ORE IRON PROCESSING (MINERALOGY PTY. LTD.)
AGREEMENT BILL 2002
COMMITTEE NOTES
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This Act ratifies the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement which was
executed by the State and the other parties to the Agreement on 5 December 2001.
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The short title of the legislation is the Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement
Act 2002.
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Provides for the Bill to come into operation as an Act on the day it receives the Royal Assent.
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Defines how the Agreement contained in Schedule 1 is to be interpreted.
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Subclause (1) is the ratification of the Agreement.
Subclause (2) is the authorisation of the implementation of the Agreement.
Subclause (3) describes how the Agreement Act is to operate in regard to any written law (as
defined in the Interpretation Act), or law.
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Empowers the State under Clause 27 which relates to resumption for the purposes of the
Agreement.
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SCHEDULE 1 - AGREEMENT
The following describes major matters dealt with in the Agreement dated 5
December, 2001 that is scheduled to the Bill:
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The Agreement is between the State of Western Australia ("the State"), Mineralogy
Pty. Ltd. ("the Company") and six `project' companies ("the Co-Proponents").
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The Recitals outline the intention of the parties in entering into the Agreement.
Recital (a) acknowledges that the Company has mining tenements in the Pilbara
region.
Recital (b) acknowledges that the Company has granted, by way of Subsidiary
Agreements, various rights in the tenements to the Co-Proponents.
Recital (c) acknowledges that the Company by itself or with Co-Proponents wishes to
develop projects incorporating:
Mining and concentration of iron ore;
Processing of iron ore for the production and sale of high grade pellets, direct
reduced iron and/or hot briquetted iron or steel;
Transport of concentrates and processed iron ore within the Pilbara region;
Establishment of new port facilities in the Pilbara region; and
Shipping of processed iron ore through the new port facilities.
Recital (d) expresses the State's agreement to assist these developments in order to
promote industrial development and employment opportunity in Western Australia.
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This clause defines terms used throughout the Agreement.
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This clause provides legal interpretations of how the Agreement is to be generally
read.
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Paragraph (a) requires the State to introduce prior to 31 December 2001 and sponsor a
Bill into Parliament to ratify the Agreement by 30 June 2002 or such later dates as
may be agreed.
Paragraph (b) requires the State to allow the Company and Co-Proponents to enter
Crown Land to undertake studies subject to protection of the environment and sites of
Aboriginal significance.
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Subclause (1) states that the Agreement, other than the first four clauses, shall not
operate until the ratification Bill is passed and comes into operation as an Act.
Subclause (2) provides for the cessation and determination of the Agreement if the
Bill has not commenced to operate as an Act from 30 June 2002 or such later date as
may be agreed.
Subclause (3) provides the manner in which the Agreement takes effect in regard to
any Act or law.
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Subclause (1) requires the Company to keep the State informed on a quarterly basis
of its studies for the purposes of preparing initial project proposals under this
Agreement.
Subclause (2) requires the reports under subclause (1) to advise the expected Western
Australian and Australian content and any proposed foreign content with reasons
therefor.
Subclause (3) requires the Company to co-operate and consult with the State with
respect to matters referred to in subclause (1) and any other relevant studies, and to
join with the State in infrastructure studies agreed with the Minister.
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Subclause (1) requires the Company by itself or with Co-Proponents (the Project
Proponents) to submit detailed proposals with respect to at least one project by 30
June 2003, and permits the submission thereafter of proposals for new projects.
Subclause (2) sets out the matters to be addressed in the proposals.
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Subclause (3) enables the proposals to be submitted in any order, with the consent of
the Minister.
Subclause (4) enables the Project Proponents to use existing infrastructure, with the
consent of the Minister.
Subclause (5) requires that proposals make provision for location of other industries
at Cape Preston and for access for those industries to the port facilities.
Subclause (6) requires the Project Proponents to submit to the Minister additional
information on aspects of the project to be sourced from outside Australia, and
demonstrate to the Minister's satisfaction the availability of finance and the readiness
of the Project Proponents to carry out the project.
Subclause (7) allows an extension of time of up to 18 months for submission of
evidence of availability of finance and readiness to proceed if the financial support of
an Export Credit Agency is being sought. The Minister may consider and approve the
proposal however the grant of any title pursuant to the approval is suspended until the
Minister is satisfied of the availability of finance and the readiness of the Project
Proponents to carry out the project.
Subclause (8) requires the Minister to notify the Project Proponents if he is not
satisfied with the evidence provided under subclause (6) and to give the Project
Proponents an opportunity to submit further or different evidence and allows the
Project Proponents to submit the Minister's decision to arbitration.
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Subclause (1) details the procedures for the consideration of proposals.
Subclause (2) requires the Minister to give notice of his decision to the Proponents
within 2 months of receiving the proposals, or 2 months of authority to proceed under
the EP Act or native title processes, whichever is the later.
Subclause (3) requires that the Minister consult with the Proponents if he rejects or
requires alteration to a proposal.
Subclause (4) makes certain decisions of the Minister under this Clause subject to
arbitration.
Subclause (5) details how an arbitrated decision on a proposal is to be implemented.
Subclause (6) requires the Proponents to implement the approved proposals.
Subclause (7) provides for determination of the Agreement if the proposals for at
least one project are not approved within a specified time period.
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Subclause (1) enables the Proponents to submit additional proposals if they wish to
significantly alter their activities under approved proposals.
Subclause (2) states that the provisions of Clause 6 and Clause 7 (except subclauses
(5)(a) (6) and (7)) will apply in relation to the consideration of additional proposals,
but the Proponents may withdraw additional proposals before approval. The
Proponent must implement approved additional proposals.
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Subclauses (1) to (3) relate to Area A shown on Plan 1.
Subclause (1) provides for reinstatement of exploration licence 08/643 that
was previously held by the Company.
Subclause (2) provides that during the currency of the Agreement mining
tenements held by the Proponents are subject to the Mining Act, as modified
in relation to rental, assignment, surrender and expenditure requirements.
Subclause (3) provides for a refund from the State to the Company of excess
rent paid before the commencement date.
Subclauses (4) and (5) relate to Area B1 shown on Plan 1.
Subclause (4) provides for reinstatement of exploration licences 47/636,
47/637 and 47/638 that were previously held by the Company.
Subclause (5) provides that exploration licences granted under subclause (4)
are subject to the Mining Act, as modified in relation to term, assignment,
surrender and expenditure requirements.
Subclause (6) provides that exploration licences comprising Area B2 on Plan 1 are
subject to the Mining Act, as modified in relation to term, assignment, surrender and
expenditure requirements.
Subclause (7) allows for mining leases granted to the Company in Areas B1 and B2
to be included in Area A and for other areas within Area A to be surrendered if
necessary to limit the total area of Area A to 777 square kilometres.
Subclause (8) allows the Company, with the Minister's consent, to withdraw mining
tenements and exploration licences from the areas covered by the Agreement subject
to defined restrictions.
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Subclause (1) requires the State to grant mining leases in the form of the Second
Schedule where such leases are part of approved proposals. The mining leases will be
subject to the Mining Act as modified by the Agreement, and will be for a period of
21 years with a right to an automatic extension for 2 further periods of 21 years.
Subclause (2) provides for mining leases that are dedicated to a Project to have a term
of 21 years from approval of proposals with two automatic extensions of 21 years.
The dedication to one Project will stand for the term of the lease.
Subclause (3) exempts the Company from expenditure conditions on mining leases
covered by the Agreement.
Subclause (4) requires the Proponents to lodge with the Department of Mineral and
Petroleum Resources various reports in relation to the mining tenements, as required
under the Mining Act or as requested by the Department.
Subclause (5) allows the State and third parties access to the mining tenements so
long as it does not interfere with the Proponents' activities under the Agreement.
Subclause (6) allows the Proponents to surrender to the State portions of the mining
tenements.
Subclause (7) allows the Proponents to obtain stone, clay and gravel from the mining
tenements for the construction of works without paying royalty.
Subclause (8) modifies regulation 28A of the Mining Regulations 1981 so that
additional rental is calculated on each tonne of iron ore concentrate in lieu of the iron
ore from which the concentrates are produced.
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Subclause (1) details the royalties to be paid by the Proponents, allowing for
discounts where iron ore undergoes further processing.
Subclause (2) details how the "imputed value" for the purposes of determining the
royalty under subclause (1) is determined.
Subclause (3) specifies reporting requirements and payment times in relation to
royalties.
Subclause (4) allows for inspection of records of the Proponents and details the
measurement of quantities of minerals.
Subclause (5) allows for the determination of an "alternative method" for calculating
imputed values.
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Subclause (6) specifies some additional definitions relevant to this Clause.
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Subclause (1) requires the Project Proponents to give preference to local labour,
professionals, suppliers and services where economically practical unless otherwise
agreed by the Minister or the Project Proponents can demonstrate that this is
impractical to achieve.
Subclause (2) requires the Project Proponents to include the same local content
obligations, as in subclause (1), in contracts with third parties unless otherwise agreed
by the Minister.
Subclause (3) details the frequency of reporting to the Minister concerning the
implementation of the local content requirements.
Subclause (4) requires the Proponents to keep the Minister informed on elements of
the project proposed to be sourced overseas and consult with the Minister.
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Subclause (1) requires the Proponents to be responsible for the cost of construction
and maintenance of their private roads.
Subclause (2) provides that public roads used by the Proponents under this
Agreement will be maintained by the State.
Subclause (3) provides that where public roads require upgrading or repairing as a
result of the Proponents' operations, then the Proponents are required to contribute
equitably to the cost of that work.
Subclause (4) enables the State to take over private roads required for public use.
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Allows the Proponents to install and operate electricity generation equipment and
transmit electricity for the projects under this Agreement in accordance with approved
proposals.
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Subclause (1) records that the Company and Co-Proponents propose to provide for
their water requirements by desalination of sea water and relieves the State of
obligation to provide water.
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Subclause (2) requires the Proponents to be responsible for the cost of construction
and maintenance of their water supply.
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Subclause (1) requires the Proponents to keep the Minister advised of water
requirements that cannot be obtained by desalination.
Subclause (2) enables the Water Corporation to enter into arrangements with
Proponents to supply or give access to potable water, subject to its availability.
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Requires the Company to confer with the Minister and the relevant local authorities
before submitting project proposals with a view to ensuring appropriate planning is
being made for housing and accommodation.
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Subclause (1) permits the Company to provide workforce accommodation at the mine
site to generally accepted mining industry standards.
Subclause (2) details facilities that may be included in Mining Lease
Accommodation.
Subclause (3) specifies that Mining Lease Accommodation will be provided at
Project Proponents' cost.
Subclause (4) requires removal of the Mining Lease Accommodation when no longer
in use.
Subclause (5) limits occupancy of Mining Lease Accommodation to persons directly
involved in a Project.
Subclause (6) prohibits dependants residing or pets being kept on a Mining Lease,
except as agreed by the Minister.
Subclause (7) requires Project Proponents to seek the Minister's consent for
upgrading, replacement, relocation or new Mining Lease Accommodation.
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Subclause (1) enables Project Proponents to provide accommodation at no cost to the
State in Karratha and/or any other locality off the Mining Leases.
Subclause (2) enables the establishment of one new town by the Company.
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Subclause (3) requires the Company and the Minister to agree on a location for the
town within the Pilbara.
Subclause (4) requires the Company to notify the Minister of its proposal to establish
a new town.
Subclause (5) details the matters to be covered in a proposal for a new town if the
Minister approves submission of detailed proposals.
Subclause (6) requires the State to grant leasehold land for the establishment of the
town.
Subclause (7) requires the Company to pay the capital cost and reasonable charges
for State provided services in the town other than operational costs of educational,
medical or police services.
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Subclause (1) requires the State to grant to Project Proponents, in accordance with
approved proposals and subject to specified conditions, leases, licences or other title
for the purpose of obtaining appropriate tenure for the purposes of the Project. The
granted tenure will cease after 6 months notice if construction is not completed in
accordance with approved proposals or if the land ceases to be used.
Subclause (2) provides for any leases, licences, or easements that have been granted
under subclause (1) before all proposals have been approved, to be determined when
the Agreement is determined or if all proposals have not been approved within 12
months.
Subclause (3) requires the State, where titles are determined in the area that was
exploration licence 08/636 and if the Company applies, to grant a one year
exploration licence under the Mining Act over the area concerned.
Subclause (4) requires that, if title granted under subclause (1) is terminated because
of failure to meet development conditions, the State will keep the land available to the
Company for 12 months, except if the land concerned is an exploration licence
granted pursuant to subclause (3).
Subclause (5) limits the application of subclause (3) to one Project, unless otherwise
approved by the Minister.
Subclause (6) modifies the Land Act for the purpose of "fast tracking" the grant of
tenure to the Proponents.
Subclause (7) modifies the Aboriginal Heritage Act 1972 by deeming the Company
as the land owner for the purposes of section 18 of that Act. Section 18 deals with
consents to disturb Aboriginal sites.
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Subclause (1) requires the Company to develop port facilities in accordance with
approved proposals.
Subclause (2) requires that all shiploading and shipping facilities are constructed,
operated and maintained in accordance with relevant legislation.
Subclause (3) requires that the Company and the Project Proponents allow third
parties to use the port facilities at reasonable charges provided this does not unduly
interfere with the Company's or Project Proponents' operations.
Subclause (4) enables the Minister to make by-laws in relation to third party use of
the port facilities.
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Subclause (1) allows the Company to construct and operate a railway if part of an
approved proposal.
Subclause (2) requires the Company to construct the railway as specified in the
approved proposals, provide necessary apparatus and equipment for the railway's
operation and to operate the railway with sufficient stock and equipment to meet their
rail transport requirements.
Subclause (3) requires the Company to operate the railway in a safe manner and
provide for current and future requirements for road, rail and other crossings of the
railway.
Subclause (4) requires the Company to carry iron ore of third parties in accordance
with arrangements between the Company and the State where such activity does not
interfere with the Proponent's operations under the Agreement, and subject to the
prior approval of the Company.
Subclause (5) requires the Company to carry passengers and freight of the State and
third parties where such activity does not interfere with the Proponent's operations
under the Agreement, and subject to the payment of charges as prescribed, but the
Company shall not be deemed a common carrier.
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Provides exemption from the provisions of the Building and Construction Industry
Training Levy Act 1990 and the Building and Construction Industry Training Fund
and Levy Collection Act 1990.
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Provides for any lands the subject of a lease, licence or other title to continue to be
zoned for the purpose for which it was granted.
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Subclause (1) ensures that the land subject to the Agreement will be rated on an
unimproved value, consistent with other State Agreements.
Subclause (2) provides for multiple leases associated with a Project to be treated as
one lease for rating purposes.
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Ensures that any land the subject of the Agreement will not be subject to
discriminatory rates taxes or charges.
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Subclause (1) allows the State to resume any land that is necessary for the project and
grant leases or other forms of tenure to the Company over that land.
Subclause (2) defines land for the purposes of this Agreement and the Land
Acquisition and Public Works Act.
Subclause (3) requires the Company to meet the costs of any resumption.
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Subclause (1) ensures that this Agreement overrides the Subsidiary Agreements
between the Company and the Co-Proponents.
Subclause (2) provides for up front approval of any assignments that are contained in
the Subsidiary Agreements and have been advised to the State before the Agreement
is executed.
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Requires the Company to warrant to the State that it has reached agreement with
Project Proponents on the use of infrastructure and lands controlled by the Company.
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Subclause (1) provides that the State shall not resume or allow to be resumed any of
the property or equipment belonging to the Proponents which is used for the purposes
of the Agreement.
Subclause (2) provides that, except in Area D, the State shall not resume or create
any easement over any of the lands the subject of the Agreement which may prejudice
or interfere with the Proponent's activities under the Agreement without the consent
of the Company (which shall not be unreasonably withheld).
In Area D the State may create easements provided these do not affect Project
Proponents or their contractors.
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Subclause (1) provides for the assignment of rights by the Proponents, subject to the
execution of a Deed of Covenant by the party receiving the benefit of the rights
assigned.
Subclause (2) provides that, where an assignment is approved by the Minister, th...