WUNDOWIE WORKS MANAGEMENT AND FOUNDRY

No. 10.] Wundowie Works Management [1966.and Foundry Agreement.

WUNDOWIE WORKS

MANAGEMENT AND FOUNDRY

AGREEMENT.

No. 10 of 1966.

AN ACT to approve an Agreement made betweenThe State and A.N.I. Australia Pty. Limitedand for purposes connected therewith.

[Assented to 5th October, 1966.]

BE it enacted by the Queen's Most ExcellentMajesty, by and with the advice and consent

of the Legislative Council and the LegislativeAssembly of Western Australia, in this presentParliament assembled, and by the authority of thesame, as follows:—

Short title. 1. This Act may be cited as the Wundowie WorksManagement and Foundry Agreement Act, 1966.

Commence-ment. 2. This Act shall come into operation on the day

the Wood Distillation and Charcoal Iron and SteelIndustry Act Amendment Act, 1966, comes intooperation.

1966.] Wundowie Works Management [No. 10.and Foundry Agreement.

3. In this Act, unless the contrary intentionappears

"the Agreement" means the Agreement a copyof which is set forth in the Schedule tothis Act, and if the Agreement is amendedin accordance with its provisions, includesthe Agreement as so amended from timeto time;

"the Management Company" has the samemeaning as that expression has in theAgreement.

4. The Agreement is approved.

Interpre-tation.

Approval ofAgreement.

5. The Management Company is empowered and ManagementCcanrtyshall, subject to the Agreement do all such things to copamply

as the Agreement provides the Management Agreement.Company will do.

SCHEDULE.THIS AGREEMENT UNDER SEAL made the 24th day ofJune One thousand Nine hundred and Sixty-six BETWEENTHE HONOURABLE DAVID BRAND, M.L.A., Premier andTreasurer of the State of Western Australia acting for andon behalf of the said State and Instrumentalities thereoffrom time to time (hereinafter called "the State") of theOne part AND A.N.I. AUSTRALIA PTY. LIMITED a Companyduly incorporated under the Companies Act, 1961 of theState of New South Wales and having its Registered Officeand principal place of business in that State at BirnieAvenue, Lidcombe, and being registered as a foreigncompany in the State of Western Australia and having itsregistered office in that State at 265 Great Eastern Highway,Rivervale, (hereinafter called "the Company", whichexpression includes the successors and permitted assigns ofthe Company) of the Other part WHEREAS:

(a) Pursuant to the Wood Distillation and CharcoalIron and Steel Industry Act, 1943, the State hasestablished maintained and carried on at Wundowiein the said State certain works plant and otherundertakings in connection with certain processesof wood distillation and the production of charcoaliron and steel and the sale of products derivedfrom the carrying on of the said works plants andother undertakings

Section 3.


(b) At the request of the State the Company has agreedto accept responsibility for the management of thesaid works on and from the First day of July, Onethousand Nine hundred and Sixty-six for theperiod and subject to the terms and conditionshereinafter appearing

(c) It is a fundamental term of the arrangement herebyconstituted:

(i) That the State grants to the Company alease or leases of land to enable theCompany to establish maintain and carryon within the precincts of the WundowieWorks a foundry and other activitieshaving a basic requirement for hot metalupon the terms and subject to theconditions set out in Part III of thisAgreement; and

(ii) That the State grants to the Company orits nominee an option to purchase theWundowie Works upon the terms andsubject to the conditions set out in PartIV of this Agreement.

NOW THIS AGREEMENT WITNESSETH AND INCONSIDERATION of the mutual agreements containedherein IT IS HEREBY AGREED AND DECLARED asfollows:—

PART I—PRELIMINARYInterpre- 1. In this Agreement unless the context shall otherwisetation. require, the following terms shall have the following

meanings:"agree" or "agreed" means agree or agreed in writing

as the case may be;"approval" or "approve" means approval or approve in

writing as the case may be;"Board" means the Charcoal Iron and Steel Industry

Board of Management constituted under and forthe purposes of the Steel Act;

"Companies Act" means the Companies Act, 1961 of thesaid State;

"consent" means consent in writing;"demised premises" means the land the subject of the

special lease or leases to be granted under PartIII hereof;

"finished foundry product" means a casting which ismachined or otherwise further processed by theIndustry or the Foundry or the Company or anysubsidiary of the Company or a casting which ismass produced for sale generally and not exclusivelymade to the order of a particular customer;


"Forests Act" means the Forests Act 1918 of the saidState;

"Foundry" means the demised premises and allbuildings, erections, and works thereon, and allplant and equipment installed in or situate thereonand the business so carried thereon by theCompany;

"Industry" means the State's Wundowie works;"interest at bank rate" or "bank rate" means interest

at the rate from time to time payable by theIndustry on bank overdraft accommodation or ifthere is no such interest payable by the Industrymeans interest at the rate of 6k% per annum;

"Land Act" means the Land Act 1933 of the said State;"Mining Act" means the Mining Act 1904 of the said

State;"Minister" means the Minister for industrial Develop-

ment in the Government of the said State, hissuccessors in office or other the Minister for thetime being responsible under whatsoever title forthe administration of industrial development inthe said State;

"Management Company" means the company formedor to be formed by the Company pursuant to Clause2 hereof to manage the works pursuant to PartII hereof in place of the Company during thetransition period;

"Month" means calendar month;"notice" means notice in writing;"person or persons" include bodies corporate;"public authority" means any Minister of the Crown

acting in his official capacity as Minister, Depart-ment of the Public Service of the said State, StateTrading concern, State instrumentality or agencyof the Crown in right of the State;

"Ratifying Act" means the Act to ratify this Agreementand referred to in Clause 2 hereof;

"Standard specification" in relation to hot metalmeans hot metal having the following specifica-tion

Carbon-4.5% max.Silicon-4% min. to 11% max.Manganese-1.0% max.Phosphorus-0.1% max.Sulphur-0.05% max.

and in relation to pig iron means pig iron of aspecification comparable to B.H.P. pig iron gradeF.115;

"Steel Act" means the Wood Distillation and CharcoalIron and Steel Industry Act 1943 of the said State;


"subsidiary company" means a subsidiary company ofthe Company within the meaning of Section 6 ofthe Companies Act;

"this Agreement" "hereof" "hereunder" and "hereto"includes this Agreement as from time to time addedto varied or amended;

"the said State" means the State of WesternAustralia;

"transition period" means the period from the 1st July1966 to the date of passing as Acts of the Billsreferred to in Clause 2 hereof;

"Wundowie Agreement Act" means the WundowieCharcoal Iron and Steel Industry Agreement Act1965 of the said State;

"Wundowie Works" means the works plant and under-takings or any part thereof established maintainedand carried on under the authority of the SteelAct and the business so carried on in or about thoseworks, plant and undertakings for the purposestherein mentioned and all real and personalproperty held under the authority of the Steel Act;

Reference in this Agreement to an Act shall include theamendments to such Act for the time being in forceand also any Act passed in substitution therefor orin lieu thereof and the regulations for the timebeing in force thereunder;

marginal notes or headings shall not affect theinterpretation or construction hereof;

Formation of 2. (1) The Company shall:managementcompany. (a) prior to 1st July 1966 and in accordance with

the Wundowie Agreement Act form andregister under the Companies Act a subsidiarycompany as the Management Company for thepurpose of managing the Wundowie Works inplace of the Company during the transitionperiod pursuant to this Agreement but other-wise on the terms and conditions set out inPart II hereof.

(b) from time to time to ensure that the Manage-ment Company is provided with sufficientfunds and staff to enable the ManagementCompany to perform its duties and obligationsunder this Agreement.

Ratification.OperationandobligationsduringtransitionPeriod.

(2) The State shall:(a) introduce and sponsor in the Parliament of the

said State a Bill to ratify this Agreement, andalso a Bill to amend the Steel Act to the extentnecessary in the opinion of the Minister to giveeffect to or for the better carrying out of this

1966.] Wundowie Works Management [No. 10. 37and Foundry Agreement.

Agreement and in particular to alter the consti-tution of the Board to a membership of three,one of whom shall be nominated by theMinister and the remaining two of whom shallbe nominated by the Company and to providethat the Company shall have power toappoint the Chairman and to appoint deputiesin the case of illness inability or absence ofany of the Company's nominees to the Boardand shall endeavour to secure the passage ofsuch Bills prior to the 31st day of December,1966;

(b) during the transition period to the extentreasonably necessary for the purposes of PartIII of this Agreement allow the Company toenter upon the land the subject of ReserveNo. 22605 and Avon Locations 24008, 24009,24010, 24011, 24012 and 24013 and survey possiblesites for the Foundry and carry out preliminaryplanning therefor and also carry out suchinterim development work thereon as the Minis-ter may approve.

(3) Parts III and IV of this Agreement shall be deemeda separate agreement and shall not operate unless anduntil the Bills referred to in paragraph (a) of subclause (2)of this clause are passed as Acts before the 31st December1966 or such later date (if any) as the parties hereto maymutually agree upon in writing. If the Bills are not sopassed before that date or later date (as the case may be)the remainder of this Agreement will then cease to operateand subject as hereinafter provided neither of the partieshereto will have any claim against the other of them withrespect to any matter or thing arising out of done orperformed or omitted to be done or performed under thisAgreement provided that the Company shall cause theManagement Company to account to the State for itsmanagement of the Industry under Part II hereof duringthe transition period and subject thereto the ManagementCompany shall be entitled to a proportionate part of itsannual fee for and to be re-imbursed for all out-of-pocketexpenses reasonably incurred by it in such managementduring the transition period, and the State shall compensatethe Company for any expenditure incurred by the Companywith the consent of the Minister in the development ofthe Foundry and shall have the benefit of the goods andthe result of the services for which such expenditure wasincurred.

(4) If the Bills referred to in Clause 2 hereof are passedas Acts before the date or later date (if any) referred to insubclause (3) of this clause the following provision of this


clause shall notwithstanding any other Act or law thereuponoperate and take effect namely:

(a) This Agreement shall operate and take effectaccording to the tenor thereof as though thesame had been brought into force as from the1st day of July 1966 and had been enacted bythe Ratifying Act.

(b) Subject to paragraph (a) of this subclause theState and the Minister respectively shall haveand shall be deemed to have had all the powersdiscretions and authority necessary or requisiteto enable them to enter into this Agreementand exercise carry out and perform the powersdiscretions authorities and obligations con-ferred or imposed upon them respectivelyhereunder.

(c) Upon the termination of the transition periodthe management of the Wundowie Works shallvest exclusively in the Company with the rightsand obligations thereof and shall be deemed torelate back to and take effect from the firstday of July 1966.

Appoint-ment.

Powers ofmanager.

PART II—MANAGEMENT.

3. On the terms of this Agreement and subject to Clause26 hereof and subject to the Minister and under the Board,the Company (which term in this Part shall mean eitherthe Company or the Management Company as the case maybe pursuant to this Agreement) shall be appointed by theBoard as sole and exclusive manager of the Industry for aterm of ten years commencing on the 1st July 1966 andthereafter (subject to the option of renewal hereinaftercontained) until either the State or the Company shallterminate the appointment by giving to the other partyhereto at least six months notice of its intention so to do.

4. (1) Subject to the Minister and under the Board theCompany shall have and may exercise all powers ofmanagement of the Industry and without in any waylimiting or restricting the generality of the foregoing, theCompany shall have control in all aspects of managementof the Industry and shall have a duty to manage theIndustry in a proper and efficient manner and will use itsbest endeavours to do all things necessary to improve theprofitability of the Industry and reduce its losses and shallin addition have and perform the following powers dutiesand functions, that is to say:

(a) the management, control and direction of allofficers, servants and agents employed orengaged in or by the Industry in the per-formance of their duties including the


determination of salaries wages and fees andconditions of employment including thesubsidising and/or rationalising of rentalspayable for housing.

(b) the purchase of goods and services for thepurposes of the Industry in the name of theIndustry for cash or on terms subject howeverto the provisions of paragraph (h) of thissubclause.

(c) the sale of the Industry's products and servicesfor cash or on terms in any market and thefixing of prices for the Industry's productsexcept that any prices so fixed for sale ofWundowie pig iron to foundries in the said Stateshall not be less than 90% of the minimum pricepayable by foundries in the said State for pigiron comparable to B.H.P. pig iron grade F.115.

(d) the making and entering into contracts in thename of the Industry in connection with thecarrying on of the Industry.

(e) the opening and operating of a bank account oraccounts in the name of the Industry.

(f) the borrowing of money for the purposes of theIndustry from any source and the giving ofsecurity therefor including the making ofarrangements for bank overdraft accommoda-tion on security of the Industry's assets.

(g) the sale of surplus assets of the Industry forcash or on terms and the fixing of prices forthe same provided that the Company shall notwithout the prior consent of the Minister sellany asset having a written down value exceed-ing $10,000.

(h) the purchase of buildings plant or equipmentfor the purposes of the Industry for cash or onterms provided that the Company shall nothave the power without the prior consent of theMinister to make any such purchase the costof which exceeds $40,000 or which is not capableof being financed from funds employed in oravailable to or generated within the Industry.

(i) the making and enforcement of claims anddemands for the Industry and the defendingsettling or compromising of claims anddemands against the Industry.

(j) the insuring with the State GovernmentInsurance Office or other Insurance Officeapproved by the Minister of the Industry'sassets and against liability of the Industry inrespect to employees, persons and property.


(k) the negotiating with public authorities ormunicipal local or other semi-governmentalauthority in respect of matters affecting theIndustry.

(1) the incurring in the name of the Industry ofexpenses necessary in the conduct of theIndustry.

(m) the payment to itself from the funds of theIndustry of such moneys as it may be entitledto receive pursuant to this Agreement as man-agement fee.

(n) the reimbursing of itself from the funds of theIndustry for expenditure properly incurred onbehalf of the Industry in its performance ofthis Agreement; and

(o) the appointing of dealers, distributors and/oragents in the Commonwealth of Australia andthroughout the world for the advancement ofthe Industry and the arranging of their remun-eration IT BEING ACKNOWLEDGED by theState that benefits would flow to the Industryby the integration of its marketing activitieswith the existing selling organisation withinthe Company and its associated or subsidiarycompanies and the Company may thereforeappoint for such purpose the Company itself orany of its subsidiary or associated companies.

Bowers ofBoard anddelegation.

Remunera-tion atmanager.

(2) The Board shall be deemed to have all the powersconferred on the Company by the preceding subclause ofthis clause with authority to delegate the same to theCompany for the purposes of this Agreement and the Boardis hereby deemed to have delegated such powers to theCompany accordingly.

5. (1) The Company shall be entitled to the followingremuneration for its services hereunder, namely

(a) for the first year a fee of Thirty-five thousandDollars ($35,000) reducing by Seven thousandDollars ($7,000) each year thereafter, plus

(b) twenty per cent. (20%) of the improvement intrading result of each year of the Company'smanagement over the adjusted trading result ofthe year 1965-66 (hereinafter referred to as the"base year") plus

(c) the amount by which the remuneration calculatedpursuant to paragraphs (a) and (b) of this sub-clause is less than $15,000 in any year.


(d) for the purposes of this clause as soon as possibleafter the trading result of the base year is ascer-tained, such result shall be adjusted to the extentnecessary to give effect to each of the following:

(i) The result shall be increased or decreasedas the case may be to the extent necessaryto bring the amount for depreciation and/or amortisation included therein for assetsat 30th June, 1964 of $3,007,102 (such assetsbeing those listed in the "Plant Schedule"hereafter contained) and of assets pur-chased after 30th June, 1964 into line withrates which would have been allowed ataxpayer (by prime cost method) by theFederal Commissioner of Taxation (exclu-sive of any deduction pursuant to Sec.62AA of the Income Tax Act).

(ii) The result shall be increased or decreasedas the case may be to the extent necessaryto bring the amount included therein forinterest paid to the State on its LoanFunds (not being interest paid or payablein respect of overdraft accommodation tothe Industry's bankers) into line withinterest at the rate of 6k% p.a. on Fundsemployed at quarterly rests during the yearended 30th June, 1966, such Funds employedbeing the sum of Capital Account No. 1,Government Loan, and Industry ProvisionAccount No. 1 (as hereinafter defined) hadthe Industry Funds been so apportioned atall the relevant dates. For the purposes ofthis subparagraph and subparagraph (i) ofparagraph (a) of Clause 8 hereof theexpressions "overdraft accommodation" and"bank overdraft" shall mean the differencebetween the amount showing in the Indus-try's accounts as owing by the Industryon its overdrawn banking account with theTreasury of the State and the amountreferred to in subparagraph (iv) of para-graph (a) of Clause 8 hereof.

(iii) The result shall be increased or decreasedas the case may be so that it will bear aproper charge for that year in respect ofpolicies to be agreed on for the proper andprudent provision for losses of any nature,expenses, contingencies, liabilities whetherincurred or accruing maintenance ofIndustry assets and without limiting the


generality thereof shall include the makingof provisions for plant maintenance andrebuilding wastage of assets loss in valueof stocks and stores due to deterioration,obsolescence or otherwise bad and doubtfuldebts and accruing or accrued employeebenefits and for the giving effect to a policyto be agreed on in regard to the extent andtype of expenses (if any) which may becapitalised and if capitalised, the rate oftheir amortisation.

(e) for the purposes of this clause the trading result(exclusive of any management fee) of any year ofthe Company's management shall be adjusted togive effect to each of the following:

(i) The result, if a profit, shall be reduced bythe amount of depreciation and/or amor-tisation of the year charged to IndustryProvision Account No. 1 and, if a loss, theresult shall be increased thereby.

(ii) The result shall be increased or decreasedas the case may be to the extent necessaryso that the interest paid or payable to theState (not being interest paid or payable onOverdraft Account) is equal to interest atbank rate on the Capital Account No. 1and Government Loan and IndustryProvision Account No. 1 as hereinafterdefined.

(iii) The result shall be increased or decreasedas the case may be to the extent that propercharges for that year relating to policiesagreed on pursuant to sub-paragraph (iii)of paragraph (d) of subclause (1) of thisClause have been over or under provided.

(2) The fee payable pursuant to this clause shall be paidmonthly as to one twelfth (1/12th) of the amount providedfor in paragraph (a) of sub-clause (1) of this clause orOne thousand Two hundred and Fifty Dollars ($1,250)which ever is the greater amount and the balance of suchfees (if any) within three (3) months of the close of thefinancial year. If the Company's appointment shallterminate during the currency of any year ending theThirtieth day of June, it shall be entitled to a rateableproportion of the management fee it would have receivedhad the appointment continued for the whole of that year.


6. The Company shall be entitled to be reimbursed by the =bore-

Industry for all salaries and other related costs (including Company.superannuation) paid to or incurred in respect of any of itssalaried officers who may be engaged from time to time bythe Company in the Industry. The Company shall not beentitled to be reimbursed for the services of its ManagingDirector or any other member of its A.N.I. ManagementCommittee made available to the Industry by the Company,but it shall be entitled to be reimbursed for all reasonableout-of-pocket expenses incurred by it in making availabletheir services. The A.N.I. Management Committee referredto herein includes its Managing Director, its GeneralManagers of Manufacturing, Merchandising and Develop-ment, its Company Controller, its Company Secretary andits Personnel Manager.

7. The Company shall cause the Industry to keep proper Accounts.accounts and records of the Industry and to prepare allBalance Sheets, Profit and Loss Accounts, reports andfinancial statements necessary for the purposes of thisAgreement, the Steel Act and the Auditor-General of thesaid State as required by the Steel Act. The Profit and LossAccounts prepared hereunder shall be drawn up inaccordance with accepted accounting practices and shallinclude all income profits, costs and expenses arising in thecarrying on of the business or arising pursuant to thisAgreement which, without limiting the generality thereofshall include:

(a) depreciation and/or amortisation of assets of theIndustry calculated by prime cost method at rateswhich would be allowable to a taxpayer by theFederal Commissioner of Taxation (exclusive ofany allowance pursuant to S.62AA of the IncomeTax Assessment Act or other similar allowance)except that the amount charged against profitsfor depreciation and/or amortisation of any assetowned by the Industry at 30th June, 1964 andlisted in the Plant Schedule hereinafter containedshall not exceed 4/15ths of the amount calculatedthereon.

(b) Interest paid or payable pursuant to paragraph(c) of clause 8 hereof and to clause 11 hereof.

(c) Proper charges in respect of policies agreed onpursuant to subparagraph (iii) of paragraph (d)of subclause (1) of clause 5 hereof.

8. For the purposes of this Agreement the funds employed Finance.by the State in the Industry as at the first day of July Onethousand Nine hundred and Sixty-six shall be allocated


between three accounts to be Down as and hereinafterreferred to as "Capital Account No. 1", "Government Loan"and "Industry Provision Account No. 1" in the followingmanner:

(a) Capital Account No. 1

Subject to adjustment from time to time ashereinafter provided, the Capital AccountNo. 1 of the Industry shall be a sum of$800,000 to be credited to the State in thebooks of the Industry, which account shallbe adjusted by adding thereto or subtractingtherefrom (as the case may be) the tradingprofits or trading losses of the Industry forthe years ended 30th June, 1965 and 30thJune, 1966. In determining the tradingprofit or loss for the year ended 30th June,1965 the stock revaluation loss of $277,682shall not be included. The Capital AccountNo. 1 shall also be adjusted by addingthereto

(1) The amount by which interest paymentsto the State (exclusive of interest paidor payable on bank overdraft) in theyears ended 30th June, 1965 and 30thJune, 1966 exceed the amounts whichwould have been payable for interestat 61% per annum calculated atquarterly rests on the GovernmentLoan had the funds of the Industrybeen apportioned pursuant to thisclause at all relevant dates.

(ii) The amounts of depreciation and/oramortisation charged in the accountsof the Industry for the years ended30th June, 1965 and 30th June, 1966which are in excess of 4/15th of thedepreciation and/or amortisation (cal-culated by prime cost method) whichwould have been allowed a taxpayerby the Federal Commissioner ofTaxation (not including any allowancepursuant to Sec. 62AA of the IncomeTax Assessment Act) in each year onany of the assets owned by the Industryat 30th June, 1964 as listed in the PlantSchedule hereinafter contained.

(iii) The amounts of depreciation and/oramortisation charged in the accountsof the Industry for the years ended30th June 1965 and 30th June 1966which are in excess of depreciation and


amortisation (calculated by prime costmethod) on assets purchased since 30thJune, 1964 which would have beenallowed a taxpayer by the FederalCommissioner of Taxation (notincluding any allowance pursuant toSec. 62AA of the Income Tax Assess-ment Act) in each year.

(iv) Cash paid by the State to the Industryfor Capital Expenditure subsequent tothe 30th June, 1964 which the Stateacknowledges is approximately thesum of $400,000.

(v) Subject to Clause 12 of this Agreementthe Capital Account No. 1 shall alsobe adjusted from time to time here-after by adding thereto or subtractingtherefrom profits or losses (as thecase may be) of each financial yearhereafter commencing with thefinancial year 1st July, 1966 to 30thJune, 1967. The profits or lossesreferred to shall be the profits orlosses disclosed by the audited Profitand Loss Accounts prepared pursuantto Clause 7 hereof.

(b) Industry Provision Account No. 1The Industry Provision Account No. 1 to be

credited to the State in the books of theIndustry shall be $2,207,102.00 less the excessdepreciation referred to in subparagraph (ii)of paragraph (a) of this clause. TheIndustry Provision Account No. 1 shall becharged from 1st July, 1966 with the balance11/15ths of depreciation and/or amortisationof any assets at 30th June, 1964 calculatedpursuant to paragraph (a) of Clause 7hereof and not charged against profits.

(c) Government Loan

The Government Loan to be credited as such tothe State in the books of the Industry shallbe the balance of funds employed by theState in the Industry as at the 30th June,1966 after deducting the aggregate amountsof the Capital Account No. 1 and the IndustryProvision Account No. 1. The amount of theGovernment Loan shall be deemed a loan tothe Industry and shall bear interest payablehalf yearly at bank rate.

No with-drawal ofGovernmentLoan orprofits orsale of assetswithoutconsent.

Increase ofcapital.

Loans byCompany.


9. Except with the consent of the Company or as providedfor in this Agreement the State shall not withdraw fromthe Industry the Government Loan or any profits of theIndustry which may properly be required for the expansionor maintenance of the Industry or dispose of any of theassets of the Industry.

10. The State shall give due consideration to any requestby the Company for the State to increase its CapitalAccount No. 1 by making further capital moneys availableto the Industry to provide funds for capital expenditureproposals not capable of being financed from fundsavailable within the Industry.

11. (1) The Company may from time to time advance andmake loans to the Industry which shall bear interest atbank rate payable half yearly provided that contemporane-ously with the advancing of such a loan the Industry shallrepay to the State an equivalent amount of its CapitalAccount No. 1. The first of any such loans to the Industryby the Company shall be equivalent to not less than 51%of the Capital Account No. 1.

(2) So long as the Government Loan or any partthereof remains owing by the Industry to the State theCompany shall not make a loan to the Industry whichof itself would have the effect at the time of reducing theCapital Account No. 1 below $100,000.

(3) Any loans made by the Company to the Industryshall be repaid forthwith on the termination of the appoint-ment of the Company as manager under Part II of thisAgreement.

(4) From the date the Company makes the first loanto the Industry pursuant to this clause Capital Account No.1 shall bear interest at bank rate payable half yearly.

CapitalAccount No.2 andIndustryProvisionAccountNo. 2.

12. As from the time the Company makes a loan to theIndustry there shall be established in the name of the Statein the books of the Industry two further accounts to beknown as and hereinafter referred to as "Capital AccountNo. 2" and "Industry Provision Account No. 2" and allprofits and losses of the Industry thereafter shall beapportioned between such accounts in the same ratiorespectively as the Capital Account No. 1 stands to theamount of loans by the Company to the Industry fromtime to time.


13. When surplus funds are available within the Industry,the Industry may with the consent of the Minister andthe Company:

(a) repay either wholly or in part the GovernmentLoan; or

(b) so as not to affect the ratio of the Capital AccountNo. 1 of the Industry to the amount of any loanfrom the Company, repay to the State part of itsCapital Account No. 1 and repay to the Companypart of its loans.

Applicationof surplusfunds.

14. In order to assist profitability and development of the obligationsIndustry so that it may continue to provide employment of the State'for the residents of Wundowie the State shall

(a) use reasonable endeavours to ensure continuation I:ionolyanob-of the supply of ore from Koolyanobbing deposits deposits.pursuant to Clause 12 of the Broken HillProprietary Company's Integrated Steel WorksAgreement Act, 1960.

(b) use reasonable endeavours to ensure continuation Isle tof the agreement or arrangement with The Broken wftintr.p.Hill Proprietary Company Limited whereby thatcompany undertakes to refrain from selling foundryand superior grades of pig iron in the said State.

(c) use reasonable endeavours to reserve for theIndustry all its rights titles and interests in land

including:

(i) subject to the Land Act and the Steel Actland at Wundowie dedicated for thepurposes of the latter Act and having anarea of approximately 460 acres;

(ii) subject to the Forests Act permit areas forsawmilling logs (Sawmilling Permit No.1441);

Reservationsfor Industryland.

Forest Actpermits.

(iii) subject to the Forests Act and the rights of Forests Actother Licensees from time to time licenses

licenses.

to take firewood in the areas listed in theForests Department Report dated April1965 at a royalty of 10 cents per ton or suchother royalty (not being discrimatoryagainst the Industry) as may be payableunder or pursuant to the Forests Act fromtime to time but no increase in such


royalty shall be made which is proportion-ately greater than any increase made fromtime to time hereafter in the B.H.P. capitalcity prices for foundry pig iron grade F.115which at the date of this Agreement is$45.75 per ton.

(iv) subject to the Forests Act and the rights ofother licensees from time to time licensesto take fallen timber on other Crown landwithin a radius of 25 miles from the town-site of Wundowie.

(v) nothing contained in the preceding sub-paragraphs (iii) and (iv) of this paragraphshall restrict the right of the State toalienate any Crown land (as defined in theLand Act) in the normal course of its landdevelopment policy from time to time andon such alienation any license or licensessubsisting over such land shall terminatebut before proceeding with the alienationof any such land the State will consultwith the Company as regards the economicuse by the Industry of any timber thereon.

Sandstoneandlimestonedeposits.

Wells anddame.

Option forCompanyto renewPart II forfurtherperiod.

(d) at the request of the Company and subject to theMining Act and to the extent considered necessaryby the Minister for Mines of the said State set asideareas for the mining of sandstone and limestone bythe Industry for reasonable use of the Industrywhere such deposits exist on Crown land and arenot subject to any prior claim.

(e) permit the Industry to sink wells or erect dams onIndustry land to obtain water.

15. Provided the Company gives to the State at any timeprior to the expiration of the term of Part II of this Agree-ment an undertaking in writing that the Company willduring the further period of ten years hereinafter referredto exercise the option granted to it pursuant to Part IVhereof and provided the Company has performed andobserved all the provisions of this Agreement up to theexpiration of the said term of Part II hereof, the Companyshall have an option of renewal of Part II for a furtherperiod of ten years commencing from the date of expirationof the said term on the same provisions as are herein con-tained (except this option) and such option shall beexercised by notice given by the Company to the Ministerat least twelve months prior to the expiration of the saidterm.


PART III—FOUNDRY

16. THE State will grant and the Company will accept aspecial lease or leases under the Land Act of a piece orparcel of land (being so much of the land the subject ofReserve No. 22605 and Avon Locations 24008, 24009, 24010,24011, 24012 and 24013) as may reasonably be required bythe Company for the purpose of the Foundry from time totime for a term or terms expiring on 30th June 1987 andthereafter from year to year at the yearly rental of onepeppercorn if demanded and on such terms and conditionsas are reasonably required to give effect to the provisionsof this Agreement, for the purpose of establishing main-taining and carrying on within the demised premises aFoundry to use the products of the Industry and to havethe benefit of an adjacent source of hot metal supply tothe Foundry and for the purpose of carrying on such otheractivities having a basic requirement for hot metal as theCompany shall think fit with power for the Company todiscontinue at any time any activity which it is unable tocarry on profitably.

17. (1) Within a period of five years after the passing asActs of the Bills referred to in Clause 2 of Part I hereof theCompany will construct instal and establish on the demisedpremises a modern mechanised foundry using predominantlynew materials plant and equipment (subject to the nextsucceeding clause hereof) and complete the same at a totalcost of not less than $600,000 of which the Company willexpend the sum of $150,000 on such construction, installationor establishment, before 30th June, 1968.

(2) All buildings plant and equipment (including thebuildings plant and equipment purchased by the Companyfrom the State pursuant to the next succeeding Clausehereof) placed constructed or installed by the Company onthe demised premises shall be and remain the propertyof the Company and shall as between the State and theCompany be deemed tenants fixtures and be removeableby the Company.

18. On the demised premises presently are the buildingsplant and equipment described in the Schedule heretowhich the State hereby agrees to sell and the Companyhereby agrees to purchase for the sum of $15,000 payableon the passing as Acts of the Bills referred to in Clause 2hereof.

19. As from the date of completion of the Foundry andduring the continuance of this Agreement the Companywill use its best endeavours to keep the Foundry in fulltime operation and production.

Lease forFoundry.

Companyto constructfoundry.

Buildings,etc., to betenantsfixtures.

Purchasefrom State.

To keepFoundry inoperation.

To payrates.


20. The Company will pay all Council rates (on anunimproved value basis) in respect of the demised premisesand all charges for water and electricity supplied to thedemised premises provided such rates or charges shall notbe discriminatory against the Company.

Prices forIndustryhot metalsupplied toCompany.

21. During the continuance of this Agreement theIndustry shall supply hot metal to the Company and theCompany agrees to pay for the same at the prices herein-after specified.

(a) For the manufacture of foundry castings (otherthan finished foundry products) for sale in the saidState—and for the manufacture of pig iron at theprice per ton of Industry pig iron to standardspecification delivered Perth less cost of cartage andpigging.

(b) For all other purposes including foundry castingsfor sale outside the said State and finished Foundryproducts for sale in the said State and elsewhere,at a price per ton calculated as follows:

(i) A basic price of $34 per ton adjusted forany increase or decrease as the case may bein the overall freight costs (rail or roadand rail) which after 1st July, 1966 arepayable by the Industry for the carriageof ore from Koolyanobbing to Wundowieplus shaker ladle direct costs if aspecification other than the standardspecification is required. Such basic priceis related to the B.H.P. capital city pricefor Foundry pig iron grade F.115 (whichat the date of this Agreement is $45.75 perton) and if such B.H.P. price is increasedor decreased hereafter the price per tonpayable by the Foundry shall be increasedor decreased by the same amount; plus

(ii) an additional amount per ton in respectof the hot metal supplied for the purposesspecified in this paragraph (b) in any yearending the 30th June which will make thetotal of the prices paid for all hot metalso supplied during such year equal to theamount calculated by multiplying thenumber of tons of hot metal so suppliedby the basic price per ton payable pursuantto the preceding paragraph of this sub-clause and adding thereto an amountequivalent to 25% of the Foundry netprofit (if any) before income tax such not


profit being calculated on the basis that theamount payable for hot metal supplied bythe Industry for the purposes referred toin this sub paragraph is the amount paidpursuant to sub paragraph (i) of this para-graph, except that if the Company'sinvestment in the Foundry's fixed assets atcost exceeds $600,000 the net profit usedfor the purpose of the calculation shall befirst reduced by an amount which afterdeducting therefrom income tax at companyrates, is equal to 10% of such excessprovided that such first reduction of profitdoes not result in the Industry receivinga lesser sum pursuant to this paragraphthan the average of the sums it has soreceived in the three (3) years immediatelyprior to such investment exceeding $600,000or the average of such sums it has soreceived since 1st July, 1966 to date of suchinvestment exceeding $600,000 whichever isthe lesser period. For the purposes of thisparagraph the Company will as soon aspossible after 30th June in each yearfurnish the Minister with a copy (dulyaudited) of its Balance Sheet and Profitand Loss Accounts relating to the operationsof the Foundry for the previous financialyear.

22. The Company may return to the Industry scrap metal Scrap metal.

arising from its operations at the Foundry and the Industryshall receive the same and pay to the Company for suchscrap metal the equivalent of Sixty per cent (60%) of theprice payable by the Company for hot metal pursuant tosub-paragraph (i) of paragraph (b) of Clause 21 hereof.

23. (1) The State shall cause the Industry to supply tothe Company at the cost to the Industry such existingservices of the Industry as are necessary for the properoperation of the Foundry.

(2) Overhead expenses solely incurred by or on behalfof the Industry or by or on behalf of the Foundry shall beborne by the Industry or the Company as the case maybe. Overhead expenses of a joint nature incurred up to30th June, 1969 shall be borne by the Industry. After 30thJune, 1969 such overhead expenses of a joint nature (otherthan the management fee payable to the Company asmanager of the Industry pursuant to this Agreement) shallbe apportioned in the ratio of tonnage of relative metalsales by the Industry to the Foundry pursuant to paragraph(b) of Clause 21 hereof and by the Industry to otherpurchasers including other sales to the Foundry made

Industryto supplyservices toFoundryat cost.

Overheadexpenses.


pursuant to paragraph (a) of Clause 21 hereof. For thepurposes of this sub clause overhead expenses of a jointnature shall not include any expenses properly apportionedby the Industry to its secondary activities such as sawmillingand chemical manufacturing and such other activities asthe parties hereto agree from time to time.

Metalsupplied toFoundry.

24. (1) Hot metal supplied to the Foundry pursuant to thisAgreement shall be ex blast furnace or ex shaker ladle andshall be delivered to the Company's requirements andspecifications.

(2) The Company for the purpose of the Foundry shallhave the first right at all times of purchase of Industry hotmetal except that the Company will not have such rightover hot metal equivalent to 40% of the hot metal producedor the average tonnage required in the previous three yearsfor the Industry sales of pig iron made at a premium tobuyers outside the Commonwealth of Australia whicheveris the lesser without compensating the Industry for anyloss. The loss referred to being the net return to beforesaken by the Industry over and above the price it willreceive for the hot metal pursuant to Clause 21 hereof andany relief from overheads it receives after 30th June 1969pursuant to subclause (2) of Clause 23 hereof. Thecompensating of the Industry referred to in this Clausevisualizes a loss to the Industry if the Company exercisesits prior right to purchase the bulk or all hot metal. There-fore, if such sales made at a premium in the previousperiod of twelve (12) months and/or the anticipated salesto be made at a premium in the foreseeable future (withwhich anticipated sales the State agrees) are considerablyless than the average referred to above, then thecompensation payable to the Industry will be reducedaccordingly.

(3) Notwithstanding the preceding subclauses of thisClause the Company shall continue the policy of the Industryto cater for and supply the needs for pig iron of otherfoundries in the said State provided that the Companyshall be entitled to discontinue such policy upon first givingtwo years notice to the Minister of its intention so to do.

Carrying onbusiness ofFoundrythroughsubsidiary orpartnership.

25. (1) The Company may carry on the business of theFoundry in its own right or at any time or from time totime through a subsidiary company or subsidiary companiesor a division or divisions of such company or companies.

(2) The Company shall be entitled if it so decides andprovided it retains a majority interest to take in a partneror partners in the business of the Foundry in which eventreference to the Company in this Agreement shall be deemedto include such partner or partners.

19861 Wundowie Works Management [No. 10.and Foundry Agreement.

26. The State shall have the right to act as follows but: ri StateclosesIndustrydown.

(a) (i) In the event of the State closing down theoperations of the Industry (of which event andwithout affecting the obligations of the Stateunder the next succeeding subparagraph atleast twelve months notice shall be given to theCompany) or in the event of the Companyterminating this Agreement pursuant toparagraph (c) of Clause 39 hereof, purchasefrom the Company such of the assets of theFoundry at their depreciated value for incometax purposes at the date thereof as theCompany may require except that if theIndustry so ceases its operations because it isunable to carry on without incurringsubstantial losses the extent to which theCompany may require the State to purchaseFoundry assets depreciated as aforesaid shallnot exceed $600,000 or such other sum as theMinister may have approved.

(ii) Not close down the operations of the Industrywithout first giving the Company sufficientnotice as will enable the Company to fulfil suchof its then existing contracts for the sale offoundry products as are dependant on thecontinuing operations of the Industry or tofulfil such other contracts necessarily made inthe conduct of its foundry provided that thelength of notice required to be given by theState under this subparagraph shall be notmore than three years unless in the case of along term contract the Minister has previouslyagreed in writing to an extension of the periodof such notice for the purposes of suchcontract.

(b) Not sell the Industry or any part thereof to apurchaser other than the Company or its nomineeor enter into a partnership with any other personfirm or corporation for the carrying on of theIndustry without requiring the purchaser or suchpartnership as the case may be to first purchasethe Foundry assets of the Company (if it is desirousof selling the same) at prices to be mutually agreed.Failing agreement or if the Company does notdesire to sell the said assets the State shall takesuch steps as are necessary to protect the interestof the Company to the extent that the Companyshall continue to receive the full benefit of thisAgreement.

If Statewishes to sellIndustry.

Housing.


27. (1) Subject to the next succeeding Clause hereof andsubject to the Company satisfying the Minister for Housingof the said State as to the need for the same the Statewill arrange for the Borrowing Authority as defined in thenext succeeding Clause hereof to build in the township ofWundowie 80 houses in addition to those which would bebuilt annually in the normal development of the townshipover a six year period from the first day of January 1967according to the following programme:-

1st year 102nd year 103rd year 154th year 155th year 206th year 10

and as and when each new house is completed and readyfor occupation and each old house becomes vacant (andon future vacancies occurring) to give a first offer of atenancy to persons who are employees of the Industry orthe Company and who are nominated by the Company.

(2) If a house is not occupied by a tenant withinseven days after notice given by the State HousingCommission to the Company that the same is ready foroccupation the Company shall be responsible for the rentof same until occupied by a tenant or until the Companyby seven days notice to the said Commission informs thesaid Commission that it does not wish to nominate atenant for such house.

Funds for 28. (1) The State may in its discretion introducehousing. legislation to enable the Industry or a Trust (to beconstituted) or some other authority either existing or tobe formed (hereinafter called "the Borrowing Authority"which term shall mean the Industry Trust or other authorityas the case may be) to raise loans guaranteed by the Statefor the purpose of building rental houses at Wundowie. Ifthe Company consents to the terms and conditions of theloans and if the terms and conditions of such loansresult in the rent charged or to be charged for such housesexceeding the economic rent which would have beencharged by the State Housing Commission for houses builtby the said Commission out of its funds the excess shallbe paid by the Industry and the Foundry in proportionto the total number from time to time at Wundowie ofrental houses (whether built or to be built out of suchloans or out of the funds of the said Commission) occupiedby tenants employed in the Industry and the total numberof tenants of such last mentioned houses employed in theFoundry.

1966.1 Wundowie Works Management [No. 10.and Foundry Agreement.

(2) The houses built out of any loans raised by theBorrowing Authority shall be managed by the saidCommission or other authority appointed by the Ministerin the same manner and on the same terms and conditionsas are applicable to the said Commission's rental housesat Wundowie.

(3) The Company will use its best endeavours toarrange for a lender to make loans to the BorrowingAuthority on terms acceptable to the State of sufficientfunds to enable the Borrowing Authority to carry out thehouse building programme mentioned in the next preced-ing clause hereof. In the event that the Company is unableto arrange such loans the State will use all reasonableendeavours to assist in raising the necessary funds for thepurpose aforesaid.

29. The parties hereto acknowledge that one of thepurposes of this Agreement is to preserve a decentralisedindustry and foundry at Wundowie and with that intent theState undertakes to use reasonable endeavours from time totime to compensate the Industry and the Foundry for thedisadvantage of decentralisation to the extent considerednecessary by the Minister.

30. The Company at all times shall be entitled to full andfree right of access to and from the demised premises byand through the various roads and means of access throughthe Industry as may be necessary or convenient for thepurposes of the Foundry.

Decentralisa-tion.

Mows.

31. (1) The State ACKNOWLEDGES that it is a funda- Fundamental

mental term of the arrangement hereby constituted that term.

the establishment by the Company of the Foundry is toobtain a source of hot metal so that the Company's productsmay be sold competitively at a profit in all markets andthat it will not impose any discriminatory restrictions orprohibitions either express or implied on the Companyduring the continuance of this Agreement which will affector prejudice this fundamental term.

(2) Subject to the prior approval of the Minister theCompany may establish maintain and carry on on its ownbehalf or with a partner at Wundowie activities not havinga basic requirement of hot metal which it can convenientlyoperate and the Company may discontinue any suchactivities and subject to the approval of the Minister forLands of the said State and if so required by the Companythe State will grant a special lease under the Land Act ofsuitable land to the Company for such activity at a reason-able rental and on such terms as are reasonable and usual

Otheracttvlttes.

Effect ofterminationof appoint-ment ofCompany asManager.


for a lease of such nature and shall supply such services tothe extent that they are available and reasonably requiredby the Company at cost. In the event of the Companyestablishing such an activity it will bear a reasonable shareof the overhead expenses referred to in subclause (2) ofClause 23 of this Agreement PROVIDED HOWEVER thatany such activity shall be excluded from the meaning of"Foundry" pursuant to this Agreement.

32. Except as otherwise provided in this Agreement thetermination of the appointment of the Company as themanager of the Industry under Part II of this Agreementshall not affect the remainder of this Agreement or anylease permit or license granted pursuant hereto.

PART IV—OPTIONS OF PURCHASE

Option forCompanyto purchaseXndustry.

33. Subject as hereinafter mentioned the State herebygrants to the Company or its nominee an option to purchasethe Industry in the manner hereinafter stipulated at anytime during the continuance of the term (or renewed termas the case may be) of the Company's management of theIndustry pursuant to Part II of this Agreement and suchoption shall be exercisable by notice to the Ministeraccompanied by a bank cheque in favour of the State forten per cent. of the purchase price (as then estimated bythe Company) on account of the purchase price. The optionto purchase may only be exercised by the Company or itsnominee if the Capital Account No. 1 of the Industry asdefined in Part II of this Agreement is reduced below Onehundred thousand dollars ($100,000).

34. (1) Upon receipt by the Minister of the noticeexercising the option the accounts of the Industry shall bemade up to the date of such receipt and the Capital AccountNo. 1, Capital Account No. 2, Industry Provision AccountNo. 1 and Industry Provision Account No. 2 as defined inPart H of this Agreement shall be adjusted in accordancetherewith and the State will carry into effect the followingat the expense of the Company:

(a) Incorporate a company (company A) underthe Companies Act which shall purchase theIndustry in exchange for shares in its capitalof a par value equal to the aggregate of theamounts standing to the credit of the saidCapital Account No. 1, Capital Account No. 2,Industry Provision Account No. 1 and IndustryProvision Account No. 2 adjusted as aforesaid

(b) Incorporate a company (company B) under theCompanies Act which will purchase all theshares in the capital of company A in exchange


for shares in the capital of company B at apar value equal to the aggregate of the amountsstanding to the credit of the said CapitalAccount No. 1 and the said Capital Account No.2 adjusted as aforesaid.

(2) (a) Following the completion of the above trans-actions the Company or its nominee will purchase the wholeof the shares in the company B from the State at a pricedetermined in accordance with paragraph (b) of thissubclause and the payment of the balance of purchasemoneys (with interest at bank rate thereon computed fromthe date of receipt of the notice exercising the option) shallbe made at the expiration of six months from the date ofsuch receipt in exchange for transfers of the shares incompany B in favour of the Company and subject to suchpayment company A shall be deemed to have conductedthe Industry for its own benefit and at its own expenseas from the date of receipt of the notice exercising theoption.

(b) The price to be paid for the shares in the capitalof company B shall be their par value or $800,000 (less anysum which may have been paid to the State out of CapitalAccount No. 1 during the continuance of this Agreement)whichever is the greater provided that in the event of theState giving notice pursuant to Clause 26 hereof to closedown the Industry the price to be paid for the shares shallbe their par value.

(c) Simultaneously with payment of the balance of thepurchase moneys the Company shall pay to the State theGovernment Loan and interest at bank rate thereon to dateof payment and such payment shall be a condition precedentto delivery by the State to the Company of the shares incompany B referred to in paragraph (a) of this Subclause.

(3) Upon incorporation of the company A as herein-before provided the State undertakes to assign transferand/or take such other action as may be necessary topreserve for company A all concessions, rights, exemptions,arrangements and privileges enjoyed by the Industry otherthan those available or granted to State Instrumentalitiesand further undertakes to transfer assign and/or take suchother action as may be necessary to enable the company Ato receive the benefits of any contracts of the Industry.

(4) On completion of the purchase by the Company ofthe shares in the capital of company B, the State will sellto the Company and the Company will purchase the freeholdof the land referred to in subparagraph (i) of paragraph(c) of Clause 14 of this Agreement at a price determined bythe Chief Valuer for the time being of the State TaxationDepartment at Perth.

Option forStateto purchaseFoundry.


35. (1) If the Company fails to exercise the option topurchase granted to it by Clause 33 hereof during thecontinuance of the Company's management of the Industrypursuant to Part II of this Agreement or fails to give theundertaking to exercise such option within the time or inthe manner provided for in Clause 15 hereof the State shallhave the option exercisable by twelve months' notice givenat any time within two years after the expiration of theCompany's management of the Industry pursuant to PartII of this Agreement of terminating the lease or leases ofthe demised premises granted pursuant to Part III of thisAgreement and of purchasing the Foundry buildings plantand equipment thereon for a sum equal to their depreciatedvalue for income tax purposes. Such option to be exercisedby notice given by the Minister to the Company and paymentof the purchase price shall be made in exchange for vacantpossession of the land the subject of the lease or leases andof the Foundry buildings plant and equipment so purchasedfree from all encumbrances on the expiration of the saidnotice exercising such option. At any time prior to thegiving of such notice by the Minister the Company shallat the request of the Minister disclose in writing to theMinister such details of the Foundry buildings plant andequipment and their depreciated values for income taxpurposes as the Minister may reasonably require.

(2) If such option is exercised the State undertakes withthe Company not within a period of ten years thereaftereither to sell the Industry to any other party on terms andconditions more favourable on the whole to the purchaserthan those on which the Company could have purchasedthe same by exercising the option contained in Clause 33hereof or to conduct the Foundry as a Governmentinstrumentality.

PART V—GENERAL.

Employmentof labour byCompany.

36. (1) The State and the Company hereby undertake andagree to take such steps and do all things as may bereasonable with a view to arranging that all employees ofthe Industry and the Foundry are engaged under similarstatutory and/or award terms and conditions of employ-ment. For this purpose the State undertakes to usereasonable endeavours to complete an agreement oragreements with the Industrial Unions concerned dealingwith all matters affecting the service of such employeesto the 30th June, 1966 or such later date as may benecessary in the circumstances.


(2) On such agreement or agreements being completedby the State with the Industrial Unions concerned theCompany through its foundry shall employ all labourrequired for the operations of the Industry and Foundryon such statutory and/or award terms and conditions asthe Company would so normally offer to an employee asa private employer of labour in the said State. For thepurpose of this subclause if such employment occurs priorto the ratification of the Bills referred to in paragraph (a)of subclause (2) of clause 2 hereof it shall be deemed to havethe Minister's approval pursuant to paragraph (b) ofsubclause (2) of clause 2 hereof.

(3) All expenses and liabilities properly incurred orborne either before or after the 1st day of July, 1966, andwhether arising before at the time of or after terminationof employment (in this clause referred to as "labourcharges") by the Company and/or its foundry by reasonof the Company through its foundry employing all labourrequired for the operations of the Industry shall be chargedto the Industry as and when the same are incurred or borneand the Industry will thereupon re-imburse the Companyand/or its foundry for such labour charges.

(4) Where any inconsistency arises in any otherprovisions of this Agreement by reason of the operation ofthis clause then such other provision shall be deemed to beamended to the extent necessary to give effect to theintentions of the State and the Company as evidenced bythis clause.

37. (1) For the better operation of the arrangementconstituted by this Agreement the State and the Companyhereby mutually agree and declare that in the event ofthe Company through its foundry employing all labour forthe Industry and the Foundry as provided in the precedingclause hereof and so long as the Company continues so todo the Industry shall sell and the Foundry shall purchaseall hot metal produced by the Industry at a price calculatedin accordance with the provisions of paragraph (a) ofclause 21 hereof and the property in such hot metal shallvest in the Foundry as soon as the same is delivered exblast furnace.

(2) So long as the Company through its foundrycontinues to employ for the Industry and the Foundry alllabour:

(a) the Foundry shall sell and the Industry shallpurchase all the pig iron produced by theFoundry at a price equal to its cost of productionplus one half of one cent per ton together withan additional amount (if any) per ton whenascertained as will result in the Companycarrying out its pigging operations without loss.

Sale of metalwhileCompanyemployslabour.


(b) Hot metal supplied by the Industry to theFoundry and re-sold to the Industry as pigiron pursuant to this clause shall not be takeninto account for the purposes of Clause 23hereof.

Assignment. 38. With the consent of the Minister but not otherwise theCompany may assign mortgage charge or otherwise disposeof or encumber to any person or corporation all or any partof its rights and obligations under this Agreement and inany lease permit or license granted pursuant hereto subjectto the assignee executing a Deed of Covenant in a formapproved by the Minister to comply with observe performand be bound by all the provisions of this Agreement.Provided that no such consent shall be required in the caseof a mortgage or charge over the Foundry or any partthereof. Notwithstanding any such assignment or dispositionthe Company shall at all times during the continuance ofthis Agreement be and remain liable for the due andpunctual performance and observance of all the provisionshereof and of any lease permit or license granted pursuanthereto.

39. Subject to Clause 42 hereof if at any time during thecontinuance of this Agreement:

Terminationof &segmenton breach.

(a) The Company or the Management Company failsto comply with or carry out any of the obligationson its part contained in Part II of this Agreementor abandons or repudiates its obligations underthat Part and fails to remedy the breach within aperiod of three months or such longer period asmay be agreed upon after notice specifying thebreach is given by the State to the Company thenthe State may by notice to the Company terminatePart II of this Agreement. Such termination shallnot prejudice or affect the remainder of thisAgreement.

(b) the Company fails to comply with or carry out anyof the obligations on its part contained in any Partof this Agreement other than Part II) and fails toremedy the breach within a period of three monthsor such longer period as may be agreed upon afternotice specifying the breach is given by the State tothe Company then the State may by notice to theCompany terminate this Agreement and on suchtermination all leases licenses and permits grantedpursuant hereto shall expire.


(c) the State fails to comply with or carry out any ofthe obligations on its part contained in thisAgreement and fails to remedy the breach within aperiod of three months or such longer period as maybe agreed upon after notice specifying the breachis given to the State by the Company then theCompany may by notice to the State terminatethis Agreement.

40. The Company will indemnify and keep indemnified the Indemnity.

State and its servants agents and contractors in respect ofall actions suits claims demands or costs of third partiesarising out of or in connection with the constructionmaintenance or use of the Foundry by the Company or itsservants agents or contractors.

41. The parties hereto may from time to time by mutual variation.agreement in writing add to cancel or vary all or any ofthe provisions of this Agreement or of any lease permitlicense or right granted hereunder or pursuant hereto forthe purpose of more efficiently or satisfactorily implement-ing or facilitating the carrying out of any of the objectivesor provisions of this Agreement or for the purpose offacilitating the carrying out of the operations of the Industryor the Company hereunder.

42. This Agreement shall be deemed to be made subject Delays.to any delays in the performance of obligations under thisAgreement and to the temporary suspension of continuingobligations hereunder which may be occasioned by or arisefrom circumstances beyond the power and control of theparty responsible for the performance of such obligationsincluding delays or any such temporary suspension asaforesaid caused by or arising from Act of God force majeurefloods storms tempests washaways fire act of war act ofpublic enemies riots civil commotions strikes lockoutstoppages restraint of labour or other similar acts (whetherpartial or general) shortage of housing at Wundowieshortages of labour or essential materials reasonablefailure to secure contractors delays of contractors andinability (common in the charcoal iron and steel or foundryindustry) to profitably sell iron or steel or factors due tooverall world economic conditions or factors which couldnot reasonably have been foreseen PROVIDED ALWAYSthat the party whose performance of obligations is affectedby any of the said causes shall minimise the effect of thesaid causes as soon as possible after their occurrence exceptthis proviso shall not operate to compel that party to actimprudently having regard to the circumstances.

Powerto extendperiods.

Arbitration.

Notices.

Exemptionfrom StampDuty.

No. 101 Wundowie Works Management [1966.and Foundry Agreement.

43. Notwithstanding any provision hereof the Minister mayat the request of the Company from time to time extendany period or date referred to in this Agreement for suchperiod or to such later date as the Minister thinks fit andthe extended period or later date when advised to theCompany by notice from the Minister shall be deemedfor all purposes hereof substituted for the period or dateso extended.

44. Any dispute or difference between the parties arisingout of or in connection with this Agreement or any agreedamendment or variation thereof or agreed addition theretoor as to the construction of this Agreement or any suchamendment variation or addition or as to the rights dutiesor liabilities of either party thereunder or as to any matterto be agreed upon between the parties under this Agreementshall in default of agreement between the parties and inthe absence of any provision in this Agreement to thecontrary be referred to and settled by arbitration underthe provisions of the Arbitration Act, 1895.

45. Any notice consent or other writing authorised orrequired by this Agreement to be given or sent shall bedeemed to have been duly given or sent by the State ifsigned by the Minister or by any senior officer of the CivilService of the said State acting by the direction of theMinister and forwarded by prepaid post to the Company atits registered office for the time being in the said State orother address of which such Company has given the Stateprior notice and by the Company if signed on its behalfby a director manager or secretary of the Company in thatbehalf or by its solicitors as notified to the State from timeto time and forwarded by prepaid post to the Minister andany such notice consent or writing shall be deemed to havebeen duly given or sent on the day on which it would bedelivered in the ordinary course of post.

46. The State shall exempt this Agreement and any transferor conveyance of any property made pursuant hereto fromany stamp duty which but for the operation of this clausewould or might be chargeable.

Interpre- 47. This Agreement shall be interpreted according to thetation. law for the time being in force in the said State.

1966.1 Wundowie Works Management [No. 10.and Foundry Agreement.

PLANT SCHEDULE.

BLAST FURNACES PLANT

No. 1 Blast Furnace-6' 6" hearth diameter, 1850 c.f.working volume complete with skipway and primarydustcatcher, cast house and two recuperative stovesof 5000 c.f.m. capacity.

No. 2 Blast Furnace-8' 0" hearth diameter, 2353 c.f.working volume complete with skipway and primarydustcatcher, cast house and two recuperative stovesof 6000 c.f.m. capacity.

Blast Furnace AncillariesRaw Materials Storage bins serving both furnaces

and including 3 scale cars.Ore Handling Equipment comprising Tippler,

crusher, conveyors and hoppers.Gas cleaning plant comprising 3 P.A. Venturi

scrubbers, gas pipes and 2 settling pits.Ladles and like equipment.Desiliconising Desulphurising Plant comprising

Shaking Ladle and Overhead Crane andQuantovac Equipment.

BLOCK FIREWOOD PRODUCING PLANT

Comprising handling equipment for wood, wood storagesite at plant, log docking machine and overheadtravelling conveyor to retorts, together withancillary equipment.

SAWMILLS

Comprising Spot mill of 250 c.f. sawn timber per dayplus dressing mill, together with auxiliary itemsapplicable and Main Mill of 1000 c.f. of sawn timberper day. Dressing Mill.

WOOD CARBONISING PLANT

Batch Retorts comprising 7 retorts, 6 pre-driers, 13coolers, together with necessary wood buggies,buggy tippler and transporter.

Lambiotte Retorts comprising 2 continuous retorts of35 tons per day nominal capacity together withnecessary conveyors to raw material bins.


REFINERY

Wood Distillation plant with a nominal capacity of 450tons acetic and 200 tons methanol per year.Dilution tanks in Eastern States.

CRUSHING PLANTS

Ore crushing plant at Koolyanobbing of 2500 tons perweek capacity. Sandstone crushing plant atBeaconsfield.

WORKSHOPS

Fitters workshop and equipment

Vehicle workshop and equipment

Instrument fitters workshop and equipment

Carpenters workshop.

OFFICES

Wundowie Main Office and equipment

Drawing office and equipment

Fremantle Shipping Office

Northam Timber Office.

POWER & SERVICES SUPPLIES

Power House with 2 boilers of 6500 lbs steam/hourcapacity and 2 boilers of 13000 lbs steam/hourcapacity, 250 K.W. Turbo-Alternator, 200 K.W. 6R.K. Diesel Alternator and 3 Turbo-Blowers withnecessary electricity distribution system.

Cooling Tower with pumps and recirculation systemfor cooling water supply.

Compressed Air equipment and air distribution system.

Bulk Oxygen Storage equipment.

Fire Control equipment.


OUTBUILDINGS

Laboratory and equipmentStores building and equipmentWeighbridgeThree staff housesAblution BlockAmbulance BuildingMens Quarters and MessCottages and Huts.

TOWN ASSETS comprising Recreation Hall, General Store,Bakers Shop, Butchers Shop, Greengrocers Shop andChemist Shop.

LAND PURCHASES

1130 acres portion of Swan Loc. 1317, Lot 1 Diagram14219

100 acres portion of Avon Loc. 1881, Lot M18222827 acres portion of Avon Loc. 1953, Lot M21402773 acres portion of Avon Loc. 1953, Lot M20504337 acres portion of Avon Loc. 1953, Lots M2137, M2138,

M21397 acres portion of Avon Loc. P1, Lot 9 Diagram 163955 acres portion of Cockburn Sound Loc. 124 and 329,

Lot 20 on plan 5777.

VEHICLES AND POWER SAWS

5 Jib Trucks15 Tip Trucks5 Flat Top Trucks5 Semi-trailer Trucks3 Magnet Cranes and

Vehicles2 Fire Trucks1 Tar-tank truck1 Break-down truck4 Trailers1 Diesel Locomotive1 R.B. 19 Drag Line

2 Chamberlain EndLoaders

1 Chamberlain Fork Lift1 Caterpillar Grader1 International Pay

Loader1 Fordson Tractor1 Michigan Logger7 Holden Utilities3 Land Rovers1 Ford Fairlane Sedan1 Holden Sedan14 Power Saws


CLAUSE 18—SCHEDULE.

FOUNDRY PLANT(Installed since June, 1964)

Foundry Building 100' x 63' 6" plus 40' x 54'Monorails and Hoists-2 x 1 ton capacityRocking Arc Furnace 500 lb capacitySand preparation plant 5 tons per day capacityGibson-Redford No. 4D Core BlowerSand Conveyors and Moulding StationsRoller Tables 350 ft.Fettling Equipment including air and pedestal grinders and

Air HoistMoulding Boxes—various sizesGassing Stations (2)Equipment for coating moulds—Arnold Devilbiss TW 39

spray painting equipmentPig Casting Machines

IN WITNESS WHEREOF The Honourable David Brand,M.L.A., has hereunto set his hand and seal and the CommonSeal of the Company has hereunto been affixed the dayand year first hereinbefore mentioned

SIGNED SEALED ANDDELIVERED by THE

DAVID BRAND

SAID HONOURABLE DAVIDBRAND, MIS., in the [L.S.]presence of

C. W. Court,Minister for Industrial Development.

The Common Seal of A.N.I.AUSTRALIA PTY. LIMITED.was hereto affixed by autho-rity of the Directors in thepresence of

J. W. DEBENHAM,Director.

D. W. ALLAN,[LS.] Director

B. E. PERKINS

Documents

WUNDOWIE WORKS MANAGEMENT AND FOUNDRY