The Company shall for the purposes of this Agreement as far as it is reasonably and economically practicable —
30 The Company shall for the purposes of this Agreement as far as it is reasonably and economically practicable —
use the services of engineers surveyors architects and other professional consultants resident and available within the said State;
use labour available within the said State;
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; and
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 where price quality delivery and service are equal to or better than that obtainable elsewhere.
Commonwealth licences and consents 2
31. (1) The Company shall from time to time make application to the Commonwealth or to the Commonwealth constituted agency, authority or instrumentality concerned for the grant to it of any licence or consent under the laws of the Commonwealth of Australia necessary to enable or permit the Company to enter into this Agreement and to perform any of its obligations hereunder.
On request by the Company the State shall make representations to the Commonwealth or to the Commonwealth constituted agency authority or instrumentality concerned for the grant to the Company of any licence or consent mentioned in subclause (1) of this Clause.
Royalty 2
32. (1) The Company shall during the continuance of this Agreement pay to the State a royalty on all iron ore products (other than iron ore shipped solely for testing purposes) at the rates herein specified in respect of each particular class of iron ore product as follows —
on iron ore products (being direct shipping ore and fine ore and fines not sold or shipped separately as such) not being locally used ore — at the rate of seven and one half per centum of the f.o.b. revenue (computed at the rate of exchange prevailing on date of receipt by the Company of the purchase price of such iron ore products) PROVIDED NEVERTHELESS that subject as provided in paragraph (e) of this subclause the total royalty payable under this paragraph shall not be less than the sum ascertained by multiplying 59.0524 cents by the total weight in tonnes of such iron ore products the subject of any shipment or sale;
on iron ore products (being fine ore and fines so sold or shipped separately as such) not being locally used ore — at the rate of seven and one half per centum of the f.o.b. revenue (computed as mentioned in paragraph (a) of this subclause) PROVIDED NEVERTHELESS that subject as provided in paragraph (f) of this subclause the total royalty payable under this paragraph shall not be less than the sum ascertained by multiplying 29.5262 cents by the total weight in tonnes of such iron ore products the subject of any shipment or sale;
(i) on iron ore products (being such as are produced by the secondary processing of iron ore by the Company or an associated company within the Commonwealth); or
on locally used ore (not being iron ore used in the secondary processing of iron ore by the Company or an associated company within the Commonwealth) —
at the rate of 14.7631 cents per tonne;
on all other iron ore products (not being locally used ore) at the rate of seven and one half per centum of the f.o.b. revenue (computed as aforesaid) without any minimum royalty;
if the amount ascertained by multiplying 59.0524 cents by the total weight in tonnes of direct shipping ore shipped or sold (and liable to royalty under paragraph (a) of this subclause) 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;
if the amount ascertained by multiplying 29.5262 cents by the total weight in tonnes of fine ore and fines shipped or sold separately as such (and liable to royalty under paragraph (b) of this subclause) 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 separately as such in that year and at the expiration of that year any necessary adjustments shall be made;
the rate of royalty of 14.7631 cents per tonne mentioned in paragraph (c) of this subclause shall 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 c.i.f. Australian capital city ports as announced by The Broken Hill Proprietary Company Limited or any subsidiary thereof 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;
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 equal to the proportion which the amount of iron in the iron ore from the mineral lease used in the production of those iron ore products bears to the total amount of iron in the iron ore so used, shall be deemed to be produced from iron ore from the mineral lease.
Payment of royalties 2
The Company shall during the continuance of this Agreement within fourteen 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 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 months after such due date pay to the Minister the royalty payable in respect of such of the iron ore products mentioned in subclause (1) of this Clause as are locally used and shall 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) rendered by the Company to the purchaser (which invoices the Company shall render without delay and simultaneously shall furnish copies thereof to the Minister) and shall from time to time when the f.o.b. revenue realised in respect of the shipments has been ascertained in the next following appropriate return and payment make (in the return and by cash) all such necessary adjustments and give to the Minister full details thereof.
Inspection of Records 2
The Company shall permit the Minister or his nominee at all reasonable times to inspect the books of account and records of the Company relative to the Company’s operations hereunder and to any shipment sale or use of iron ore products hereunder including sales contracts and to take copies or extracts therefrom. For the purpose of determining the f.o.b. revenue payable in respect of any shipment or sale of iron ore products hereunder the Company shall take reasonable steps (either by the certificate of a competent independent party acceptable to the Minister or otherwise to the Minister’s satisfaction) to satisfy the State as to the correctness of all relevant weights assays and analyses and shall 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 Company 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.
Offloading 2
33. (1) Subject to the provisions of subclause (3) of this Clause the Company shall 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.
Where iron ore products are offloaded in breach of subclause (1) of this Clause the Company shall forthwith after becoming aware of that event notify the Minister and shall without prejudice to any other rights or remedies of the State by reason of the breach on demand pay to the State such sum as the Minister may determine but not more than a sum representing one dollar per tonne on the quantity of iron ore products offloaded.
The Company shall not be deemed to have committed a breach of this Clause if iron ore products are offloaded at a place within the Commonwealth in any of the following circumstances —
where the iron ore products are shipped in a vessel that is not owned by the Company or an associated company and the Company satisfies the Minister that it has taken appropriate steps to ensure that iron ore products will not again be offloaded in breach of this Clause; or
because the vessel in which the iron ore products are being carried is unforeseeably diverted for necessary repairs or because of a force majeure or other unforeseeable cause and the Company satisfies the Minister that because of any such event it could not take or be reasonably expected to have taken steps to prevent the offloading; or
where the weight of iron ore products offloaded in any part of the Commonwealth in any year and used by the Company or an associated company within the Commonwealth but outside the said State does not exceed fifty per centum (or such other percentage as the Minister approves) of the weight of locally used ore consumed used or otherwise applied in the said State for that year.
Secondary processing proposals 2
34. (1) The Company shall from time to time renew the investigations already commenced by it as to the feasibility of establishing within the said State a plant 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 on the following basis —
the plant to be of such design and dimensions that it will progressively have the capacity to process annually —
by the end of Year 12 — not less than five hundred thousand tonnes of iron ore;
by the end of Year 13 — not less than one million tonnes of iron ore;
by the end of Year 16 — not less than two million tonnes of iron ore;
the capital cost involved to be not less than forty million dollars unless the Company utilises a less expensive but at least equally satisfactory method of secondary processing of iron ore than any at present known to either party.
Consideration of proposals 2
If such detailed proposals are submitted by the Company to the Minister within the time mentioned in subclause (1) of this Clause the Minister shall within two months of the receipt thereof give to the Company 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 shall afford the Company an opportunity to consult with and to submit new or further proposals to him and if within thirty days after receipt of such notice agreement is not reached as to the said proposals the Company may within a further period of thirty days by notice to the State elect to refer to arbitration as hereinafter provided 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 Company the Minister shall be deemed to have approved of the said proposals as submitted by the Company.
Failure to submit proposals 2
If such detailed proposals are not submitted by the Company to the Minister within the time mentioned in subclause (1) of this Clause 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) then the following provisions shall apply —
subject as provided in paragraph (c) of this subclause the Company shall not after the end of Year 12 export iron ore hereunder at an annual rate in excess of five million tonnes unless prior to Year 10 the Minister has already approved of the Company entering into a contract or contracts for the export of iron ore at an annual rate in excess of five million tonnes; and
if by the end of Year 13 the State gives to the Company notice that some other company or party (hereinafter referred to 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 Company hereunder then this Agreement shall (subject as hereinafter provided) cease and determine at the end of Year 21 or at the date on which the Third Party shall substantially establish the said plant in accordance with terms agreed between the State and the Third Party whichever date is the later;
if by the end of Year 13 the State has not given to the Company a notice pursuant to the provisions of paragraph (b) of this subclause then the provisions of paragraph (a) of this subclause shall as from the end of Year 13 cease to operate and have effect.
Submission of proposals after Year 10 2
Notwithstanding the provisions of subclause (3) of this Clause the Company may nevertheless at any time after the end of Year 10 submit proposals for the establishment of the said plant if at the time it has not received a notice pursuant to the provisions of paragraph (b) of subclause (3) of this Clause and the provisions of subclause (2) of this Clause shall apply to such proposals but the Company may not submit such proposals between the end of Year 10 and the end of Year 21 if during that time it receives notice from the Minister that he is negotiating with the Third Party and such notice is not subsequently withdrawn. In the event of negotiations between the Minister and the Third Party being terminated the Minister shall withdraw such notice.
Failure not a default 2
Notwithstanding anything contained herein the failure by the Company to submit proposals to the Minister a pursuant to subclause (1) of this Clause or the non‑approval by the Minister of any proposals so submitted shall not constitute a breach of this Agreement by the Company but subject as herein otherwise provided the only consequence arising from such failure or non‑approval will be that set out in subclause (3) of this Clause.
Provisions applying to proposals 2
Subject as in this Clause otherwise provided the provisions of Clauses 7, 8 and 10 shall apply mutatis mutandis to detailed proposals made pursuant to this Clause.
Iron and steel industry 2
35. (1) The Company shall in due course during the continuance of this Agreement investigate the feasibility of establishing an integrated iron and steel industry within the said State and shall by the end of Year 20 (or within such extended time as the Minister may allow) submit to the Minister detailed proposals —
EITHER for the establishment of such an industry, to be capable ultimately of producing 250 000 tonnes of steel per annum on the following basis —
the extent dimension design and construction thereof to be such that will permit the same having the capacity to produce progressively annually —
by the end of Year 25 — not less than 125 000 tonnes of processed products consisting of pig iron, foundry iron and steel of which not less than 62 500 tonnes shall be steel;
by the end of Year 29 — not less than 250 000 tonnes of processed products of which not less than 125 000 tonnes shall be steel;
by the end of Year 31 — not less than 250 000 tonnes of processed products which shall be comprised entirely of steel;
the capital cost involved to be not less than fifty million dollars unless the Company utilises a less expensive but at least equally satisfactory method of production than any at present known to either of the parties
OR for joining with an existing or proposed iron and steel making venture within the said State to produce steel pursuant to an agreement with the State on a basis that the Company’s obligations in that venture are not less than the Company’s obligations referred to in the first alternative in this subclause.
If before the end of Year 20 such proposals are submitted by the Company to the Minister the State shall within two months of the receipt thereof give to the Company notice either of its approval of the proposals (which approval shall not be unreasonably withheld) or of any objections raised or alterations desired thereto and in the latter case shall afford to the Company an opportunity to consult with and to submit new proposals to the Minister. If within thirty days of receipt of such notice agreement is not reached as to the proposals the Company may within a further period of thirty days elect by notice to the State to refer to arbitration as hereinafter provided any dispute as to the reasonableness of the Minister’s decision. If by the award on arbitration the question is decided in favour of the Company the Minister shall be deemed to have then approved the proposals of the Company.
If such proposals are not submitted by the Company to the Minister before the end of Year 20 or if such proposals are so submitted but are not approved by the Minister within two months after receipt thereof then if by the end of Year 23 (or extended date if any) the State gives to the Company notice that some other company or party (hereinafter referred to as “the Fourth Party”) has agreed to establish either —
a plant for secondary processing within the said State of iron ore from the mineral lease (if proposals by the Company for the establishment of such a plant have not previously been submitted to and approved by the Minister) on terms not more favourable on the whole to the Fourth Party than those proposed by or available to the Company hereunder; or
an integrated iron and steel industry within the said State (using iron ore from the mineral lease) on terms not more favourable on the whole to the Fourth Party than those proposed by or available to the Company hereunder;
then and in either case the Minister shall forthwith notify the Company in reasonable detail of the proposals of the Fourth Party and allow the Company a reasonable opportunity to submit counter proposals or to enter into negotiations with such Fourth Party with a view to participating in the proposed activities of such Fourth Party. If at the end of twelve months from the date of the Minister’s notification the Minister is not satisfied with such counter proposals (which counter proposals are not arbitrable hereunder) or with the outcome of such negotiations then the Minister may, either require the Company to supply to such Fourth Party quantities of iron ore in addition to but otherwise in accordance with the provisions of Clause 38 but not exceeding a total of ten million tonnes in any year (which amount is inclusive of the Company’s obligations to the Fourth Party under Clause 38) or, notify the Company that this Agreement will determine whereupon this Agreement shall cease and determine —
in the case of the Fourth Party proceeding with secondary processing then when the Fourth Party has substantially established the plant referred to in paragraph (a) of this subclause;
in the case of the Fourth Party proceeding with an integrated iron and steel industry then (if proposals by the Company for a plant for secondary processing have previously been submitted to and approved by the Minister) at the end of Year 30 or at the date by which the Fourth Party has substantially established that industry whichever is the later; and
in the case of the Fourth Party proceeding with an integrated iron and steel industry then (if proposals by the Company for a plant for secondary processing have not previously been submitted to and approved by the Minister) at the date by which the Fourth Party has substantially established that industry.
If by the end of Year 23 (or extended date if any) the State has not given to the Company any such notice as is referred to in subclause (3) of this Clause that subclause shall thereupon cease to have effect except that (to the extent they can from time to time operate) the provisions of subclause (3) of this Clause shall revive (for a period of three years) at the end of Year 33 and at the end of each successive period of thirteen years thereafter in such a way that each year referred to in that subclause shall be read as the year thirteen years or (as the case may require) a multiple of thirteen years thereafter (subject to extensions of dates if any as aforesaid).
The Company may at any time after the end of Year 20 submit proposals for an integrated iron and steel industry if at that time it has not received any notice under subclause (3) of this Clause and the provisions of subclauses (1) and (2) of this Clause shall apply to such proposals.
Except as provided in subclause (3) of this Clause this Agreement shall continue in operation subject to compliance by the Company with its obligations hereunder and with such proposals by the Company as are approved by the Minister.
Notwithstanding anything contained herein no failure by the Company to submit to the Minister proposals as aforesaid nor any non‑approval by the Minister of such proposals shall constitute a breach of this Agreement by the Company and the only consequences arising from such failure, or non‑approval (as the case may be) will be those set out in subclause (3) of this clause.
Substantial establishment 2
36. For the purposes of this Agreement the Third Party or the Fourth Party shall be deemed to have substantially established a plant for secondary processing or an integrated iron and steel industry when and not before that party’s secondary processing plant has the capacity to treat not less than two million tonnes of iron ore per annum or (as the case may be) that party’s integrated iron and steel industry has the capacity to produce 250 000 tonnes of steel per annum and in either case the Minister has notified the Company that he is satisfied that that party will proceed bona fide to operate its plant or industry.
Terms “not more favourable” 2
37. In deciding whether for the purposes of Clause 34 or Clause 35 the terms granted by the State to some company or party are not more favourable on the whole than those proposed by or available to the Company regard shall be had inter alia to the quantities and grades of iron ore available to the Company and to all the obligations which would have continued to devolve on the Company had it proceeded with secondary processing or (as the case may be) iron and steel manufacture or steel manufacture including their obligations to mine transport by rail and ship iron ore and restrictions relating thereto to pay rent additional rental and royalty and (in the case of secondary processing by a third party pursuant to Clause 34) to termination of rights as provided in Clause 35 if proposals for iron and steel manufacture or steel manufacture are not brought to fruition and also to the need for the other company or party to pay on a fair and reasonable basis for or for the use of property accruing to the State and made available by the State to that company or party but also to any additional or equivalent obligations to the State assumed by that company or party PROVIDED HOWEVER that if after the end of Year 33 the Minister gives notice to the Company under Clause 35 that another company or party has agreed to establish either secondary processing or an integrated iron and steel industry but not both then the latter company or party need not have any obligation to establish both.
Supply of iron ore to others 2
38. The Company covenants and agrees with the State 6 that should the company remain in possession of the mineral lease for any period during which the Third Party or the Fourth Party is operating or is ready to operate a plant for secondary processing of iron ore or an integrated iron and steel industry then during such period (whenever commencing) the Company shall supply the Third Party or the Fourth Party or both (as the case may be) with iron ore (not exceeding in all five million tonnes per annum unless otherwise agreed) —
at such rates and grades as may reasonably be available and be required;
at such points on the Company’s railway;
at such price; and
on such other terms and conditions
as may be agreed between the Company and the State or failing agreement determined by arbitration PROVIDED ALWAYS that the price shall unless otherwise agreed be equivalent to the total cost of production and transport incurred by the Company (including reasonable allowance for depreciation and all overhead expenses) plus ten per centum of such total cost.
Protection for current contracts 2
39. If this Agreement should cease and determine pursuant to the provisions of Clause 34 or Clause 35 and if at the date of such cessation or determination the Company is under an obligation arising under a current contract or contracts with some other party with the consent of the Minister to supply iron ore to that other party the Company may give notice of that fact to the Minister and request the State to ensure that the Third Party or the Fourth Party (as the case may be) takes over and assumes liability for the due and punctual discharge of the Company’s said obligations or alternatively agrees to supply iron ore to enable it to discharge its said obligations and the State shall 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 Company’s said request.
Delays 2
40. 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 without limiting the generality of the foregoing delays or any such temporary suspension as aforesaid caused by or arising from Act of God force majeure floods storms tempest washaways fire (unless caused by the actual fault or privity of the Company) 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 PROVIDED ALWAYS that the party whose performance of obligations is affected by any of the said causes shall promptly give notice to the other party of the event or events and shall minimise the effect of such causes as soon as possible after their occurrence.
Assignment 2
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