Iron Ore (Marillana Creek) Agreement Act 1991

BHP Minerals Limited / BHP successors. The Agreement holder and its corporate successors are bound by the mining lease conditions, royalty obligations, environmental requirements, and infrastructure commitments in the Agreement.

State of Western Australia. The State must perform its obligations under the Agreement, including granting and maintaining the mining lease, providing access to infrastructure, and administering the royalty collection framework.

Banjima and Nyiyaparli peoples. The Marillana Creek area has been the subject of native title proceedings by the Banjima People (Federal Court proceedings) and the Nyiyaparli People. The Act predates recognition of native title and does not on its face address native title rights. The relationship between the resource agreements regime and native title is complex and continues to be worked through in Federal Court proceedings.

Iron ore industry. The royalty structure established by the Act and its variations sets precedents for ore product categorisation (lump ore, fine ore, pisolite fine ore) that have broader industry significance.

Company obligations under the Agreement:

• Maintain and operate the mining lease in accordance with Agreement and Mining Act conditions
• Pay royalties on all iron ore shipped or sold, at the rates specified in clause 13 as varied
• Construct and maintain infrastructure as specified in the approved proposals
• Comply with environmental conditions and approved proposals for accommodation, roads, and related infrastructure
• Notify the Minister and obtain approvals for changes to the project as required by the Agreement

State obligations:

• Grant and maintain the mining lease as specified
• Not interfere with the Company's rights under the Agreement without express amendment
• Facilitate necessary infrastructure access

Ministerial approval powers. The Agreement requires Ministerial approval for major project changes (increases in production, changes to accommodation arrangements, new or expanded infrastructure). The term "Minister" under the Agreement means the Minister responsible for administering the Act.

Value determination. If the Company and the Minister cannot agree on the f.o.b. value of iron ore within three months of the Minister giving notice, the Minister may determine the value. The determination process requires consideration of prevailing iron ore markets on an arm's length basis (clause 1 definitions, as retained in Agreement Schedule 1).

Section 9 -- State empowerment. Section 9 empowers the State to act under clause 14C(9)(a) of the Agreement as varied by the Third Variation Agreement, dealing with specific operational matters.

The Act itself does not contain criminal offences or penalty provisions. Enforcement is through the Agreement's contract law framework: breach by either party gives rise to contractual remedies. For royalty underpayment, the State's remedy is a contractual debt claim. The Mining Act 1978 (WA) provides separate regulatory enforcement for the mining lease conditions.

Mining lease term: 21 years from commencement, with two successive 21-year renewal rights (clause 12 and the Mining Lease form in Schedule 1).

Royalty payments: Payable at the rates specified in clause 13 at the times prescribed in the Agreement and under the Mining Act 1978.

Project approvals: The Agreement requires staged approvals for production increases, with specified notice and consultation requirements.

Variation agreements: Variations require mutual agreement and, where they have legislative effect, a separate Act amending the ratification legislation. Four such Acts have been passed (reflected in sections 4A, 5, 6-8, and 10 of the current Act).

Government Agreements Act 1979 (WA). The paramount effect provisions in sections 4(3), 4A(3), and 5(3) operate "without limiting or otherwise affecting" the Government Agreements Act, which provides the general framework for ratified State agreements in Western Australia.

Mining Act 1978 (WA). The mining lease is granted under the Mining Act, but the Agreement prevails over the Mining Act provisions to the extent of any inconsistency. Section 4 confirms the Public Works Act 1902 does not apply to Agreement railways.

Native Title Act 1993 (Cth). The Marillana Creek area has been the subject of native title determinations proceedings by the Banjima People (FCA 868 [2013], FCA 201 [2014]) and the Nyiyaparli People (FCA 1453 [2018]). These cases establish native title rights in the broader Pilbara region that co-exist with the resource agreement framework.

Iron Ore Agreements Legislation Amendment Act 2010 (WA). Part 4 of that Act inserted sections 6 and 7 into the current Act, varying the royalty rates and ore product definitions.

Iron Ore Agreements Legislation Amendment Act 2011 (WA). Inserted section 8 (Third Variation Agreement ratification).

Paramount effect means later state legislation does not easily override the Agreement. The notwithstanding provisions mean that a general State Act could not inadvertently affect the Agreement's royalty rates or lease conditions. Only specific amending legislation can vary the Agreement's statutory effect.

Ore product definitions have been changed multiple times. The definitions of "lump ore," "fine ore," and "pisolite fine ore" in clause 1 of the Agreement have been varied by sections 6 and 7 of the Act and by variation agreements. Users of the Act must read the varied definitions, not the original Schedule 1 definitions, when calculating royalties on current shipments.

The Agreement is primarily contained in the Schedules, not the main Act. The operative commercial provisions (lease terms, royalty rates, infrastructure obligations) are all in the Agreement texts in Schedules 1-5. The main Act sections are primarily ratification provisions.

Native title co-existence. The native title proceedings over Marillana Creek have established that native title rights of the Banjima and Nyiyaparli peoples co-exist with the rights granted under the Agreement. The precise implications for access, consultation, and operational decisions are governed by the native title legislation and any Indigenous Land Use Agreements, not by the State Act.

Example 1: Calculating royalties on lump ore. In any quarter, the Company ships 2 million tonnes of lump ore (screened, not passing through a 6.3mm mesh, not beneficiated) from Port Hedland. The f.o.b. value is agreed at $100 per tonne. Royalties are payable at 7.5% of f.o.b. value under clause 13(1)(ab) as varied by section 6 of the Act: 2,000,000 x $100 x 7.5% = $15,000,000.

Example 2: Pisolite fine ore. The Company separately ships pisolite fine ore (channel iron ore, LOI 8.5%+, screened through 9.5mm) at a determined f.o.b. value of $80 per tonne. Royalties are payable at 5.625% under clause 13(1)(ac) as varied: 5.625% x $80 = $4.50 per tonne.

Example 3: Project expansion approval. The Company wishes to expand production beyond 10 million tonnes per annum (the initial approved capacity). Under the Agreement, this requires a new approved proposal, Ministerial consultation and approval, and potentially new accommodation and infrastructure arrangements.