Western Australian Current Acts Western Australian Current Acts[s. 2]
[Heading inserted: No. 37 of 2008 s. 6.]
2008
THE HONOURABLE ALAN JOHN CARPENTER
PREMIER OF THE STATE OF WESTERN AUSTRALIA
AND
ARGYLE DIAMONDS LIMITED
ACN 009 102 621
AND
RIO TINTO DIAMONDS LIMITED
DIAMOND (ARGYLE DIAMOND MINES JOINT VENTURE)
AGREEMENT 1981
RATIFIED VARIATION AGREEMENT
[Solicitor’s details]
THIS AGREEMENT is made this 21 st day of May 2008
BETWEEN
THE HONOURABLE ALAN JOHN CARPENTER MLA., Premier of the State of Western
Australia acting for and on behalf of the said State and its instrumentalities
from time to time ( State )
AND
ARGYLE DIAMONDS LIMITED ACN 009 102 621 of 2 Kings Park Road, West Perth,
Western Australia ( Company )
AND
RIO TINTO DIAMONDS LIMITED (Company No. 05266164) a company incorporated in
the United Kingdom and having its registered office at 2 Eastbourne Terrace,
London, England ( RTDL ).
RECITALS
A. The State and the Company are now the parties
to the agreement dated 17 November 1981 which was ratified by and is scheduled
to the Diamond (Argyle Diamond Mines Joint Venture) Agreement Act 1981 and
which as subsequently varied is referred to in this Agreement as the “
Principal Agreement ”.
B. The Company proposes to continue its mining
operations under the Principal Agreement by undertaking underground mining
operations. The State for the purpose of supporting a continuation of the
Company’s mining operations under the Principal Agreement and employment
opportunities generally in the Kimberley region of Western Australia has
agreed to grant to the Company certain royalty and other concessions.
C. The Company and RTDL propose that RTDL be
permitted to undertake the sorting and marketing of diamonds produced from the
areas the subject of the Principal Agreement. The State has agreed to permit
RTDL to do so on certain terms and conditions including RTDL becoming a party
to the Principal Agreement.
D. The State, the Company and RTDL wish to vary
the Principal Agreement to address the matters referred to in recitals B and
C.
THE PARTIES AGREE AS FOLLOWS:
1. Subject to the context, the words and
expressions used in this Agreement have the same meanings respectively as they
have in and for the purpose of the Principal Agreement.
2. The State shall introduce and sponsor a Bill in
the Parliament of Western Australia to ratify this Agreement and endeavour to
secure its passage as an Act prior to 31 December 2008 or such later date as
the parties may agree.
3. (1) Clause 4 shall
not come into operation until the said Bill referred to in clause 2 is passed
by the Parliament of Western Australia and comes into operation as an Act.
(2) If by 31 December
2008 or such later date as may be agreed pursuant to clause 2 the said Bill
has not come into operation as an Act then unless the parties hereto otherwise
agree this Agreement shall 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
coming into operation as an Act all the provisions of this Agreement will
operate and take effect despite any enactment or other law.
4. The Principal Agreement is hereby varied as
follows:
(1) in clause 1:
(a) by
inserting the following new definitions in their appropriate alphabetical
positions:
“primary
cleaning and sizing” means the removal of all non-diamond material from
the surface of rough diamonds by chemical means and their classification after
such cleaning into size categories as required by subclause (1) of Clause 30;
“RTDL”
means Rio Tinto Diamonds Limited (Company No. 05266164) a company incorporated
in the United Kingdom and having, at the date of the variation agreement made
on or about 22 May 2008 between the State, the Joint Venturers and RTDL, its
registered office at 2 Eastbourne Terrace, London, England and in which term
shall be included its successors and permitted assigns;
“variation
date” means the date on which the Bill to ratify the variation agreement
made on or about 22 May 2008 between the State, the Joint Venturers and RTDL
comes into operation as an Act;
(b) by
deleting “parties hereto” in the definition of “Argyle
mining area” and substituting “State and the Joint
Venturers”;
(c) by
deleting “parties” in the definition of “private road”
and substituting “State and the Joint Venturers”; and
(d) in
the definition of “sorting”:
(i)
by deleting “any” and substituting
“primary cleaning and sizing and other”; and
(ii)
by inserting “but does not include such primary
cleaning and sizing and other necessary cleaning” after
“value”;
(2) in clause 4 by
inserting the following new subclause:
“(4) From and
including the variation date RTDL shall be deemed to be a party to this
Agreement with the State and the Joint Venturers.”;
(3) in clause 6 by
inserting the following new subclauses:
“(7) The Joint
Venturers may from time to time during the continuance of this Agreement after
the variation date sell transfer or dispose of to RTDL unsorted rough diamonds
produced pursuant to this Agreement for sorting and marketing by RTDL rather
than by the Joint Venturers, provided that:
(a) the
approvals of the Minister and the Minister for Mines referred to in subclauses
(3)(c)(ii) and (iii) respectively of Clause 30 have been given and
RTDL’s proposed arrangements with respect to the sorting of such rough
diamonds are otherwise in accordance with subclauses (3)(c)(i), (ii) and (iii)
of Clause 30; and
(b)
RTDL’s proposed arrangements for the marketing of such diamonds as
sorted rough diamonds have been first submitted by it to, and approved of by,
the Minister in accordance with this Clause. The provisions of subclauses (2)
– (6) inclusive of this Clause shall apply mutatis mutandis to the
submission, approval, modification, expansion or other variation of and
implementation by RTDL of arrangements for the marketing by it of such sorted
rough diamonds and as if references in those subclauses to the Joint Venturers
were to RTDL.
(8) The Joint
Venturers may from time to time during the continuance of this Agreement after
the variation date sell transfer or dispose of to RTDL sorted rough diamonds
produced pursuant to this Agreement for marketing by RTDL rather than by the
Joint Venturers provided that RTDL’s proposed arrangements for the
marketing of such sorted rough diamonds have been first submitted by it to,
and approved of by, the Minister in accordance with this Clause. The
provisions of subclauses (2) – (6) inclusive of this Clause shall apply
mutatis mutandis to the submission, approval, modification, expansion or other
variation of and implementation by RTDL of arrangements for the marketing by
it of such sorted rough diamonds and as if references in those subclauses to
the Joint Venturers were to RTDL.”;
(4) in clauses 13(2)
and (6) by deleting “parties” and substituting “State and
the Joint Venturers”;
(5) in clause 15(1) by
deleting “the Schedule” and substituting “Schedule 1”;
(6) in clause 21(7) by
deleting “parties” and substituting “State and the Joint
Venturers”;
(7) in clause 22:
(a) by
deleting “parties” in subclauses (1), (4) and (8) and substituting
“State and the Joint Venturers”; and
(b) by
deleting “parties hereto” in subclause (10) and substituting
“State and the Joint Venturers”;
(8) in clause
29(1)(a):
(a) by
inserting the following new definitions in their appropriate alphabetical
positions:
“Bank”
means a body corporate that is authorised under the Banking Act 1959 of the
Commonwealth to carry on banking business as defined in that Act;
“bank
undertaking” means an unconditional and irrevocable undertaking issued
by a Bank (first approved of by the Minister for Mines) in favour of the State
to pay on demand to the State any amounts from time to time demanded by the
Minister for Mines up to the specified limit of the undertaking and in a form
approved by the Minister for Mines but substantially in the form contained in
Schedule 2;
“Banker’s
Undertaking 2007” means the undertaking issued on 7 May 2007 by
Australia and New Zealand Banking Group Limited in favour of the State;
“milestone
achievement date” means the date on which the milestone event occurs;
“milestone
deadline” means 30 June 2009 or such later date as the Minister may
before that date approve;
“milestone
event” means first blasting of the undercut to commence the caving
process by which the underground mining operations the subject of proposals
approved by the Minister pursuant to this Agreement on 13 January 2006 is to
occur;
(b) in
the definition of “allowable deductions”:
(i)
by inserting “or RTDL” in subparagraphs (i),
(ii), (iii), (iv) and (vi) after each reference to “the Joint
Venturers”; and
(ii)
by inserting “, primary cleaning and sizing”
in subparagraph (i) after each reference to “mining, recovery”;
and
(iii)
by inserting “, primary cleaning and sizing,”
in subparagraph (ii) after “mining, recovery”;
(c) in
the definition of “allowable f.o.b. revenue costs”:
(i)
by inserting “by the Joint Venturers or RTDL”
after “sorted rough diamonds”; and
(ii)
by inserting “or RTDL” after “paid by
the Joint Venturers”;
(d) in
the definition of “sales value”:
(i)
by inserting in subparagraph (i):
(A) “in respect of the sale, transfer
or disposal of sorted rough diamonds by the Joint Venturers (other than to
RTDL as permitted under subclause (8) of Clause 6),” at the beginning of
that subparagraph; and
(B) “such” after “sale
transfer or disposal by the Joint Venturers of”; and
(C) “(other than to RTDL as permitted
under subclause (8) of Clause 6)” after “sold transferred or
disposed of by the Joint Venturers”;
(ii)
by inserting in subparagraph (ii):
(A) “or RTDL” after the first
and second reference to “the Joint Venturers”; and
(B) “of the Joint Venturers”
after “and where sorted rough diamonds”;
(iii)
by renumbering subparagraph (ii) as subparagraph (iii)
and inserting the following new subparagraph:
“(ii) in respect
of the sale, transfer or disposal of sorted rough diamonds by RTDL (including
without limitation those sold transferred or disposed of to it by the Joint
Venturers as permitted under subclause (8) of Clause 6), the greater of the
gross sales revenue from the sale transfer or disposal by RTDL of such sorted
rough diamonds on an arms length basis or the fair and reasonable market value
on an arms length basis of sorted rough diamonds sold transferred or disposed
of by RTDL (including without limitation those sold transferred or disposed of
to it by the Joint Venturers as permitted under subclause (8) of Clause 6) as
determined by the Minister after consultation with RTDL; and”;
(9) in clause 29(1) by
inserting the following new paragraphs:
“(e)
(i) A reference to a
sales value, or a price, of sorted rough diamonds is to be treated as a
reference to that value or price, reduced by an amount equal to the net GST
(if any) payable on the supply to which the value or price relates.
(ii) A reference to the value of
sorted rough diamonds at a particular point in its production (other than its
supply), or in a particular form, is to be treated as a reference to that
value, reduced by an amount equal to the amount of GST that would be payable
if the diamonds were supplied at that point, or in that form.
(iii) If, when determining a value
or price of sorted rough diamonds an amount (an “expense”) that
relates to obtaining the diamonds may be deducted from another amount, the
amount that may be deducted is reduced by an amount equal to the net input tax
credit (if any) that arises in relation to the expense.
(iv) The “net input tax
credit” that arises in relation to an expense is:
(a) the
input tax credit that arises in relation to that expense; plus
(b) the
sum of any decreasing adjustments in relation to that expense; minus
(c) the
sum of any increasing adjustments in relation to that expense.
(v) In this paragraph (e),
“decreasing adjustment”, “GST”, “increasing
adjustment”, “input tax credit”, “net GST” and
“supply” have the respective meanings given by section 195-1 of
the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth.
(f)
Where, for the purposes of determining the amount of royalty payable for
sorted rough diamonds, it is necessary to convert an amount or a price to
Australian currency, the conversion is to be calculated using a rate that has
been approved by the Minister at the request of the Joint Venturers and in the
absence of such request as determined by the Minister to be a reasonable rate
for the purpose.”;
(10) in clause 29(2)
by deleting “The” and substituting “Subject to subclauses
(2a), (2b) and (2c) of this Clause, the”;
(11) by inserting the
following new subclauses (2a) – (2e) after clause 29(2):
“ Underground Mining Royalty Concession
(2a) Subject to
subclauses (2b) and (2c) of this Clause, the Joint Venturers shall each year
after 31 December 2005 during the continuance of this Agreement:
(a)
remain liable to pay to the State in respect of diamonds from the areas the
subject of this Agreement royalty at the relevant rate specified in subclause
(2) of this Clause;
(b) pay
to the State on account of that royalty liability an amount equal to 5% of the
f.o.b. revenue for that year; and
(c)
provide to the State bank undertakings in accordance with subclause (2d) of
this Clause.
(2b) If the milestone
event occurs on or before the milestone deadline:
(a) the
Joint Venturers shall each year after the milestone achievement date during
the continuance of this Agreement pay to the State in respect of diamonds from
the areas the subject of this Agreement a royalty payment in an amount equal
to 5% of the f.o.b. revenue for that year;
(b) the
Joint Venturers shall in respect of each year that the royalty payment
arrangements set out in subclause (2a) of this Clause applied be deemed
released from liability under this Clause to pay royalty over and above the
amount payable by them pursuant to paragraph (b) of subclause (2a) of this
Clause;
(c)
Venturers’ obligation under paragraph (c) of subclause (2a) of this
Clause shall cease to apply; and
(d) the
State shall return all bank undertakings provided to it in accordance with
subclause (2d) of this Clause which are then held by it to the Bank or Banks
who provided them and notify the Bank or Banks that they are no longer
required.
(2c) If the milestone
event does not occur by the milestone deadline:
(a) the
royalty payment arrangements set out in subclause (2a) of this Clause shall
continue to apply in respect of the year during which the milestone deadline
was to occur but in respect of each following year during the continuance of
this Agreement the Joint Venturers shall resume payment of the royalty payable
by them under subclause (2) of this Clause (subject to subclause (3) of this
Clause) at the times and in the manner they were formerly required to do so by
this Clause; and
(b) the
Joint Venturers shall on lodgement of the annual return pursuant to subclause
(5) of this Clause for the year during which the milestone deadline was to
occur, pay to the State the aggregate amount of unpaid royalty for which they
are liable under this Clause in respect of the years commencing after 31
December 2005 and ending at the end of that year. If on the basis of an audit
pursuant to this Clause of the Joint Venturers’ returns relating to that
period the Minister for Mines determines that the amount so paid by the Joint
Venturers is less than the amount owed by them, the difference shall be paid
by the Joint Venturers to the State within 7 days of demand by the Minister
for Mines. In the event that the Joint Venturers fail to comply with this
paragraph (b) the State may enforce the bank undertakings provided to it
pursuant to subclause (2d) of this Clause which it then holds. Enforcement of
such bank undertakings shall not release the Joint Venturers from liability to
pay to the State upon demand by the Minister the difference referred to above
to the extent it exceeds the amount recovered by the State in enforcing the
bank undertakings; and
(c) as
soon as practicable after the State has received all outstanding royalties as
referred to in paragraph (b) above it shall return all bank undertakings
provided to it pursuant to subclause (2d) of this Clause which it then still
holds but has not enforced to the Bank or Banks who provided them and notify
the Bank or Banks that they are no longer required.
(2d) (a)
As security for the payment by the Joint Venturers
to the State in respect of the years to which the royalty payment arrangements
set out in subclause (2a) of this Clause apply of the difference between their
royalty liability under subclause (2) of this Clause and the amount payable by
them on account of that royalty liability pursuant to paragraph (b) of
subclause (2a) of this Clause, the Joint Venturers shall provide bank
undertakings to the State in accordance with this subclause (2d).
(b) The
Joint Venturers shall before the date occurring 14 days after the variation
date provide to the State a bank undertaking in an amount equal to the
difference between:
(i)
the aggregate of the amounts estimated in accordance with
paragraph (a) of subclause (5) of this Clause as the amount of royalty the
Joint Venturers are liable under subclause (2) of this Clause to pay in
respect of the diamonds the subject of their return for the quarter ended 31
March 2006 and for each subsequent quarter expiring before the variation date;
and
(ii)
the aggregate amount of royalty payable by the Joint
Venturers in respect of those quarters pursuant to paragraph (b) of subclause
(2a) of this Clause.
Upon receipt of that
bank undertaking the State shall promptly return the Banker’s
Undertaking 2007 to Australia and New Zealand Banking Group Limited and refund
to the Joint Venturers any royalties paid by them in respect of the
abovementioned quarters in excess of the royalties payable by them in respect
of those quarters pursuant to paragraph (b) of subclause (2a) of this Clause.
(c) The
Minister for Mines may at any time or times during the application of the
royalty payment arrangements set out in subclause (2a) of this Clause require
the Joint Venturers to furnish replacement or additional security by way of
bank undertaking so as to enable the State to at all times hold security in an
amount equal to the then difference between the Joint Venturers’
aggregate royalty liability under subclause (2) of this Clause and the
aggregate of the amounts payable by them on account of that liability pursuant
to paragraph (b) of subclause (2a) of this Clause. The Joint Venturers shall
within 14 days after written request from the Minister for Mines furnish to
the State replacement or additional security by way of bank undertaking in
such amount as the Minister for Mines shall nominate for the purposes of this
subclause (2d). On receipt of an approved replacement security the State shall
release and discharge the original security.
(2e) (a)
For the purposes of determining whether or not the
milestone event has occurred by the milestone deadline, the Joint Venturers:
(i)
may at least 30 days prior to the date on which the Joint
Venturers consider the milestone event will occur, notify the Minister for
Mines in writing of the date on which they consider the milestone event will
occur; and
(ii)
shall within 7 days after the date upon which the Joint
Venturers consider the milestone event has occurred and in any event by no
later than the milestone deadline, notify the Minister for Mines in writing of
the date of and the occurrence of the milestone event.
If the Joint Venturers fail to give notification by the milestone
deadline in accordance with subparagraph (ii), the milestone event shall be
deemed to not have occurred by the milestone deadline.
(b)
Within 14 days after receipt of notification in
accordance with paragraph (a)(i) the Minister for Mines shall appoint (at the
State’s expense) a suitably qualified mining engineer to consult with
the Joint Venturers about the achievement of the milestone event and what (if
any) additional measures the Joint Venturers need to take to achieve the
milestone event. The Joint Venturers will co-operate fully with such person
and provide that person with such access to the mining lease and records of
the Joint Venturers as that person may reasonably require for the purpose of
the consultation.
(c)
Within 14 days after receipt of notification in
accordance with paragraph (a)(ii), the Minister for Mines may appoint (at the
State’s expense) a suitably qualified mining engineer to verify within
14 days after being appointed whether or not the milestone event has occurred.
The Joint Venturers will co-operate fully with such person and provide that
person with such access to the mining lease and undercut and records of the
Joint Venturers as that person may reasonably require to enable verification.
If after receipt of notification in accordance with paragraph (a)(ii) the
Minister for Mines does not appoint a person under this paragraph (c), the
milestone event shall be deemed to have occurred on the date notified by the
Joint Venturers in accordance with paragraph (a)(ii).
(d)
The Minister for Mines shall advise the Joint
Venturers of the conclusion of the person appointed under paragraph (c) within
7 days of the Minister for Mines being advised of it. If that person concludes
that the milestone event was not achieved:
(i)
then if the milestone deadline has not passed, the Joint
Venturers may take further steps to achieve the milestone event by the
milestone deadline and in which case the provisions of paragraphs (a)(ii) and
(c) shall continue to apply; or
(ii)
if the Joint Venturers wish to dispute that conclusion
they may within 28 days after being notified of the conclusion refer the
dispute to arbitration in accordance with the provisions of Clause 49.”;
(12) in clause 29(3)
by inserting the following new paragraphs:
“(d) Paragraphs
(b) and (c) shall not apply in respect of the years that the royalty payment
arrangements referred to in subclause (2a) of this Clause apply.
(e) If
the milestone event occurs by the milestone deadline, paragraphs (a), (b) and
(c) shall cease to apply.”;
(13) in clause 29(4):
(a) by
deleting “parties” in paragraph (b) and substituting “State
and the Joint Venturers”; and
(b) by
inserting the following new paragraph:
“(c) This
subclause shall not apply in respect of or during the years that the royalty
payment arrangements referred to in subclause (2a) of this Clause
apply.”;
(14) in clause 29(5):
(a) in
paragraph (a) by deleting all the words after “a return in a form
approved by the Minister for Mines” and substituting a colon followed
by:
“(i) showing the
quantity, value, allowable f.o.b. revenue costs and such other details
(including estimated costs of production and claimed deductions itemised) as
the Minister for Mines may require of diamonds on which royalty has accrued
payable hereunder during, in respect of the return for the quarter ending 31st
March, 1982, the period from the commencement date to 31st March, 1982 and
thereafter, during the quarter immediately preceding the due date of the
return and estimating the amount of royalty paid and payable in respect of
such diamonds including in respect of the years that the royalty payment
arrangements set out in subclause (2a) of this Clause apply, pursuant to
paragraph (b) of that subclause; and
(ii)
in respect of each quarter occurring after the variation
date, showing the RTDL information specified below and such other details as
the Minister for Mines may from time to time require with respect to unsorted
rough diamonds which the Joint Venturers have sold transferred or disposed of
to RTDL for sorting and marketing by RTDL and to sorted rough diamonds which
the Joint Venturers have sold transferred or disposed of to RTDL for
marketing; and
(iii)
showing the opening and closing balance of stocks on hand
of the Joint Venturers including rough diamonds being sorted for the Joint
Venturers; and
(iv)
in respect of each quarter occurring after the variation
date and in relation to unsorted rough diamonds produced pursuant to this
Agreement and which were sold transferred or disposed of by the Joint
Venturers to RTDL for sorting and marketing by RTDL rather than by the Joint
Venturers, showing the opening and closing stocks on hand of RTDL; and
(v)
in respect of each quarter occurring after the variation
date and in relation to sorted rough diamonds produced pursuant to this
Agreement and which were sold transferred or disposed of by the Joint
Venturers to RTDL for marketing by RTDL, showing the opening and closing
stocks on hand of RTDL.
The Joint Venturers,
if required by the Minister for Mines, shall consult with him with respect to
such abovementioned estimates of royalty and revise such estimates if required
on the basis of actual quarterly sales. Royalty at the applicable rate (as
defined below) shall be payable on the due date and shall be paid by the Joint
Venturers on the amount of the estimate or other amount agreed between the
Joint Venturers and the Minister for Mines within 45 days of the due date.
For the purposes of
this paragraph (a) “the applicable rate” means:
(A) in respect of the years that the
royalty payment arrangements set out in subclause (2a) of this Clause apply,
5% of the f.o.b. revenue;
(B) in respect of the years referred to in
paragraph (a) of subclause (2b) of this Clause, 5% of the f.o.b. revenue; and
(C) otherwise at the rate specified in
subclause (2) of this Clause.
For the purposes of
this paragraph (a) “RTDL information” means:
(A) the quantity of unsorted rough diamonds
sold transferred or disposed of by the Joint Venturers to RTDL for sorting and
marketing by RTDL;
(B) the quantity of unsorted rough diamonds
sent by the Joint Venturers to RTDL during the quarter for sorting on behalf
of the Joint Venturers;
(C) the quantity of sorted rough diamonds
sold transferred or disposed of by the Joint Venturers to RTDL for marketing
by RTDL;
(D) the quantity of sorted rough diamonds
received by the Joint Venturers from RTDL during the quarter being diamonds
that the Joint Venturers sent to RTDL for sorting on their behalf;
(E) copies of the sales invoices for sorted
rough diamonds sold by RTDL during the quarter; and
(F) details of RTDL costs (and supporting
documentation) claimed by the Joint Venturers as allowable deductions or
allowable f.o.b. revenue costs.”;
(b) in
paragraph (b) by inserting “(including without limitation sales
transfers or disposals by RTDL (after sorting) of unsorted rough diamonds sold
transferred or disposed of by the Joint Venturers to it for sorting and
marketing and of sorted rough diamonds sold transferred or disposed of by the
Joint Venturers to it for marketing)” after “during the year of
return.”;
(c) by
deleting “Where” at the beginning of paragraph (c) and
substituting “Subject to paragraph (d), where”;
(d) by
inserting the following new paragraphs (d) and (e):
“(d) In respect
of the years that the royalty payment arrangements set out in subclause (2a)
of this Clause apply and of the years after the milestone achievement date,
the references in paragraph (c) of this subclause (5) to “estimated
royalty” and “royalty payable for that period” shall be to
the royalty payable by the Joint Venturers pursuant to paragraph (b) of
subclause (2a) of this Clause.
(e) RTDL
covenants with the Joint Venturers and with the State that it will promptly
provide to the Joint Venturers all such information as shall be required to
enable the Joint Venturers to comply with their obligations under paragraphs
(a) and (b).”;
(15) in clause 29(7):
(a) by
deleting the opening words of paragraph (a) before subparagraph (i) and
substituting:
“The Joint
Venturers and RTDL shall permit the Minister for Mines or his nominee or as
the case may be ensure that the Minister for Mines or his nominee are
permitted:”;
(b) in
paragraph (a)(i):
(i)
by inserting “, RTDL” after the first
reference to the “Joint Venturers”;
(ii)
by inserting “or on behalf of any one or more of
them,” after “any person acting on their behalf”; and
(iii)
by inserting “or RTDL” after the second
reference to the “Joint Venturers”;
(c) in
paragraph (a)(ii):
(i)
by inserting “or RTDL” after the first
reference to the “Joint Venturers”;
(ii)
by inserting “(within or outside the said
State)” after “all other areas and facilities”; and
(iii)
by inserting “or RTDL (being diamonds produced from
the areas the subject of this Agreement)” after the second reference to
the “Joint Venturers”; and
(d) in
paragraph (b) by deleting “this paragraph” and substituting
“paragraph (a)”;
(16) in clause 29(10):
(a) by
deleting the heading to this clause and substituting:
“ Sorting, Valuation and Auditing Procedures
”;
(b) in
paragraph (a):
(i)
by inserting “and RTDL” after “Joint
Venturers”; and
(ii)
by deleting “its” and substituting
“their (or of their agent’s or contractor’s as the case may
be) respective sorting”; and
(c) in
paragraph (b) by inserting “or RTDL as the case may be” after
“Joint Venturers”;
(17) by deleting
clause 30 and the heading to that clause and substituting the following new
clause and heading:
“ Primary cleaning and sizing, cutting and
polishing and sorting of rough diamonds
30. (1)
During the continuance of this Agreement after the variation
date the Joint Venturers shall undertake:
(a) the
primary cleaning and sizing of rough diamonds from the areas the subject of
this Agreement at the mining lease or at such other place in the said State
approved from time to time by the Minister; and
(b)
except to the extent otherwise permitted from time to time by the Minister,
the cutting and polishing of high colour, low inclusion pink diamonds having
an expected polished weight greater than 0.25 carats in Perth Western
Australia or at such other place in the said State approved from time to time
by the Minister.
The Joint Venturers further undertake that the sizing of rough diamonds
as part of the abovementioned primary cleaning and sizing shall involve their
classification after cleaning into a minimum of 10 size categories approved by
the Minister. The Minister may from time to time at the request of the Joint
Venturers approve a reduction in the number of size categories to below 10.
(2) (a)
Except to the extent they are permitted under
subclause (7) of Clause 6 to sell transfer or dispose of unsorted rough
diamonds to RTDL, the Joint Venturers shall undertake or cause to be
undertaken on their behalf (whether in or outside the said State) the sorting
of all rough diamonds from the areas the subject of this Agreement before they
are sold transferred or otherwise disposed of by the Joint Venturers.
(b)
The Joint Venturers shall during the continuance
of this Agreement:
(i)
keep the Minister and the Minister for Mines fully
informed with respect to the arrangements for the sorting of its rough
diamonds including without limitation as to the place or places at which such
sorting is being or is to be undertaken; and
(ii)
ensure that the nature and extent of such sorting will be
to a standard and level reasonably necessary to maximise the value of its
diamonds before sale transfer or disposal as the case may be as approved by
the Minister; and
(iii)
ensure that such sorting is undertaken in accordance with
sorting and auditing procedures approved by the Minister for Mines.
(c)
If such sorting is to be undertaken outside of the
said State the Joint Venturers must also comply, or ensure compliance, with
such procedures and provide such information as the Minister for Mines may
from time to time require to track the rough diamonds produced from the areas
the subject of this Agreement from the mining lease through to the place or
places at which sorting is being or is to be undertaken.
(3) (a)
RTDL shall comply with the following paragraphs in
respect of the unsorted rough diamonds sold transferred or disposed of to it
by the Joint Venturers as permitted under subclause (7) of Clause 6.
(b)
RTDL shall undertake or cause to be undertaken on
its behalf (whether in or outside the State) the sorting of all such rough
diamonds before they are sold transferred or disposed of by RTDL.
(c)
RTDL shall during the continuance of this
Agreement:
(i)
keep the Minister and the Minister for Mines fully
informed with respect to the arrangements for the sorting of such rough
diamonds including without limitation as to the place or places at which such
sorting is being or is to be undertaken; and
(ii)
ensure that the nature and extent of such sorting will be
to a standard and level reasonably necessary to maximise the value of its
diamonds before sale transfer or disposal as the case may be as approved by
the Minister; and
(iii)
ensure such sorting is undertaken in accordance with
auditing procedures approved by the Minister for Mines.
(d)
If such sorting is to be undertaken outside of the
said State the Joint Venturers and RTDL must comply, or ensure compliance,
with such procedures and provide such information as the Minister for Mines
may from time to time require to track the rough diamonds produced from the
areas the subject of this Agreement from the mining lease through to the place
or places at which sorting is being or is to be undertaken.”;
(18) in clause 37:
(a) by
inserting “subclauses (1) – (4) inclusive of” in subclause
(1) after “Subject to the provisions of”; and
(b) by
inserting the following new paragraphs:
“(5) Subject to
the provisions of subclauses (5) and (6) of this Clause, RTDL may at any time
assign mortgage charge or dispose of to any company or persons with the
consent of the Minister the whole or any part of the rights of RTDL hereunder
and of the obligations of RTDL hereunder subject in the case of an assignment
or disposition to the assignee 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 approved by the Minister to comply with observe and perform
the provisions hereof on the part of RTDL to be complied with observed or
performed in regard to the matter or matters the subject of such assignment or
disposition.
(6) Notwithstanding
anything contained in or anything done under or pursuant to subclause (5) of
this Clause, RTDL 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 PROVIDED THAT the
Minister may agree to release RTDL or any party comprising RTDL from such
liability where he considers such release will not be contrary to the
interests of the State.”;
(19) in clause 38(1):
(a) by
deleting “The parties” and substituting “The State and the
Joint Venturers”; and
(b) by
inserting the following new sentence at the end of it:
“After the
variation date and while RTDL is a party to this Agreement its agreement shall
be required to add to substitute for cancel or vary all or any of the
provisions of this Agreement.”;
(20) in clause 40 by
inserting the following sentence at its end:
“This clause
shall not apply to any extension of the milestone deadline as defined in
subclause (1) of Clause 29 otherwise than as contemplated by that
definition.”;
(21) in clause 41(1):
(a) by
inserting in paragraph (a)(i):
(i)
“(including without limitation to provide bank
undertakings to the State in accordance with subclause (2d) of Clause
29)” after “State herein”; and
(ii)
by inserting “or pursuant to” after
“assigned under”; and
(b) by
inserting “; or” after paragraph (b) followed by:
“(c)
(i) RTDL makes default
which the State considers material in the due performance or observance of any
of the covenants or obligations to the State herein and on its part to be
observed or performed; or
(ii) RTDL abandons or repudiates
this Agreement or its operations under this Agreement,
and within a period of
180 days after notice is given by the State as provided in subclause (2) of
this Clause or, if the default or abandonment is referred to arbitration, then
within the period mentioned in subclause (3) of this Clause:
(A) such
default is not remedied or such operations resumed; or
(B) the Joint
Venturers do not cease selling transferring or disposing of to RTDL rough
diamonds produced pursuant to this Agreement for marketing or for sorting and
marketing by RTDL as the case may be rather than by the Joint Venturers and
resume such sorting and marketing activities themselves; or
(d)
RTDL goes into liquidation (other than a voluntary
liquidation for the purpose of reconstruction) and unless within 3 months
RTDL’s interest is assigned to an assignee approved by the Minister
under Clause 37 or the Joint Venturers cease selling transferring or disposing
of to RTDL rough diamonds produced pursuant to this Agreement for marketing or
for sorting and marketing by RTDL as the case may be rather than by the Joint
Venturers and resume such sorting and marketing activities themselves,”;
and
(c) by
inserting “and to RTDL” after “the Joint Venturers”
where that reference appears last in subclause (1);
(22) in clause 41(2):
(a) by
inserting “to RTDL and” after “given to the Joint Venturers
and”;
(b) by
inserting “and RTDL’s” after “time being of the Joint
Venturers”; and
(c) by
inserting “or RTDL (as the case may be) or” after “State by
the Joint Venturers”;
(23) in clause 41(3)
(a) by
inserting “and RTDL” after each reference to “Joint
Venturers” in paragraphs (a) and (b); and
(b) by
deleting “(a) and (b)” and substituting “(a), (b), (c) or
(d) as the case may be”;
(24) in clause 42(1):
(a) in
paragraph (a):
(i)
by inserting “and of RTDL” after the first
reference to “Joint Venturers”;
(ii)
by deleting “either” and substituting
“any”; and
(iii)
by inserting “or bank undertaking” after
“indemnity”;
(b) by
deleting “neither of the parties hereto” in paragraph (c) and
substituting “none of the State, the Joint Venturers or RTDL”;
(25) in clauses 42(3)
and 43(2) by deleting “parties” and substituting “State and
the Joint Venturers”;
(26) in clause 47 by
deleting “either” and substituting “each”;
(27) in clause 49:
(a) by
deleting subclause (1) and inserting the following new subclause:
“(1) Any dispute
or difference between the State and either or both of the Joint Venturers and
RTDL arising out of or in connection with this Agreement the construction of
this Agreement or as to the rights, duties or liabilities of any of them
hereunder or as to any matter to be agreed upon between the State and either
or both of the Joint Venturers and RTDL under this Agreement shall in default
of agreement between those having the dispute or difference and in the absence
of any provision in this Agreement to the contrary be referred to the
arbitration of two arbitrators one to be appointed by the State and the other
by the Joint Venturers and RTDL (or if only one of them is having the dispute
or difference with the State then that one) the arbitrators to appoint their
umpire before proceeding in the reference and every such arbitration shall be
conducted in accordance with the provisions of the
Commercial Arbitration Act 1985 ”; and
(b) in
subclause (3) by deleting “either of the” and substituting
“the State or the other party or”;
(28) in clause 50:
(a) by
inserting “and RTDL” after “The Joint Venturers”; and
(b) by
inserting “or RTDL” after “the Joint Venturers”;
(29) in clause 51 by
inserting “(and if by RTDL if signed on its behalf by any person
authorised by it or by its solicitors as notified to the State from time to
time)” after “authorised by the Joint Venturers”;
(30) by inserting
after the existing provision of clause 53 the following sentence:
“The parties
irrevocably submit to the non-exclusive jurisdiction of the courts of Western
Australia and of all courts competent to hear appeals therefrom.”;
(31) in the Schedule
by deleting the heading “THE SCHEDULE” and substituting
“SCHEDULE 1”; and
(32) by inserting a
Schedule 2 as follows:
“ SCHEDULE 2
BANKER’S UNDERTAKING
To: State of Western Australia ( State )
At the request of the Joint Venturers as defined
in the agreement ratified by the
Diamond (Argyle Diamond Mines Joint Venture) Agreement Act 1981 ( Customer )
In consideration of the State at the request of
the Customer agreeing to
accept this Undertaking from [ ] (Bank) as security
in accordance with clause 29(2d) of the abovementioned agreement (which as
varied from time to time is herein referred to as the State Agreement ) the
Bank unconditionally and irrevocably undertakes to pay on demand to the State
any amount or amounts which may from time to time be demanded in writing by
the Minister for Mines (as defined in the State Agreement) on behalf of the
State up to a maximum in aggregate of $.............. (the Amount ).
Payment of the Amount or any part thereof will be
made by the Bank to the State without reference to the Customer, despite any
notice from the Customer to the Bank not to pay any amount and irrespective of
the performance or non-performance by the Customer or the State of the
provisions of the State Agreement.
The Bank’s liability under this Undertaking
is continuing and irrevocable and (without limitation) shall not be impaired
or discharged by any variation that may be made to the provisions of the State
Agreement or by any extension of time or other forbearance on the part of any
of the State, the Minister or the Minister for Mines (each as defined in the
State Agreement) or the Customer under or pursuant to the State Agreement.
The Bank’s obligations under this
Undertaking shall continue in force until the earlier of:
•
written notification being received by the Bank from the State that the
Undertaking is no longer required;
•
the Undertaking being returned to the Bank by the State; and
•
the aggregate of all payments made by the Bank to the State under this
Undertaking equalling the Amount.
Dated at ................................., this
...................................................
Signed as a deed for and on behalf of
...............................................
............................................................................................................
Print name of the Bank
by its duly appointed attorney pursuant to a power
of attorney dated
............................................................................................................
............................................................................................................
Signature Signature
Name: Name:
Title: Title:
In the presence of:
....................................................................
Signature
Name:”
EXECUTED as a deed.
SIGNED by THE HONOURABLE )
ALAN JOHN CARPENTER )
[Signature]
in the presence of: )
[Signature]
______________________________
Name: MATT KEOGH
THE COMMON SEAL of )
ARGYLE
DIAMONDS LIMITED )
ACN 009 102 621 was hereto
affixed ) C.S.
in
accordance with its constitution )
in the presence
of: )
[Signature]
______________________________
Director
Name: KEVIN MCLEISH
[Signature]
______________________________
Director/ Secretary
Name: SHANE SULLIVAN
EXECUTED by RIO TINTO
)
DIAMONDS LIMITED by its )
Attorney
)
pursuant to a power of
)
attorney dated 16 May 2008 )
in the
presence of: )
[Signature]
[Signature]
________________________
________________________
Witness Attorney
Name:
CATHRYN WELLS Name: SHANE SULLIVAN
[Schedule 5 inserted: No. 37 of 2008 s. 6.]