Silicon (Kemerton) Agreement Act 1987 (Western Australia)

Mechanically, the Silicon (Kemerton) Agreement Act 1987 ratifies and gives statutory force to a negotiated project agreement between the State of Western Australia, Barrack Silicon Pty Ltd (the Company) and Barrack Mines Limited (the Guarantor). Section 4 ratifies the Agreement in Schedule 1 and authorises its implementation, and s 4A similarly ratifies and authorises implementation of the Variation Agreement in Schedule 2. Section 4(3) and s 4A(2) each provide that the respective Agreement "shall operate and take effect notwithstanding any other Act or law". The Act also contains a planning carve‑out in s 4B, inserted in 2005, which states that planning schemes prepared under the Planning and Development Act 2005 do not apply to or in relation to the silicon plant site.

The schedules set out the text of the underlying contractual arrangements that the State has ratified. The principal Schedule (Schedule 1) records the original project terms, including prospective obligations to submit detailed development and environmental proposals (Clause 5), Ministerial approval processes with time limits (Clause 6), continuity of the Mining Lease (Clause 11), a jarrah timber supply commitment from CALM (Clause 12), transport, power and water arrangements (Clauses 13 to 16), procurement and local content commitments (Clause 10), indemnities (Clause 25), stamp duty exemptions (Clause 28) and arbitration procedures (Clause 29). The Variation Agreement in Schedule 2 (ratified by s 4A) substitutes Kemerton for Picton, modifies implementation mechanics (for example, Clause 5 replaced by an obligation to implement the "approved project" under the EP Act), and adds material financial support and performance incentives: an $8,000,000 interest‑free loan repayable on specified triggers and thereafter by instalments linked to production (Clause 6A), a production incentive grant of $400,000 per fiscal year for each year production exceeds 20,000 tonnes (Clause 7A), and a delay payment by the State of $1,100,000 per month in certain commissioning delay circumstances (Clause 6B). The Variation Agreement also adds a grant/transfer approach to the silicon plant site (Clause 6) and permits the Company to proceed with development notwithstanding town planning schemes (Clause 17A).

CrestWestern Australia

Silicon (Kemerton) Agreement Act 1987

Western Australia

Silicon (Kemerton) Agreement Act 1987

Contents

Short title 1
Commencement 1
Interpretation 1
Agreement ratified and implementation authorised 1

4A. Variation Agreement ratified and implementation authorised 2

4B. Planning laws modified 2

Schedule 1 — Silicon (Kemerton) Agreement

Schedule 2 — Variation Agreement

Notes

Compilation table 37

Defined terms

Western Australia

Silicon (Kemerton) Agreement Act 1987

An Act to ratify an agreement between the State of Western Australia and Barrack Silicon Pty. Ltd. and Barrack Mines Limited relating to the establishment of a plant for the manufacture of silicon, and for purposes incidental thereto or connected therewith.

1. Short title

This Act may be cited as the Silicon (Kemerton) Agreement Act 1987 1.

[Section 1 amended: No. 3 of 1988 s. 4; correction to reprint in Gazette 21 Jul 2006 p. 2652.]

2. Commencement

This Act shall come into operation on the day on which it receives the Royal Assent 1.

3. Interpretation

In this Act, unless the contrary intention appears —

silicon plant site means the silicon plant site as defined by the Agreement as varied by the Variation Agreement;

the Agreement means the agreement a copy of which is set out in Schedule 1 and includes that agreement as varied from time to time in accordance with its provisions;

the Variation Agreement means the agreement a copy of which is set out in Schedule 2.

[Section 3 amended: No. 3 of 1988 s. 5.]

4. Agreement ratified and implementation authorised

(1) The Agreement is ratified.

(2) The implementation of the Agreement is authorised.

(3) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Agreement shall operate and take effect notwithstanding any other Act or law.

4A. Variation Agreement ratified and implementation authorised

(1) The Variation Agreement is ratified and its implementation is authorised.

(2) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Variation Agreement shall operate and take effect notwithstanding any other Act or law.

[Section 4A inserted: No. 3 of 1988 s. 6.]

4B. Planning laws modified

Despite anything in the Planning and Development Act 2005, planning schemes prepared under that Act do not apply to or in relation to the silicon plant site.

[Section 4B inserted: No. 38 of 2005 s. 15.]

Schedule 1 — Silicon (Kemerton) Agreement

[s. 3]

[Heading amended: No. 19 of 2010 s. 4.]

THIS AGREEMENT is made the 12th day of November 1987 BETWEEN THE HONOURABLE BRIAN THOMAS BURKE, 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 BARRACK SILICON PTY. LTD. a company incorporated in the State of Western Australia and having its registered office at 614 Newcastle Street, Leederville (hereinafter called the Company which term shall include its successors and permitted assigns) of the second part and BARRACK MINES LIMITED a company incorporated in the State of Western Australia and having its registered office at 614 Newcastle Street, Leederville (hereinafter called “the Guarantor”) of the third part.

WHEREAS:

(a) the company is desirous of establishing and operating a silicon plant for the manufacture of silicon at Picton in the said State and intends to provide such facilities and services as may be necessary for its proposed manufacturing operation under this agreement; and

(b) the State, for the purpose of promoting employment opportunity and industrial development in Western Australia, desires to assist the establishment of the proposed silicon plant upon and subject to the terms of this Agreement.

NOW THIS AGREEMENT WITNESSES as follows:

Definitions

In this Agreement subject to the context:

“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;

“approved proposal” means any proposal approved under this Agreement;

“CALM” means the Department of Conservation and Land Management established pursuant to the Conservation and Land Management Act 1984;

“Clause” means a clause of this Agreement;

“commencement date” means the date 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

“EP Act” means the Environmental Protection Act 1986;

“local authority” means the council of a municipality that is a city, town or shire constituted under the Local Government Act 1960;

“Mining Act” means the Mining Act 1978;

“Mining Lease” means Mining Lease No. 70/191 and any mining lease or mining leases that be granted in respect of lands the subject of the Prospecting Licences pursuant to application by the Company under section 49 of the Mining Act and includes any extension or variation of such lease or leases from time to time and any replacements thereof;

“Minister” means the Minister in the Government of the State for the time being responsible (under whatsoever title) 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;

“month” means calendar month;

“notice” means notice in writing;

“person” or “persons” includes bodies corporate;

“project” means the mining of silica, the production of charcoal or other reductant and the manufacture of silicon at the silicon plant together with all associated facilities to be developed and operated by the Company under this Agreement;

“Prospecting Licences” means prospecting licences numbered 70/258 and 70/260;

“public road” means a road as defined by the Road Traffic Act 1974;

“silicon plant” means the charcoal production facilities the submerged arc electric furnaces and associated ancillary plant and buildings to be established at Picton for the conversion of silica or other silicon bearing material to chemical and/or metallurgical grade silicon with a production capacity of not less than 20,000 tonnes of silicon per annum and includes any expansion thereof or addition thereto in accordance with this Agreement;

“silicon plant site” means the site for the silicon plant at Picton being the land hatched on the plan marked A initialled by or on behalf of the parties hereto for the purpose of identification;

“said State” means the State of Western Australia;

“silica” means chert quartz quartzite silica sand or other materials containing a high percentage of silicon dioxide used as a source of silicon;

“silicon” means the elemental product of the high temperature smelting of a blended mixture of chert, quartzite or other form of high purity silica with charcoal, coke, coal or other suitable reductants in a submerged arc electric furnace;

“State Energy Commission” means The State Energy Commission of Western Australia as described in section 7 of the State Energy Commission Act 1979;

“subclause” means subclause of the Clause in which the term is used;

“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.

Interpretation

In this Agreement:

(a) monetary references are references to Australian currency unless otherwise specifically expressed;

(b) power given under any clause other than Clause 21 to extend any period or date shall be without prejudice to the power of the Minister under Clause 21;

(d) 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.

Ratification of Agreement

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 31st December 1987.

Commencement and Operation of Agreement

(1) The provisions of this Agreement other than this Clause and Clauses 1, 2 and 3 shall not come into operation until the Bill referred to in Clause 3 has been passed by the Parliament of Western Australia and comes into operation as an Act.

(2) If before 31st December 1987 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.

(3) On the said Bill commencing to operate as an Act all the provisions of this Agreement shall operate and take effect notwithstanding the provisions of any Act or law.

Company to Submit Proposals for the Project

(1) The Company shall on or before 31st January 1988 (or thereafter within such extended time as the Minister may allow as hereinafter provided), and subject to the provisions of this Agreement, submit to the Minister to the fullest extent reasonably practicable its detailed proposals for the project which proposals shall include plans where appropriate and specifications where reasonably required by the Minister and shall make provision for the necessary workforce required to enable the Company to implement the project and shall include the location, area, lay‑out, design, quantities, materials and a time programme for the commencement an completion of construction or the provision (as the case may be) of each of the following matters, namely:

(a) the mining of silica;

(b) the silicon plant;

(d) transport;

(e) power supply;

(f) water supply;

(g) 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;

(h) an environmental management programme as to measures to be taken, in respect of the Company’s activities under this Agreement, for the protection and management of the environment; and

(i) elements of the project which the Company proposes to be sourced from outside Australia and the reason therefor.

**Order of Proposals**

(2) The proposals pursuant to subclause (1) may with the approval of the Minister or if so required by him be submitted separately and in any order as to the matter or matters mentioned in one or more of paragraphs (a) to (i) of subclause (1).

**Use of Existing Infrastructure**

(3) The proposals pursuant to subclause (1) may with the approval of the Minister and that of any third parties concerned instead of providing for the construction of new facilities of the kind therein mentioned provide for the use by the Company of any existing facilities of such kind belonging to the Company or upon reasonable terms and conditions of any other existing facilities of such kind.

**Marketing and Financial Arrangements**

(4) At the time when the Company submits the said proposals it shall furnish to the State’s reasonable satisfaction evidence of:

(a) marketing arrangements demonstrating the Company’s ability to profitably sell or use silicon manufactured pursuant to this Agreement;

(b) the availability of finance necessary for the fulfilment of the operations to which the said proposals refer; and

(c) the readiness of the Company to embark upon and proceed to carry out the operations referred to in the said proposals.

Consideration of Proposals

(1) In respect of the said proposals pursuant to subclause (1) of Clause 5 the Minister shall:

(a) approve of the said proposals either wholly or in part 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 subclause (1) of Clause 5 not covered by the said proposals; or

(c) require as a condition precedent to the giving of his approval to the said proposals that the Company makes such alteration thereto or complies with such conditions in respect thereto as he (having regard to the circumstances including the overall development of and the use by others as well as the Company of all or any of the facilities proposed to be provided) thinks reasonable and in such a case the Minister shall disclose his reasons for such conditions

PROVIDED ALWAYS that any approval or decision of the Minister under this clause shall be in accordance with the conditions and procedures, if any, to which implementation of the project is made subject pursuant to the EP Act and such approval or decision shall if the case so requires incorporate a requirement that the Company make such alterations to the said proposals as may be necessary to make them accord with those conditions or procedures.

**Advice of Minister’s Decision**

(2) The Minister shall, within whichever is the later of two months after receipt of the said proposals or seven days after service on him of an authority under section 45(7) of the EP Act, give notice to the Company of his decision in respect to the same.

**Termination**

(3) Notwithstanding subclauses (1) and (2) in the event that:

(a) it is determined under the EP Act that the project contemplated by this Agreement may not be implemented; or

(b) it is determined under that Act that the said project may be implemented but such implementation is made subject to conditions and procedures and the Company does not notify the Minister of its acceptance thereof within six months of the determination of those conditions and procedures, or if the Company lodges an appeal in respect thereof within six months of the decision on the appeal,

the parties shall consult together with respect to any modifications that may be proposed by the Company or the State to enable the project to be implemented and subject thereto the Company may by notice to the State determine this Agreement or if the Company has not given a notice under this subclause determining this Agreement by 31st January 1989 or by such extended date if any as the Company shall be granted pursuant to the provisions of this Agreement 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 each and every proposal pursuant to subclause (1) of Clause 5 is so approved or determined this Agreement shall cease and determine. The provisions of Clause 23 shall apply to any termination of this Agreement pursuant to this subclause.

**Consultation with Minister**

(4) 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.

**Minister’s Decision Subject to Arbitration**

(5) 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 two 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.

**Arbitration Award**

(6) An award made on an arbitration pursuant to subclause (5) shall have force and effect as follows:

(a) if by the award the dispute is decided against the Company then unless the Company within three months after delivery of the award give notice to the Minister of its acceptance of the award this Agreement shall on the expiration of that period of three 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.

**Effect of Non‑Approval of Proposals**

(7) Notwithstanding that under subclause (1) detailed proposals of the Company are approved by the Minister or determined by arbitration award unless each and every such proposal is approved or determined by 31st January 1989 or by such extended date if any as the Company shall be granted pursuant to the provisions of this Agreement 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 23.

**Implementation of Proposals**

(8) The Company shall implement the approved proposals in accordance with the terms thereof.

**Transfer of Silicon Plant Site**

(9) (a) As soon as practicable after the final approval of all the detailed proposals required pursuant to subclause (1) of Clause 5 the State shall cause to be transferred and vacant possession to be given of the silicon plant site free from encumbrances to the Company on such terms as agreed between the parties.

(b) The State shall to the extent reasonably necessary for the purposes of this Agreement allow the Company to have access to the silicon plant site prior to the transfer thereof to the Company for the purpose of carrying out surveys and preparatory building works necessary to enable it to finalise the detailed proposals referred to in Clause 5 and otherwise as agreed by the Minister.

Operation of Silicon Plant

The Company shall during the continuance of this Agreement use its best endeavours to operate the silicon plant so as to produce in each year silicon of a quantity at least equal to or above 80% of installed capacity.

Additional Proposals

If the Company at any time during the continuance of this Agreement desires to significantly modify expand or otherwise vary its activities carried on pursuant to this Agreement beyond those specified in the approved proposals or to mine minerals from the Mining Lease or the Prospecting Licences in addition to silica or to mine silica for the project from other than the Mining Lease or Prospecting Licences it shall give notice of such desire to the Minister and if required by the Minister within two months of the giving of such notice shall submit to the Minister within such period as the Minister shall reasonably allow detailed proposals in respect of all matters covered by such notice and such of the other matters mentioned in paragraphs (a) to (i) of subclause (1) of Clause 5 and where minerals other than silica are the subject of the proposals specifying those other minerals and the proposed mining methods and other relevant information as the Minister may require. The provisions of Clause 5 and Clause 6 (other than subclauses (6)(a) and (7) of Clause 6) shall mutatis mutandis apply to detailed proposals submitted pursuant to this subclause. The Company shall implement the approved proposals in accordance with the terms hereof.

Protection and Management of the Environment

(1) The Company shall in respect of the matters referred to in paragraph (h) of subclause (1) of Clause 5 and which are the subject of approved proposals under this Agreement, carry out a continuous programme of investigation and research including monitoring and the study of sample areas to ascertain the effectiveness of the measures it is taking pursuant to such approved proposals for rehabilitation and the protection and management of the environment.

(2) The Company shall during the currency of this Agreement at yearly intervals commencing from the date when the Company’s proposals are approved submit an interim report to the Minister concerning investigations and research carried out pursuant to subclause (1) and at 3 yearly intervals commencing from such date submit a detailed report to the Minister on the result of the investigations and research during the previous 3 years.

(3) Whenever as a result of its investigations and research under subclause (1) or otherwise information becomes available to the Company which may necessitate or could require any changes or additions to any approved proposals or which concerns matters not addressed in approved proposals the Company shall forthwith notify the Minister thereof and with such notification shall submit a detailed report thereon.

(4) The Minister may within two months of the receipt of any interim or detailed report pursuant to subclauses (2) or (3) notify the Company that he requires additional detailed proposals to be submitted in respect of all or any of the matters the subject of the report and such other matters as the Minister may require.

(5) The Company shall within two months of the receipt of a notice given pursuant to subclause (4) submit to the Minister additional detailed proposals as required and the provisions of Clause 5 and Clause 6 (other than subclauses (6) and (7)) where applicable shall mutatis mutandis apply in respect of such proposals.

(6) The Company shall implement the decision of the Minister or an award made on arbitration as the case may be in accordance with the terms thereof.

Use of Local Labour Services and Materials

(1) The Company shall, for the purposes of this Agreement:

(a) except in those cases where the Company can demonstrate it is impracticable so to do, use labour available within the said State;

(b) as far as it is reasonable and economically practicable so to do, use the services of engineers surveyors architects and other professional consultants, project managers manufacturers suppliers and contractors resident and available within the said State;

(c) 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 Western Australian suppliers manufacturers and contractors are given fair and reasonable opportunity to tender or quote; and

(d) give proper consideration and where possible preference to Western Australian suppliers manufacturers and contractors when letting contracts or placing orders for works material plant equipment and supplies where price quality delivery and service are equal to or better than that obtainable elsewhere.

(2) The Company shall require in every contract entered into with a third party for the supply of services labour works materials plant equipment and supplies for the purposes of this Agreement as a condition thereof that such third party shall undertake the same obligations as are referred to in subclause (1) and shall report to the Company concerning such third party’s implementation of that condition.

(3) The Company shall submit a report to the Minister at monthly intervals (or such longer period as the Minister determines) commencing from the date of this Agreement concerning its implementation of the provisions of this Clause together with a copy of any report received by the Company pursuant to subclause (2) during that month.

Mining Lease

Subject to due performance of the terms and conditions thereof by the holder from time to time and except as otherwise provided in this Agreement, during the term of this Agreement and any extension thereof, the Mining Lease shall continue to be held pursuant to the Mining Act.

Supply of timber

(1) The State shall ensure that CALM through its Executive Director shall supply up to 150,000 tonnes of dry jarrah (Eucalyptus Marginata) of firewood quality suitable for the production of charcoal (or an equivalent amount of green jarrah and dry jarrah both of firewood quality) per annum from the jarrah forest upon reasonable and commercial terms and conditions to be negotiated and agreed between CALM and the Company for a term of fifteen years with the right to an extension of the said term for a further term of five years. If the Company desires an expansion of the capacity of the silicon plant the State shall investigate its capacity to supply further quantities of dry jarrah of firewood quality within the limits of good forest management as it is at that time able to supply from the jarrah forest or, if the State determines that the requisite supplies are not available from that source then such other forest under its control, if any, as may be a practicable and commercial source of supply for the Company having regard for the place or places of its operation. For the purposes of this Clause, dry jarrah means dead jarrah from which the bark has been shed, green jarrah means dead jarrah from which the bark has not been shed.

(2) The State shall ensure that CALM shall not contract to supply jarrah of firewood quality suitable for the production of charcoal to a third party for use in the production of silicon on terms more favourable on the whole to the third party than those under which the Company is being supplied jarrah pursuant to subclause (1) without similar terms being made available to the Company.

Private Roads

(1) The Company shall:

(a) be responsible for the provision of finance for and the construction and maintenance of all private roads which shall be used in its operations hereunder;

(b) at its cost make such provision as shall ensure that all persons and vehicles (other than those engaged upon the Company’s operations and its invitees and licencees) are excluded from use of any such private roads; and

(c) at any place where such private roads are constructed by the Company so as to cross any public roads or railways provide adequate grade separation or such other reasonable protection as may be required by the Commissioner of Main Roads or the Railway Commission as the case may be.

Public Roads — Maintenance

(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 authority which may be used by the Company to a standard similar to comparable public roads maintained by the Commissioner of Main Roads or a local authority as the case may be.

Upgrading of Public Roads

(3) In the event that for or in connection with the Company’s operations hereunder (including the construction of the silicon plant) the Company or any person engaged by the Company uses or wishes to use a public road which is inadequate for the purpose or in the event that any use by the Company or any person engaged by the Company of any public road results in excessive damage thereto or deterioration thereof (other than fair wear and tear) the Company shall pay to the State 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 any such public road by others.

Transport Licences

The State shall ensure that:

(a) subject to the payment by the Company of appropriate fees, the Minister for Transport under the Transport Co‑ordination Act 1966 will not refuse to grant and issue to the Company (or suppliers to or contractors with the Company and subcontractors of such contractors reasonably approved by the State) a licence to transport by road:

(i) from the silicon plant to Fremantle silicon and other products (including waste products) manufactured by the Company at the silicon plant; and

(ii) logs and timber to the silicon plant for use in the production of silicon; and

(b) the appropriate fees charged to the Company for licences under the Transport Co‑ordination Act 1966 will not be such as to discriminate against the Company its suppliers contractors and subcontractors.

Power

(1) The Company shall confer with the State Energy Commission with respect to the Company’s power requirements for the project during the constructional phase and the operational phase.

(2) The Company and the State Energy Commission shall enter into arrangements for the provision of power, to the mining areas if required and the silicon plant during the currency of this Agreement on the terms and conditions to be negotiated between them.

Water

(1) The State and the Company shall agree upon the reasonable amounts and qualities thereof of the Company’s annual and maximum daily water requirements for its purposes hereunder at the silicon plant.

(2) The water requirements referred to in subclause (1) shall be obtained in accordance with the provisions of the Water Authority Act 1984 or other relevant Act.

Zoning

(1) The State shall ensure after consultation with the relevant local authority that the Mining Lease the Prospecting Licences and the silicon plant site shall be and remain zoned for use or otherwise protected during the currency of this Agreement so that the operations of the company hereunder may be undertaken and carried out thereon without any interference or interruption by the State or by any State agency or instrumentality or by any local or other authority of the State on the ground that such operations are contrary to any zoning by‑law regulation or order.

(2) The State shall ensure that the land outside the silicon plant site and within a radius of one kilometre from a point determined by the Minister after consultation with the Company as the centre of the silicon plant site shall not be zoned during the currency of this Agreement for residential purposes.

Assignment

(1) Subject to the provisions of this Clause the Company may at any time with the consent of the Minister assign mortgage charge sublet or dispose of to any company or person the whole or any part of the rights and obligations of the company hereunder subject however in the case of an assignment subletting or disposition to the assignee sublessee or disponee (as the case may be) executing in favour of the State (unless the Minister otherwise determines) a deed of covenant in a form to be approved by the Minister to comply with observe and perform the provisions hereof on the part of the Company to be complied with observed or performed in regard to the matter or matters the subject of such assignment subletting or disposition.

(2) Notwithstanding anything contained in or anything done under or pursuant to subclause (1) the Company shall at all times during the currency of this Agreement be and remain liable for the due and punctual performance and observance of all the covenants and agreements on its part contained herein the subject of an assignment mortgage subletting or disposition under subclause (1) PROVIDED THAT the Minister may agree to release the Company from such liability where he considers such release will not be contrary to the interests of the State.

Variation

(1) The parties hereto may from time to time by agreement in writing add to substitute for cancel or vary all or any of the provisions of this Agreement for the purpose of more efficiently or satisfactorily implementing or facilitating any of the objects of this Agreement.

(2) The Minister shall cause any agreement made pursuant to subclause (1) in respect of any addition substitution cancellation or variation of the provisions of this Agreement to be laid on the Table of each House of Parliament within 12 sitting days next following its execution.

(3) Either House may, within 12 sitting days of that House after the agreement has been laid before it pass a resolution disallowing the agreement, but if after the last day on which the agreement might have been disallowed neither House has passed such a resolution the agreement shall have effect from and after that last day.

Force Majeure

This Agreement shall be deemed to be made subject to any delays in the performance of the obligations hereunder and to the temporary suspension of 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 earthquakes floods storms tempest washaways fire (unless caused by the actual fault or privity of the party responsible for such performance) act of war act of public enemies riots civil commotions strikes lockouts stoppage restraint of labour or other similar acts (whether partial or general) acts of omissions of the Commonwealth shortages of labour or essential materials reasonable failure to secure contractors delays of contractors 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 use its best endeavours to minimise the effects of such causes as soon as possible after the occurrence.

Power to Extend Periods

Notwithstanding any provision of this Agreement the Minister may at the request of the Company from time to time extend or further extend any period or vary or further vary any date referred to in this Agreement or in any approved proposal hereunder for such period or to such later date as the Minister thinks fit whether or not the period to be extended has expired or the date to be varied has passed.

Determination of Agreement

(1) In any of the following events namely if:

(a) (i) the Company makes default which the State considers material in the due performance or observance of any of the covenants or obligations to the State herein or in the Mining Lease on its part to be performed or observed; or

(ii) the Company abandons or repudiates this Agreement or its operations under this Agreement

and such default is not remedied or such operations resumed within a period of 180 days after notice is given by the State as provided in subclause (2) or, if the default abandonment or repudiation is referred to arbitration, then within the period mentioned in subclause (3); or

(b) the Company goes into liquidation (other than a voluntary liquidation for the purpose of reconstruction) and unless within 3 months from the date of such liquidation the interest of the Company is assigned to an assignee approved by the Minister under Clause 18,

the State may by notice to the Company determine this Agreement.

(2) The notice to be given by the State in terms of subclause (1) shall specify the nature of the default or other ground so entitling the State to exercise such right of determination and where appropriate and known to the State the party or parties responsible therefor and shall be given to the Company and all such assignees mortgagees chargees and disponees for the time being of the Company’s said rights to or in favour of whom or by whom an assignment mortgage charge or disposition has been effected in terms of Clause 18 whose name and address for service of notice has previously been notified to the State by the Company or any such assignee mortgagee chargee or disponee.

(3) (a) If the Company contests the alleged default abandonment or repudiation referred to in paragraph (a) of subclause (1) the Company shall within 60 days after notice given by the State as provided in subclause (2) refer the matter in dispute to arbitration.

(b) If the question is decided against the Company, the Company shall comply with the arbitration award within a reasonable time to be fixed by that award PROVIDED THAT if the arbitrator finds that there was a bona fide dispute and that the Company was not dilatory in pursuing the arbitration, the time for compliance with the arbitration award shall not be less than 90 days from the date of such award.

(4) If the default referred to in sublease (1) shall not have been remedied after receipt of the notice referred to in subclause (1) or within the time fixed by the arbitration award as aforesaid the State instead of determining this Agreement as aforesaid because of such default may itself remedy such default or cause the same to be remedied (for which purpose the State by agents workmen or otherwise shall have full power to enter upon lands occupied by the Company and to make use of all plant machinery equipment and installations thereon) and the actual costs and expenses incurred by the State in remedying or causing to be remedied such default shall be a debt payable by the Company to the State on demand.

Effect of Cessation or Determination of Agreement

On the cessation or determination of this Agreement:

(a) except as otherwise agreed by the Minister the rights of the Company to in or under this Agreement shall thereupon cease and determine but without prejudice to the liability of either of the parties hereto in respect of any antecedent breach or default under this Agreement or in respect of any indemnity given hereunder;

(b) the Company shall forthwith pay to the State all moneys which may then have become payable or accrued due;

(c) save as aforesaid and as otherwise provided in this Agreement neither of the parties hereto shall have any claim against the other of them with respect to any matter or thing in or arising out of this Agreement

PROVIDED ALWAYS that such cessation or determination shall in no way affect the Mining Lease and the Prospecting Licences or such of them then in force which, for their remaining unexpired terms and any extensions shall continue in accordance with the Mining Act.

Environmental Protection

Nothing in this Agreement shall be construed to exempt the Company from compliance with any requirement in connection with the protection of the environment arising out of or incidental to its activities hereunder that may be made by the State or by any State agency or instrumentality or any local or other authority or statutory body of the State pursuant to any Act from time to time in force.

Indemnity

The Company shall indemnify and keep indemnified the State and its servants agents and contractors in respect of all actions suits claims demands or costs of third parties arising out of or in connection with any work carried out by or on behalf of the Company pursuant to this Agreement or relating to its operations hereunder or arising out of or in connection with the construction maintenance or use by the Company or its servants agents contractors or assignees of the Company’s works or services the subject of this Agreement or the plant apparatus or equipment installed in connection therewith PROVIDED THAT subject to the provisions of any other relevant Act such indemnity shall not apply in circumstances where the State, its servants, agents or contractors are negligent in carrying out work for the Company pursuant to this Agreement.

Commonwealth Licences and Consents

(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 necessary to enable or permit the Company to enter into this Agreement and to perform any of its obligations hereunder.

(2) 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).

Subcontracting

The State shall ensure that without affecting the liabilities of the parties under this Agreement either party shall have the right from time to time to entrust to third parties the carrying out of any portions of the operations which it is authorised or obliged to carry out hereunder.

Stamp Duty Exemption

(1) The State shall exempt from any stamp duty which but for the operation of this Clause would or might be assessed and chargeable on:

(a) this Agreement;

(b) the Agreement for sale and purchase dated 16th October 1987 between Agnew Clough Limited as Vendor and the Company as purchaser, whereby the Company acquired the whole of the right title and interest of Agnew Clough Limited in the project, including all assets and other property belonging thereto and mentioned in that Agreement;

(d) any assignment sublease or disposition (other than by way of mortgage or charge) made in conformity with the provisions of Clause 18

PROVIDED THAT this subclause shall not apply to any instrument or other document executed or made more than three years from the date hereof.

(2) If prior to the date on which the Bill referred to in Clause 3 to ratify this Agreement is passed as an Act stamp duty has been assessed and paid on any instrument or other document referred to in subclause (1) the State when such a Bill is passed as an Act shall on demand refund the amount of any stamp duty paid on any such instrument or other document to the person who paid the same.

Arbitration

(1) Any dispute or difference between the parties arising out of or in connection with this Agreement the construction of this Agreement or as to the rights, duties or liabilities of either party hereunder or as to any matter to be agreed upon between the parties under this Agreement shall in default of agreement between the parties and in the absence of any provision in this Agreement to the contrary be referred to and settled by arbitration in accordance with the provisions of the Commercial Arbitration Act 1985 and notwithstanding section 20 subsection (1) of that Act each party may be represented before the arbitrators by a duly qualified legal practitioner or other representative.

(2) Except where otherwise provided in this Agreement, the provisions of this Clause shall not apply to any case where the State the Minister or any other Minister in the Government of the said State is by this Agreement given either expressly or impliedly a discretionary power.

(3) The arbitrators of any submission to arbitration hereunder are hereby empowered upon the application of either of the parties to grant in the name of the Minister any interim extension of any period or variation of any date referred to herein which having regard to the circumstances may reasonably be required in order to preserve the rights of that party or of the parties hereunder and an award may in the name of the Minister grant any further extension or variation for that purpose.

Consultation

The Company shall during the currency of this Agreement consult with and keep the State fully informed on a confidential basis concerning any action that the Company proposes to take with any third party (including the Commonwealth or any Commonwealth constituted agency authority instrumentality or other body) which might significantly affect the overall interest of the State under this Agreement.

Notices

Any notice consent or other writing authorised or required by this Agreement to be given or sent shall be deemed to have been duly given or sent by the State if signed by the Minister or by any senior officer of the Public Service of the said State acting by the direction of the Minister and forwarded by prepaid post or handed to the Company at its respective address in the said State hereinbefore set forth or other address in the said State nominated by the Company to the Minister from time to time and by the Company if signed on its behalf by any person or persons authorised by the Company or by its solicitors as notified to the State from time to time and forwarded by prepaid post or handed to the Minister and except in the case of personal service any such notice consent or writing shall be deemed to have been served on the day on which it would be delivered in the ordinary course of post.

Term

(1) Subject to the provisions of Clause 6(3) Clause 22 and this Clause, this Agreement shall expire on 31st December 2010.

(2) The Company may, provided that it is not in default of its obligations under this Agreement, give notice to the Minister not later than 30th September 2010 of:

(a) its desire to have the provisions of this Agreement extended for such period not exceeding 21 years as the Company may nominate in such notice; and

(b) its arrangements for the production of silicon metal and the marketing thereof during such period.

(3) The Minister may, if he agrees with the Company’s arrangements under paragraph (b) of subclause (2), extend the term of this Agreement accordingly.

Applicable Law

This Agreement shall be interpreted according to the law for the time being in force in the State of Western Australia.

Guarantee

Notwithstanding any addition to or deletion or variation of the provisions of this Agreement or any time or other indulgence granted by the State to the Company whether or not notice thereof is given to the Guarantor by the State, the Guarantor hereby guarantees to the State the due performance by Barrack Silicon Pty. Ltd. of all its obligations to be performed hereunder PROVIDED THAT after the Company has completed construction of the silicon plant and commenced to produce silicon in commercial quantities the Minister may release the Guarantor from this guarantee where he considers such release will not be contrary to the interests of the State.

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 said THE HONOURABLE BRIAN THOMAS BURKE, M.L.A. in the presence of:<br>D. PARKER MINISTER FOR MINERALS AND ENERGY	View image in the official source	BRIAN BURKE

THE COMMON SEAL of BARRACK SILICON PTY. LTD. was hereunto affixed by authority of the Directors in the presence of:<br>Director: A. D. PAICE, Secretary: DONNA COX.	View image in the official source	[C.S.]

THE COMMON SEAL of BARRACK MINES LIMITED was hereunto affixed by authority of the Directors in the presence of:<br>Director: A. D. PAICE, Secretary: DONNA COX.	View image in the official source	[C.S.]

[Schedule 1 amended: No. 3 of 1988 s. 7.]

Schedule 2 — Variation Agreement

[s. 3]

[Heading amended: No. 19 of 2010 s. 4.]

THIS AGREEMENT is made this sixth day of June 1988 BETWEEN THE HONOURABLE PETER McCALLUM DOWDING, LL.B., 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 BARRACK SILICON PTY. LTD. a company incorporated in the State of Western Australia and having its registered office at 614 Newcastle Street, Leederville (hereinafter called “the Company” which term shall include its successors and permitted assigns) of the second part and BARRACK MINES LIMITED a company incorporated in the State of Western Australia and having its registered office at 614 Newcastle Street, Leederville (hereinafter called “the Guarantor”) of the third part.

WHEREAS:

(a) on the 12th day of November 1987 the parties hereto entered into an agreement relating to the establishment of a plant for the manufacture of silicon which agreement was ratified by the Silicon (Picton) Agreement Act 1987 and is hereinafter referred to as “the principal Agreement”;

(b) the parties have agreed that the said plant shall be established at Kemerton in the said State in lieu of Picton as provided in the principal Agreement and desire to vary the principal Agreement for such purpose.

NOW THIS AGREEMENT WITNESSETH:

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.
The provisions of this Agreement shall not come into operation until a Bill to approve and ratify this Agreement is passed by the Legislature of the said State and comes into operation as an Act.
The principal Agreement is hereby varied as follows —

(1) Clause 1 —

(a) by inserting, in the appropriate alphabetical positions, the following definitions —

“ “approved project” means the project as described in the bound volume entitled ‘Project Description’ initialled by or on behalf of the Minister and the Company for the purpose of identification;

“commissioning” means the earlier of —

(a) 30 days after the second furnace assembly and its auxiliaries have been erected and are ready for operation; or

(b) completion of 2 consecutive days of operation of the second furnace at the following figures —

(i) Power consumption: Electric power consumption shall not be greater than 12,000 kWh/tonne of silicon metal tapped;

(ii) Production rate: The rate of silicon metal production shall not be less than an average of 1.5 tonnes/hour; and

(iii) Active power of furnace: The active power of the furnace shall not be less than 18MW; ”;

(b) in the definition of “silicon plant”, by deleting “Picton” and substituting the following —

“ Kemerton ”;

(c) by substituting for the plan marked “A” referred to in the principal Agreement the plan marked “B” initialled by or on behalf of the parties hereto for the purpose of identification;

(d) in the definition of “silicon plant site”, by deleting “Picton being the land hatched on the plan marked “A” ” and substituting the following —

“ Kemerton being the land shown shaded on the plan marked “B” ”.

(2) Clause 5 —

by deleting Clause 5 and the clause heading thereto and substituting the following clause —

“ Implementation of approved project

The Company shall subject to and in accordance with the EP Act and any approvals and licences required under that Act implement the approved project in accordance with the terms thereof. ”.

(3) Clause 6 —

by deleting Clause 6 and the clause heading thereto and substituting the following clause —

“ Silicon plant site

(1) The State shall cause the silicon plant site to be granted free from encumbrances and vacant possession thereof to be given to the Company at such time and on such terms as agreed between the parties.

(2) The State shall to the extent reasonably necessary for the purposes of this Agreement allow the Company to have access to the silicon plant site prior to the grant thereof to the Company for the purpose of carrying out surveys and preparatory building works and otherwise as agreed by the Minister.

(3) If the Company has not proceeded with the implementation of the approved project in accordance with the terms thereof by 31 March 1990, or if this Agreement ceases or determines pursuant to Clause 22 on or before that date as a consequence of a matter mentioned in paragraph (a)(ii) or paragraph (b) of Clause 22(1) without the Company having completed the construction of the silicon plant or as a consequence of a failure by the Company to proceed with the implementation of the approved project in accordance with the terms thereof the Company shall —

(a) pay to the State on demand by the State an amount equal to the value of the silicon plant site (but not including the value of any buildings or other improvements erected thereon); or

(b) alternatively if the Company so desires and the State agrees, transfer the silicon plant site and all buildings and other improvements erected thereon to the State free from encumbrances and free of cost to the State. ”.

(4) By inserting after Clause 6 the following clauses —

“ 6A. The State in recognition of the decentralised location of the project and the change in the silicon plant site from Picton to Kemerton has advanced to the Company by way of loan the sum of $8,000,000 which amount (without interest) shall be repaid by the Company to the State upon demand by the State if the Company has not proceeded to implement the approved project in accordance with the terms thereof by 30 September 1989 (or such later date as may be agreed) or if this Agreement ceases or determines as a consequence of a matter mentioned in paragraph (a)(ii) or paragraph (b) of Clause 22(1) on or before 30 September 1989 but otherwise the said loan shall be repaid by the Company to the State by instalments of $400,000 free of all deductions for every fiscal year in which in excess of 20,000 tonnes of silicon metal is manufactured by the Company at the silicon plant after 30 June 1990 until the said loan is repaid in full. After each fiscal year in which the said minimum quantity of silicon metal has been manufactured as aforesaid, the Company shall forthwith give to the State notice of that fact and the Company shall within 30 days after the date of that notice pay to the State the said instalment in reduction of the said loan.

6B. In the event that commissioning of the silicon plant’s electric furnaces does not occur by 30 June 1989 or such later date as may be agreed, the State, except where or to the extent to which it can reasonably demonstrate that the delay in commissioning the said furnaces by that date or any delay in commissioning the said furnaces thereafter was due to lack of diligence on the part of the Company or arose otherwise than as a specific result of the transfer of the project from Picton to Kemerton or of a matter associated with the silicon plant site at Kemerton but which would not have been associated with the proposed site at Picton, shall pay to the Company the sum of $1,100,000 per month (or pro rata for any part of a month) in respect of the period from 1 July 1989 or such later date as may be agreed to whichever shall first occur of the commissioning of the said furnaces or 31 December 1989. Payment of a monthly amount or a pro rated monthly amount under this Clause shall be made at the end of the month in respect of which it is payable and without any deduction or set off whatsoever. ”.

(5) By inserting after Clause 7 the following clause —

“ 7A. The State in recognition of the expected economic benefits to the State resulting from maximum utilisation of the installed capacity of the silicon plant, shall pay to the Company a production grant by way of incentive of $400,000 for every fiscal year in which in excess of 20,000 tonnes of silicon metal is manufactured by the Company at the silicon plant after 30 June 1990 providing that the grant shall only be paid in respect of a maximum of 20 such fiscal years. The said grant shall be paid by the State to the Company free from all deductions within 30 days of the receipt by the State of the notice from the Company under Clause 6A. The State may elect by notice to the Company within 14 days of receipt of the said notice to apply the said grant by way of offset against the outstanding balance of the loan under Clause 6A and the Company shall thereupon be relieved from its obligation to pay the instalment then payable in reduction of the said loan. ”.

(6) Clause 8 —

by deleting Clause 8 and substituting the following clause —

“ 8. (1) If the Company at any time during the continuance of this Agreement desires to significantly modify expand or otherwise vary its activities carried on pursuant to this Agreement beyond those specified in the approved project or in any approved proposals or to mine minerals from the Mining Lease or the Prospecting Licences in addition to silica or to mine silica for the project from other than the Mining Lease or Prospecting Licences it shall give notice of such desire to the Minister and if required by the Minister within 2 months of the giving of such notice shall submit to the Minister within such period as the Minister may reasonably allow detailed proposals in respect of all matters covered by such notice and such other matters, including matters relating to any of the following, namely —

(a) the mining of silica;

(b) the silicon plant;

(d) transport;

(e) power supply;

(f) water supply;

(h) an environmental management programme as to measures to be taken, in respect of the Company’s activities under this Agreement, for the protection and management of the environment;

(i) elements of the project which the Company proposes to be sourced from outside Australia and the reason therefor; and

(j) where minerals other than silica are the subject of the proposals, specifying those other minerals and the proposed mining methods,

and other relevant information as the Minister may require.

(2) If the Minister does not require the Company to submit proposals under subclause (1) the Company may, subject to compliance with all applicable laws, proceed with the modification, expansion or variation of its activities carried on pursuant to this Agreement.

(3) Subject to the EP Act, in respect of proposals pursuant to subclause (1) the Minister shall —

(a) approve of the said proposals either wholly or in part without qualification or reservation; or

(c) require as a condition precedent to the giving of his approval of the said proposals that the Company makes such alteration thereto or complies with such conditions in respect thereto as he (having regard to the circumstances including the overall development of and the use by others as well as the Company of all or any of the facilities proposed to be provided) thinks reasonable and in such a case the Minister shall disclose his reasons for such conditions,

(4) The Minister shall within two months after service on him of an authority under section 45(7) of the EP Act if applicable and otherwise within two months after receipt of the said proposals pursuant to subclause (1) give notice to the Company of his decision in respect to the said proposals.

(5) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of subclause (3) 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.

(6) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of subclause (3) and the Company considers that the decision is unreasonable the Company within two months after receipt of the notice mentioned in subclause (4) 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 (3) shall not be referable to arbitration hereunder.

(7) The Company may withdraw its proposals submitted pursuant to subclause (1) 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 proposed modification expansion or variation of its activities as so proposed in those proposals.

(8) Subject to and in accordance with the EP Act and any approvals and licences required under that Act the Company shall implement the decision of the Minister or an award made on arbitration (where the proposals are not withdrawn) as the case may be in accordance with the terms thereof. ”.

(7) Clause 9 —

(a) subclause (1) —

(i) by deleting “matters referred to in paragraph (h) of subclause (1) of Clause 5 and which are” and substituting the following —

“ matters relating to the environment which are referred to in the approved project or which are ”;

(ii) by deleting “such approved proposals” and substituting the following —

“ the approved project or such approved proposals as the case may be ”;

(b) subclause (2) —

by deleting “the date when the Company’s proposals are approved” and substituting the following —

“ 1 July 1988 ”;

(i) by inserting after “additions to” the following —

“ the approved project or ”;

(ii) by inserting after “addressed in” the following —

“ the approved project or ”;

(d) subclause (5) —

by deleting “Clause 5 and Clause 6 (other than subclauses (6) and (7))” and substituting the following —

“ subclauses (3), (4), (5) and (6) of Clause 8 ”.

(8) By inserting after Clause 17 the following clause —

“ 17A. (1) Subject to subclause (2) the design, construction, commissioning and operation of the silicon plant shall comply with the lawful requirements of and all regulations and bylaws of all relevant local and other authorities of the State and the Commonwealth and all Acts of the State and Commonwealth applicable thereto.

(2) Notwithstanding the provisions of any Act, regulation, bylaw, interim development order or town planning scheme the Company may proceed with the development of the silicon plant site and the construction and commissioning of the silicon plant in accordance with the approved project. ”.

(9) Clause 22 —

by inserting after subclause (4) the following subclause —

“ (5) Without prejudice to the rights of the State under the preceding subclauses the State may upon any failure by the Company to make payment to the State under Clause 6(3) or under Clause 6A give notice to the Company specifying the failure and if such failure is not remedied by the Company within 14 days after the giving of such notice the State may by further notice to the Company determine this Agreement. ”.

(10) Clause 23 —

by deleting “all moneys” and substituting the following —

“ any moneys due or falling due pursuant to Clause 6(3) or Clause 6A and all other monies ”.

(11) Clause 28 —

subclause (1) paragraph (c) —

(a) by deleting “transfer” and substituting the following —

“ grant ”;

(b) by deleting “subclause (9) of ”.

(12) Clause 32 subclause (1) —

by deleting “Clause 6(3).”.

The Guarantor hereby consents to this Agreement.

IN WITNESS WHEREOF this Agreement had been executed by or on behalf of the parties hereto and day and year first hereinbefore written.

SIGNED by the said THE HONOURABLE PETER M’CALLUM DOWDING, L.L.B., M.L.A. in the presence of:<br>D. PARKER MINISTER FOR ECONOMIC DEVELOPMENT AND TRADE	View image in the official source	PETER DOWDING

THE COMMON SEAL of BARRACK SILICON PTY. LTD. was hereunto affixed by authority of the Directors in the presence of:<br>Director V. J. NOVAK<br>Secretary DONNA COX	View image in the official source	[C.S.]

THE COMMON SEAL of BARRACK MINES LIMITED was hereunto affixed by authority of the Directors in the presence of:<br>Director V. J. NOVAK<br>Secretary DONNA COX	View image in the official source	[C.S.]

[Schedule 2 inserted: No. 3 of 1988 s. 8.]

Notes

1 This is a compilation of the Silicon (Kemerton) Agreement Act 1987 and includes the amendments made by the other written laws referred to in the following table. The table also contains information about any reprint.

Compilation table

Short title	Number and year	Assent	Commencement
Silicon (Picton) Agreement Act 1987 2	93 of 1987	16 Dec 1987	16 Dec 1987 (see s. 2)
Silicon (Picton) Agreement Amendment Act 1988	3 of 1988	30 Jun 1988	30 Jun 1988 (see s. 2)
Local Government (Consequential Amendments) Act 1996 s. 4	14 of 1996	28 Jun 1996	1 Jul 1996 (see s. 2)
Reprint 1: *The Silicon (Kemerton) Agreement Act 1987* as at 24 Apr 2003** (includes amendments listed above) (correction in Gazette 21 Jul 2006 p. 2652)
Planning and Development (Consequential and Transitional Provisions) Act 2005 s. 15	38 of 2005	12 Dec 2005	9 Apr 2006 (see s. 2 and Gazette 21 Mar 2006 p. 1078)
Standardisation of Formatting Act 2010 s. 4	19 of 2010	28 Jun 2010	11 Sep 2010 (see s. 2(b) and Gazette 10 Sep 2010 p. 4341)

2 Short title changed to the Silicon (Kemerton) Agreement Act 1987 (see note under s. 1).

Defined terms

[This is a list of terms defined and the provisions where they are defined. The list is not part of the law.]

Defined term Provision(s)

silicon plant site 3

the Agreement 3

the Variation Agreement 3

Western Australia

Silicon (Kemerton) Agreement Act 1987

Western Australia

Silicon (Kemerton) Agreement Act 1987

Contents

Short title 1
Commencement 1
Interpretation 1
Agreement ratified and implementation authorised 1

4A. Variation Agreement ratified and implementation authorised 2

4B. Planning laws modified 2

Schedule 1 — Silicon (Kemerton) Agreement

Schedule 2 — Variation Agreement

Notes

Compilation table 37

Defined terms

Western Australia

Silicon (Kemerton) Agreement Act 1987

1. Short title

This Act may be cited as the Silicon (Kemerton) Agreement Act 1987 1.

[Section 1 amended: No. 3 of 1988 s. 4; correction to reprint in Gazette 21 Jul 2006 p. 2652.]

2. Commencement

This Act shall come into operation on the day on which it receives the Royal Assent 1.

3. Interpretation

In this Act, unless the contrary intention appears —

silicon plant site means the silicon plant site as defined by the Agreement as varied by the Variation Agreement;

the Agreement means the agreement a copy of which is set out in Schedule 1 and includes that agreement as varied from time to time in accordance with its provisions;

the Variation Agreement means the agreement a copy of which is set out in Schedule 2.

[Section 3 amended: No. 3 of 1988 s. 5.]

4. Agreement ratified and implementation authorised

(1) The Agreement is ratified.

(2) The implementation of the Agreement is authorised.

(3) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Agreement shall operate and take effect notwithstanding any other Act or law.

4A. Variation Agreement ratified and implementation authorised

(1) The Variation Agreement is ratified and its implementation is authorised.

The instrument is a statutory ratification of a bespoke commercial State agreement. It treats the negotiated Schedule 1 Agreement and the Schedule 2 Variation Agreement as creating enforceable rights and obligations between the State and the Company, and embeds those contractual commitments in statute (s 4 and s 4A). Key legal concepts and mechanisms in the text include:

Statutory ratification and primacy: s 4(1) and (2) ratify and authorise implementation of the Agreement; s 4(3) and s 4A(2) state the Agreements "shall operate and take effect notwithstanding any other Act or law", which places the ratified contractual terms in a position of statutory primacy as between this instrument and other Western Australian legislation. This is a mechanical override, subject only to constitutional limits not addressed in the text.
Planning exclusion: s 4B removes the application of planning schemes under the Planning and Development Act 2005 to the silicon plant site. The Variation Agreement’s Clause 17A provides a parallel mechanism permitting the Company to proceed with development notwithstanding statutes, regulations or town planning schemes.
Ministerial approvals and discretion: the Agreement requires the Company to submit detailed proposals (Clause 5), and gives the Minister wide power to approve, defer, or require conditions on proposals (Clause 6). Time limits are prescribed for decisions (Clause 6(2) provides a two‑month period, with specific triggers linked to the EP Act), but Clause 21 permits the Minister to extend any period or date, including after it has expired.
Environmental layering: although many approvals and implementation steps are to be "in accordance with" the Environmental Protection Act 1986 (EP Act) and associated processes (see Clause 6 proviso and the Variation Agreement replacement Clause 5), Clause 24 expressly states that nothing in the Agreement exempts the Company from compliance with environmental protection requirements made by State agencies under any Act. The Agreement therefore both references and preserves environmental regulation while also asserting statutory application "notwithstanding any other Act" in ss 4(3) and 4A(2).
Financial support and incentives: the Variation Agreement introduces an $8,000,000 interest‑free loan (Clause 6A) repayable on failure to proceed or subsequently by $400,000 instalments tied to annual production thresholds; a production grant of $400,000 per fiscal year where production exceeds 20,000 tonnes subject to a 20‑year cap (Clause 7A); and a State obligation to make delay payments of $1,100,000 per month if commissioning does not occur by a specified date, subject to exceptions where delay is due to lack of Company diligence or unrelated to the site transfer (Clause 6B).
Resource supply guarantee: Clause 12 obliges the State to ensure CALM supplies up to 150,000 tonnes of dry jarrah per annum on reasonable and commercial terms for 15 years with a right of extension, and prevents CALM contracting more favourable terms to third parties without offering similar terms to the Company.
Procurement and local content obligations: Clause 10 requires the Company to use Western Australian labour, services and suppliers where practicable, to base specifications on Australian Standards, to require similar obligations of subcontractors, and to report monthly to the Minister on implementation.
Remedies, termination and arbitration: termination events are set out (Clause 22), with notice periods and arbitration pathways for contested defaults. The Agreement allows the State to remedy defaults at the Company’s cost (Clause 22(4)). Disputes are to be arbitrated under the Commercial Arbitration Act 1985, but Clause 29(2) excludes cases where the State or Minister exercise discretionary powers under the Agreement.
Stamp duty and fiscal concessions: Clause 28 grants stamp duty exemptions for the Agreement and specified transactions for instruments executed within three years, and requires refund where stamp duty was paid before ratification.

These concepts combine contractual project governance, statutory priority, limited regulatory carve‑outs (notably planning), State financial support and incentives, and a governance architecture that places substantial decision‑making power with the Minister. The Variation Agreement repurposes several provisions to accommodate the site move to Kemerton and adds explicit State financial and production incentives.

Primary parties named in the instrument are the State of Western Australia, Barrack Silicon Pty Ltd (the Company) and Barrack Mines Limited (the Guarantor). The Agreement explicitly contemplates successors and permitted assigns of the Company (Clause 1 definitions and Clause 18 assignment provisions). Beyond the contracting parties, a range of public bodies and private actors are legally implicated by express terms:

State agencies: CALM (Conservation and Land Management) is obliged to supply timber per Clause 12; the State Energy Commission is the counterparty for power supply arrangements under Clause 15; the Commissioner of Main Roads and Railway Commission have roles in assessing crossing protection and upgrade requirements under Clause 13; local authorities are engaged for zoning (Clause 17). The Minister, and senior officers of the Public Service acting under the Minister, are the State’s operational decision‑makers for notices and approvals (Clause 31).
Local government and planning authorities: Clause 17 requires the State, after consultation with the relevant local authority, to ensure zoning protections for the Mining Lease, Prospecting Licences and silicon plant site. However, s 4B of the Act and variation Clause 17A operate to exclude town planning schemes and planning schemes under the Planning and Development Act 2005 from application to the silicon plant site; this directly affects local planning control.
Commonwealth authorities and third parties: the Company must apply for and obtain Commonwealth licences and consents necessary for the project and the State will, on request, make representations to Commonwealth agencies (Clause 26). The Agreement contemplates that third parties (suppliers, contractors and subcontractors) will be engaged and required to undertake local content obligations (Clause 10(2)).
Commercial counterparties and market participants: suppliers of timber, contractors engaged to build private roads, manufacturers of plant and equipment and purchasers of silicon are affected by the Agreement’s guarantees and market obligations. The Agreement contains assurances regarding transport licences (Clause 14), and the Company must demonstrate marketing arrangements and financing when submitting proposals (Clause 5(4)).
Landholders and local residents: zoning protections (Clause 17) and the s 4B planning‑scheme exclusion mean that land within one kilometre of the plant centre is to remain not zoned for residential purposes during the Agreement. Private road construction by the Company also leads to exclusion of public access to private roads constructed under Clause 13(1)(b).
Financial stakeholders: the Guarantor guarantees performance by the Company (Clause 34), and the State’s loan, production grant and delay payment provisions in the Variation Agreement create payment streams and obligations that will concern lenders, investors and auditors.

Indirectly, the broader community is affected because the State assumes commitments that have fiscal and environmental footprints: timber supply from public forests (Clause 12), road maintenance obligations (Clause 13(2)), and power and water arrangements (Clauses 15 and 16). The Agreement imposes reporting, monitoring and environmental management obligations on the Company (Clause 9) that shape operational costs and practices. Assignment and mortgage rights are permitted with Ministerial consent (Clause 18), but the Company remains liable for obligations unless released by the Minister.

In short, the Act converts bilateral contractual allocations of rights and obligations into statutory entitlements and constraints that bind the State, the Company and the Guarantor, and that materially involve multiple State instrumentalities, local authorities, commercial counterparties and affected local land uses.

The ratified Agreements create detailed reciprocal duties and rights between the State and the Company. The most salient duties and rights, with clause references, are:

Company duties and operational obligations

Submit detailed proposals: The Company must submit detailed proposals for the project (Clause 5(1)), addressing mining of silica, the silicon plant, manning, transport, power, water, local content, environmental management, and overseas sourcing reasons (Clause 5(1)(a)-(i)). Variation Agreement replaces Clause 5 with an obligation to implement the "approved project" in accordance with the EP Act (Schedule 2, cl 3(2)).
Implement approved proposals: The Company must implement any proposals approved by the Minister in accordance with the terms of approval (Clause 6(8); Variation Agreement cl 3(2)).
Operate to capacity: The Company must use best endeavours to produce not less than 80% of installed capacity each year (Clause 7).
Environmental monitoring and reporting: A continuous programme of investigation, research and monitoring is required, with annual interim reports and detailed three‑year reports to the Minister (Clause 9(1)-(2)). The Company must notify the Minister of information necessitating changes to approved proposals, and the Minister may require additional proposals (Clause 9(3)-(6)).
Local procurement and labour use: The Company must use Western Australian labour and suppliers where practicable, require like obligations in contracts with third parties, and report monthly to the Minister on implementation (Clause 10).
Construction and maintenance of private roads: The Company finances, constructs and maintains private roads used in its operations and excludes public use (Clause 13(1)).
Indemnity obligations: The Company indemnifies the State against third party claims arising from Company works and operations, subject to exceptions where the State or its agents are negligent as provided by law (Clause 25).
Commonwealth licences: The Company must apply for any necessary Commonwealth licences (Clause 26).
Financial duties under Variation Agreement: The Company must repay the $8,000,000 loan if it fails to implement the approved project by specified dates, otherwise repay by instalments tied to production (Variation Agreement Clause 6A). It may be required to pay the value of the silicon plant site if it has not proceeded with implementation by March 1990 under the Variation Agreement substituted Clause 6 (cl 3(3)).

Company rights and State duties and commitments

Transfer/grant of site: The State must transfer or grant the silicon plant site free from encumbrances and give vacant possession to the Company when detailed proposals are finally approved (Clause 6(9)(a); Variation Agreement modifies to grant free from encumbrances, cl 3(3) and cl 3(4)).
Timber supply: The State ensures CALM supplies up to 150,000 tonnes of jarrah per year on reasonable commercial terms for 15 years with a right to extend five years (Clause 12(1)). The State must not contract more favourable jarrah supply terms to others without offering similar terms to the Company (Clause 12(2)).
Transport licences and fees: The State will ensure that, subject to fees, the Minister for Transport will not refuse to grant licences to transport silicon products and logs to the plant and that fees will not discriminate against the Company (Clause 14).
Road maintenance: The State will maintain public roads under its control which the Company may use to a similar standard as comparable roads (Clause 13(2)); if Company use causes damage, Company pays an equitable part of upgrading costs (Clause 13(3)).
Power and water arrangements: The State will facilitate arrangements with the State Energy Commission for power supply (Clause 15); water is to be agreed and obtained in accordance with the Water Authority Act 1984 (Clause 16).
Zoning protections: The State must ensure the Mining Lease, Prospecting Licences and silicon plant site are zoned or otherwise protected so the Company can operate without interference on zoning grounds and ensure land within one kilometre radius is not zoned residential during the Agreement term (Clause 17).
Financial assistance and incentives in Variation Agreement: The State provided an $8,000,000 interest‑free loan (Clause 6A) subject to repayment conditions, will pay a production grant of $400,000 per fiscal year where output exceeds 20,000 tonnes up to a 20‑year maximum (Clause 7A), and may in certain circumstances pay delay compensation of $1,100,000 per month for delayed commissioning (Clause 6B).

Ministerial and State discretions and procedural rights

Approval and conditioning powers: The Minister may approve, defer or require conditions on proposals and must give reasons for conditions (Clause 6(1)(a)-(c)). The Minister can extend deadlines (Clause 21) and may specify timeframes for additional proposals requested (Clause 9(4)-(5)).
Termination rights: The State has the right to determine the Agreement on material default or insolvency grounds (Clause 22(1)), and can itself remedy defaults and recover costs (Clause 22(4)). Variation Agreement added a specific termination route for unpaid obligations under Clause 6(3) or 6A (cl 3(9)).
Arbitration and limited waiver of discretion: Disputes are referable to arbitration under the Commercial Arbitration Act 1985 (Clause 29), but Clause 29(2) excludes matters where the Minister or other Ministers are "given either expressly or impliedly a discretionary power", restricting arbitrability of certain State decisions.

Other rights and ancillary features

Stamp duty exemptions for specified instruments within three years of the Agreement date are granted by Clause 28, with refunds if duty was paid prior to ratification.
Assignment with consent: The Company may assign or mortgage rights with Ministerial consent but remains liable for performance unless released by the Minister (Clause 18).
Guarantor’s continuing guarantee: The Guarantor guarantees the Company’s performance (Clause 34), but the Minister may release the Guarantor after commercial production commences.

These duties and rights create a framework where the State makes material supply, regulatory and financial commitments, while the Company accepts operational, environmental, local content and repayment obligations, within a Ministerially controlled approval architecture and a limited arbitration safety valve.

The Agreement does not establish criminal sanctions. Enforcement and remedial mechanisms are contractual and statutory rather than penal. Key enforcement features include:

Determination and termination: Clause 22 sets out events giving the State a right to determine (terminate) the Agreement, notably material default by the Company in performance of covenants, abandonment or repudiation, and insolvency events. The State must give notice specifying the default and, where appropriate, allow time for arbitration (Clause 22(1)-(3)). The Variation Agreement inserted an express termination power where the Company fails to pay amounts under Clause 6(3) or Clause 6A and does not remedy within 14 days of notice (Schedule 2, cl 3(9)).
Notice requirements and cure periods: The State’s termination notice must specify defaults and the parties responsible (Clause 22(2)). If the Company contests the default, it must refer the matter to arbitration within 60 days (Clause 22(3)(a)). Arbitrator’s awards are binding, and where the Company loses it must comply within a reasonable time fixed by the award (Clause 22(3)(b)).
State remedial powers and cost recovery: Rather than outright termination, the State may remedy defaults itself by entering Company lands and using plant and equipment to remedy the default; the costs and expenses incurred are recoverable as a debt payable by the Company on demand (Clause 22(4)). This creates a direct enforcement power accompanied by monetary recovery.
Financial enforcement: The Variation Agreement ties repayment of the $8,000,000 loan to specified performance triggers; the State can demand repayment on failure to proceed or otherwise require payment of moneys due under Clause 6(3) or 6A, making these contractual debts enforceable (Schedule 2, cl 3(4) and cl 3(9)). Clause 23 requires the Company on cessation to pay "any moneys due or falling due pursuant to Clause 6(3) or Clause 6A and all other monies" (Schedule 2, cl 3(10)), reinforcing monetary enforcement on termination.
Arbitration: Clause 29 provides for arbitration under the Commercial Arbitration Act 1985 for disputes arising out of the Agreement. Clause 29(3) empowers arbitrators to grant interim extensions or variations of timeframes in the name of the Minister, which is an enforcement and remedial mechanism. However, Clause 29(2) excludes disputes where the State or Minister is given discretionary powers, limiting the scope of arbitrable issues.
Indemnities and third party claims: Clause 25 imposes an indemnity on the Company to keep the State indemnified against third party claims arising out of Company works, subject to exceptions where the State is negligent. This shifts financial exposure for third party liabilities onto the Company, subject to statutory limitations.
Guarantor guarantee and Ministerial release: Clause 34 makes the Guarantor liable for performance of Company obligations. The Minister may release the Guarantor after commercial production starts, meaning enforcement can proceed against both the Company and Guarantor until release.
Rights on cessation: Clause 23(a) states that on cessation the Company's rights under the Agreement cease, but antecedent liabilities survive and the Company must pay all monies then payable (Clause 23(b)). Clause 11 preserves the Mining Lease despite cessation.
Other remedies: The State retains rights to require the Company to comply with Ministerial decisions and arbitration awards (Clause 9(6)). Where approvals under the EP Act prohibit implementation, Clause 6(3) provides for consultation and potential termination by the Company with associated Clause 23 processes.

In summary, enforcement is primarily through contractual termination, monetary debt recovery, State entry and remediation with cost recovery, indemnity claims, and arbitration where available. Ministerial discretion and exclusions of arbitrability narrow the scope for certain contested decisions to be arbitrated, and the State retains direct powers to remedy defaults and to require repayment of loan or other monies on the occurrence of specified events.

The ratified Agreements intersect with and, in some respects, displace ordinary regulatory regimes by express statutory wording, while also preserving certain regulatory processes. Key interactions in the instrument are explicit:

Statutory primacy vs regulatory compliance: Sections 4(3) and 4A(2) state each Agreement "shall operate and take effect notwithstanding any other Act or law". That is an express statutory override insofar as the Agreement’s terms conflict with other State legislation. However, the schedules also incorporate multiple references to other statutes and regulatory processes: the EP Act (Environmental Protection Act 1986) is referenced repeatedly as the process governing environmental approvals and conditions (see Clause 6 proviso, and Variation Agreement changes that require implementation to be "in accordance with the EP Act" (Schedule 2, cl 3(2))). Clause 24 states explicitly that nothing in the Agreement exempts the Company from compliance with environmental protection requirements made by the State or its agencies "pursuant to any Act". Thus the instrument both asserts primacy and recognises ongoing environmental regulatory obligations, creating overlapping legal layers.
Planning law modification: Section 4B, inserted by amendment in 2005, provides that planning schemes prepared under the Planning and Development Act 2005 "do not apply to or in relation to the silicon plant site". The Variation Agreement also contains Clause 17A(2) which provides that "Notwithstanding the provisions of any Act, regulation, bylaw, interim development order or town planning scheme the Company may proceed with the development of the silicon plant site and the construction and commissioning of the silicon plant in accordance with the approved project." Together these provisions disapply local planning schemes and permit development despite local instruments. That interaction reduces the application of standard planning law at the designated site.
Mining law: Clause 11 preserves the Mining Lease and provides that, subject to due performance, the Mining Lease shall continue to be held pursuant to the Mining Act. The Agreement therefore interfaces with mining regulatory frameworks by preserving the Mining Lease while placing project‑specific obligations on the holder.
Environmental procedures: The Agreement ties decision‑making and implementation to the EP Act's processes in several places (Clause 6 proviso, Variation Agreement Clause 5 replacement). At the same time, Clause 24 asserts that the Agreement does not itself exempt the Company from environmental protection requirements; this preserves the substantive reach of environmental statutes even where the Agreement otherwise purports to be effective notwithstanding other Acts.
Transport, road and water law: Specific statutory instruments are referenced for operational matters: transport licences are to be issued under the Transport Co‑ordination Act 1966 (Clause 14), public roads are defined by the Road Traffic Act 1974 for purposes of the Agreement (Clause 1 definitions), power arrangements reference the State Energy Commission Act 1979 (Clause 1 definition of State Energy Commission and Clause 15), and water obligations reference the Water Authority Act 1984 (Clause 16). The Agreement thus layers negotiated operational arrangements over pre‑existing sectoral statutes.
Arbitration statute: Disputes are to be arbitrated under the Commercial Arbitration Act 1985 (Clause 29(1)), which supplies procedural and enforcement mechanisms for arbitrated awards.
Stamp duty and other fiscal statutes: Clause 28 grants exemptions from stamp duty that would otherwise be payable, interacting directly with the Stamp Act and revenue law. It also provides refund mechanics if duty was paid before ratification.
Local government instruments: Clause 17 requires consultation with local authorities for zoning protections, but the planning exclusion in s 4B and Clause 17A(2 of the Variation Agreement) limits the application of local planning schemes to the silicon plant site during the Agreement term.

The Agreement thus creates a hybrid legal environment: it asserts statutory priority for the negotiated terms, but simultaneously embeds and references other regulatory regimes, particularly environmental legislation. Practically, some regulatory processes (for example, EP Act procedures) remain central to implementation, while others (notably local planning schemes) are expressly excluded for the designated site. The Agreement thereby reshapes the normal application of State regulatory law for the silicon plant site, while leaving intact many sectoral statutes where expressly preserved.

The legislation includes a documented amendment and compilation history in the Notes and Compilation Table. The principal steps recorded in the compilation are:

Original enactment and title: The instrument was originally enacted as the Silicon (Picton) Agreement Act 1987 (No. 93 of 1987), receiving assent on 16 December 1987 and commencing the same day (s 2). The Act’s short title was later changed to the Silicon (Kemerton) Agreement Act 1987 in subsequent reprints (see compilation notes).
Variation and re‑ratification 1988: The Silicon (Picton) Agreement Amendment Act 1988 (No. 3 of 1988), assented on 30 June 1988 and commencing 30 June 1988, inserted the Variation Agreement as Schedule 2 and amended Schedule 1 in the ways recorded in Schedule 2’s text. The Variation Agreement (Schedule 2) moved the site from Picton to Kemerton, modified the project implementation clauses, added the $8,000,000 loan (Clause 6A), the $1,100,000 per month delay compensation (Clause 6B), a $400,000 per year production incentive for years in which production exceeds 20,000 tonnes (Clause 7A), and other consequential changes. Section 4A (ratifying the Variation Agreement) and the insertion of Schedule 2 were effected by that amending Act (see s 6 and s 8 references in the Act’s marginal notes).
Local Government consequential amendments 1996: The Local Government (Consequential Amendments) Act 1996 (No. 14 of 1996), with commencement on 1 July 1996, appears in the compilation as an amendment affecting the Act. The compilation table lists this Act but does not detail the exact textual changes in the present material; it is recorded in the compilation provenance.
Planning and Development consequential and transitional provisions 2005: The Planning and Development (Consequential and Transitional Provisions) Act 2005 (No. 38 of 2005), assented 12 December 2005 and commencing 9 April 2006, inserted s 4B into the Act. Section 4B provides that planning schemes prepared under the Planning and Development Act 2005 do not apply to or in relation to the silicon plant site (see s 4B inserted: No. 38 of 2005 s. 15).
Formatting standardisation 2010: The Standardisation of Formatting Act 2010 (No. 19 of 2010) effected formatting and heading amendments to the Schedules; the compilation records that Schedule headings were amended and the Reprint date includes corrections.

The Reprint history: A Reprint incorporating amendments as at 24 April 2003 is noted, with a correction in the Gazette on 21 July 2006. The Compilation Table lists the Acts and commencement dates that altered the original instrument. The Variation Agreement (1988) is the major substantive amendment recorded in the schedules appended to the Act.

No other textual amendments are shown in the provided compilation beyond those identified above. The compilation entries identify the insertion of Schedule 2 and s 4A in 1988 and the insertion of s 4B in 2005 as the main subsequent statutory modifications recorded in the text provided.

The Act and its Schedules as provided do not record any judicial decisions, cases, or litigation outcomes. The schedules contain a full arbitration clause (Clause 29) providing for dispute resolution under the Commercial Arbitration Act 1985, and Clause 22 establishes processes for contesting defaults by reference to arbitration. Beyond those contractual dispute resolution processes, the text records no reported litigation, no judicial interpretations, and no named cases.

Practically, the Agreement creates parallel dispute resolution pathways: parties may refer disputes under many provisions to arbitration within prescribed timeframes and subject to exclusions (Clause 29(2) excludes matters involving discretionary powers of the State or Minister from arbitration). Clause 22(3) requires the Company to refer contested defaults to arbitration within 60 days and sets the consequences of arbitration awards. Clause 29(3) empowers arbitrators to grant interim extensions or variations in the name of the Minister. The procedural frameworks are therefore set out for negotiated dispute resolution rather than court litigation, but the Agreement does not preclude enforcement of arbitrated awards in courts under the Commercial Arbitration Act 1985.

Because the source text contains no reported cases, there is no litigation history recorded in the instrument to cite. Users seeking judicial interpretations of the Act or of the ratified Agreements will need to consult external case law databases and court records; none are supplied in the Schedule text provided.

The Agreement contains multiple provisions that create implementation risks and traps for parties unfamiliar with its structure. The following are specific operational and legal "gotchas" drawn from the text:

"Notwithstanding any other Act" wording juxtaposed with preserved regulatory obligations: ss 4(3) and 4A(2) provide that the Agreements operate "notwithstanding any other Act or law", which suggests statutory primacy. However, multiple clauses elsewhere presuppose compliance with other statutes, particularly the EP Act. Clause 6’s proviso requires Ministerial approvals to be "in accordance with the conditions and procedures, if any, to which implementation of the project is made subject pursuant to the EP Act", and Clause 24 expressly states that nothing exempts the Company from environmental protection requirements. The coexistence of an express override and multiple cross‑references to regulatory processes creates legal complexity about which statutory controls apply in practice and when.
Planning carve‑outs: Section 4B removes planning schemes under the Planning and Development Act 2005 from application to the silicon plant site. The Variation Agreement’s Clause 17A(2) further allows the Company to proceed notwithstanding town planning schemes. Parties should note that the usual local planning controls will not apply to the declared site, which can have both operational advantages and community or regulatory controversy.
Ministerial discretion and extensions: The Minister has broad power to approve, condition, defer or require changes to proposals (Clause 6), and Clause 21 allows the Minister to extend any period or vary any date "whether or not the period to be extended has expired". That creates uncertainty about timeframes and substantial Ministerial control over project timing.
Arbitration limits: Although Clause 29 provides for commercial arbitration, Clause 29(2) excludes disputes where the State or Minister exercises a discretionary power under the Agreement. Several significant decisions are framed as Ministerial discretions (for example, approvals, conditions, and zoning protections), which narrows the range of matters arbitrable.
Strict deadlines and termination exposure: The original Clause 5 and Clause 6 set specific deadlines (for example, submission of proposals by 31 January 1988 and approval decision within two months), and Clause 6 and its successors create termination triggers if proposals are not finally approved by specified dates. The Variation Agreement adjusts some dates but also introduces trigger dates tied to commissioning (Clause 6B) and repayment (Clause 6A). Failure to meet these dates or cure defaults can expose the Company to termination and immediate repayment obligations.
Financial contingencies and offsets: The State’s loan and production grant are interlinked. Under Clause 6A the $8,000,000 loan is repayable by instalments tied to annual production above 20,000 tonnes. Clause 7A allows the State to offset production grants against the outstanding loan balance where the State gives notice within 14 days of receipt of the Company’s production notice. This gives the State a unilateral selection right to apply grants as offsets rather than as cash unless the State elects otherwise, affecting cashflow expectations.
Delay payment conditionality: Clause 6B obliges the State to pay $1,100,000 per month where commissioning of furnaces does not occur by a specified date, but the State may avoid payments if it can "reasonably demonstrate" the delay was due to lack of Company diligence or arose for reasons unrelated to the site transfer. The burden to establish diligence or causation is placed on the State, but the clause creates an evidentiary dispute risk.
Timber supply specifics and resource tradeoffs: Clause 12 commits CALM-controlled timber supply up to 150,000 tonnes p.a. for 15 years, subject to "reasonable and commercial terms" and limits of good forest management. This imposes an obligation on a conservation agency to supply a large volume of forest product, raising operational and sustainability constraints and potential conflicts with other forest uses or conservation law.
Indemnity scope and State negligence carve-outs: Clause 25 indemnifies the State against third party claims arising from Company works "PROVIDED THAT subject to the provisions of any other relevant Act such indemnity shall not apply in circumstances where the State, its servants, agents or contractors are negligent". The indemnity is broad but framed subject to other Acts, which may affect insurers and claimants.
Assignment and continued Company liability: Clause 18 allows assignment with the Minister’s consent, but the Company remains liable for performance unless the Minister releases it. Assignees are required to execute a deed of covenant in favour of the State. Parties should not assume assignment transfers liability without explicit Ministerial release.
Stamp duty time limit: Clause 28’s stamp duty exemption applies only to instruments executed within three years of the Agreement date. That limits the fiscal relief window and may surprise parties entering transactions after that period.
Preservation of Mining Lease: Clause 11 expressly preserves the Mining Lease under the Mining Act even on cessation of the Agreement, but the Agreement’s termination can still create operational discontinuity. Mining tenure continues, but rights to operate may be constrained by other consequences of termination.
Reporting and administrative burden: The Company faces frequent reporting duties: monthly local procurement reports (Clause 10(3)), annual interim environmental reports and three‑year detailed reports (Clause 9(2)), and notices required when production thresholds are met (Clause 6A). These create ongoing compliance costs.
Ministerial ability to remedy defaults at Company cost: Clause 22(4) allows the State to enter Company lands, use Company plant to remedy defaults, and recover costs as a debt. That is a practical enforcement power that can have immediate operational impact.

Understanding these provisions and their interactions is critical in project planning, particularly where statutory overrides, Ministerial discretion and project financing are involved.

Compliance requires a coordinated regulatory, commercial, environmental and reporting approach aligned with the Agreement’s specific clauses. Key compliance steps and practices grounded in the Agreement text include:

Timely submission of approved project documentation

Prepare and submit the detailed proposals required by Clause 5(1) (or the approved project documentation contemplated in the Variation Agreement) by the dates specified in the Agreement or any extensions obtained under Clause 21. Ensure proposals comprehensively cover the matters listed: mining of silica; silicon plant design and capacity; manning and recruitment policies; transport; power and water; local procurement; environmental management programme; and elements to be sourced overseas (Clause 5(1)(a)-(i)).

Satisfy Ministerial decision processes and EP Act interfaces

Anticipate Ministerial review periods: the Minister must give notice of decision within two months after receipt or after service of an EP Act authority where applicable (Clause 6(2) and Variation Agreement cl 3(6)). Prepare EP Act documentation concurrently because the Minister’s approval is to be consistent with EP Act conditions and procedures (Clause 6 proviso, Variation Agreement replacement Clause 5). Engage early with the Environmental Protection Authority processes and be ready to submit any additional proposals the Minister may require under Clause 9(4)-(5).

Evidence of marketing and finance

When submitting proposals, furnish evidence of marketing arrangements, availability of finance, and readiness to proceed as required by Clause 5(4)(a)-(c). These are explicit preconditions to Ministerial approval and link to later obligations such as loan repayment triggers in the Variation Agreement.

Environmental monitoring and reporting

Implement the continuous environmental investigation, monitoring and research programme in Clause 9(1). File annual interim reports and detailed three‑year reports to the Minister (Clause 9(2)). Promptly notify and submit detailed reports for any information necessitating changes to approved proposals (Clause 9(3)). Comply with any additional proposals requested by the Minister under Clause 9(4)-(5) and implement Ministerial or arbitration decisions per Clause 9(6).

Local procurement and workforce policies

Adopt and document policies to use WA labour, services and suppliers where practicable; ensure specifications are based on Australian Standards; require subcontractors to accept the same obligations (Clause 10(1)-(2)). Maintain monthly implementation reports for the Minister as to local procurement (Clause 10(3)).

Manage transport, roads, power and water arrangements

Negotiate transport licences and ensure payment of appropriate fees while monitoring non‑discrimination assurances in Clause 14. Design private road construction and maintenance to exclude unauthorised public use and provide grade separations where required by Commissioner of Main Roads or Railway Commission (Clause 13(1)). Agree power supply arrangements with the State Energy Commission (Clause 15) and secure water allocations under the Water Authority Act 1984 for annual and maximum daily requirements (Clause 16).

Timber supply and forest management obligations

Engage with CALM to finalise reasonable and commercial timber supply terms up to 150,000 tonnes per annum and document commitments, ensuring compliance with sustainable forest management constraints as contemplated in Clause 12. Monitor any State investigations into expanded supply if plant capacity expands.

Financial covenant and production reporting

Track production against installed capacity targets and the 20,000 tonnes threshold. For repayment of the $8,000,000 loan under Variation Agreement Clause 6A, provide timely notice to the State when annual production exceeds 20,000 tonnes and pay instalments by due dates. Be aware that the State may elect to offset production grants against outstanding loan balances under Clause 7A.

Adhere to commissioning and deadline obligations

Meet commissioning milestones to avoid loan acceleration or to benefit from delay payments where they apply. The Variation Agreement’s Clause 6B provides for delay compensation by the State if commissioning does not occur by the agreed date, but payments are contingent on State not being able to demonstrate Company lack of diligence or other causation. Maintain detailed records of works, commissioning milestones and delays to evidence diligence.

Maintain insurance, indemnity and liability management

Ensure sufficient insurance cover for third party claims and for operations so as to meet the indemnity in Clause 25, noting it excludes State negligence "subject to the provisions of any other relevant Act". Clarify indemnity scope with insurers and legal counsel.

Procedural safeguards for assignment and guarantees

If seeking to assign or mortgage rights under Clause 18, secure Ministerial consent and prepare the required deed of covenant by the assignee to comply with the Agreement’s obligations. Retain the Guarantor’s obligations until the Minister releases the Guarantor under Clause 34, which the Minister may do only after commercial production commences.

Dispute mechanics and arbitration readiness

Where disputes arise, follow the arbitration timelines in Clause 29 and Clause 22(3). Identify issues that may be excluded from arbitration because they fall within Ministerial discretion (Clause 29(2)) and plan administrative and political engagement strategies accordingly.

Stamp duty timing

If transactions such as transfer of the silicon plant site or assignments are anticipated, ensure instruments are executed within the three‑year stamp duty exemption window under Clause 28, or else prepare for duty obligations and possible refund mechanics if duty has been paid prior to ratification.

Recordkeeping and ministerial consultation

Keep contemporaneous records of consultations with the Minister and other State agencies, and comply with Clause 30 confidentiality and reporting protocols. Maintain an audit trail of procurement opportunities offered to Western Australian suppliers and of subcontractor reports as required by Clause 10(2).

Termination preparedness

Monitor for events that could trigger Clause 22 rights to determine the Agreement, and ensure immediate remedy capabilities for any alleged defaults to avoid the State exercising its power to enter Company lands and remedy defaults at Company cost (Clause 22(4)).

Following these steps aligns operational practice with the Agreement’s provisions. Given the substantial Ministerial discretion and the interaction with environmental and other statutory approvals, close coordination with the Minister’s office, relevant State agencies (CALM, State Energy Commission, Water Authority, Commissioner of Main Roads), and legal counsel is necessary to manage timing, approvals, compliance reporting and financial triggers under the Agreement.

Silicon (Kemerton) Agreement Act 1987

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