PROPOSAL FOR PERILYA BROKEN HILL MINE OUTOKUMPU COURIER6 SL SUPPLY AND INSTALLATION OF ANALYZER AND SAMPLING SYSTEM

PROPOSAL REFERERENCE S238A

PERILYA BROKEN HILL

OUTOKUMPU COURIER 6 SL SUPPLY AND INSTALLATION OF ANALYZER AND SAMPLING SYSTEM INDEX
1.0 2.0 INTRODUCTION COMMERCIAL PROPOSAL 2.1 2.2 3.0 Pricing Optional take out price

COURIER 6 ON STREAM ANALYSER

SCOPE OF SUPPLY 3.1 3.2 3.3 3.4 3.5 3.6 Analyzer Probe and PCS MXA 4645 Multiplexer DMA 4642 Slurry De-multiplexer Composite Sample Drier Analyser Management Station and Software Analyser Sampling System

4.0

SCOPE OF WORK 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 Primary Sampling Sampling Installation Primary Siphon Sampler Flushing System De-multiplexing Polyethylene Sampling Pipe and Bracketing Analyser and System Platform Primary Sampling Pumps DCS and Courier Terminal Configuration Uninterrupted Power Supply Sampling Pumps Power Supply ISA System Lifting Requirements

5.0

OUTOKUMPU STANDARD TERMS & CONDITIONS OF SALE 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 Pricing Packing Delivery Installation Commissioning Practical Completion Terms of Payment Taxes & Duties Insurance Risk Security & Retention Defects Liability Limit of Liability Vendor Documentation and Data Subcontractors Quality Assurance Material Selection Applicable Law Arbitration Force Majeure
March -2006

OUTOKUMPU TECHNOLOGY

PERILYA BROKEN HILL

COURIER 6 ON STREAM ANALYSER

1.0

INTRODUCTION This proposal details the supply and installation of Courier6 SL on stream XRF slurry analyzer technology for simultaneous measurement of concentrations of Fe, Cu, Zn, Pb and pulp density of 10 sample streams with high power WDXRF-technology.

Figure 1. Courier6 SL Low Head Installation The Courier SL analyzers provide high performance on stream XRF-measurements for metals concentrations with special attention to: accuracy - difference of the on line assay and the true concentration in the bulk process flow. precision - repeatability of successive measurements from the same process situation or detecting small concentration changes timeliness of information - the time delay between generating the measurement information and using the assay for control. High performance is a prerequisite for optimised control of grade and recovery of the process. Further savings by a high performance analyzer are obtained through reduced need for laboratory assays and control of penalty minerals in the concentrate. Timeliness of information is obtained by using the WDXRF-technology: each WDXRFmeasurement channel dedicated for one element each collects intensity information from the sample at rate up to 30 000 counts per second. With configuration of four WDXRFmeasurement channels information simultaneously collected is 4 x 30 000 = 120 000 counts per second, whilst EDXRF-technology is limited down to 10 000 counts per second for all the measured elements altogether slowing down significantly speed of the measurement. Correct calibration of the XRF-analyzer is an essential part of high performance. Special Outocal calibration software developed for the application guides the operator for the best calibration model showing all the needed statistical information for evaluation. Also the points discarded as outlayers are shown for check-up. Advanced self-diagnostics implemented in the Courier analyzers basic functionality provides tools to efficient preventive maintenance and short troubleshooting in case of failure. In Courier analyzers the daily maintenance is reduced to practical minimum: automated functions like the internal reference measurement, monitor operation of the
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COURIER 6 ON STREAM ANALYSER

analyzer and ensure stability. Operation of the analyzer does not require high maintenance liquid nitrogen cooling system or external cooling water. User safety is guaranteed by fail-safe design and use of an X-ray tube instead of radioisotopes. All X-rays are absorbed by shielding of the analyzer, and no residue radiation can be detected outside of the analyzer. Radiation produced by the X-ray tube is ceased by switching off the X-ray tube for maintenance. The Courier analyzer fulfils the strict safety norms set by the European Union. Courier on-stream XRF-analyzer is the world market leader at all the major minerals and metals processing operations with more than 400 analyser installations. The latest generation of the Courier analyzers Courier 6 - was introduced to market in year 2002 and Courier 5 in 2003. Global service network providing local support keep the analyzers running with exceptional performance. Indication of this is an established second hand market for Courier analyzers from exhausted mining operations. 2.0 2.1 COMMERCIAL PROPOSAL Pricing The pricing below supports the supply, installation and commissioning of 10 nominated process flows to the Courier 6 analyser.

Supply of Courier 6, 12 stream unit Supply and transportation of ancillary equipment System design and installation* System commissioning and basic training

$ 497,566 $ 809,181 $ 422,232 $ 17,178 Selling Price $1,746,157

Note: All pricing excludes GST. * No provision has been made for the installation of the metallurgical samplers on the primary cyclone overflow streams. Pricing includes the supply of metallurgical samplers and ancillary equipment, and commissioning of same once installation is completed. 2.2 Optional Take Out Price A take out price for the installation of all sample pump electrical requirements is included in this proposal. Should Perilya wish to undertake electrical installation the take out price will be deducted from the total selling price of this proposal. This option has a validity time of 60days from award of contract. Take Out Price $ 77,000 SCOPE OF SUPPLY Our proposal includes the supply of the following: 1 x Courier 6 Analyzer Probe configured for 12 streams. Measurement Channels for Fe, Cu, Zn, Pb & Scatter. 1 x Automatic Window Advance Assembly. 1 x Composite Sampler Drier (12 stream capability) 1 x Vasa Probe Pump. 1 x PCS Local Control Panel. 2 x 6 stream MXA4645 Multiplexers. 10 x MXA Flow Decelerators. 1 x DMA 4642 Slurry De-multiplexers.
OUTOKUMPU TECHNOLOGY March -2006

3.0

PERILYA BROKEN HILL

COURIER 6 ON STREAM ANALYSER

1 x Analyser System Platform. 1 x Analyser Management Station and Software. 1 x Outocal Calibration Software. 2 x MS2-50 Metallurgical Sampler. 3 x MS1-50 Metallurgical Sampler. 1 x MS1-40 Metallurgical Sampler. 2 x LSA200 Primary Samplers. 1 x HCS100 Primary Sampler. 2 x Siphon Sampler with Flushing System. 1 x PSA200 Primary Samplers. 8 x 1.5/1 Warman Centrifugal Sample Pumps. 1 x Hopper for Residue Sampling. 2 x Hopper for Primary COF Sampling. 1 x Hopper for Secondary COF Sampling. 1 x Hopper for Pb Thickener Feed. 1 x Hopper for Zn Thickener Feed. 1 x Hopper for De-Leaded Tail. 5 x VSD and Level Control for Slurry Pump Control. Fabricated Steel Pipe for Sampler Installation. Manual Flushing Spools for Slurry Pumps. Poly Piping for Slurry Delivery, and Process Return. Poly Piping Supports for Slurry Delivery and Process Return. All mains service requirements (air / water / electricity). Automation Controls for Siphon Sampler Cleaning. Automation Controls for Probe Pump System. 3.1 Analyzer Probe and PCS

High power X-ray tube and high voltage generator. Courier 6 200W, 50kV X-Ray tube water-cooled Fixed spectrometer measuring head including: Safety interlocks. Fe, Cu, Zn, Pb & Scatter spectrometer channels, each with a fixed crystal spectrometer. Pulse amplifying and processing units Internal reference reference sample configured for the measured metals the reference sample is measured automatically between the sample measurements and updated reference measurement results are used for monitoring and self diagnostics Microprocessor hardware and software for the following functions:
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COURIER 6 ON STREAM ANALYSER

Control of analyzer and coordination of sample handling Pulse counting and normalizing of measured intensities Multi-model assay calculation Calibration data storage Status and diagnostic routines Power supplies. Probe temperature control and cooling system closed circuit temperature controlled water cooling Calibration sampler CSA4651 one separate outlet for each slurry multiplexer. automatic water flushing position monitoring with feedback signal Probe Control Set (PCS 4000) including: local display and keypad for assays and status information control of slurry multiplexers, calibration sampler and de-multiplexers. Communication port for analyzer system management station. Serial modbus or Ethernet communication with third party control system. Automatic Window Advance Assembly Programmable window advance system Equivalent to 700 std windows Probe Pump Vasa 161-25NR Centrifugal pump / 3kW direct overhead motor configuration Pumping capacity, 20l/m @ 1.5-2m head. 3.2 MXA 4645 Multiplexer

MXA slurry multiplexers equipped for measuring six (6) sample streams each with following items and features: ICM 4300 control module for each multiplexer Composite sampling for each stream with automatic or manual operation Automatic level control and monitoring for the measured process sample Pinch valve arrangement for most effective measurement cycle Water valve and nozzle arrangements for flushing purposes Pressurized air filter set to maintain the instrument air properties Interconnection cables and piping to Probe for typical installation Flow decelerators for horizontal process feed connection. 3.3 DMA 4642 Slurry De-multiplexers DMA has 4 user defined slurry outlet ports Slurry de-multiplexing for separate measured samples DMA connects to specific MXA
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3.4

Composite Sampler Drier system (12 stream capability)

Filter units each with 6 sample pot capacity Water collection tank with controlled drain on each unit Vacuum pump each servicing two filter units Controls for stand-alone operation Connecting vacuum pipe between pumps and filter units 3.5 Analyser Management Station and Software

Analyzer system parameter management Collecting data for analyzer system on line status monitoring, real time display and diagnostic data logging including: assay data sample and reference measurement data event and alarm data diagnostic data for remote support Software for Outokumpu Remote Diagnostics connection Sample measurement control including: process sample immediate measurement request process sample bypass setting Outocal Calibration Program for On Stream Analyzer calibration including two copies of 3.5""OUTOCAL program diskette authorization module for serial (9 and 25-pin D-connector) and parallel ports three copies of the COURIER Calibration Manual and Outocal Calibration Tool Instructions Manuals
OUTOKUMPU TECHNOLOGY March -2006

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COURIER 6 ON STREAM ANALYSER

This item includes a personal computer with at least the following specifications: Pentium processor, 128 Mbytes of RAM, 2GB or bigger Hard disk, CD ROM drive, Ethernet interface for Courier 6 SL analyzer, 17" monitor Windows 2000 operating system license Microsoft Office Pro for Windows license Outokumpu Courier application software licenses Agreed number of copies of the following manuals: Courier Analyzer Management Station User's Instructions for slurry applications Courier Analyzer Management Instructions Description of Courier 6 SL User parameters Copy of manuals on Compact Disk media. 3.6 Analyzer Sampling System Metallurgical samplers MS2-50, MS1-50, MS1-40. Fixed and continuous cross cut sampling. User adjustable sample cutting intervals. Maintenance switch for sampler standby. Sample cutter water flushing system. Compact design.

Primary samplers LSA200, HCS100, Siphon and PSA200. Isokinetic representative sampling. Rubber lined Compact design Sample pumps Warman 1.5/1 B-AH with motor to suit sampling location. Rubber lined impellers and liners. Centrifugal Hi seals. Collection hoppers Rubber lined. Manual dump valve. Angled floor for slurry direction. Overflow capabilities. VSD controlled pump via hopper ultrasonic level sensor. Fabricated steel piping Rubber lined. Painted to site standards. Flanged to site requirements. Polyethylene sample piping and supports Graded for slurry application.
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PERILYA BROKEN HILL

COURIER 6 ON STREAM ANALYSER

Sized for sampling and pumping requirements. Sweeping bends for uninhibited slurry flow. Butt welded flanges where applicable for strength. Cable trays and angle iron for pipe support. Painted to site standards Automation controls Communication between analyser and siphon sampler flushing system. Communication between analyser and probe pump. Fully programmable system via Courier parameter manager. Siphon sampler field isolation recognition. 4.0 SCOPE OF WORK The quoted price includes installation and commissioning costs. Supply of all items listed in Section 3 of this proposal Supply of materials necessary for installation Sea freight Customs clearance and duty Inland freight Unloading and installation (as qualified in Section 4.12 of this proposal) Personnel travel and accommodation costs Hire car Dry and wet commissioning requirements 4.1 Primary Sampling The selection of primary samplers in this proposal, are based on the process flows in table.1, supplied by Perilya Broken Hill Mines.
Sample I.D. #1 Primary COF #1 Secondary COF #2 Primary COF #2 Secondary COF #3 Primary COF #3 Secondary COF Approx Flowrate (l/m) 1795 2073 1795 2073 1795 2073 Sample I.D. Pb Cleaner Tail Residue De-leaded Tail Pb Concentrate Zn Concentrate Zn Re-Cln Tail Approx Flowrate (l/m) 170 6863 8936 414 958 290 JKtech Survey (l/m) 1106 11738 8852 538 958 1458

Table1. #1 Primary Cyclone Overflow and #2 Primary Cyclone Overflow The process streams above will utilise MS1-50 metallurgical samplers for delivery of flow to a single collection hopper, this combined flow will be pumped to the Courier Multiplexer utilising a variable speed drive and ultrasonic level sensor for pump control. The process flow presented to the Courier by this arrangement will reflect process variations; provide sample representation for analysis and composite sampling. The combining of the streams will also provide an additional sampling point on the Courier multiplexer for future sample addition. The location of Courier Multiplexer will allow gravity flow bypass back to the process via #3/4 Cyclone Overflow Sump. #1 Secondary Cyclone Overflow and #2 Secondary Cyclone Overflow The process streams above will utilise LSA200 (Launder Sampler Assembly) samplers for delivery of flow to a single collection hopper, this combined flow will be pumped to the
OUTOKUMPU TECHNOLOGY March -2006

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COURIER 6 ON STREAM ANALYSER

Courier Multiplexer utilising a variable speed drive and ultrasonic level sensor for pump control. The process flow presented to the Courier by this arrangement will reflect process variations; provide sample representation for analysis and composite sampling. The combining of the streams will also provide an additional sampling point on the Courier multiplexer for future sample addition. The location of Courier Multiplexer will allow gravity flow bypass back to the process via #3/4 Cyclone Overflow Sump. #3 Primary Cyclone Overflow The process stream above will utilise MS1-50 metallurgical samplers for delivery of flow to a single collection hopper, the flow will be pumped to the Courier Multiplexer utilising a variable speed drive and ultrasonic level sensor for pump control. The process flow presented to the Courier by this arrangement will reflect process variations and provide sample representation for analysis and composite sampling. The location of Courier Multiplexer will allow gravity flow bypass back to the process via #3/4 Cyclone Overflow Sump. #3 Secondary Cyclone Overflow Sampling will be via 1 x PSA200 (Pressure Sampler Assembly) sampler with manual upstream/downstream flushing. The #3 secondary cyclone over flow stream has 2 process delivery pumps, Perilya will need to identify the primary pump for installation of this sampler. The sample will be delivered to a 1.5/1 Warman pump via the sampler for transfer to the Courier Multiplexer. The location of Courier Multiplexer will allow gravity flow bypass back to the process via #3/4 Cyclone Overflow Sump. Residue A MS2-50 metallurgical sampler will provide sample representation for delivery to a collection hopper, the sample will be pumped to the Courier Multiplexer utilising a variable speed drive and ultrasonic level sensor for pump control. The process flow presented to the Courier multiplexer by this arrangement will reflect process variations for analysis and composite sampling. The location of Courier multiplexer will allow gravity flow bypass back to the process via the residue pump tank. Pb Cleaner Tail A Siphon sampler will be located in the Pb Cleaner Tail ISA zone with direct feed to a 1.5/1 Warman sample pump. The sampler will have automated upstream/downstream flushing for cleaning, and to ensure continuous siphoning operation. The location of the Courier Multiplexer will allow gravity flow bypass back to the process via the Pb cleaner Tail pump hopper. This sampling arrangement will not reflect process variations for composite sample collection, but will provide sample representation for real time analysis. The selection of a siphon sampler for this stream is based on the extreme variation in process flow. (table 1.) De-Leaded Tail A MS2-50 metallurgical sampler will be utilised for delivery of flow to a single collection hopper, the flow will be pumped to the Courier Multiplexer utilising a variable speed drive and ultrasonic level sensor for pump control. The process flow presented to the Courier by this arrangement will reflect process variations; provide sample representation for analysis and composite sampling. The location of Courier Multiplexer will allow gravity flow bypass back to the process via the De-Leaded tail pump hopper.

OUTOKUMPU TECHNOLOGY

March -2006

PERILYA BROKEN HILL

COURIER 6 ON STREAM ANALYSER

Pb Concentrate A HCS100 (Horizontal Sector Sampler) sampler will be utilised to provide sample representation for analysis and composite sampling, the selection of the horizontal sector sampler is based on the low process flow for this stream. Sector samplers are designed to sub-sample up to 50% of the total process flow, by gravity feeding the Courier Multiplexer the sampler will provide sample representation, and reflect process variations. The location of Courier Multiplexer will allow gravity flow bypass back to the process via the Pb Concentrate pump hopper. Note: There will be sample re-cycling with the above arrangement. Zn Concentrate A MS1-40 metallurgical sampler will provide a representative sample to the Courier multiplexer by gravity feeding, delivery of the sample to the Courier multiplexer by gravity will reflect process variations for analysis and composite sampling. The location of Courier multiplexer will allow gravity flow bypass back to the process via the Zn Concentrate pump hopper. Note: There will be sample re-cycling with the above arrangement. Zn Re-Cleaner Tail A Siphon sampler will be located in the Zn Re-Cleaner Tail ISA zone with direct feed to a 1.5/1 Warman sample pump. The sampler will have automated upstream/downstream flushing for cleaning, and to ensure continuous siphoning operation. The location of the Courier Multiplexer will allow gravity flow bypass back to the process via the Zn Re-Cleaner Tail pump hopper. This sampling arrangement will not reflect process variations for composite sample collection, but will provide sample representation for real time analysis. The selection of a siphon sampler for this stream is based on the extreme variation in process flow. (table 1.) 4.2 Sampling installation The installation of samplers in this proposal is based on the primary cyclone overflows of the grinding circuits being screened of trash. No provisions have been made in this proposal to deal with trash should the Courier and ancillary equipment be exposed to significant amounts. It is Outokumpus recommendation that trash screens be installed on the primary cyclone overflow streams to eliminate the risk of sample bias and blockages (this will ensure sample validity). Residue Metallurgical Sampler Installation The installation of the MS2-50 will require the removal of the Residue ISA station. Once removed, the existing structure will be modified to allow for the sampler installation, with process flow delivered to the existing tails pump tank. Pb Concentrate Metallurgical Sampler Installation The installation of the HCS100 will require the removal of the Pb concentrate ISA station. Once removed, the existing structure will be modified to allow for the installation of the
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COURIER 6 ON STREAM ANALYSER

sampler and a fabricated thickener feed hopper. Process flow through the sampler will be delivered to the fabricated feed hopper for thickener feed. Zn Concentrate Metallurgical Sampler Installation The installation of the MS1-40 will require the removal of the Zn concentrate ISA station. Once removed, the existing structure will be modified to allow for the installation of the sampler and a fabricated thickener feed hopper. Process flow through the sampler will be delivered to the fabricated feed hopper for thickener feed. De-Leaded Tail Metallurgical Sampler Installation The installation of the MS2-50 will require the removal of the De-Leaded Tail ISA station. Once removed, the existing structure will be modified to allow for the installation of the sampler and a fabricated hopper. Process flow through the sampler will be delivered to the De-Leaded Tail pump hopper via the fabricated hopper. Primary Cyclone Overflow Metallurgical Sampler Installation This proposal provides no costs for the installation of metallurgical samplers on the primary cyclone overflow streams. Primary Sampler Installations Where applicable, steel, rubber lined pipes will be prefabricated to replace pipes were primary samplers are required. Pre-fabrication will eradicate lengthy time delays, caused by site modifications, and reduce installation time. LSA samplers will be fitted with manual isolation valves, and flushing ports. 4.3 Primary Siphon Sampler Flushing System The flushing system for the siphon sampler will be configured and controlled through the analyser management station, the system will also incorporate automated field isolation for operator intervention. The system will utilise a pinch valve for system isolation, with angle seat valves for flushing. All field controls will be via the valve box assembly with direct 24VDC connection from the analyser. The sampler pinch and flush valves will be activated using regulated and filtered plant air. 4.4 De-Multiplexing During analyser analysis, streams must return to their appropriate process sources, this is achieved by utilising a De-Multiplexers (DMA). A DMA has 4 programmable slurry outlets for process return, presented below are 4 streams that will require de-multiplexing to eliminate product re-processing and contamination. DMA outlet: 1, De-Pb Tail and Zn Re-Cleaner tail Flow will be directed to the de-leaded tail pump hopper. DMA outlet: 2, Residue Flow will be directed to the residue pump tank. DMA outlet: 3, Pb Concentrate Flow will be directed to the Pb concentrate pump hopper. DMA outlet: 4, Zn Concentrate Flow will be directed to the Zn concentrate pump hopper.

OUTOKUMPU TECHNOLOGY

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COURIER 6 ON STREAM ANALYSER

4.5

Polyethylene Sampling Pipe and Bracketing The sampling pipework required by the analyser sampling system, will be installed to minimize sample blockages, and ensure longevity. This will be achieved by utilising graded pipe, with sweeping bends. Were applicable, pipes, flanges and bends will be welded to ensure strength. The bracketing requirements of the pipework will conform to site standards, were applicable, pipes will be kept uniform to ensure slurry flow. Angle iron and cable trays will be utilised to meet this need, with all painting requirements conforming to site standards.

4.6

Analyser and System Platform The layout configuration of the analyser system recommended in this proposal is known as a Low Head Installation (Figure.1). The selected location of the analyser and associated systems is on the first floor flotation circuit.

Figure 2. Selected location Courier 6 SL Analyzer Perilya Broken Hill Mine The analyser system in a low head installation will require a probe pump for delivery of streams to the probe for analysis, the platform also allows adequate height for the Multiplexer and the De-Multiplexer to gravitate slurry back to the process. The pump will be located under the platform, with access to the pump via a floor hatch. 4.7 Primary Sampling Pumps The Warman sample pumps will be mounted on footings to meet site requirements. The 4 pole electric pump motors will be Toshiba (size to be finalized during design). The pumps in this proposal will utilise centrifugal Hi seals, the operation of the pumps in this proposal will be without DCS control, field control will consist of manual emergency stop, and run request

OUTOKUMPU TECHNOLOGY

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PERILYA BROKEN HILL

COURIER 6 ON STREAM ANALYSER

Figure 3. LSA sampler, and Sample Pump Arrangement. (reference details and location available on request) 4.8 DCS & Courier Terminal Configuration Communication wiring between the Courier system and the DCS and Courier configuration terminal must be terminated Perilya Broken Hill. All DCS configuration requirements must be undertaken by Perilya Broken Hill. 4.9 Uninterrupted Power Supply UPS is highly recommended for Courier analyzer systems, should this system be required, supply and install must be undertaken by Perilya Broken Hill. 4.10 Sampling Pumps Power Supply The installation of electrics for the proposed sampling pumps and associated variable speed drives is made under the offer to Perilya Broken Hill on the assumption that available spare modules within the MCC are available. It is assumed these MCC modules will be available via the redundant ISA agitation systems. Cabling to and from the MCC modules will utilize existing cable and cable trays, this offer is based on these existing systems being a maximum of 5metres from termination. 4.11 ISA System The Courier6 analyzer and associated sampling systems will be installed once the current site ISA system has been removed. This assumption is made to ensure the safety of installation personnel and availability of redundant systems. 4.12 Lifting Requirements The lifting requirements under this offer are based on the assumption that items delivered to site, and items requiring installation will be undertaken with the support of Perilya cranes, forklifts and personnel.

OUTOKUMPU TECHNOLOGY

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COURIER 6 ON STREAM ANALYSER

5.0 5.1

OUTOKUMPU STANDARD TERMS & CONDITIONS OF SALE Pricing Proposed selling price is outlined in Section 2 of this Proposal. 5.1.1 Currency All amounts are quoted in Australian Dollars. 5.1.2 Basis The proposal price is firm and fixed for the duration of the validity period. 5.1.3 Validity The proposal price is valid for 30 days from date of submission.

5.2

Packing Equipment will be packed as required for road transport.

5.3

Delivery 5.3.1 Terms Transport to site has been included in the proposal pricing. 5.3.2 Period Delivery of analyser system is 26-30 weeks into Broken Hill. Installation works shall be arranged in conjunction with Perilya Broken Hill.

5.4

Installation Site installation works are included in the proposal pricing.

5.5

Commissioning As specified in the proposal, commissioning has been included in the lump sum price. However, delays to the commissioning process beyond the reasonable control of Outokumpu may lead to additional charges as a variation to the contract.

5.6

Practical Completion The contract shall be deemed to be practically complete when dry commissioning commences.

5.7

Terms of Payment Subject to approval of credit account, terms of payment shall be 100% of contract value in accordance with monthly progress payments. We have not allowed to provide additional security for off site work and materials.

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5.8

Duties All components for the equipment offered are sourced from or manufactured in Australia.

5.9

Insurance Risk We have based our proposal on Outokumpu taking insurance cover on the goods until point of delivery to site at which stage responsibility for insurance of the goods passes to the purchaser.

5.10

Security and Retention Outokumpu shall provide security in the form of two standard bank guarantees. These bank guarantees shall each be valued at 5% of the contract value. One of these bank guarantees shall be returned on practical completion, and the second shall be returned on expiry of the defects liability period. Each bank guarantee shall be issued with an agreed expiry date. We have made no allowance for retention of any form.

5.11

Defects Liability Outokumpu Technologies Pty Ltd (Outokumpu") warrants that the equipment supplied shall be free from defects arising from faulty materials, workmanship and design during the specified warranty period provided that Outokumpu will not be held responsible for any direct or consequential loss arising from incorrect installation or improper maintenance of the equipment by the purchaser. In no circumstance does this warranty extend to or apply in respect of claims arising from chemical degradation and/or abrasive erosion. Where in writing a claim arises under this warranty, the liability of Outokumpu shall include the replacement or repair of any defect. Provided that if such a claim arises by virtue of a design fault, Outokumpu may redesign, alter or amend the equipment supplied in this quotation. The notification by a purchaser of any alleged defect shall give no right implied or otherwise to withhold or make any deduction from payments due to Outokumpu. It is expressly agreed that Outokumpu shall not be liable for any damage, consequential or otherwise, nor shall Outokumpu be liable for any loss or injury to the purchasers property or person or purchasers employees. The terms of the above warranty are twelve (12) months from commissioning.

5.12

Limit of Liability Outokumpu shall not be liable for any loss of profit or other indirect or consequential loss or damage suffered by the Purchaser whether prior to, during or following completion of the contract. The liability of Outokumpu to the Purchaser shall in no case exceed 10% of the contract price other than any liabilities arising out of insurance of the works and contractors equipment.

5.13

Vendor Documentation and Data 5.13.1 Drawings

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General arrangement and schematic drawings will be provided for the system. 5.13.2 Design Calculations Outokumpu design calculations are proprietary information and are not supplied to the purchaser. 5.13.3 Manuals Outokumpu will supply 3 copies of Operation and Maintenance manuals. 5.14 Subcontractors Outokumpu reserves the right to select suitably qualified subcontractors for the provision of any component of this contract. 5.15 Quality Assurance Our offer is based upon the use of Outokumpus approved and audited ISO9001 quality system. 5.16 Material Selection Materials and coatings proposed by Outokumpu are selected with due consideration to the process duty. However, it is assumed that Principal / Head Contractor has far greater knowledge of the process and as such we expect that materials and coatings would be reviewed by the Principal / Head Contractor and approved for use. Outokumpu do not provide warranty for the suitability of mild steel or coatings. It should be noted that all coatings require periodic maintenance for long-term corrosion resistance. 5.17 Applicable Law The agreement will read and be construed in accordance with the laws in force from time to time in the State of NSW. 5.18 Arbitration Any dispute arising in connection with this tender which cannot be settled amicably by the parties shall be referred to and settled by arbitration. Arbitration shall be conducted by an arbitrator appointed by the president of the Australian Institute of Arbitrators NSW. 5.19 Force Majeure Delay in the provision of the goods and services covered by this tender shall not be deemed a breach of the agreement if such a delay is caused by Force Majeure circumstances. Force Majeure circumstances are considered to be acts of nature, fire, war, government restrictions, labour disputes, delays in deliveries by subcontractors as a result of a Force Majeure event, breakage or loss during transport and any other event which is clearly beyond the control of the party affected. In the event of a delay due to Force Majeure circumstances Outokumpu would be entitled to an extension of time for delivery of the goods and services without penalty of any kind.
OUTOKUMPU TECHNOLOGY March -2006