Iron Ore (Yandicoogina) Agreement Act 1996

• The Company (Hamersley Iron-Yandi Pty Ltd / Rio Tinto Iron Ore) and its successors and assigns.
• Hamersley Iron Pty Ltd as guarantor.
• The State of Western Australia and the Minister for Mines (and related Ministers) who exercise approval functions under the Agreement.
• Native title holders whose rights over the Hamersley Range area are affected by tenures granted under the Agreement.
• Aboriginal corporations and communities benefiting from or participating in community and social benefits obligations under Clause 9C.
• Infrastructure users and competitors who may seek access under Clause 12C (infrastructure sharing).
• Western Australian businesses who are affected by the local industry participation obligations in Clause 9D.

Company's core obligations

Engineering and environmental investigations (Clause 4): The Company must continue field and engineering studies and submit detailed proposals to the Minister in accordance with Clause 6 before commencing major works.

Proposal approval process (Clauses 6, 7): Before carrying out significant works, the Company must submit detailed proposals in prescribed form covering engineering, social, environmental, Aboriginal heritage and other matters. The Minister must approve or determine proposals within prescribed timeframes. Approved proposals are the gateway to commencing work.

Production limit (Clause 10): The Company must not produce more than 15,000,000 tonnes of iron ore per annum for transportation from the mining lease, nor employ more than 150 persons in the mine workforce, without prior Ministerial consent and approval of expanded proposals. Production above 30 million tonnes requires additional preconditions, including satisfaction of metallised agglomerates processing obligations (Clause 23).

Mining lease application (Clause 11): The Company must apply for a mining lease within three months of all proposals being approved, and the State must cause the lease to be granted subject to native title law constraints.

Environmental monitoring and reporting (Clause 13): The Company must carry out continuous monitoring of environmental management measures and submit annual brief reports and triennial detailed reports to the Minister.

Labour and training (Clause 14): The Company must employ Western Australian labour to the fullest extent reasonably practicable, use State and local government training facilities, and give priority to Aboriginal persons for training and employment.

Infrastructure (Clauses 8, 14, 15, 16): The Company is obliged to share access to private roads and consider use of existing airports. New railway construction must comply with State requirements. Under Clause 12B (inserted by First Variation Agreement), infrastructure sharing obligations apply to Relevant Infrastructure.

Water supply (Clause 18): The Company must use water as efficiently as reasonably practicable and must not waste water.

Accommodation (Clause 19): Accommodation for the mine workforce at the mine site must meet applicable standards.

Metallised agglomerates (Clause 23): The Agreement includes an obligation on the Company to investigate and, subject to feasibility, to establish within Western Australia plant for the production of metallised agglomerates (a value-add processing step). This obligation is subject to detailed feasibility and government approval processes and may be modified.

Community and social benefits (Clause 9C, inserted by Third Variation Agreement): The Company must prepare and implement community and social benefits plans, engage with Aboriginal communities and government, and report on the outcomes of initiatives.

Local industry participation (Clause 9D, inserted by Third Variation Agreement): The Company must prepare a local industry participation plan and annual reports documenting procurement of WA goods and services.

State's core obligations

Tenures (Clause 11): The State must cause mining leases and associated licences to be granted on application, subject to compliance with native title law.

Non-discrimination (Clause 29): The State must not impose, and must not permit its agencies or authorities to impose, discriminatory taxes, rates or charges on the Company's property, products or activities.

Non-resumption (Clause 30): The State must not resume the Company's infrastructure or property during the Agreement's currency without consent, and must not create or grant rights over leased lands that would unduly prejudice the Company's activities.

Guarantee of Agreement benefits (Clause 28): The State must ensure that the Company's rights under the Agreement will not be derogated by any Act or other measure.

Ministerial approval (Clauses 7, 9, 10): The Minister exercises broad discretion in approving or determining proposals submitted by the Company. Where the Minister does not approve within the prescribed period, a dispute resolution mechanism (Clause 37) may be invoked.

Infrastructure sharing determinations (Clause 12C): Section 5 of the Act gives the State power under Clause 12C(9)(a) to make determinations regarding access to Relevant Infrastructure. The Minister may approve or impose conditions on third-party access to the Company's infrastructure.

Assignment and variation (Clauses 32, 33): The Company may assign its interests with Ministerial consent. The Agreement may be varied by written agreement between the parties.

Suspension for force majeure (Clause 34): Performance is excused during force majeure events (acts of God, strikes, lockouts, floods, etc.).

Dispute resolution (Clause 37): Disputes between the State and the Company that cannot be resolved by negotiation may be referred to arbitration. Arbitration is the exclusive dispute resolution mechanism.

Termination (Clause 39): The Agreement may be terminated following cessation, with consequences for tenure and restoration obligations.

The Agreement is a commercial contract ratified by statute. There are no penalty provisions in the Act itself; enforcement is through:

• Arbitration under Clause 37 for disputes between the parties.
• Contractual remedies including damages for breach.
• Consequences of termination under Clause 39.
• Revocation of tenures on default.

The Act's operation "despite any other written law" under section 4(3) means that competing statutory obligations cannot override the Agreement, but the Company must still comply with native title legislation as required by Clause 11(1).

Key procedural timelines under the Agreement:

| Step | Timeframe | |---|---| | Minister to advise in principle approval of production increase (Clause 10(2)(b)) | Within 1 month of notice | | Company to submit detailed proposals after in-principle approval (Clause 10(4)(a)) | Within 3 months of approval | | Ministerial approval of detailed proposals generally (Clause 7) | Within prescribed periods | | Company to apply for mining lease after proposals approved (Clause 11(1)) | Within 3 months | | Annual brief environmental report due (Clause 13(2)(a)) | By 30 June each year | | Triennial detailed environmental report due (Clause 13(2)(b)) | By 30 June (triennially as requested) | | Minister to review triennial environmental report (Clause 13(3)) | Within 2 months of receipt | | Stamp duty exemption for Agreement instruments (Clause 42) | Instruments executed within 2 years of commencement date |

Government Agreements Act 1979 (WA): Section 4(3) states that the Agreement operates despite any other written law, but also references the Government Agreements Act 1979 as not being limited by the Agreement. The Government Agreements Act provides a general framework for State agreement Acts in WA.

Mining Act 1978 (WA): Mining leases and associated tenures are granted under, and are subject to, the Mining Act 1978 to the extent consistent with the Agreement. The mining lease conditions are prescribed in Schedule 1, Part 3 of the Agreement.

Native Title Act 1993 (Cth): Clause 11(1) of the Agreement acknowledges that the State's obligation to grant mining leases is subject to native title law. The Banjima People litigation ([2013] FCA 868) considered whether mineral leases granted under the Yandicoogina Agreement extinguished or affected Banjima People's native title rights. The Federal Court found that mineral lease AM70/274 (granted pursuant to the Yandicoogina State Agreement) was valid.

Building and Construction Industry Training Levy Act 1990 (WA): Clause 24 provides that certain provisions of this Act apply to work under the Agreement.

Public Works Act 1902 (WA): Section 4(4) of the Act expressly provides that section 96 of the Public Works Act 1902 does not apply to a railway constructed under the Agreement.

Acquisition Act (WA): Clause 22 allows the State to use the Acquisition Act to compulsorily acquire land for the purposes of the Agreement, conferring rights on the Company.

The Agreement overrides other legislation: Section 4(3) expressly provides that the Agreement operates "despite any other written law or law." This means that if the Agreement confers a right or imposes an obligation inconsistent with a general Act, the Agreement prevails. However, native title law (being a Commonwealth law) is not a "written law" of WA and is not overridden.

Approved proposals are the gateway: Nothing of substance can be built or done under the Agreement without approved proposals. The Ministerial approval mechanism in Clause 7 is procedurally complex: proposals must be submitted in prescribed form, the Minister has defined timeframes to respond, and the Company must comply with conditions. Failure to follow the process can deprive the Company of authority to act.

Production cap requires multiple approvals for expansion: The 15 million tonne cap in Clause 10 cannot be exceeded without in-principle Ministerial approval, followed by detailed proposals, followed by approval of those proposals. The additional cap at 30 million tonnes requires satisfaction of Clause 23 metallised agglomerates obligations or Ministerial dispensation.

Guarantee by Hamersley survives variation: Clause 43 provides that Hamersley's guarantee of the Company's obligations survives any variation, amendment or indulgence. This means that even after the Three Variation Agreements have altered the original terms, Hamersley remains liable as guarantor.

Stamp duty exemption is time-limited: The stamp duty exemption in Clause 42 applies only to instruments executed within 2 years of the commencement date. Instruments executed after that period are not exempt.

Example 1 (production expansion): The Company wishes to increase annual production from 15 million to 22 million tonnes. Under Clause 10, it must first give notice to the Minister and submit an outline of proposals. The Minister must within one month advise whether he approves in principle. If approved, the Company must within three months submit detailed proposals. The Minister then approves or determines the detailed proposals. Only after approval may construction and expansion proceed.

Example 2 (infrastructure sharing): A third party seeks access to the Company's rail infrastructure at Yandi. Under Clause 12C, the Minister may make a determination regarding the terms of access. Section 5 of the Act gives the State power under Clause 12C(9)(a) for this purpose. The process involves the Minister balancing the interests of the Company, potential infrastructure users and broader public interest considerations.

Example 3 (native title interaction): A native title claimant group files a claim over land that includes the mining lease area. As the mineral lease was granted pursuant to the Yandicoogina Agreement before or after the commencement of the NTA in accordance with the Act and applicable savings provisions, the lease's effect on native title must be assessed under the NTA (particularly sections 23B and 23C), as the Banjima People litigation confirmed.

Example 4 (assignment): The Company wishes to assign its rights under the Agreement to a related entity. Under Clause 32, assignment requires the prior written consent of the Minister. The Minister may impose conditions on the assignment. The assignee must be financially capable and technically qualified to perform the Company's obligations.