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IRON ORE PROCESSING (MINERALOGY PTY. LTD.) AGREEMENT AMENDMENT BILL 2008

                    Western Australia


Iron Ore Processing (Mineralogy Pty. Ltd.)
     Agreement Amendment Bill 2008

                       CONTENTS


 1.   Short title                                      2
 2.   Commencement                                     2
 3.   Act amended                                      2
 4.   Section 3 amended                                2
 5.   Section 6 inserted                               2
      6.       Variation agreement ratified and
               implementation authorised          3
 6.   Schedule 2 inserted                              3
      Schedule 2 -- Variation agreement




                           015--1                      page i
                           Western Australia


                     LEGISLATIVE ASSEMBLY



    Iron Ore Processing (Mineralogy Pty. Ltd.)
         Agreement Amendment Bill 2008


                               A Bill for


An Act to amend the Iron Ore Processing (Mineralogy Pty. Ltd.)
Agreement Act 2002.



The Parliament of Western Australia enacts as follows:




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     1.       Short title
              This is the Iron Ore Processing (Mineralogy Pty. Ltd.)
              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.       Act amended
10            This Act amends the Iron Ore Processing (Mineralogy Pty.
              Ltd.) Agreement Act 2002.

     4.       Section 3 amended
              In section 3:
                (a) in the definition of the Agreement delete "provisions."
15                    and insert:

                      provisions;

               (b)    after the definition of the Agreement insert:
20
                     variation agreement means the agreement a copy of
                     which is set out in Schedule 2.


     5.       Section 6 inserted
25            After section 5 insert:




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                                                                               s. 6



          6.         Variation agreement ratified and implementation
                     authorised
               (1)   The variation agreement is ratified.
 5             (2)   The implementation of the variation agreement is
                     authorised.
               (3)   Without limiting or otherwise affecting the application
                     of the Government Agreements Act 1979, the variation
                     agreement operates and takes effect despite any other
10                   Act or law.


     6.        Schedule 2 inserted
               After Schedule 1 insert:

15                     Schedule 2 -- Variation agreement
                                                                           [s. 3]

                                          2008

20

                  THE HONOURABLE COLIN JAMES BARNETT
               PREMIER OF THE STATE OF WESTERN AUSTRALIA

25                                        and

                             MINERALOGY PTY. LTD.
                                ACN 010 582 680

30                                        and

                                AUSTEEL PTY. LTD.
                                  ACN 058 430 032



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     s. 6


                         BALMORAL IRON PTY. LTD.
                               ACN 058 429 931
                        ANSHAN RESOURCES PTY. LTD.
                               ACN 058 429 977
 5                        KOREAN STEEL PTY. LTD.
                               ACN 058 429 600
                            SINO IRON PTY. LTD.
                               ACN 058 429 708
                     INTERNATIONAL MINERALS PTY. LTD.
10                             ACN 058 341 638



              IRON ORE PROCESSING (MINERALOGY PTY LTD)
15                         AGREEMENT 2002

                       RATIFIED VARIATION AGREEMENT


20




25
                                    [Solicitor's details]



30

     THIS AGREEMENT is made the 14th day of November 2008

     BETWEEN
35

     THE HONOURABLE COLIN JAMES BARNETT MEc., 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) of the first part
40



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     AND

     MINERALOGY PTY. LTD. ACN 010 582 680 of Mineralogy House,
     Level 8, 135 Wickham Terrace, Spring Hill, Queensland (Company) of the
 5   second part

     AND

     AUSTEEL PTY. LTD. ACN 058 430 032, BALMORAL IRON PTY. LTD.
10   ACN 058 429 931 and ANSHAN RESOURCES PTY. LTD.
     ACN 058 429 977 all of Mineralogy House, Level 8, 135 Wickham Terrace,
     Spring Hill, Queensland, KOREAN STEEL PTY. LTD. ACN 058 429 600 of
     99 St Georges Terrace, Perth, Western Australia, SINO IRON PTY. LTD.
     ACN 058 429 708 of C/- Gilbert & Tobin, Level 37, 2 Park Street, Sydney,
15   New South Wales and INTERNATIONAL MINERALS PTY. LTD.
     ACN 058 341 638 of Level 4, 5 Mill Street, Perth Western Australia
     (Co-Proponents) of the third part.


20   RECITALS

     A.      The State, the Company and the Co-Proponents are the parties to the
             agreement made 5 December 2001 which was ratified by the Iron Ore
             Processing (Mineralogy Pty Ltd) Agreement Act 2002.           That
25           agreement is referred to in this Agreement as the "Principal
             Agreement".

     B.      The State, the Company and the Co-Proponents wish to vary the
             Principal Agreement as set out in this variation including:
30           (a)      to allow Project Proponents to produce iron ore concentrates
                      for sale within Australia or by export to overseas producers;
             (b)      to amend Area A, Area C and Area D as defined in the State
                      Agreement; and
             (c)      to provide for the relinquishment by the Company of land to
35                    the State to facilitate the future development of multi user
                      port facilities at Cape Preston outside Area A.




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     s. 6


     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
 5            for the purpose of the Principal Agreement.

     2.       The State shall sponsor a Bill in the Parliament of Western Australia
              to ratify this Agreement and shall endeavour to secure its passage as
              an Act prior to 31 December 2008 or such later date as the parties may
10            agree.

     3.       (a)      Clause 4 of this Agreement shall not come into operation
                       unless or until an Act passed in accordance with clause 2 of
                       this Agreement ratifies this Agreement.
15
              (b)      If by 31 December 2008 or such later date as may be agreed
                       pursuant to clause 2 of this Agreement, clause 4 of this
                       Agreement has not come into operation then unless the
                       parties hereto agree this Agreement shall cease and
20                     determine and none of the parties hereto shall have any
                       claim against the other parties with respect to any matter or
                       thing arising out of, done, performed or omitted to be done
                       or performed under this Agreement.

25   4.       The Principal Agreement is hereby varied:

              (1)      in clause 1:

                       (a)       by inserting in the appropriate alphabetical
30                               positions the following new definitions;

                                 "Access Act" means the Railways (Access)
                                 Act 1998;

35                               "Access Code" means the Railways (Access)
                                 Code 2000;

                                 "Access Minister" means the Minister in the
                                 Government of the State for the time being
40                               responsible for the administration of the Access
                                 Act;

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                      "including" means "including, but not limited to";

                      "Plan 3" and "Plan 4" mean respectively the
 5                    plans marked "3" and "4" initialled by or on behalf
                      of the parties hereto for the purpose of
                      identification;

                      "Project 4" means a project or projects for the
10                    production of iron ore concentrates within Western
                      Australia with subject to Clause 2(h) an initial
                      minimum production capacity of six million tonnes
                      per annum (or lesser amount approved by the
                      Minister) from a mine or mines within Area A and
15                    an iron ore concentrates production facility located
                      within Area A including expansions of projects the
                      subject of approvals from time to time and may
                      include inter alia a mine, concentrator, power
                      station, desalination plant, port, pipelines and any
20                    other necessary facilities to enable iron ore
                      concentrates to be produced transported and
                      shipped for sale within Australia or for export to
                      overseas purchasers including, subject to
                      subclause (7) of Clause 11, as part of a blended
25                    product;

                      "Rail Safety Act" means the Rail Safety Act 1998;

                      "said State" means the State of Western Australia;
30
                      "Sino Iron" means Sino Iron Pty. Ltd.
                      ACN 058 429 708 (formerly called Bellswater Pty.
                      Ltd.) and includes its successors and permitted
                      assigns;
35
                      "Sino Iron Project" means the project of the type
                      of Project 1 the subject of proposals submitted by
                      Sino Iron and the Company on 29 February 2008
                      and approved by the Minister under Clause 7 as
40                    modified, expanded or otherwise varied from time
                      to time in accordance with this Agreement;

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                              "variation date" means the date on which clause 4
                              of the variation agreement made on or about
                              14 November 2008 between the State, the
 5                            Company and the Co-Proponents comes into
                              operation;

                     (b)      in the definition of "Ancillary Tenement" by
                              deleting "and its application for miscellaneous
10                            licence 08/20" and substituting ", 08/63 and
                              08/74, applications by it for general purpose
                              leases over land currently the subject of its
                              general purpose lease 08/52 for a pellet plant or
                              accommodation village or both and its
15                            applications for miscellaneous licences 08/20,
                              08/22 and 08/23";"

                     (c)      in the definition of "Area A":

20                            (i)     by deleting in paragraph (a) "Sheet 1 of
                                      Plan 1" and substituting "Plan 3";

                              (ii)    by deleting in paragraph (a)(ii) "and
                                      08/660" and substituting ", 08/660 and
25                                    08/1414";

                              (iii)   by     inserting     in    paragraph (a)(iii)
                                      "exploration licence 08/1451 being" before
                                      "the exploration licence"; and
30
                              (iv)    by deleting in paragraph (a)(vi) "Sheet 1 of
                                      Plan 1" and substituting "Plan 3";

                     (d)      in the definition of "Area C" by deleting
35                            "Plan 2" and substituting "Plan 4";

                     (e)      in the definition of "Area D":

                              (i)     by deleting "light blue" and substituting
40                                    "green"; and


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                                                                         s. 6


                        (ii)    by deleting "Plan 2" and substituting "Plan
                                4";

              (f)       in the definition of "iron ore concentrates" by
 5                      deleting "mean" and substituting "means";

              (g)       in the definition of "Mining Leases" by deleting
                        "that have been dedicated to a Project" and
                        substituting "the carrying out of mining of iron
10                      ore on all or part of which is authorised by an
                        approved proposal";

              (h)       in the definitions of "Project 1", "Project 2" and
                        "Project 3" by deleting "supply of a minor
15                      tonnage of iron ore concentrates for use as
                        heavy media in the coal washing industry" and
                        substituting     "production     of    iron    ore
                        concentrates from iron ore mined as part of the
                        Project for sale within Australia or for export to
20                      overseas purchasers including, subject to
                        subclause (7) of Clause 11, as part of a blended
                        product"; and

              (i)       in the definition of "Project" by deleting the
25                      first reference to "or Project 3" and substituting
                        ", Project 3 or Project 4";

     (2)      in clause 2:

30            (a)       by inserting in paragraph (c) "and subclause"
                        after "Clause"; and

              (b)       by, in paragraph (h):

35                      (i)     inserting ", or Project 4" after the first
                                reference to "Project 3"; and

                        (ii)    deleting "Project 3 or a combination
                                thereof " and substituting ", Project 3 or
40                              Project 4 or a combination of Project 1,
                                Project 2 or Project 3";

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               (3)   in clause 5(1) by deleting "its field" and substituting "the
                     field (including drilling and sampling)";

 5             (4)   by inserting after clause 5 the following new clauses 5A and
                     5B:

                     "Community and social benefits plan

10                   5A.    (1)     In this Clause, the term "community and
                                    social benefits" includes:

                                    (a)     training and guaranteed employment
                                            for indigenous and non-indigenous
15                                          persons living in the Pilbara region
                                            of the said State;

                                    (b)     regional development and local
                                            procurement of goods and services;
20
                                    (c)     contribution to community services
                                            and facilities; and

                                    (d)     a regionally based workforce.
25
                            (2)     For the purposes of this Clause "Sino Iron
                                    Project" shall include the proposed
                                    production as part of it of 36 million tonnes
                                    per annum of iron ore concentrates for sale
30                                  within Australia or for export to overseas
                                    purchasers.

                            (3)     Sino Iron acknowledges the need for
                                    community and social benefits flowing from
35                                  the Sino Iron Project.

                            (4)     As soon as practicable after the variation
                                    date Sino Iron shall:

40                                  (a)     consult, or as the case may be
                                            continue its consultations with,

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                                                                      s. 6


                                    relevant local government or local
                                    governments with respect to the
                                    need for community and social
                                    benefits in relation to the
 5                                  developments proposed as part of
                                    the Sino Iron Project;

                            (b)     following such consultation, prepare
                                    a plan which describes Sino Iron's
10                                  proposed strategies for achieving
                                    community and social benefits in
                                    connection with the developments
                                    proposed as part of the Sino Iron
                                    Project and such plan shall include a
15                                  process for regular consultation by
                                    Sino Iron with the relevant local
                                    government or local governments in
                                    respect of the strategies; and

20                          (c)     submit to the Minister the plan
                                    prepared          pursuant        to
                                    subclause (4)(b) and confer with the
                                    Minister in respect of the plan.

25                   (5)    The Minister shall within one month after
                            receipt of a plan submitted under
                            subclause (4)(c), either notify Sino Iron that
                            the Minister approves the plan as submitted
                            or notify Sino Iron of any changes that the
30                          Minister requires be made to the plan. If
                            Sino Iron is unwilling to accept the changes
                            which the Minister requires it shall notify
                            the Minister to that effect and either party
                            may refer to arbitration hereunder the
35                          question of the reasonableness of the
                            changes required by the Minister.

                     (6)    The effect of an award made on an
                            arbitration pursuant to subclause (5) shall be
40                          that the plan submitted by Sino Iron
                            pursuant to subclause (4)(c) shall, with such

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     s. 6


                                   changes required by the Minister under
                                   subclause (5) as the arbitrator determines to
                                   be reasonable (with or without modification
                                   by the arbitrator), be deemed to be the plan
 5                                 approved by the Minister under this Clause.

                            (7)    During the continuance of this Agreement,
                                   Sino Iron shall implement the plan approved
                                   or deemed to be approved by the Minister
10                                 under this Clause.

                            (8)    Sino Iron shall report to the Minister about
                                   the results of its periodic ongoing
                                   consultation with the relevant local
15                                 government or local governments in
                                   accordance with the plan approved or
                                   deemed to be approved by the Minister
                                   under this Clause and as soon as practicable
                                   after each such consultation takes place.
20
                            (9)    The State acknowledges that the Company is
                                   intending to:

                                   (a)     establish as soon as practicable after
25                                         commencement         of      shipping
                                           operations as part of the Sino Iron
                                           Project a Prescribed Private Fund
                                           ("the Fund") as defined in
                                           section 995-1 of the Income Tax
30                                         Assessment Act of 1997;

                                   (b)     include the advancement of medical
                                           research and the support of the
                                           indigenous communities in Western
35                                         Australia ("the Objects") as part of
                                           the objects of the Fund; and

                                   (c)     provide the Fund during the term of
                                           this Agreement with a total of
40                                         $100,000,000 of benefits and grants
                                           to achieve the Objects.

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                                                                       s. 6



              Land to be the subject of this Agreement

              5B.    (1)     Area A covers the areas of Fortescue and
 5                           Cape Preston in the Pilbara region of the
                             said State that the Company believes will
                             satisfy requirements for development in the
                             short to medium term after the variation
                             date. Area B1 and Area B2 contain iron ore
10                           formations which are seen by the Company
                             as having long term exploration and
                             development potential.

                     (2)     Subject to subclause (3) of Clause 19, the
15                           land to be granted pursuant to this
                             Agreement, whether under the LA Act, the
                             Mining Act or otherwise, will be drawn
                             from within:

20                           (a)     Area A; and

                             (b)     such other areas of land in the
                                     vicinity of Area A as the Minister,
                                     before the Project Proponents
25                                   submit proposals in respect thereof,
                                     approves as land the Project
                                     Proponents may as part of the
                                     particular   proposals      and     in
                                     accordance with but subject to this
30                                   Agreement request the grant to the
                                     Company of leases, licences or other
                                     tenure over to support the
                                     undertaking of the particular Project.

35                   (3)     (a)     The Company shall in accordance
                                     with the Mining Act or other
                                     relevant Act promptly lodge for
                                     registration surrenders in respect of
                                     Area D of all mining tenements and
40                                   other titles, and withdrawals of all
                                     applications for mining tenements,

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     s. 6


                                          which it then holds or as the case
                                          may be has made, over Area D upon
                                          at least 3 months notice from the
                                          Minister given not earlier than 36
 5                                        months after the variation date. In
                                          consideration of the Company doing
                                          so the State shall upon such
                                          surrender or as soon as practicable
                                          thereafter grant or arrange to have
10                                        granted to the Company an easement
                                          to allow the pipelines and
                                          communications        cables     then
                                          constructed as part of the Sino Iron
                                          Project within that part of Area D
15                                        shown cross hatched on Plan 4 to be
                                          continue to be used, operated,
                                          maintained and repaired for a term
                                          determinable, if it has not already
                                          determined, upon the expiration of 6
20                                        months notice from the grantor of
                                          the easement if the Project
                                          Proponents for the Sino Iron Project
                                          cease (other than by reasons of force
                                          majeure) to operate the Sino Iron
25                                        Project.

                                   (b)    Without limiting the Company's
                                          obligations under the Mining Act
                                          consequent upon such surrenders the
30                                        Company shall yield up Area D free
                                          of all improvements (excepting the
                                          pipelines and the communications
                                          cables to be the subject of the
                                          abovementioned easement and any
35                                        road) in a state of repair and
                                          condition as shall be consistent with
                                          the obligations of the Project
                                          Proponents for the Sino Iron Project
                                          under the approved proposals for the
40                                        Sino Iron Project and to the
                                          satisfaction of the Minister.";

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                                                                        s. 6



     (5)      in clause 6(1) by deleting in the second sentence "or
              Project 3 or a combination thereof as aforesaid" and
              substituting ", Project 3 or Project 4 or a combination of
 5            Project 1, Project 2 and/or Project 3 as described in the
              definition of Project in Clause 1. However, the production
              by Sino Iron or the Company and Sino Iron together of iron
              ore concentrates from iron ore mined from mining leases
              08/123-08/125 may only be proposed (pursuant to Clause 8)
10            as part of the Sino Iron Project.";

     (6)      in clause 6(2):

              (a)     by deleting the words "recover and process" and
15                    substituting the words "recover, concentrate and (if
                      applicable) process or blend";

              (b)     by deleting in paragraph (a)(ii) all the words after
                      "Clause 10 in respect of the project" and inserting
20                    the following new subparagraphs;

                      "(iii)    any existing mining lease or leases, further
                                mining leases or leases or other mining
                                leases comprising part of Area A, or part
25                              thereof, from which the Project Proponents
                                propose iron ore be mined as part of and for
                                the purposes of the project and the amount
                                of iron ore from such mining lease or leases
                                to be assigned to the project; and
30
                      (iv)      any Ancillary Tenement or part thereof
                                which the Project Proponents propose be
                                used for the purposes of the project;";

35            (c)     by deleting in paragraph (b) the words "for
                      processing of iron ore" and substituting the words
                      "for producing iron ore concentrates and for
                      processing or blending of iron ore concentrates";




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                     (d)     by inserting in paragraph (g) "(including as part of a
                             blended product)" after "transportation of iron ore
                             concentrates";

 5                   (e)     by deleting paragraph (l) and substituting the
                             following new paragraph (l):

                             "(l)      production of iron ore concentrates
                                       (including for sale within Australia or for
10                                     export to overseas purchasers) and final
                                       products from iron ore concentrates by
                                       pelletising and/or direct reduction and/or
                                       steel making or, subject to subclause (7) of
                                       Clause 11, by blending and disposal of
15                                     residues;";

                     (f)     by inserting in paragraph (m) "iron ore concentrates
                             and" after "ship loading of"; and

20                   (g)     by deleting in paragraph (n) "and corridors for";

               (7)   in clause 6(4):

                     (a)     by inserting "or proposed" after "Use of existing" in
25                           the heading of clause 6(4);

                     (b)     by inserting "proposed to be constructed or acquired
                             by them or," after "belonging to the Company or the
                             Project Proponents or"; and
30
                     (c)     by inserting the following new sentence:

                             "The Minister's abovementioned consent will not be
                             required for a Project 4 to provide for the use by its
35                           Project Proponents of any existing facilities
                             equipment or services belonging to any Project
                             Proponents in their capacity as Project Proponents
                             for a project of the type of Project 1, Project 2,
                             Project 3 or combination thereof as described in the
40                           definition of Project in Clause 1.";


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                                                                           s. 6


     (8)      by inserting after      clause   6(4)   the   following      new
              subclause (4a):

              "(4a)   The Project Proponents for a Project of the type of
 5                    Project 1, Project 2, Project 3 or combination thereof
                      as described in the definition of Project in Clause 1
                      may with the consent of the Minister propose, as
                      part of their proposals under Clause 6 or Clause 8,
                      the construction establishment or provision as the
10                    case may be as part of their Project of facilities,
                      equipment or services as the case may be for use by
                      Project Proponents of a particular Project 4 (whether
                      current or proposed).";

15   (9)      by deleting clause 6(5) and substituting the following new
              subclause (5):

              "(5)    Proposals submitted pursuant to subclause (1) for
                      Plant areas in respect of any area within Area C shall
20                    make reasonable provision for future third party use
                      of port facilities as provided for in subclause (3) of
                      Clause 21.";

     (10)     in clause 7(2) by deleting in paragraph (a) "section 40(1)(b)"
25            and substituting "Part IV";

     (11)     in clause 9(2):

              (a)     by deleting ", dedication thereof to one of the
30                    Projects and, in any other case, surrender of the
                      tenement by the Company" and substituting "it
                      becomes a Mining Lease and in any other case
                      surrender of the tenement by the Company";

35            (b)     by deleting in paragraph (c)(i) "any Ancillary
                      Tenements," and substituting "in respect of any
                      Ancillary Tenements which are being used as part of
                      a Project in accordance with approved proposals,";

40            (c)     by deleting "and" at the end of paragraph (c)(ii);


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                      (d)     by deleting in paragraph (c)(iii) "(not being a mining
                              lease which has been dedicated to a Project)" and
                              substituting "(not being a Mining Lease)";

 5                    (e)     by deleting the full stop at the end                 of
                              paragraph (c)(iii) and substituting "; and"; and

                      (f)     by inserting after paragraph (c)(iii) the following
                              new paragraph (c)(iv):
10
                              "(iv)     in respect of mining leases, the mining of
                                        iron ore (other than exploration, bulk
                                        sampling or testing) shall not be
                                        undertaken other than as part of a Project
15                                      subject to and in accordance with this
                                        Agreement.";

               (12)   in clause 9(5) by deleting "five" in paragraph (b) and
                      substituting "ten";
20
               (13)   in clause 9(6) by deleting "and as if the word "five" in
                      paragraph (b) of subclause (5) were deleted and substituted
                      by the word "ten" ";

25             (14)   in clause 9(7) by inserting "(excluding all Ancillary
                      Tenements)" after "the aggregate area of Area A";

               (15)   in clause 9(8):

30                    (a)     by deleting in paragraph (a) "or part thereof within
                              Area A other than a mining lease dedicated to a
                              Project or a mining lease granted pursuant to
                              Clause 10" and substituting "within Area A other
                              than a Mining Lease";
35
                      (b)     by deleting "or part thereof" in paragraph (a)(ii); and

                      (c)     by deleting "or part thereof" in paragraph (c)(i);




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                                                                        s. 6


     (16)     in clause 10(2):

              (a)     by deleting in paragraph (a) the words "becomes
                      dedicated to a Project" and substituting the words
 5                    "first becomes a Mining Lease"; and

              (b)     by deleting paragraph (b) and substituting the
                      following new paragraph (b):

10                    "(b)       The parties acknowledge that more than
                                 one Project may be established in
                                 accordance with approved proposals upon
                                 an existing mining lease or further mining
                                 lease.";
15
     (17)     by inserting after clause 10(2) the following new
              subclause (3a):

              "Mining of iron ore
20
              (3a)    A Mining Lease shall, in addition to any covenants
                      and conditions that may be imposed pursuant to the
                      Mining Act or this Agreement, be subject to the
                      condition that during the currency of this Agreement
25                    the mining of iron ore (other than exploration, bulk
                      sampling or testing) shall not be undertaken other
                      than as part of a Project subject to and in accordance
                      with this Agreement.";

30   (18)     in clause 10(7) by inserting "or Ancillary Tenements" after
              "within the Mining Leases";

     (19)     in clause 10(8) by deleting "[   ]" and substituting "2002";

35   (20)     in clause 11(3):

              (a)     by inserting "(including iron ore concentrates)" after
                      "quantities of input, other iron ore";

40            (b)     by inserting ", and also showing such other
                      information in relation to the abovementioned return

                                                                   page 19
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6


                             as the Minister may from time to time reasonably
                             require in regard to and to assist in verifying the
                             calculation of royalties in accordance with
                             subclause (1)," after "due date of the return";
 5
               (21)   in clause 11(6) by renumbering the existing paragraph (d) as
                      paragraph (e) and inserting the following new paragraph (d):

                      "(d)   "processed" in relation to iron ore concentrates
10                           means processed into pellets, DRI or steel as the
                             case may be as part of a Project;";

               (22)   by inserting after clause 11(6) the following new
                      subclause (7):
15
                      "Blending of iron ore

                      (7)    (a)       Project Proponents may as part of their
                                       Project undertake within Area A the
20                                     blending of iron ore concentrates produced
                                       as part of their Project with iron ore owned
                                       by any one or more of them or of a third
                                       party or parties and mined from mining
                                       tenements or other mining titles within the
25                                     Pilbara outside Area A, B1 and B2
                                       ("Non-Agreement ore") for the purpose of
                                       shipping such blended ore through port
                                       facilities established under this Agreement.

30                           (b)       The Project Proponents must establish and
                                       keep in place adequate systems and
                                       controls, to the reasonable satisfaction of
                                       the Minister for Mines, for the correct
                                       apportionment between each of the
35                                     relevant mining leases or other mining
                                       titles of the quantities of iron ore
                                       concentrates and other iron ore being
                                       blended and which systems and controls
                                       monitor       production,     concentrating,
40                                     transportation, stockpiling and shipping of
                                       all such ore.

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                      (c)      If any blending occurs as contemplated by
                               this subclause then for the purposes of
                               calculating the royalty payable as provided
 5                             in this Clause 11 on the iron ore
                               concentrates produced as part of the
                               Project and used in the admixture, the
                               gross sale price of the blended product as
                               set out in the invoices relating to the sale
10                             (and converted if necessary to Australian
                               currency in accordance with the Mining
                               Regulations 1981) shall be apportioned to
                               those iron ore concentrates (as their gross
                               invoice value) in the same proportion as
15                             the total amount of iron in those iron ore
                               concentrates bears to the total amount of
                               iron in the blended product.

                      (d)      To avoid doubt the parties acknowledge
20                             that the mining, concentrating, processing
                               and transport of Non-Agreement ore to
                               Project Proponents within Area A for
                               blending as referred to above will not be
                               part of Projects under this Agreement.";
25
     (23)     in clause 14 by deleting in paragraph (a) all the words after
              "generate electricity", inserting a colon followed by the
              following new subparagraphs:

30            "(i)    for their activities on the Mining Leases and at the
                      Plant areas;

              (ii)    if the Company so desires, for the activities of other
                      Project Proponents on the Mining Leases and at the
35                    Plant areas as permitted under subclauses (4) and
                      (4a) of Clause 6; and

              (iii)   if the Company so desires and with the Minister's
                      consent given before submission and approval of
40                    their abovementioned proposals (which consent may
                      be given subject to a condition as to the amount to

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     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6


                              be generated for such purpose), for supply to third
                              parties or other third parties as the case may be;
                              and";

 5             (24)   in clause 20(1) by deleting "or dedicated to the Project" and
                      substituting "or to be mined as part of the Project";

               (25)   in clause 21(3):

10                    (a)     by inserting "and in accordance with the principles
                              for access contained in section 6(4) of the
                              Competition Principles Agreement made on 11 April
                              1995 between the Commonwealth, New South
                              Wales, Victoria, Queensland, Western Australia,
15                            South Australia, Tasmania, the Australian Capital
                              Territory and the Northern Territory" after "the
                              Company or the Project Proponents as the case may
                              be)";

20                    (b)     by inserting "(excepting the Export Wharves and
                              Associated Facilities)" before "PROVIDED
                              THAT";

                      (c)     by inserting "in the reasonable opinion (after
25                            consultation with the Project Proponents) of an
                              Independent Person" after "PROVIDED THAT such
                              use shall not";

                      (d)     by deleting the full stop at the end of this subclause
30                            and inserting the following:

                              "(which approval shall not be unreasonably
                              withheld). For the purpose of this subclause:

35                            (a)        an "Independent Person" means such person
                                         as is agreed upon between the Company and
                                         the State or third parties as the case may be
                                         seeking the abovementioned use and in
                                         default of agreement within one month of
40                                       the Minister requiring such person to be


     page 22
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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                                                                           s. 6


                                 agreed upon then as nominated by the
                                 Minister; and

                      (b)        the "Export Wharves and Associated
 5                               Facilities" means the wharf or wharves,
                                 stockpile areas, conveyors and ship loaders
                                 constructed or provided by the Company
                                 and the Project Proponents or either of them
                                 at Cape Preston for the export from the said
10                               State of iron ore concentrates and other final
                                 products produced as part of a Project.

                      The Company and such of the State or third parties
                      as the case may be seeking the abovementioned use
15                    shall each pay one half of the Independent Person's
                      costs and expenses.";

     (26)     by inserting after clause 21(4) the following new
              subclause (5):
20
              "Access pursuant to legislation

              (5)     The Company must, during the currency of this
                      Agreement, consult with and keep the State fully
25                    informed concerning any steps that the Company
                      proposes to take or is taking, or concerning any steps
                      which the Company is aware any other person
                      proposes to take or is taking, to have the wharf and
                      port installations wharf machinery and equipment
30                    and wharf and port services and facilities referred to
                      in subclause (2) (including the Export Wharves and
                      Associated Facilities) made subject to Part III of the
                      Trade Practices Act 1974.";

35   (27)     in clause 22(1):

              (a)     by deleting "and operated"; and

              (b)     by deleting "thereto" and substituting "to its
40                    construction and operation";


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     s. 6


               (28)   in clause 22(2):

                      (a)     by inserting "and in accordance with approved
                              proposals, the Rail Safety Act and" after "Subject
 5                            to"; and

                      (b)     by deleting "shall operate the said railway" and
                              substituting "shall operate or ensure the said railway
                              is operated";
10
               (29)   in clause 22(3):

                      (a)     by deleting "operate and maintain the said railway"
                              and substituting "keep the said railway in operation
15                            and operated and maintained in";

                      (b)     by deleting "1998"; and

                      (c)     by inserting the at end of this subclause:
20
                              "Without limiting the generality of the foregoing
                              provisions the Company shall during the
                              continuance of this Agreement:

25                            (a)        ensure that the obligations imposed under
                                         the Rail Safety Act on an owner and an
                                         operator (as those terms are therein defined)
                                         are complied with in connection with the
                                         said railway and (from when the Access Act
30                                       and Access Code apply to the said railway)
                                         ensure that the obligations imposed under
                                         the Access Act and the Access Code on a
                                         railway owner (as that term is therein
                                         defined) are complied with in connection
35                                       with the said railway; and

                              (b)        shall not at any time without the prior
                                         consent of the Minister dismantle, sell or
                                         otherwise dispose of any part or parts of the
40                                       said railway or permit this to occur, other


     page 24
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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                                                                      s. 6


                             than for the purpose of maintenance, repair,
                             upgrade or renewal.

                     Nothing in this Agreement shall be construed to
 5                   exempt the Company or any other person from
                     compliance with the Rail Safety Act and the Access
                     Act and the Access Code or limit their application to
                     the Company's or Project Proponents' operations
                     generally.";
10
     (30)     by inserting after clause 22(5) the following new
              subclause (6):

              "Access Act and Code
15
              (6)    (a)     The Company shall, during the continuance
                             of this Agreement and until the Access Act
                             and the Access Code are applied to and in
                             respect of the said railway and associated
20                           roads which provide access to the said
                             railway, notify the Minister of all written
                             requests made by third parties to the
                             Company for access to the said railway and
                             associated roads which provide access to the
25                           said railway and as soon as practicable after
                             such requests are made.

                     (b)     The Minister shall provide to the Access
                             Minister a copy of each notification from the
30                           Company as soon as practicable after such
                             notification is received for consideration by
                             the Access Minister as to whether or not in
                             the Access Minister's discretion the Access
                             Act and the Access Code should be applied
35                           to and in respect of the said railway and
                             associated roads which provide access to the
                             said railway.

                     (c)     The Company acknowledges that the Access
40                           Act and the Access Code may during the
                             continuance of this Agreement be applied to

                                                                 page 25
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6


                                      and in respect of the said railway and
                                      associated roads which provide access to the
                                      said railway (but not to the Company's
                                      rolling stock, rolling stock maintenance
 5                                    facilities, office buildings, housing, freight
                                      centres, terminal yards and depots and any
                                      other facilities which are not railway
                                      infrastructure (as that term is defined in the
                                      Access Act).";
10
               (31)   by deleting clause 25 Rating;

               (32)   by inserting after clause 28(2) the following new
                      subclause (3):
15
                      "(3)    (a)     For the purposes of this subclause (3) the
                                      "State" includes the Minister, the Minister
                                      for Mines, any other Minister for the time
                                      being in the Government of the State, any
20                                    department for the time being of the
                                      Government of the State, any governmental
                                      or semi-governmental body, any statutory
                                      authority or agency and the agents, servants,
                                      employees and contractors from time to time
25                                    of each of them.

                              (b)     Except as otherwise provided in this
                                      Agreement the State may in respect of a
                                      Project or proposed Project communicate
30                                    directly with any Project Proponent or
                                      proposed Project Proponent for that Project
                                      without involving any other Project
                                      Proponent or proposed Project Proponent for
                                      that Project. However, such communication
35                                    shall not bind such other Project Proponent
                                      or proposed Project Proponent.";




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     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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                                                                           s. 6


     (33)     in clause 30(2):

              (a)     by deleting "Except as regards the land referred to in
                      paragraph (b) of this subclause, the" and substituting
 5                    "The";

              (b)     by deleting paragraph (b) and the designation "(a)"
                      before the first paragraph;

10   (34)     by inserting after clause 31(1) the following new
              subclause (1a):

              "(1a)   The Company will advise the Minister within 30
                      days after it ceases to beneficially hold 50% of the
15                    voting rights in a Co-Proponents of that occurrence
                      together with details of the new holder or holders
                      and their respective holdings of voting rights.";

     (35)     in clause 33(1) by deleting "The" and substituting "Subject
20            to subclause (1a) the";

     (36)     by inserting after subclause 33(1) the following new
              subclause (1a):

25            "(1a)   Subclause (1) does not apply to the obligation to
                      construct the pellet plant approved for construction
                      as part of the Sino Iron Project."; and

     (37)     by deleting 33(3) and substituting the following new
30            subclause (3):

              "(3)    The party whose performance of obligations is
                      affected by any of the said events or circumstances
                      shall:
35
                      (a)        promptly give notice to the other party of the
                                 event or circumstance;

                      (b)        consult with the other party and promptly
40                               provide the other party with all such
                                 information as may be reasonably required

                                                                      page 27
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6


                                        by the other party to satisfy itself as to the
                                        existence of the events or circumstances;
                                        and

 5                              (c)     shall use its best endeavours to minimise the
                                        effects of such causes as soon as possible
                                        after the occurrence."

     5.        Upon clause 4 of this Agreement coming into operation ("variation
10             date"):

               (1)      notwithstanding the provisions of the Mining Act 1978 and
                        the Mining Regulations 1981:

15                      (a)     the Company's exploration licence 08/636 shall be
                                deemed to have been surrendered on the variation
                                date in relation to that part of it coloured red on
                                Sheet 1 of Plan 5; and

20                      (b)     the Company's general purpose lease 08/52 shall be
                                deemed to have been surrendered on the variation
                                date in relation to that part of it coloured green on
                                Sheet 2 of Plan 5; and

25                      (c)     the Company's application for general purpose lease
                                08/74 shall be deemed to have lapsed in relation to
                                that part of it coloured brown on Sheet 2 of Plan 5;
                                and

30             (2)      the Company shall, in the manner provided in regulation 59
                        of the Mining Regulations 1981, mark out the land that
                        remains the subject of its application for general purpose
                        lease 08/74 as soon as may be practicable and such marking
                        in that manner shall be valid notwithstanding it is done after
35                      the application for the general purpose lease has been made.

               For the purpose of this clause 5 "Plan 5" means the plan marked "5"
               (comprising Sheet 1 and Sheet 2) initialled by and on behalf of the
               parties for the purpose of identification.
40



     page 28
          Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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                                                                               s. 6


     6.   Subject to the Environmental Protection Act 1986 and to clause 4 of
          this Agreement coming into operation, the State shall cause to be
          granted to the Company:

 5        (1)      its application for general purpose lease 08/63 as soon as
                   practicable after:

                   (a)     an indigenous land use agreement with the native
                           title party or parties affected by its grant is entered
10                         into and registered under the Native Title Act 1993
                           (Commonwealth) ("NTA"); and

                   (b)     that native title party or those native title parties as
                           the case may be withdraw all objections previously
15                         made by it or them under the NTA in respect of the
                           grant of that application and advise the State in
                           writing that it or they no longer wish to pursue the
                           objections previously made by it or them under the
                           Mining Act 1978 ("Mining Act") in respect of the
20                         grant of that application,

                   and upon such reasonable terms and conditions as the
                   Minister for the time being responsible for the
                   administration of the Mining Act ("Minister for Mines")
25                 shall determine; and

          (2)      its application for general purpose lease 08/74 (less the area
                   lapsed under clause 5(1)(c) of this Agreement) as soon as
                   practicable after:
30
                   (a)     clause 5(2) of this Agreement has been complied
                           with;

                   (b)     an indigenous land use agreement with the native
35                         title party or parties affected by its grant is entered
                           into and registered under the NTA;

                   (c)     that native title party or those native title parties as
                           the case may be withdraw all objections previously
40                         made by it or them under the NTA in respect of the
                           grant of that application;

                                                                          page 29
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6



                       (d)   the Warden's Court proceedings in respect of the
                             proposed grant to this application are completed and
                             a recommendation of the mining registrar or Warden
 5                           as required by the Mining Act is provided to the
                             Minister for Mines; and

                       (e)   that native title party or those native title parties
                             advise the State in writing that it or they no longer
10                           wish to pursue the objections previously made by it
                             or them under the Mining Act in respect of the grant
                             of that application,

                       and upon such reasonable terms and conditions as the
15                     Minister for Mines shall determine.


     EXECUTED as a deed.

20
     SIGNED by THE HONOURABLE                 )
     COLIN JAMES BARNETT                      )
     in the presence of:                      ) [Signature]

25   [Signature]
     Witness

     Name Sean David

30




     page 30
             Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
                                                                    Bill 2008



                                                                         s. 6


     SIGNED by MINERALOGY                       )
     PTY. LTD. ACN 010 582 680 by its           )
     Attorney Murray R K Wheater                )
     under Power of Attorney dated              )
 5   12 November 2008 who                       )
     declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


     [Signature]
10   Witness

     Name Paul Sartori


15
     SIGNED by AUSTEEL PTY. LTD.                )
     ACN 058 430 032 by its Attorney            )
     Murray R K Wheater                         )
     under Power of Attorney dated              )
20   12 November 2008 who                       )
     declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


     [Signature]
25   Witness

     Name: Paul Sartori


30




                                                                     page 31
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6


     SIGNED by BALMORAL IRON                    )
     PTY. LTD. ACN 058 429 931 by its           )
     Attorney Murray R K Wheater                )
     under Power of Attorney dated              )
 5   12 November 2008 who                       )
     declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


     [Signature]
10   Witness

     Name Paul Sartori


15
     SIGNED by ANSHAN RESOURCES                 )
     PTY. LTD. ACN 058 429 977 by its           )
     Attorney Murray R K Wheater                )
     under Power of Attorney dated              )
20   12 November 2008 who                       )
     declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


     [Signature]
25   Witness

     Name Paul Sartori


30




     page 32
             Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
                                                                    Bill 2008



                                                                         s. 6


     SIGNED by KOREAN STEEL
     PTY. LTD. ACN 058 429 600 by its           )
     Attorney Rick Joseph Malone                )
     under Power of Attorney dated              )
 5   5 November 2008 who                        )
     declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


     [Signature]
10   Witness

     Name Philip Richard Scott


15   SIGNED by SINO IRON PTY. LTD.              )
     ACN 058 429 708 by its Attorney            )
     Rick Joseph Malone                         )
     under Power of Attorney dated              )
     5 November 2008 who                        )
20   declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


     [Signature]
     Witness
25
     Name Catherine Ann Pinchin




                                                                     page 33
     Iron Ore Processing (Mineralogy Pty. Ltd.) Agreement Amendment
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     s. 6


     SIGNED by INTERNATIONAL                    )
     MINERALS PTY. LTD.                         )
     ACN 058 341 638 by its Attorney            )
     Murray R K Wheater                         )
 5   under Power of Attorney dated              )
     12 November 2008 who                       )
     declared that he has no notice of          )
     revocation of the said Power of Attorney   )
     in the presence of:                        ) [Signature]


10   [Signature]
     Witness

     Name Paul Sartori

15




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