Sch 2First Variation Agreement

Schedule 2 — First Variation Agreement [Heading inserted: No. 29 of 1994 s. 15; amended: No. 19 of 2010 s. 4.] **THIS AGREEMENT** is made the 31st day of March 1994 B E T W E E N **THE HONOURABLE RICHARD FAIRFAX COURT** B.Com., 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 one part AND **BHP MINERALS PTY. LTD.** ACN 008 694 782 a company incorporated in the State of Western Australia and having its registered office at Level 18, 200 St George’s Terrace, Perth, **CI MINERALS AUSTRALIA PTY. LTD.** ACN 009 256 259 a company incorporated in the State of Western Australia and having its registered office at 22nd Floor, Forrest Centre, 221 St George’s Terrace, Perth and **MITSUI IRON ORE CORPORATION PTY. LTD.** ACN 050 157 456 a company incorporated in the State of Western Australia and having its registered office at 24th Floor, Forrest Centre, 221 St George’s Terrace, Perth (hereinafter called “the Joint Venturers”) of the other part. WHEREAS: (a) the State and the Joint Venturers (pursuant to an assignment dated 10 June 1991) are now the parties to the agreement ratified by the *Iron Ore (Marillana Creek) Agreement Act 1991* (hereinafter called “the Principal Agreement”); (b) the State and the Joint Venturers wish to vary the Principal Agreement. NOW THIS AGREEMENT WITNESSES — 1. Subject to the context the words and expressions used in this Agreement have the same meanings respectively as they have in and for the purpose of the Principal Agreement. 2. The State shall introduce and sponsor a Bill in the Parliament of Western Australia to ratify this Agreement and endeavour to secure its passage as an Act prior to 31 December 1994 or such later date as may be agreed between the parties hereto. 3. (1) The provisions of this Agreement other than this Clause and Clauses 1 and 2 shall not come into operation unless and until — (a) the Bill to ratify this Agreement as referred to in Clause 2; and (b) Bills to ratify the following agreements of even date herewith, namely: — (i) an agreement between the State of the one part and BHP Minerals Pty. Ltd. of the other part called the Iron Ore Processing (BHP Minerals) Agreement; (ii) an agreement between the State of the one part and BHP Iron Pty. Ltd., BHP Australia Coal Pty. Ltd., CI Minerals Australia Pty. Ltd. and Mitsui Iron Ore Corporation Pty. Ltd. of the other part to vary the Iron Ore (Mount Goldsworthy) Agreement; and (iii) an agreement between the State of the one part and BHP Iron Ore (Jimblebar) Pty. Ltd. of the other part to vary the Iron Ore (McCamey’s Monster) Agreement are passed as Acts before 31 December 1994 or such later date if any as the parties hereto may agree upon. (2) If before 31 December 1994 or such later agreed date the said Bills have not commenced to operate as Acts 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. (3) On the said Bills commencing to operate as Acts all the provisions of this Agreement shall operate and take effect notwithstanding the provisions of any Act or law. 4. The Principal Agreement is hereby varied as follows — (1) Clause 11 — by deleting Clause 11 and substituting the following clause — **Limits on mining** “11.(1) In this Clause — **“**aggregate project cost under the Processing Agreement” means the sum of $400,000,000 (June 1993 dollars) which is agreed or determined for the purposes of Clause 27 of the Processing Agreement to have been expended on the establishment of facilities for further processing or alternative investments pursuant to that Agreement; **“**approved production limit under this Clause” means a production level of 10,000,000 tonnes of iron ore per annum for transportation from the mining lease or such higher number of tonnes per annum as may be consented to from time to time by the Minister pursuant to subclauses (5) or (6) and become the subject of proposals approved or deemed to be approved pursuant to subclause (8); **“**approved mine workforce” means a mine workforce of 100 persons or such higher number as may be consented to from time to time by the Minister pursuant to subclause (4) and become the subject of proposals approved or deemed to be approved pursuant to subclause (8); **“**BHP” means BHP Minerals Pty. Ltd. and its successors and assigns who are parties with the State to the Processing Agreement; **“**combined limit” means the aggregate of — (i) the approved production limit under this Clause; (ii) the approved production limit under Clause 11A of the McCamey’s Agreement; and (iii) the approved production limit under clause 12 of the Mount Goldsworthy Agreement PROVIDED THAT if any of the approved production limits referred to in paragraphs (i), (ii) or (iii) exceeds 15,000,000 tonnes per annum then in calculating the combined limit such approved production limit shall be treated as being 15,000,000 tonnes per annum; **“McCamey’s Agreement”** means the agreement (as amended from time to time) the execution of which was authorized by the *Iron Ore (McCamey’s Monster) Agreement Authorization Act 1972*; **“Mount Goldsworthy Agreement”** means the agreement (as amended from time to time) approved by the *Iron Ore (Mount Goldsworthy) Agreement Act 1964*; **“Processing Agreement”** means the agreement (as amended from time to time) ratified by the *Iron Ore Processing (BHP Minerals) Agreement Act 1994*. (2) The Company shall not produce iron ore under this Agreement for transportation in any calendar year in excess of the approved production limit nor shall the total number of the mine workforce exceed the approved mine workforce without the prior consent in principle of the Minister and, subject to that consent, approval of detailed proposals in regard thereto in accordance with this Clause. (3) If the Company desires to increase the approved production limit under this Clause or the approved mine workforce it shall 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 paragraphs (a)‑(m) of subclause (1) of Clause 7). (4) In respect of a notice relating to a proposed increase in the approved mine workforce the Minister shall advise the Company within one month of receipt of the notice by the Minister whether or not he consents in principle to the proposed increase. (5) In respect of a notice relating to a proposed increase in the approved production limit under this Clause the Minister shall advise the Company within two months of receipt of the notice by the Minister whether or not he consents in principle to the proposed increase PROVIDED THAT the Minister shall consent in principle to the proposed increase — (a) if the aggregate project cost under the Processing Agreement has been expended; or (b) if the aggregate project cost under the Processing Agreement has not been expended and: (i) the obligations of BHP under the Processing Agreement have been and are being properly performed and complied with; and (ii) the proposed increase would not result in the approved production limit under this Clause exceeding 15,000,000 tonnes per annum or the combined limit exceeding 30,000,000 tonnes per annum, (6) If the aggregate project cost under the Processing Agreement has not been expended and: (i) the obligations of BHP under the Processing Agreement have been and are being properly performed and complied with; and (ii) the proposed increase would result in the approved production limit under this Clause exceeding 15,000,000 tonnes per annum or the combined limit exceeding 30,000,000 tonnes per annum, the Minister may consent in principle to the whole or part of a proposed increase or withhold his approval of an increase. The Minister shall give reasons for his decision if he withholds his approval, but his decision shall not be referable to arbitration under this Agreement or otherwise be the subject of challenge by the Joint Venturers. (7) A consent in principle by the Minister under this Clause in relation to a proposed increase in the approved mine workforce 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 impose an obligation for further processing of iron ore or for an alternative investment under this Agreement or require variations of — (a) the term of the mining lease or the rail spur lease or the rental thereunder; (b) the rentals payable under any other lease or licence hereunder; (c) the rates of or method of calculating royalty; or (d) Clause 23. (8) (a) If the Minister consents in principle to a proposed increase in the approved production limit or approved mine workforce the Company must within three months of that consent submit to the Minister detailed proposals in respect thereof, and, in respect of a consent in relation to a proposed increase in the approved mine workforce, in accordance with any conditions of that consent, otherwise that consent shall lapse. (b) The provisions of subclause (2) of Clause 10 shall apply to detailed proposals submitted pursuant to this subclause.”. (2) **Clause 18 —** (a) by deleting the subclause designations (1), (2), (3) and (4) and substituting respectively the subclause designations (2), (3), (4) and (5); (b) by inserting as the first subclause the following — “(1) The Company may purchase its electricity requirements from generating facilities established under the agreement (as amended from time to time) ratified by the *Pilbara Energy Project Agreement Act 1994* and may transmit power within the mine site and for the operations of the rail spur subject to the provisions of the *Electricity Act 1945* and the approval and requirements of the State Energy Commission pursuant to any Act.”; (c) in subclause (2), as renumbered by paragraph (a) of this clause, by deleting “For the purposes of facilitating integration of electricity generation and transmission facilities in the areas where the Company carried on activities under this Agreement” and substituting the following — “Subject to subclause (1),”; (d) in subclause (3), as renumbered by paragraph (a) of this subclause, by deleting “subclause (1)” and substituting the following — “subclause (2)”; (e) in subclause (4), as renumbered by paragraph (a) of this subclause, by deleting “subclause (2)” and substituting the following — “subclause (3)”. (3) **Clause 21 —** in subclause (2) paragraph (a), by deleting “tonnages or workforce” and substituting the following “the approved production limit or the approved mine workforce”. (4) By deleting Clause 24. IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the parties hereto the day and year first hereinbefore mentioned. | SIGNED by **THE HONOURABLE RICHARD FAIRFAX COURT** in the presence of — | ) ) ) | RICHARD COURT | Colin Barnett MINISTER FOR RESOURCES DEVELOPMENT | THE COMMON SEAL of **BHP MINERALS PTY. LTD.** was hereunto affixed by authority of the Directors — | ) ) ) | C.S. | Director R J Carter Secretary Ada Lian Davies | THE COMMON SEAL of **CI MINERALS AUSTRALIA PTY. LTD.** was hereunto affixed by authority of the Directors in the presence of: | ) ) ) ) | C.S. | Director Y Kowata Secretary M Appelbee | THE COMMON SEAL of **MITSUI IRON ORE CORPORATION PTY. LTD.** was hereunto affixed by authority of the Directors in the presence of: | ) ) ) ) | C.S. | Director N Hinohara Secretary J MacKenzie [Schedule 2 inserted: No. 29 of 1994 s. 15.]