRALIA and FMG CHICHESTER PTY LTD ACN 109 264 262 and FORTESCUE METALS GROUP LTD ACN 002 594 872 IRON ORE (FMG CHICHESTER PTY LTD) AGREEMENT [Solicitor's details] THIS AGREEMENT is made this 1st day of December 2005 BETWEEN THE HONOURABLE GEOFFREY IAN GALLOP, B.Ec., MA., MPhil., DPhil., M.L.A., 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, FMG CHICHESTER PTY LTD ACN 109 264 262 of Ground Floor, 46‑50 Kings Park Road, West Perth, Western Australia (hereinafter called "the Company" in which term shall be included its successors and permitted assigns) of the second part, and FORTESCUE METALS GROUP LTD ACN 002 594 872 of Level 1, 46‑50 Kings Park Road, West Perth, Western Australia (hereinafter called "the Guarantor") of the third part. WHEREAS: A. The Company wishes to develop within the Defined Area in the vicinity of the Chichester Ranges in the Pilbara region of Western Australia a project for the mining of iron ore for sale either within Australia or by export to overseas purchasers. B. At the date of this Agreement the Company holds, in respect of the Defined Area, the exploration licences referred to in part A of schedule 1 and has applied under the Mining Act to have granted to it the exploration licences referred to in part B of schedule 1. The Company has also applied under the Mining Act to have granted to it the mining leases, as referred to in schedule 2, in respect of part of the land the subject of those exploration licences held by it. C. The Guarantor and The Pilbara Infrastructure Pty Ltd ACN 103 096 340 are proceeding with detailed feasibility studies for the construction and operation of a multi‑user railway from in the vicinity of the Chichester Ranges to multi‑user port facilities within the Port of Port Hedland or to a location near the boundary of that port for delivery to such port facilities by multi‑user conveyor, and of such multi‑user port facilities, for the shipping and export of iron ore products, freight goods and other products. The State has agreed to assist the development of those multi‑user facilities upon and subject to the terms of the Railway and Port Agreement. D. The Guarantor and the Company intend the railway and port facilities, upon being constructed, to be used for the transportation, shipping and export of iron ore produced as part of the Company's proposed project. E. The State, for the purposes of promoting the development of the iron ore industry and the creation of employment opportunity generally in Western Australia, has agreed to assist the Company in the establishment of its proposed project and has agreed to provide a framework for managing future changes to the project, upon and subject to the terms of this Agreement. F. This Agreement is the Mining Agreement as defined in clause 1 of the Railway and Port Agreement. NOW THIS AGREEMENT WITNESSES: Definitions 1. In this Agreement subject to the context: "Access Act" means the Railways (Access) Act 1998; "Access Code" means the Railways (Access) Code 2000; "Access Minister" means the Minister in the Government of the State for the time being responsible for the administration of the Access Act; "accommodation area" means an area or areas on, or subject to clause 6 in the vicinity of, the Mining Leases for accommodation and ancillary facilities for the mine workforce; "advise", "apply", "approve", "approval", "consent", "certify", "direct", "notify", "request", or "require", means advise, apply, approve, approval, consent, certify, direct, notify, request or require in writing as the case may be and any inflexion or derivation of any of those words has a corresponding meaning; "Agreement Mining Tenements" means: (a) the exploration licences listed in part A of schedule 1; (b) any exploration licences granted to the Company pursuant to the applications for exploration licences listed in part B of schedule 1; (c) any mining leases granted to the Company pursuant to its applications for mining leases referred to in schedule 2; (d) any other mining leases or general purpose leases granted to the Company wholly by way of conversion of all or part of an exploration or exploration licences which at the time of conversion is an Agreement Mining Tenement or are Agreement Mining Tenements; (e) any other mining tenements granted to the Company in accordance with approved proposals; and (f) any other mining tenements approved by the Minister as Agreement Mining Tenements pursuant to clause 12(10), and includes any renewals or extensions thereof as the case may be; "approved proposal" means a proposal approved or deemed to be approved under this Agreement; "beneficiated ore" means iron ore which has been concentrated or upgraded, otherwise than by washing, drying, crushing or screening or a combination thereof, by the Company in a plant constructed pursuant to an approved proposal or such other plant as is approved by the Minister after consultation with the Minister for Mines and "beneficiation" and "beneficiate" have corresponding meanings; "commencement date" means the date on which the Bill referred to in clause 3 comes into operation as an Act; "Commonwealth" means the Commonwealth of Australia and includes the Government for the time being thereof; "Company's workforce" means the persons (and the dependants of those persons) connected directly with the Company's activities under this Agreement, whether or not such persons are employed by the Company and includes the persons (and the dependants of those persons) involved in the construction phases of the Project; "Defined Area" means the area of land shown hatched on the plan annexed to this Agreement and marked with the letter "A"; "Department" means the instrumentality of the State from time to time assisting the Minister for Mines in the administration of the Mining Act; "EP Act" means the Environmental Protection Act 1986; "Government agreement" has the meaning given to it in the Government Agreements Act 1979; "iron ore" includes beneficiated ore; "iron ore products" includes iron ore of all grades and all products from the processing of iron ore; "LAA" means the Land Administration Act 1997; "laws relating to native title" means laws applicable from time to time in Western Australia in respect of native title and includes the Native Title Act 1993 (Commonwealth); "local government" means a local government established under the Local Government Act 1995; "metallised agglomerates" means the product of a pyrometallurgical iron ore reduction process which has a composition of not less than 85% total iron excluding carbon; "mine workforce" means such of the Company's workforce (excluding dependants) engaged for the Company's activities on the area of the Mining Leases, the accommodation area, and other areas provided for the facilities of the Company in the vicinity of the Mining Leases but does not include persons visiting any of those areas in connection with the Company's activities on a short term basis only or employed for a specific task of limited duration; "Mining Act" means the Mining Act 1978; "Mining Amendment Act" means the Mining Amendment Act 2004; "Mining Leases" means mining leases granted to the Company wholly by way of conversion of all or part of an exploration licence or exploration licences which at the time of conversion is an Agreement Mining Tenement or are Agreement Mining Tenements and mining leases approved by the Minister as Agreement Mining Tenements pursuant to clause 12(10) and includes any renewal thereof and according to the requirements of the context shall describe the area of land demised as well as the instruments by which such land is demised; "mining tenement" has the meaning given to it in section 8 of the Mining Act; "Minister" means the Minister in the Government of the State for the time being responsible for the administration of the Act to ratify this Agreement and pending the passing of that Act means the Minister for the time being designated in a notice from the State to the Company and includes the successors in office of the Minister; "Minister for Mines" means the Minister in the Government of the State for the time being responsible for the administration of the Mining Act; "month" means calendar month; "native title" and "native title rights and interests" have the meaning given in the Native Title Act 1993 (Commonwealth); "notice" means notice in writing; "private roads" means the roads referred to in clause 15(1) and any other roads constructed by the Company in accordance with an approved proposal or agreed by the State and the Company to be a private road for the purposes of this Agreement; "Project" means the establishment and operation under this Agreement and in accordance with approved proposals of a project for the production of iron ore from the Mining Leases for transportation from the Mining Leases; "public road" means a road as defined by the Road Traffic Act 1974; "Rail Safety Act" means the Rail Safety Act 1998; "Railway" has the meaning given to it in clause 1 of the Railway and Port Agreement; "Railway and Port Agreement" means the agreement ratified by the Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Act 2004; "said State" means the State of Western Australia; "The JORC Code" means the Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia in December 2004 or any future superseding code issued by the same or any future equivalent organisation or organisations; "this Agreement" "hereof" and "hereunder" refer to this Agreement whether in its original form or as from time to time added to, varied or amended; and "washing" means a process of separation by water using only size as a criterion. Interpretation 2. (1) In this Agreement: (a) monetary references are references to Australian currency unless otherwise specifically expressed; (b) power given under any clause other than clause 29 to extend any period or date shall be without prejudice to the power of the Minister under clause 29; (c) clause headings do not affect interpretation or construction; (d) words in the singular shall include the plural and words in the plural shall include the singular according to the requirements of the context; (e) one gender includes the other genders; (f) a covenant or agreement by more than one person binds, and is enforceable against, those persons jointly and each of them severally; (g) reference to an Act includes the amendments to that Act for the time being in force and also any Act passed in substitution therefor or in lieu thereof and the regulations for the time being in force thereunder; (h) reference to the Access Code includes the amendments to that code for the time being in force and also any code established or made in substitution therefor or in lieu thereof; (i) reference in this Agreement to any other document includes that document as from time to time added to, varied or amended and notwithstanding any change in the identity of the parties to it; (j) reference to a clause, schedule or annexure is a reference to a clause, schedule or annexure to this Agreement, and a reference to a subclause or paragraph is a reference to the subclause of the clause or paragraph of the clause or subclause as the case may be in, or in relation to, which the reference is made; (k) "including" means "including, but not limited to"; and (l) reference to a "person" includes a body corporate. (2) Nothing in this Agreement, including the approval of proposals, shall be construed to exempt the State or the Company from compliance with, or to require the State or the Company to do anything contrary to, any laws relating to native title or any lawful obligation or requirement imposed on the State or the Company, as the case may be, pursuant to any laws relating to native title. (3) Nothing in this Agreement, including the approval of proposals, shall be construed to exempt the Company from compliance with any requirement in connection with the protection of the environment, including the clearing of native vegetation (as defined in section 3 of the EP Act), arising out of or incidental to its activities under this Agreement that may be made by or under the EP Act. Ratification and operation 3. (1) The State shall introduce and sponsor a Bill in the State Parliament of Western Australia to ratify this Agreement and endeavour to secure its passage as an Act prior to 30 June 2006 or such later date as may be agreed between the parties hereto. (2) (a) This clause and clauses 1, 2, 4 and 6 (2) shall come into operation on the date of this Agreement. (b) Clause 12(3) shall not come into operation until both the Bill referred to in subclause (1) has been passed by the Parliament of Western Australia and comes into operation as an Act and Parts 6 and 10 of the Mining Amendment Act come into operation. (c) The other provisions of this Agreement shall not come into operation until the Bill referred to in subclause (1) has been passed by the Parliament of Western Australia and comes into operation as an Act. (3) If by 31 December 2006 the said Bill has not commenced to operate as an Act then unless the parties hereto otherwise agree this Agreement shall then cease and determine and no party hereto shall have any claim against any other party hereto with respect to any matter or thing arising out of, done, performed, or omitted to be done or performed under this Agreement. (4) Subject to subclauses 2(b) and (5), on the said Bill commencing to operate as an Act all the provisions of this Agreement shall operate and take effect despite any enactment or other law. (5) On the later of: (a) the date on which the said Bill commences to operate as an Act; and (b) the date on which Parts 6 and 10 of the Mining Amendment Act come into operation, the provisions of clause 12(3) shall operate and take effect despite any enactment or other law. Initial obligations of the Company 4. (1) The Company shall continue its field and office engineering, environmental, heritage, market and finance studies and other matters necessary for the purposes of this clause and to enable it to finalise and to submit to the Minister the detailed proposals referred to in clause 8. This shall include progressively exploring and carrying out geological investigations to delineate both the Indicated Mineral Resource and the Measured Mineral Resource (each as defined in The JORC Code) of iron ore within those parts of the exploration licences referred to in part A of schedule 1 which are the subject of the applications for mining leases set out in schedule 2. (2) The Company shall keep the State fully informed in writing at quarterly intervals from the date of this Agreement as to the progress and results of its operations under subclause (1) and shall supply to the Minister such information in relation thereto as the Minister may request from time to time. (3) The Company shall co‑operate with the State and consult with the representatives or officers of the State regarding matters referred to in subclauses (1) and (2) and any other relevant studies in relation to those subclauses that the Minister may wish the Company to undertake. (4) Notwithstanding the dedication of Agreement Mining Tenements to the Project as referred to in clause 6(2), as part of undertaking its obligations under subclause (1) the Company may mine iron ore on not more than 2 Mining Leases for the purposes of taking bulk samples and for testing mining equipment intended to be used in the Project provided that: (a) such mining and associated mining operations shall be subject to the Mining Act, the EP Act and the other laws of the State; and (b) the amount of earth, soil, rock, stone, fluid or mineral bearing substances that is excavated, extracted or removed from: (i) those Mining Leases; and (ii) exploration licences which are Agreement Mining Tenements and in respect of which the Minister for Mines has, pursuant to section 66(c) of the Mining Act, approved a limit greater than the prescribed limit as referred to in that section, as part of that bulk sampling and testing does not exceed 1,000,000 tonnes in aggregate. Aboriginal Heritage Act 1972 5. For the purposes of this Agreement the Aboriginal Heritage Act 1972 applies as if it were modified by: (a) the insertion before the full stop at the end of section 18(1) of the words: "and the expression "the Company" means the persons from time to time comprising "the Company" in their capacity as such under the agreement made on 1 December 2005 between The Honourable Geoffrey Ian Gallop, Premier of the State of Western Australia acting for and on behalf of the said State and its instrumentalities from time to time, FMG Chichester Pty Ltd ACN 109 264 262 and Fortescue Metals Group Ltd ACN 002 594 872, in relation to the use or proposed use pursuant to that agreement of land within the Defined Area (as defined in that agreement) after and in accordance with approved proposals under that agreement and in relation to the use of that land before any such approval of proposals where the Company has the requisite authority to enter upon and so use the land"; (b) the insertion in sections 18(2), 18(4), 18(5) and 18(7) of the words "or the Company as the case may be" after the words "owner of any land"; (c) the insertion in section 18(3) of the words "or the Company as the case may be" after the words "the owner"; (d) the insertion of the following sentence at the end of section 18(3): "In relation to a notice from the Company pursuant to subsection (2) the conditions that the Minister may specify can as appropriate include, among other conditions, a condition restricting the Company's use of the relevant land to after the approval or deemed approval as the case may be under the abovementioned agreement of all of the Company's submitted proposals thereunder for the Project (as defined in the abovementioned agreement), or in the case of additional proposals submitted or to be submitted by the Company to after the approval or deemed approval under that agreement of such additional proposals, and to the extent so approved."; and (e) the insertion in sections 18(2) and 18(5) of the words "or it as the case may be" after the word "he". The Company acknowledges that nothing in this clause 5 nor the granting of any consents under section 18 of the Aboriginal Heritage Act 1972 will constitute or is to be construed as constituting the approval of any proposals submitted or to be submitted by the Company under this Agreement or as the grant or promise of land tenure for the purposes of this Agreement. Land to be the subject of this Agreement 6. (1) The land to be granted pursuant to this Agreement, whether under the LAA, the Mining Act or otherwise, will be drawn from within: (a) the Defined Area; and (b) such other area of land in the vicinity of the Defined Area as the Minister, before the Company submits proposals in respect thereof, approves as land the Company may as part of the particular proposals and in accordance with but subject to this Agreement request the grant to it of leases, licences or other tenures over as referred to in clause 18 to support the undertaking of the Project. (2) Subject to clause 4(4), the Company dedicates to the Project: (a) all Agreement Mining Tenements held by it at the date of this Agreement; and (b) all future Agreement Mining Tenements, and agrees that while this Agreement continues they shall remain so dedicated for their respective terms including as renewed or extended from time to time. Community development plan 7. (1) In this clause, the term "community and social benefits" includes: (a) training and guaranteed employment for indigenous and non‑indigenous persons living in the Pilbara region of the said State; (b) regional development and local procurement of goods and services; (c) contribution to community services and facilities; and (d) a regionally based workforce. (2) The Company acknowledges the need for community and social benefits flowing from this Agreement. (3) The Company agrees that, prior to the time at which it submits any proposals pursuant to clause 8 and, if required by the Minister, prior to the time at which it submits any additional proposals pursuant to clauses 10 or 11, it shall: (a) consult with the relevant local government or local governments with respect to the need for community and social benefits in relation to the developments proposed; (b) following such consultation, prepare a plan which describes the Company's proposed strategies for achieving community and social benefits in connection with the developments proposed, and such plan shall include a process for regular consultation by the Company with the relevant local government or local governments in respect of the strategies; and (c) submit to the Minister the plan prepared pursuant to subclause (3)(b) and confer with the Minister in respect of the plan. (4) The Minister shall within one month after receipt of a plan submitted under subclause (3)(c), either notify the Company that the Minister approves the plan as submitted or notify the Company of any changes that the Minister requires be made to the plan. If the Company is unwilling to accept the changes which the Minister requires it shall notify the Minister to that effect and either party may refer to arbitration hereunder the question of the reasonableness of the changes required by the Minister. (5) The effect of an award made on an arbitration pursuant to subclause (4) shall be that the plan submitted by the Company pursuant to subclause (3)(c) shall, with such changes required by the Minister under subclause (4) as the arbitrator determines to be reasonable (with or without modification by the arbitrator), be deemed to be the plan approved by the Minister under this clause. (6) During the continuance of this Agreement, the Company shall implement the plan approved or deemed to be approved by the Minister under this clause. (7) The Company shall report to the Minister about the results of its periodic ongoing consultation with the relevant local government or local governments in accordance with the plan approved or deemed to be approved by the Minister under this clause and as soon as practicable after each such consultation takes place. (8) At the request of either of them made at any time and from time to time, the Minister and the Company shall confer as to any amendments desired to any plan approved or deemed to be approved by the Minister under this clause and may agree to amendment of the plan or adoption of a new plan. Any such amended plan or new plan will be deemed to be the plan approved by the Minister under this clause. Company to submit proposals 8. (1) The Company shall, subject to the EP Act, the provisions of this Agreement and approval of a plan as referred to in clause 7, submit to the Minister by 31 December 2006 to the fullest extent reasonably practicable its detailed proposals (including plans where practicable and specifications where reasonably required by the Minister and any other details normally required by a local government in whose area any works are to be situated) with respect to the production of iron ore from the Mining Leases then held by the Company and, if the Company so wishes, also from any mining leases which the Company has then applied for under the Mining Act and which if granted would be Agreement Mining Tenements (such Mining Leases and proposed mining leases in this subclause together being called "the relevant mining leases") in an amount not less than, in aggregate, 10,000,000 tonnes per annum and not greater than the production limit specified in clause 11(1) or such higher number of tonnes per annum as may be approved in principle by the Minister pursuant to clause 11(2), for transportation from the relevant mining leases and which proposals shall include the location, area, lay‑out, design, quantities, materials and time program for the commencement and completion of construction or the provision (as the case may be) of each of the following matters, namely: (a) the mining and recovery of iron ore including mining, crushing, screening, handling, transport and storage of iron ore and plant facilities; (b) any beneficiation or further processing of iron ore proposed to be carried out; (c) transportation of iron ore from the relevant mining leases by road or by rail spur line or conveyor connecting to the Railway or to any other railway of a third party at a location within the Defined Area; (d) roads within the relevant mining leases and roads serving the relevant mining leases; (e) temporary accommodation and ancillary facilities for the mine workforce on, or subject to clause 6 in the vicinity of, the relevant mining leases and housing or other appropriate accommodation and facilities elsewhere for the Company's workforce; (f) water supply and disposal; (g) energy supplies; (h) a mine aerodrome on, or subject to clause 6 in the vicinity of, the relevant mining leases; (i) any other works, services or facilities desired by the Company; (j) residue disposal; (k) subject to clause 6, any ancillary leases (not being general purpose leases for land within the Defined Area or mining leases), licences (not being exploration licences or retention licences) or other tenures of land in favour of the Company required from the State to support the undertaking of the Project; and (l) use of local labour, professional services, manufacturers, suppliers, contractors and materials and measures to be taken with respect to the engagement and training of employees by the Company, its agents and contractors. (2) Proposals submitted pursuant to subclause (1) must not: (a) include a request for the grant of a lease, licence or other tenure of land which the Company has already applied for under the Mining Act, the LAA or otherwise; (b) in relation to all Agreement Mining Tenements the subject of the proposals, be inconsistent with the conditions endorsed by the Minister for Mines on the grants of those mining tenements; and (c) if they relate to a mining lease or mining leases which the Company has applied for under the Mining Act and which if granted would be an Agreement Mining Tenement or Agreement Mining Tenements as the case may be, be inconsistent with the documentation that accompanied that application or those applications under the Mining Act. (3) Each of the proposals submitted pursuant to subclause (1) may with the approval of the Minister or must if so required by the Minister be submitted separately and in any order as to the matter or matters mentioned in one or more of paragraphs (a) to (l) of subclause (1). Until all of its proposals under this clause have been approved the Company may withdraw and may resubmit any proposal but the withdrawal of any proposal shall not affect the obligations of the Company to submit a proposal under this clause in respect of the subject matter of the withdrawn proposal. (4) Each of the proposals submitted pursuant to subclause (1) may with the consent of the Minister and the consents of any other parties concerned, instead of providing for the construction of new facilities or equipment or the provision of new services of the kind therein mentioned, provide for the use by the Company of any existing facilities equipment or services of such kind belonging to the Company or upon terms and conditions agreed between the Company and the other parties concerned of any other existing facilities equipment or services of such kind. (5) The Company shall, whenever any of the following matters referred to in this subclause are proposed by the Company (whether before or during the submission of proposals under this clause), submit to the Minister details of any services (including any elements of the Project investigations, design and management) and any works, materials, plant, equipment and supplies that it proposes to consider obtaining from or having carried out or permitting to be obtained or carried out outside Australia, together with its reasons therefor and shall, if required by the Minister consult with the Minister with respect thereto. (6) At the time when the Company submits the last of the said proposals pursuant to this clause, it shall furnish to the Minister's reasonable satisfaction evidence of: (a) marketing arrangements demonstrating the Company's ability to sell iron ore produced in accordance with the said proposals; (b) the financial capacity of the Company to undertake the operations to which the said proposals refer; (c) all accreditations under the Rail Safety Act which are required to be held by the Company or any other person for the construction of any rail spur proposed as referred to in subclause (1)(c); and (d) the readiness of the Company to embark upon and proceed to carry out the operations referred to in the said proposals. Consideration of proposals 9. (1) In respect of each proposal pursuant to clause 8(1) the Minister shall subject to the EP Act: (a) approve of the proposal without qualification or reservation; or (b) defer consideration of or decision upon the same until such time as the Company submits a further proposal or proposals in respect of some other of the matters mentioned in clause 8(1) not covered by the said proposal or until such time as clause 8(6) has been complied with by the Company; or (c) require as a condition precedent to the giving of his approval to the said proposal that the Company make such alteration thereto (including where the proposal relates to an Agreement Mining Tenement or Agreement Mining Tenements granted after the submission of the proposal, to accord with the conditions endorsed by the Minister for Mines on the grant of that mining tenement or grants of those mining tenements) or comply with such conditions in respect thereto as he thinks reasonable, and in such a case the Minister shall disclose his reasons for such conditions, PROVIDED ALWAYS that where implementation of any proposals hereunder have been approved pursuant to the EP Act subject to conditions or procedures, any approval or decision of the Minister under this clause shall if the case so requires incorporate a requirement that the Company make such alterations to the proposals as may be necessary to make them accord with those conditions or procedures. (2) The Minister shall within 2 months after the later of: (a) receipt of proposals pursuant to clause 8(1); (b) where the proposals are to be assessed under Part IV of the EP Act, service on the Minister of an authority under section 45(7) of the EP Act; (c) where a proposal will or may require the State to do any act which affects any native title rights and interests, completion of all processes required by laws relating to native title to be undertaken by the State before that act may be done by the State; and (d) where the proposals relate to a mining tenement or mining tenements which the Company has applied for under the Mining Act and which if granted would be an Agreement Mining Tenement or Agreement Mining Tenements, the grant of that application or of all of those applications as the case may be, give notice to the Company of his decision in respect to the proposals. (3) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of subclause (1) the Minister shall afford the Company full opportunity to consult with him and should it so desire to submit new or revised proposals either generally or in respect to some particular matter. (4) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of subclause (1) and the Company considers that the decision is unreasonable the Company within 2 months after receipt of the notice mentioned in subclause (2) may elect to refer to arbitration in the manner hereinafter provided the question of the reasonableness of the decision provided that any requirement of the Minister pursuant to the proviso to subclause (1) shall not be referable to arbitration hereunder. (5) An award made on an arbitration pursuant to subclause (4) shall have force and effect as follows: (a) if by the award the dispute is decided against the Company then unless the Company within 3 months after delivery of the award gives notice to the Minister of its acceptance of the award this Agreement shall on the expiration of that period of 3 months cease and determine; or (b) if by the award the dispute is decided in favour of the Company the decision shall take effect as a notice by the Minister that he is so satisfied with and approves the matter or matters the subject of the arbitration. (6) Notwithstanding any provision of this Agreement (other than clause 29) or that the plan required to be approved pursuant to clause 7 has not been approved, or that under this clause any proposals of the Company are approved by the Minister or determined by arbitration award, unless each and every proposal and matter required pursuant to clause 8 is so approved or determined by 31 December 2007 then the Minister may give to the Company 12 months notice of intention to determine this Agreement and unless before the expiration of the said 12 months period all the detailed proposals and matters are so approved or determined this Agreement shall cease and determine subject however to the provisions of clause 31. (7) Subject to and in accordance with the EP Act and any approvals and licences required under that Act the Company shall implement the approved proposals in accordance with the terms thereof. (8) Notwithstanding clause 27, the Minister may during the implementation of approved proposals approve variations to those proposals. (9) The Minister may extend the periods set forth in clause 8(1) and subclause (6) of this clause (in addition to any extension granted under clauses 28 and 29) upon request of either the Company or the State for such reasonable period or periods as the Minister considers appropriate to enable either of them to comply with laws relating to native title. Expansion of the Project 10. (1) Subject to clause 11, if the Company at any time during the continuance of this Agreement desires to significantly modify, expand or otherwise vary its activities that are the subject of this Agreement and that may be carried on by it pursuant to this Agreement beyond those activities specified in any approved proposals it shall give notice of such desire to the Minister and within 2 months thereafter shall submit to the Minister detailed proposals in respect of all matters covered by such notice and such of the other matters mentioned in clause 8(1) as the Minister may require. (2) The provisions of clauses 8 and 9 (other than subclauses (5)(a) and 6) shall mutatis mutandis apply to detailed proposals submitted pursuant to this clause with the proviso that the Company may withdraw such proposals at any time before approval thereof or, where any decision of the Minister in respect thereof is referred to arbitration, within 3 months after the award by notice to the Minister that it shall not be proceeding with the same. Subject to and in accordance with the EP Act and any approvals or licences required under that Act, the Company shall implement approved proposals pursuant to this clause in accordance with the terms thereof. Limits on mining 11. (1) The Company shall not produce, in aggregate, more than 45,000,000 tonnes of iron ore per annum from the Mining Leases without the prior in‑principle approval of the Minister under, and approval of detailed proposals in regard thereto in accordance with, this clause. (2) (a) If the Company desires to increase the annual tonnage beyond that specified in subclause (1) it shall, subject to sub‑clause (3), give notice thereof to the Minister and furnish to the Minister with that notice an outline of its proposals in respect thereto (including the matters mentioned in clause 8(1) or as the Minister otherwise requires). (b) The Minister shall within one month of receipt of a notice under paragraph (a) of this subclause advise the Company whether or not he approves in principle the proposed increase. An in‑principle approval by the Minister under this subclause may be given subject to conditions including a condition requiring variations of or additions to this Agreement provided that any such condition shall not without the consent of the Company require variations of: (i) the term of any Agreement Mining Tenement; or (ii) the rentals payable under any Agreement Mining Tenement; or (iii) the rates or method of calculating royalty; or (iv) the provisions of clause 20. The Minister shall afford the Company full opportunity to consult with him in respect of the decision of the Minister under this subclause. (3) The Company may not give a notice under subclause (2)(a) in regard to the production, in aggregate, of more than 45,000,000 tonnes of iron ore per annum from the Mining Leases unless the Minister: (a) acting in accordance with clause 20(4) has approved or is deemed to have approved proposals submitted under clause 20(2) for the establishment within the said State of plant for the production of metallised agglomerates or under clause 20(6) for an alternative project in lieu of the Company's obligations under clause 20 in respect of the establishment of such plant; or (b) agrees for the purpose of this subclause (3) to receive a notice under subclause (2)(a). If at the time the Minister is considering whether or not to so agree for the purpose of this subclause the Company has pursuant to clause 20(3) applied for or been granted a postponement of its obligations to submit proposals under clause 20(2) or such an application made by it is subject to clause 20(3)(d), the Minister shall in considering whether or not to so agree for the purpose of this subclause take into account the estimated quantity of iron ore then still available to be produced from the Mining Leases. (4) (a) If the Minister approves in principle a proposed increase the Company: (i) if it has not already submitted pursuant to clause 8 all of its proposals for its initial mining project, shall submit to the Minister pursuant to clause 8 detailed proposals in respect of the proposed increase as part of the Company's proposals for its initial mining project and in accordance with any condition of the Minister's in‑principle approval which may include the amendment of the plan approved under clause 7 as a prerequisite to the submission by the Company of proposals under clause 8; or (ii) if it has already submitted pursuant to clause 8 all of its proposals for its initial mining project, may after compliance with clause 7 (if required by the Minister) and within 18 months or such longer period as the Minister may from time to time allow of the Minister's in‑principle approval, submit to the Minister detailed proposals in respect of the proposed increase in accordance with any conditions of that in‑principle approval otherwise that in‑principle approval shall lapse. (b) The provisions of clauses 8 and 9 shall mutatis mutandis apply to detailed proposals regarding a proposed increase referred to in paragraph (a)(i) of this subclause. The provisions of clause 10(2) shall apply to detailed proposals submitted pursuant to paragraph (a)(ii) of this subclause. (5) Any proposal to increase the annual tonnage to be produced from the Mining Leases shall specify the proposed increase and on and after approval or determination of any such proposal in accordance with subclause (4)(b): (a) a reference to the amount referred to in subclause (1) shall be deemed to be a reference to the increased tonnage and the provisions of this clause shall apply mutatis mutandis to the increased tonnage and also to any subsequent desires of the Company for an increase in the tonnage; and (b) a reference to the amount referred to in subclause (3) shall be deemed to be a reference to the increased tonnage if that increased tonnage is higher than 45,000,000 tonnes of iron ore per annum. Agreement Mining Tenements 12. (1) The Company shall be responsible for obtaining the grant to it under the Mining Act of mining leases and general purpose leases, by way of conversion of all or part of exploration licences now or hereafter held by it and which are Agreement Mining Tenements, required for the purposes of the Project and the grant of such leases and any other mining leases will not be sought or granted pursuant to this Agreement. (2) For the purposes of this Agreement and without limiting the operation of other subclauses, the application of the Mining Act and regulations made thereunder are specifically modified during the continuance of this Agreement as follows: (a) in relation to an application that the Company may after the commencement date make under the Mining Act: (i) to convert all or part of an exploration licence referred to in part A of schedule 1 or granted to the Company pursuant to an application referred to in part B of schedule 1 to a mining lease or general purpose lease; or (ii) otherwise for the grant to it of a mining tenement solely over land within the Defined Area where the grant is provided for in approved proposals, the provisions of the Mining Act which, but for this paragraph, entitle or would entitle a person to object with or without the leave of the warden to the grant of such a mining tenement to the Company, shall not apply to the extent only that those provisions entitle or would entitle a person to so object; (b) by inserting in section 65(1a) the words "or otherwise by the terms of the licence" after the words "section 111"; (c) the Company shall not be entitled to apply for and be granted any retention licences in respect of the whole or any part of the land the subject of a Mining Lease or an exploration licence which is an Agreement Mining Tenement; and (d) in respect of any exploration licence that is an Agreement Mining Tenement by inserting in regulation 23AB the following new ground for extension of the term of such exploration licence: "the holder of the exploration licence is a person authorised by the Minister under section 111 or otherwise by the terms of the licence to explore for iron on that land". (3) For the purposes of this Agreement and without limiting the operation of other subclauses, the application of the Mining Act and regulations made thereunder are also specifically modified during the continuance of this Agreement as follows: (a) in respect of the applications for mining leases referred to in schedule 2 and any other applications by Company for mining leases under the Mining Act which if granted would be Agreement Mining Tenements, by deleting section 120AA; (b) section 6(1a), including as applying pursuant to section 90(1), shall not apply to the extent it may prevent the Minister from referring for assessment under Part IV of the EP Act, a proposal or proposals submitted pursuant to clauses 8, 10 or 11 as the case may be; (c) in section 6(1d), including as applying pursuant to section 90(1), by deleting the full stop at the end of paragraph (b) and substituting "; or" and inserting the following new paragraph: "(c) a proposal or proposals submitted pursuant to a Government agreement as defined in the Government Agreements Act 1979 for approval under that agreement"; (d) a "relevant mining proposal" as defined in section 82(1a) shall include an approved proposal; (e) in section 82A(2), including as applying pursuant to section 90(4), by deleting the full stop at the end of paragraph (b) and substituting a comma and inserting as a qualification to paragraphs (a) and (b) the words "unless such mining operations are dealt with in a proposal or proposals approved or deemed to be approved pursuant to a Government agreement as defined in the Government Agreements Act 1979."; and (f) by deleting section 118A. (4) For the purposes of this Agreement and without limiting the operation of other subclauses, during the continuance of this Agreement and notwithstanding any provisions of the Mining Act and regulations made thereunder to the contrary: (a) any assignment, mortgaging, charging, subletting, parting with possession or disposal of an Agreement Mining Tenement shall be subject to clause 26; (b) subject to compliance with its obligations hereunder, the Company shall not be required to comply with the expenditure obligations imposed by or under the Mining Act in regard to Agreement Mining Tenements; (c) in considering an application by the Company for the extension of the term of an Agreement Mining Tenement or for an exemption from the requirement of section 65 of the Mining Act in respect of an exploration licence which is an Agreement Mining Tenement, the Minister for Mines shall consult with the Minister and if applicable have regard to the Company's compliance with clause 12(11) in respect of that Agreement Mining Tenement and the results of the geological investigations carried out on it; and (d) an Agreement Mining Tenement shall not be forfeited (except if it is an exploration licence, in regard to failure to surrender land the subject of the licence in accordance with the Mining Act) or determined otherwise than in accordance with this Agreement. (5) Except as required by section 65 of the Mining Act the Company shall not surrender all or any part of an Agreement Mining Tenement without the prior consent of the Minister. (6) The Company shall lodge with the Department at Perth: (a) in respect of each Agreement Mining Tenement such periodical reports and returns as may be prescribed from time to time in respect of such type of mining tenement under or pursuant to the Mining Act or the regulations made thereunder; (b) if requested by the Department but not more frequently than annually, a report on identified mineral resources and/or iron ore reserves within the Agreement Mining Tenements (prepared in accordance with The JORC Code) together with a list of any geological, geochemical, geophysical, geotechnical and metallurgical activities carried out during the year and, if requested by the Department, the Company will provide details and results of any of those activities in a mineral exploration report, or other technical report, in accordance with the statutory guidelines on reporting as specified in the Mining Act; and (c) reports on drilling operations and drill holes where the main purposes of the drilling was to discover or define future mineral resources and ore reserves within the Agreement Mining Tenements and, if requested by the Department, reports on drilling done within blocks of proven ore for the purpose of mine planning. (7) The Company shall at all times permit the State and third parties with the consent of the State (with or without stock, vehicles and rolling stock) to have access to and to pass over Agreement Mining Tenements and any other lease, licence of other title granted pursuant to or under this Agreement (by separate route, road or railway) so long as that access and passage does not in the Minister's opinion unduly prejudice or interfere with the activities of the Company under this Agreement. (8) Notwithstanding the Mining Act, the Company may with the prior consent of the Minister and 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 and has been paid in advance) surrender to the State all or any portion or portions of the Mining Leases. (9) The Company in accordance with approved proposals may for the construction of works (and the maintenance thereof) within the Mining Leases for the purposes of this Agreement and without payment of royalty, obtain stone sand clay an gravel from the Mining Leases. (10) The Minister, after consulting the Minister for Mines, may approve any mining tenement held by the Company the land the subject of which is wholly or partly within the Defined Area or in the vicinity of the Defined Area, and which is not then an Agreement Mining Tenement, as an Agreement Mining Tenement for the purposes of this Agreement and subject to such of the existing conditions of that mining tenement as the Minister for Mines determines but otherwise as from the date of the Minister's approval subject to the provisions of this Agreement. (11) The Company shall to the extent permitted by the Mining Act progressively explore and carry out geological investigations to delineate the Inferred Mineral Resource (as defined in The JORC Code) of iron ore within the Mining Leases and exploration licences which are Agreement Mining Tenements. Royalties 13. Except as otherwise provided in clause 12(9) the Company shall pay to the State royalties on all minerals obtained from Agreement Mining Tenements as may from time to time be prescribed under or pursuant to the Mining Act or the regulations made thereunder. Transportation by rail 14. (1) Subject to and in accordance with approved proposals, the Rail Safety Act and the State having assured to the Company all necessary rights in or over Crown lands (as defined in the LAA) available for the purpose the Company shall 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 the rail spur line or lines specified in the approved proposals and shall also construct inter alia any necessary loops, sidings, crossings, points, bridges signalling switches and other works and appurtenances and provide for crossing places and (where required by the Minister) grade separation or other protective devices including flashing lights and boom gates (all of which together with the specified rail spur line or lines being hereinafter referred to as "the said railway spur line") at places where the said rail spur line crosses or intersects with major roads or existing railways and unless the Minister otherwise allows shall operate the said railway spur line with sufficient and adequate locomotives freight cars and other railway stock and equipment for the purposes of the Company's activities under this Agreement. (2) The Company shall during the continuance of this Agreement: (a) keep the said railway spur line constructed under this Agreement in operation; (b) ensure that the said railway spur line is operated in a safe and proper manner in compliance with all applicable laws from time to time; and (c) without limiting subclause 2(b), ensure that the obligations imposed under the Rail Safety Act on an owner and an operator (as those terms are therein defined) are complied with in connection with the said railway spur line, and nothing in this Agreement shall be construed to exempt the Company or any other person from compliance with the Rail Safety Act, or limit their application to the Company's operations generally. (3) The Company shall provide crossings for livestock and also for any roads, other railways, conveyors, pipelines and other utilities which now exist and where in the Minister's opinion it can do so without unduly prejudicing or interfering with its activities hereunder the Company shall allow such crossings for roads, railways, conveyors, pipelines and other utilities which may be constructed for future needs and which may be required to cross the said railway spur line. (4) Where in the Minister's opinion the Company can do so without materially prejudicing or interfering with its operations hereunder and subject to the payment to it of the charges prescribed by and for the time being payable under any by‑laws made by the Company in respect of the transporting of passengers and the carriage of freight (including the iron ore and iron ore products of third parties) over the said railway spur line 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 shall be reasonable having regard to the cost to the Company of the construction and operation of the said railway spur line) the Company shall if and when reasonably required so to do transport passengers and carry the freight of the State and third parties (including the iron ore and iron ore products of third parties) over the said railway spur line but in relation to its use of the said railway spur line the Company shall not be deemed to be a common carrier at law or otherwise. (5) (a) The Company shall, during the continuance of this Agreement and until the Access Act and the Access Code are applied to and in respect of the said railway spur line and associated access roads of the Company, notify the Minister of all written requests made by third parties to the Company for access to the said railway spur line and associated access roads of the Company and as soon as practicable after such requests are made. (b) The Minister shall provide to the Access Minister a copy of each notification from the Company as soon as practicable after such notification is received for consideration by the Access Minister as to whether or not in the Access Minister's discretion the Access Act and the Access Code should be applied to and in respect of the said railway spur line and associated access roads of the Company. (c) The Company acknowledges that the Access Act and the Access Code may during the continuance of this Agreement be applied to and in respect of the said railway spur line and associated access roads of the Company (but not to the Company's rolling stock, rolling stock maintenance facilities, office buildings, housing, freight centres, terminal yards and depots and any other facilities which are not railway infrastructure (as that term is defined in the Access Act)). The Company: (i) acknowledges that the State shall from time to time be entitled to make such legislative changes as are necessary to achieve that application; and (ii) in the event the Access Minister decides in exercise of the Access Minister's discretion as referred to in paragraph (b) that such application should occur, shall do all such things as the Minister reasonably requests for the purposes of the Access Act and the Access Code applying and continuing to apply to and in respect of the said railway spur line and associated access roads of the Company which are not inconsistent with this Agreement. (6) Throughout the continuance of this Agreement the Company shall all times keep and maintain the said railway spur line in good repair and working order and condition (which obligation includes, where necessary, replacing or renewing all parts which are worn out or in need of replacement or renewal due to their age or condition). (7) The Company shall not at any time without the prior consent of the Minister dismantle, sell or otherwise dispose of any part or parts of the said railway spur line constructed under this Agreement or permit this to occur, other then for the purpose of maintenance, repair, upgrade or renewal. Private and public roads 15. (1) The Company shall: (a) be responsible for the cost of the construction and maintenance of all private roads which shall be used in its activities hereunder; (b) at its own cost erect signposts and take other steps that may be reasonable in the circumstances to prevent any persons and vehicles (other than those engaged upon the Company's activities and its invitees and licensees) from using the private roads; and (c) at any place where any private roads are constructed by the Company so as to cross any public roads or private railways provide at its cost such reasonable protection and signposting as may be required by the Commissioner of Main Roads or the owner of the private railway as the case may be. (2) The State shall maintain or cause to be maintained those public roads under the control of the Commissioner of Main Roads or a local government which may be used by the Company for the purposes of this Agreement to a standard similar to comparable (in the Minister's opinion) public roads maintained by the Commissioner of Main Roads or a local government as the case may be. (3) In the event that for or in connection with the Company's activities hereunder the Company or any person engaged by the Company uses or wishes to use a public road (whether referred to in subclause (2) or otherwise) which is inadequate for the purpose, or any use by the Company or any person engaged by the Company of any public road results in excessive damage to or deterioration thereof (other than fair wear and tear) the Company shall pay to the State or the local government as the case may require the whole or an equitable part of the total cost of any upgrading required or of making good the damage or deterioration as may be reasonably required by the Commissioner of Main Roads having regard to the use of such public road by others. (4) Where a road constructed by the Company for its own use is subsequently required for public use, the State may, after consultation with the Company and so long as resumption thereof shall not in the Minister's opinion unduly prejudice or interfere with the activities of the Company under this Agreement, resume and dedicate such road as a public road. Upon any such resumption the State shall pay to the Company such amount as is reasonable for such resumption. Electricity 16. The Company may in accordance with its approved proposals hereunder and subject to the provisions of the Electricity Act 1945 and any other relevant Act: (a) install and operate without cost to the State at an appropriate location or locations on the Mining Leases equipment of sufficient capacity to generate electricity for its activities on the Mining Leases and other areas provided for the facilities of the Company in the vicinity of the Mining Leases; and (b) transmit power within and between the Mining Leases and other areas provided for the facilities of the Company in the vicinity of the Mining Leases and for other elements of the Company's operations hereunder as the Minister may approve for the purposes of this clause. Water 17. (1) (a) To the fullest extent reasonably practicable the Company shall use water obtained from dewatering on Mining Leases for its purposes under this Agreement. (b) Nothing in this Agreement shall be construed so as to exempt the Company from any liability to the State or to third parties arising out of or caused by the extraction of water from the Agreement Mining Tenements by dewatering or any discharge or escape from the Agreement Mining Tenements of water obtained by dewatering. (2) Except as otherwise specifically provided for under this clause the water requirements for the Project shall be obtained in accordance with laws applicable from time to time in Western Australia in respect of rights in water and the supply and discharge of water and the supply of water services. (3) The Company shall to the extent that it is practical and economical design, construct and operate all plant and equipment used in its activities under this Agreement so as to minimise water consumption and shall at all times use its best endeavours to minimise the consumption of water in its activities under this Agreement and ensure the most efficient use of the available water resources. Ancillary titles 18. On application made by the Company not later than 3 months after proposals submitted pursuant to clause 8(1) have been approved or determined or not later than 3 months after proposals submitted pursuant to clause 10 or 11 have been approved or determined (as applicable), the State shall in accordance with the Company's approved proposals grant to the Company, or arrange to have the appropriate authority or other interested instrumentality of the State grant to the Company, for such periods and on such terms and conditions including rentals and renewal rights as shall be reasonable having regard to the requirements of the Company and as are consistent with the terms of this Agreement and approved proposals, leases and where applicable licences, easements and rights of way for all or any of the purposes of the Company's activities hereunder including any of the following namely ‑ accommodation area, mine aerodrome, rail spur line, conveyor, private roads, water pipelines, pumping installations and reservoirs, power transmission lines, radio and communication sites and plant site areas. Use of local labour professional services and materials 19. (1) Except as otherwise agreed by the Minister the Company shall, for the purposes of this Agreement: (a) except in those cases where the Company can demonstrate it is not reasonable and economically practicable so to do, use labour available within the said State (using all reasonable endeavours to ensure that as many as possible of the workforce be recruited from the Pilbara region) or if such labour is not available then, except as aforesaid, use labour otherwise available within Australia; (b) as far as it is reasonable and economically practicable so to do, use the services of engineers, surveyors, architects and other professional consultants experts and specialists, project managers, manufacturers, suppliers and contractors resident and available within the said State, or if such services are not available within the said State, then, as far as practicable as aforesaid, use the services of such persons otherwise available within Australia; (c) during design and when preparing specifications, calling for tenders and letting contracts for works, materials, plant, equipment and supplies (which shall at all times, except where it is impracticable so to do, use or be based upon Australian Standards and Codes) ensure that suitably qualified Western Australian and Australian suppliers, manufacturers and contractors are given fair and reasonable opportunity to tender or quote; (d) give proper consideration and, where possible, preference to Western Australian suppliers, manufacturers and contractors when letting contracts or