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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
Diamond (Argyle Diamond Mines Joint
Venture) Agreement Amendment Bill 2008
CONTENTS
1. Short title 2
2. Commencement 2
3. The Act amended 2
4. Section 2 amended 2
5. Section 3C inserted 3
3C. Third supplementary agreement 3
6. Schedule 5 inserted 3
Schedule 5 -- Third supplementary agreement
290--1 page i
Western Australia
LEGISLATIVE ASSEMBLY
Diamond (Argyle Diamond Mines Joint
Venture) Agreement Amendment Bill 2008
A Bill for
An Act to amend the Diamond (Argyle Diamond Mines Joint Venture)
Agreement Act 1981.
The Parliament of Western Australia enacts as follows:
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 1
1. Short title
This is the Diamond (Argyle Diamond Mines Joint Venture)
Agreement Amendment Act 2008.
2. Commencement
5 This Act comes into operation as follows:
(a) sections 1 and 2 -- on the day on which this Act
receives the Royal Assent;
(b) the rest of the Act -- on the day after that day.
3. The Act amended
10 The amendments in this Act are to the Diamond (Argyle
Diamond Mines Joint Venture) Agreement Act 1981.
4. Section 2 amended
Section 2 is amended as follows:
(a) in the definition of "the Agreement" by deleting ", and"
15 and inserting instead --
" and, except in section 3(1), ";
(b) in the definition of "the Agreement" by inserting after
"provisions" --
"
20 and by the first supplementary agreement, the
second supplementary agreement and the third
supplementary agreement
";
(c) in the definition of "the second supplementary
25 agreement" by deleting the full stop and inserting
instead a semicolon;
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 5
(d) by inserting after the definition of "the second
supplementary agreement" --
"
"the third supplementary agreement" means the
5 agreement a copy of which is set out in
Schedule 5.
".
5. Section 3C inserted
After section 3B the following section is inserted --
10 "
3C. Third supplementary agreement
The third supplementary agreement is ratified.
".
6. Schedule 5 inserted
15 After Schedule 4 the following Schedule is inserted --
"
Schedule 5 -- Third supplementary agreement
[s. 2]
2008
20
THE HONOURABLE ALAN JOHN CARPENTER
PREMIER OF THE STATE OF WESTERN AUSTRALIA
AND
25
ARGYLE DIAMONDS LIMITED
ACN 009 102 621
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
AND
RIO TINTO DIAMONDS LIMITED
5
DIAMOND (ARGYLE DIAMOND MINES JOINT VENTURE)
10 AGREEMENT 1981
RATIFIED VARIATION AGREEMENT
15
20
[Solicitor's details]
THIS AGREEMENT is made this 21st day of May 2008
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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)
5 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
10 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
15 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.
20 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
25 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
30 to address the matters referred to in recitals B and C.
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
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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.
5 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
10 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
15 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
20 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
25 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
30 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
page 6
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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;
5 "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
10 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":
15 (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";
20 (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:
25 "(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
30 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
page 7
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
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
5 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
10 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
15 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
20 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
25 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
30 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
35 "Schedule 1";
(6) in clause 21(7) by deleting "parties" and substituting "State and
the Joint Venturers";
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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(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
5 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
10 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
15 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;
20 "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;
25 "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
30 the Minister pursuant to this Agreement on
13 January 2006 is to occur;
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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(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
5 (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";
10 (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";
15 (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
20 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
25 (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):
30 (A) "or RTDL" after the first and second
reference to "the Joint Venturers"; and
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
(B) "of the Joint Venturers" after "and where
sorted rough diamonds";
(iii) by renumbering subparagraph (ii) as
subparagraph (iii) and inserting the following
5 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
10 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
15 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
20 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:
25 "(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.
30 (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
35 would be payable if the diamonds were supplied
at that point, or in that form.
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
(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
5 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:
10 (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
15 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
20 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,
25 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.";
30 (10) in clause 29(2) by deleting "The" and substituting "Subject to
subclauses (2a), (2b) and (2c) of this Clause, the";
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
(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
5 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
10 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
15 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
20 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
25 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)
30 of this Clause;
(c) Venturers' obligation under paragraph (c) of
subclause (2a) of this Clause shall cease to apply;
and
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
(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
5 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
10 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
15 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
20 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
25 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
30 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
35 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
page 14
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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
5 (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
10 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
15 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
20 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
25 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
30 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
35 ended 31 March 2006 and for each
subsequent quarter expiring before the
variation date; and
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
(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.
5 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
10 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
15 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
20 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
25 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
30 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.
35 (2e) (a) For the purposes of determining whether or not
the milestone event has occurred by the milestone
deadline, the Joint Venturers:
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
(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
5 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
10 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
15 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
20 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
25 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
30 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
35 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
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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s. 6
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
5 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
10 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
15 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
20 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
25 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:
30 "(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.";
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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(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:
5 "(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):
10 (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
15 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,
20 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
25 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
30 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
35 disposed of to RTDL for sorting and marketing
by RTDL and to sorted rough diamonds which
page 19
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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
5 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
10 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
15 (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
20 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
25 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
30 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
35 Clause apply, 5% of the f.o.b. revenue;
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Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
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(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
5 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
10 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
15 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
20 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
25 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
30 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.";
page 21
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
(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
5 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
10 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
15 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
20 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:";
25 (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 " ;
30 and
(iii) by inserting "or RTDL" after the second
reference to the "Joint Venturers";
page 22
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
(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)"
5 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
10 (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";
15 (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)
20 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:
25 "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:
30 (a) the primary cleaning and sizing of rough
diamonds from the areas the subject of
page 23
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
this Agreement at the mining lease or at
such other place in the said State
approved from time to time by the
Minister; and
5 (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
10 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
15 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
20 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
25 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
30 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
35 continuance of this Agreement:
(i) keep the Minister and the
Minister for Mines fully
page 24
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
informed with respect to the
arrangements for the sorting of
its rough diamonds including
without limitation as to the place
5 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
10 necessary to maximise the value
of its diamonds before sale
transfer or disposal as the case
may be as approved by the
Minister; and
15 (iii) ensure that such sorting is
undertaken in accordance with
sorting and auditing procedures
approved by the Minister for
Mines.
20 (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
25 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
30 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
35 permitted under subclause (7) of
Clause 6.
page 25
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 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
5 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
10 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
15 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
20 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
25 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
30 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
35 from the areas the subject of this
Agreement from the mining lease
page 26
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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
5 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
10 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
15 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
20 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)
25 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
30 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):
35 (a) by deleting "The parties" and substituting "The State and
the Joint Venturers"; and
page 27
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
(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
5 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.";
10 (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
15 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
20 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
25 (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
30 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
page 28
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
(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
5 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
10 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
15 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
20 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
25 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";
30 (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";
page 29
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
(24) in clause 42(1):
(a) in paragraph (a):
(i) by inserting "and of RTDL" after the first
reference to "Joint Venturers";
5 (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
10 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:
15 (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
20 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
25 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
30 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
page 30
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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";
5 (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
10 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:
15 "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
20 (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
25 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
30 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
page 31
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
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).
5 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.
10 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
15 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
20 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 ....................................
25 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 .............................................................................
30 ..............................................................................
Signature Signature
Name: Name:
Title: Title:
page 32
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
In the presence of:
...................................................
Signature
Name:"
5 EXECUTED as a deed.
SIGNED by THE HONOURABLE )
ALAN JOHN CARPENTER ) [Signature]
in the presence of: )
10
[Signature]
______________________________
Name: MATT KEOGH
15 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: )
20
[Signature]
______________________________
25 Director
Name: KEVIN MCLEISH
[Signature]
30 ______________________________
Director/Secretary
Name: SHANE SULLIVAN
page 33
Diamond (Argyle Diamond Mines Joint Venture) Agreement Amendment
Bill 2008
s. 6
EXECUTED by RIO TINTO )
DIAMONDS LIMITED by its )
Attorney )
pursuant to a power of )
5 attorney dated 16 May 2008 )
in the presence of: )
10 [Signature] [Signature]
________________________ ________________________
Witness Attorney
Name: CATHRYN WELLS Name: SHANE SULLIVAN
".
15
page 34
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