TOLL CONVERSION AGREEMENT 2 Contract no. 161.06.27451-S
Contract
no.
161.06.27451-S
THIS
TOLL
CONVERSION AGREEMENT 2 is entered into as of April 30, 2007, by Nordural ehf,
a
company organized and existing under the laws of the Republic of Iceland
(“Nordural”), and Glencore AG, a company organized and existing
under the laws of Switzerland (“Glencore”).
Recitals
A. Nordural
owns and operates an aluminum reduction plant at Grundartangi, Iceland (the
“Plant”).
B. Nordural
and Glencore agreed the delivery of Alumina by Glencore and the conversion
of
such Alumina into primary aluminum at the Plant, pursuant to the terms
thereof.
Terms
of Agreement
The
parties hereto, intending legally to be bound by this Agreement, hereby agree
as
follows:
Article
I
DEFINITIONS
1.1 Definitions. In
this Agreement, unless inconsistent with the context, the words and expressions
set forth below shall have the following meanings:
“Affiliate”
means any other person or entity directly or indirectly controlling, controlled
by, or under common control with, such person or entity, whether through the
ownership of voting securities, by contract or otherwise.
“Alumina”
means alumina meeting the Permitted Source Specifications.
“Alumina
Delivery” means the delivery of Alumina by Glencore duty unpaid at the
Discharge Port pursuant to Section 3.1.2.
“Alumina
Load Port” means the port at which Alumina is loaded onto a Vessel for
delivery to Nordural pursuant to the terms of this Agreement.
“Aluminum
Delivery” means the delivery by Nordural of Product pursuant to Section
4.3.1.
“Aluminum
Load Port” means the port of Grundartangi, Iceland or such other port
in Iceland as may be agreed between the parties.
“Applicable
Laws” means any applicable laws, codes, rules and regulations, any
applicable judgments, decrees, writs and injunctions of any court, arbitration
panel, arbitrator or Regulatory Authority and any applicable orders, licenses,
permits, directives or other actions of any Regulatory Authority.
“Bailed
Property” means all Alumina delivered by Glencore pursuant to this
Agreement from the point of Alumina Delivery to Nordural as specified in Section
6.1.1 (including Alumina in transit from the Discharge Port, from the Discharge
Port to the Plant, and Alumina in storage at the Plant), and all Product
produced hereunder up to the point of delivery by Nordural to Glencore as
specified in Article IV (including Product in transit to storage or in storage
at the Plant), or any combination of the foregoing. “Bailed
Property” shall not include Alumina in the process of Conversion or in
the metal pads in the pots or any residue, slag dross, bath or by-products
of
the Conversion process or remaining after the satisfying the conversion ratio
set forth in section 4.1.
“Contract
Year” means the twelve (12)-month period from January 1 through
December 31 of each year during which this Agreement is in effect, except that
(i) for the year in which the Start Date occurs, “Contract
Year” shall mean that portion of such year from the Start Date through
December 31 of such year, and (ii) for the year in which the End Date occurs,
“Contract Year” shall mean that portion of such year from January 1 through the
End Date.
“Conversion”
means the electrolytic reduction of Alumina into molten aluminum and casting
molten aluminum into primary aluminum, and the verb “convert” shall have the
corresponding meaning.
“Conversion
Charge” shall have the meaning specified in Section 5.1.
“Discharge
Port” means the port of Grundartangi, Iceland, or such other port in
Iceland as may be agreed by the parties.
“End
Date” shall have the meaning specified in Section 9.1.1.
“Event
of Default” shall have the meaning specified in Section
10.1.
“Force
Majeure” shall have the meaning specified in Section 8.1.
“Iceland
Business Day” means any day other than a Saturday, Sunday or a day on
which banking institutions in the Republic of Iceland are required or permitted
to close.
“Lien”
means any mortgage, pledge, lien, charge, encumbrance, lease or other security
interest of any kind.
“LME”
shall have the meaning specified in Section 5.1.3.
“LME
Price” shall have the meaning specified in Section 5.1.3.
“Metal
Premium” shall be calculated in accordance with Exhibit
E.
“MT”
means a unit of metric weight equal to 1,000 kilograms or 2,204.62
Pounds.
“Nomination”
shall have the meaning specified in Section 3.2.1.
“Notices”
shall have the meaning specified in Section 11.6.
“Permitted
Source” means any of the following sources of
alumina: Aughinish, EurAllumina, San Ciprian, Alunorte, Bauxilum,
Suriname or any Jamaican source.
“Permitted
Source Specifications” shall have the meaning specified in Section
3.3.
“Plant”
shall have the meaning specified in Recital A.
“Pound”
means a unit of weight of 16 ounces avoirdupois.
“Product”
means primary aluminum products in the form of ingot and sow converted on behalf
of Glencore pursuant to the conversion ratio set forth in Section 4.1 and having
the specifications set forth in Section 4.2.
“Product
Specifications” means the specifications for primary aluminum set forth
in Exhibit D, as the same may be amended from time to time by agreement
of the parties.
“Quotation
Period” means the month prior to the month of scheduled delivery,
irrespective of physical delivery.
“Regulatory
Authority” means any national, regional, European Union, municipal,
local or other government or any department, commission, board, agency or taxing
authority thereof.
“SHINC”
means Sundays and holidays included, except:
|
Time
Start
|
Date
Start
|
Time
End
|
Date
End
|
Comment
|
|
11:30
|
December
24
|
7:30
|
December
27
|
Christmas
|
|
11:30
|
December
31
|
7:30
|
January
2
|
New
year
|
|
19:30
|
Friday
before first Monday of August
|
7:30
|
Tuesday
thereafter
|
“Labour
day” weekend
|
|
00:00
|
Thursday
before Easter
|
7:30
|
Tuesday
thereafter
|
Easter
weekend
|
|
00:00
|
June
17
|
7:30
|
June
18
|
Independence
Day
|
|
19:00
|
Friday
before 7th
weekend
after Easter
|
7:30
|
Tuesday
thereafter
|
“Start
Date” shall have the meaning specified in Section 2.1.
“Vessel”
means any vessel suitable for the transportation of Alumina nominated by
Glencore pursuant to Section 3.2 and Exhibit A.
1.2 References
in Agreement. In this Agreement, unless the context
otherwise requires:
1.2.1 References
to an Article, Section or Exhibit shall be construed as references to that
specific Article or Section of, or Exhibit to, this Agreement.
1.2.2 References
to a document (including this Agreement), or to any provision of any document,
shall be construed as references to that document or provision as amended or
supplemented from time to time upon the written agreement of the parties thereto
and with any further consent which may be required.
Article
II
TERM
1.3 Term. This
Agreement shall be effective from the date of signing this contract and shall
continue until year 2014 including, unless earlier terminated or extended as
provided in this Agreement.
1.4 Coordination
of Alumina and Product Flow. In order to make the flow of
Alumina and Product hereunder efficient for the parties, Glencore and Nordural
shall coordinate the timing of Alumina and Product shipments and deliveries,
taking into consideration port availability and congestion, the Conversion
process and storage and shipment scheduling to be made hereunder. In
connection therewith, Glencore and Nordural also shall discuss/meet at least
quarterly to establish the laydays for Alumina and Product shipments to be
made
hereunder.
Article
III
ALUMINA
1.5 Alumina
Delivery Obligations.
1.5.1 Glencore
shall deliver or cause to be delivered to Nordural for Conversion at the Plant
tonnage as follows:
Year
2007:
1st half 2007: 11'000MT (+/-5pct in
Nordural's option)
2nd
half 2007: 25'000MT (+/-5pct in
Nordural's option)
Year
2008: 85'000MT
per annum (+/-5pct in Nordural's option)
Year
2009-2014
including: 90'000MT
per annum (+/-5pct in Nordural's option)
of
Alumina at the Discharge Port,
under appropriate bills of lading or other documents of title; provided,
however, that the annual quantity of Alumina required to be delivered hereunder
shall be pro rated for any Contract Year of less than twelve (12)
months. Deliveries of Alumina hereunder shall be approximately evenly
spread throughout each Contract Year except for Contract Year 2007 delivery
of
Alumina to be evenly spread per the half year requirements stated in 3.1.1
above, and Glencore shall make monthly declaration of the quantities and dates
of its Alumina Deliveries. All Alumina Deliveries hereunder shall be
deemed to occur when the Alumina passes the Vessel rail at the Discharge
Port.
The
final
applicable tonnage within the tolerance to be declared by Nordural by latest
November 30th year prior year of delivery. In case of no declaration the nominal
amount shall apply.
If
in
respect of any contract year Nordural requires up to an additional 10'000MT
Alumina per annum, Nordural shall inform Glencore of the requirement and
Glencore shall have the option, exercisable within 10 (ten) Iceland Business
Days, to supply that additional Alumina and offtake the additional Aluminum
on
the same terms and conditions of this contract.
1.6 Alumina
Delivery Procedures.
1.6.1 Glencore
shall give or cause to be given to Nordural a notice of nomination (the
“Nomination”) not less than twenty (20) days prior to the
estimated time of sailing of the relevant Vessel. The Nomination
shall specify:
|
(a)
|
the
name of the Vessel or substitute;
|
|
(b)
|
the
Alumina Load Port;
|
|
(c)
|
the
approximate quantity of Alumina to be
loaded;
|
|
(d)
|
the
estimated time of arrival of the Vessel at the Discharge
Port;
|
|
(e)
|
the
source of the Alumina;
|
|
(f)
|
confirmation
that the Vessel crew has ITF or comparable labor contracts;
and
|
|
(g)
|
any
other relevant details.
|
1.6.2 Nordural
shall notify Glencore of its acceptance or rejection of the Vessel within two
(2) Iceland Business Days after its receipt of the
Nomination. Acceptance shall not be unreasonably
withheld.
1.6.3 Glencore
is aware that Nordural has obligations to notify shipping schedules to the
harbor authorities in Iceland, and Glencore will use reasonable efforts to
notify the timing of individual shipments to Nordural as far in advance as
possible.
1.6.4 Delivery
will be in accordance with the loading and discharge requirements specified
in
Exhibit A. Nordural shall provide Glencore reasonable advance
notice regarding any changes to delivery schedules or the dock facility
requirements at the Discharge Port during the term of this Agreement, and any
change which materially impairs Glencore’s ability to meet its Alumina delivery
obligations shall be subject to Glencore’s approval, which shall not be
unreasonably withheld.
1.6.5 Glencore
shall be responsible for paying all costs, insurance and freight and all other
standard and customary charges, but excluding harbor dues, to effect delivery
of
its Alumina on board the Vessel at the Discharge Port. Nordural shall
pay harbor dues, if any, related to Alumina Deliveries.
1.6.6 The
Vessel shall be discharged free of expense to Glencore at the rate of 6,000
MT
per weather working day of twenty-four (24) running hours, SHINC; provided
the
Vessel is in all respects ready and Nordural has full and unimpeded access
to
the Vessel’s holds.
1.6.7 All
charges for demurrage and half-despatch for Alumina unloading at the Discharge
Port hereunder shall be for the account of Nordural. The demurrage/Despatch
shall be as per the applicable Charter Party.
1.6.8 Glencore
undertakes that it will at all times use properly enclosed Vessels for delivery
of Alumina to the Discharge Port so as to enable Nordural to comply with the
obligations imposed under its environmental operating permit or similar
licenses.
1.6.9 Risk
of
loss and/or damage to all Alumina supplied by Glencore shall pass to Nordural
when the Alumina passes the rail of the Vessel at the Discharge
Port.
1.7 Quality
of Alumina; Source. All Alumina to be delivered by Glencore
hereunder shall be supplied from a Permitted Source and shall conform to the
specifications set forth in Exhibit B (the “Permitted Source
Specifications”). If at any time during the term of this
Agreement a particular alumina source nominated and/or used in the alumina
to
aluminum conversion process adversely impacts Nordural’s ability to convert the
alumina into the aluminum quality set forth in Exhibit D and/or creates a
legal or a governmental condition that adversely impacts the operating
performance of the Nordural smelter in part or in whole, Nordural and Glencore
agree to expeditiously work to together to find a mutually acceptable
solution.
1.8 Sampling
and Analysis; Non-Conforming Alumina. Alumina shall
be sampled and analyzed at the Alumina Load Port in the manner and under the
procedures set forth in Exhibit C, or as otherwise agreed from time to
time by the parties.
1.9 Weights. Glencore
shall deliver or cause to be delivered to Nordural documentation evidencing
the
▇▇▇▇ of lading weight for each Alumina Delivery. The ▇▇▇▇ of lading
weight shall be determined by means of a Vessel displacement survey in the
light
and loaded condition at the Alumina Load Port, or by means of scale
weights. The ▇▇▇▇ of lading weight shall presumptively establish the
loaded Alumina weight. However, Nordural shall have the right to
verify, at its own expense, such weight by draft survey. If there is
a discrepancy of greater than .2% between the weight as indicated on the ▇▇▇▇
of
lading and the Nordural draft survey, Glencore shall pay the cost of surveying
and the parties shall promptly meet and confer in good faith to determine what
adjustment (if any) should be made to the presumptively established weight
of
such shipment.
1.10 Stored
Alumina. There shall be no charge to Glencore for storage of
Alumina delivered to Nordural in accordance with the terms of this
Agreement.
-1-
Article
IV
CONVERSION;
DELIVERY OF ALUMINUM
1.11 Conversion
Ratio. From and after such time as the Phase V operation is
completely started and running under normal standard conditions, Nordural will
convert alumina delivered by Glencore hereunder into primary aluminum metal
as
specified in Section 4.2 at the rate of ** MT of alumina per MT of primary
aluminum,
provided that the Alumina delivered by Glencore meets the Permitted Source
Specifications. It is understood the initial startup of Phase V of the smelter
may cause some variations in aluminum production and quality. Nordural and
Glencore to work together to find a mutually beneficial solution to these
variations until such time as the Phase V operation is completely started and
running under normal standard conditions. Nordural expects to have, without
guarantee, Phase V production stabilized within six months after commissioning
of the last smelting pot for Phase V. If Product (Aluminum) is produced which
does not meet the minimum specification as described in Exhibit D of this
Agreement, both parties to mutually agree on the applicable discounts for the
quality variations.
1.12 Aluminum
Specifications. Nordural will cast all aluminum metal
produced hereunder to primary unalloyed aluminum ingots, in a standard weight
of
12 to 26 kilograms per ingot, packed in strapped bundles of approximately 1
MT
each, and meeting the specifications set forth in Exhibit
D. Notwithstanding the foregoing, Nordural may cast a maximum of
10% of aluminum metal produced hereunder as sow with maximum piece weight of
750
kilograms each. Nordural shall provide a chemical analysis for every
batch of Product produced in accordance with this Agreement.
1.13 Scheduling
of Aluminum Delivery.
1.13.1 Subject
to Glencore’s compliance with its obligations relating to delivery of Alumina,
Nordural shall deliver to Glencore the amount of Product produced per annum,
based on the conversion ratio set forth in Section 4.1, for the Alumina
delivered by Glencore to Nordural during such Contract Year. The
Product shall be delivered for transport as directed by Glencore, as evenly
spread as practicable during each Contract Year; provided, however, that the
annual quantity of Product required to be delivered hereunder shall be pro
rated
for any Contract Year of less than twelve (12) months. Aluminum
Delivery shall be deemed to occur when the Product passes the Vessel rail at
the
Aluminum Load Port.
1.13.2 Glencore
shall take delivery from Nordural of all Product converted for Glencore’s
account in accordance with this Agreement.
1.13.3 Nordural
is to provide Glencore a 15 month rolling metal production forecast not later
than 40 days prior to the month of shipment. If the actual aluminum shipped
does
not meet forecasted production for a given month, the next forecast will be
adjusted accordingly. If a shortfall against actual production exists, the
first
tons of next months production will be delivered against the prior months
pricing until the commitment has been fulfilled. If there are deliveries above
the commitment, these deliveries will be priced according to next months pricing
methodology.
1.14 Releases;
Stored Aluminum.
1.14.1 Not
less
than seven (7) days prior to the date Glencore wishes to have Product loaded
aboard a Vessel, Glencore shall give Nordural a release for each lot of Product
confirming the tonnage and delivery dates of each such
lot. Glencore’s withdrawals of Product from storage shall be subject
to reasonable limitations based upon the capacity of the loading facilities
of
the Plant.
1.14.2 Nordural
shall prepare such shipping or delivery documentation as may be reasonably
required by Glencore (including bills of lading, analysis certificates, material
safety data sheets, and certified weight certificates).
1.14.3 At
Glencore’s request, Nordural shall store up to 7,000 MT of Product in the
aggregate at any time at the Plant under the Amended and Restated Toll
Conversion Agreement dated 10 February 2005 and under the Toll Conversion
Agreement 2 dated 21 August 2006. Nordural will make their reasonable effort
to
increase the storage of Aluminum at the Nordural smelter by additional 5'000MT
up to a maximum of 12'000MT whenever practical and feasible. The additional
storage allowance to be at Nordural's option but such not to be unreasonably
withheld or denied. Such storage may be open or
enclosed. All Product which Glencore requests be stored shall be
placed in storage at the Plant as provided in Section 6.3. There
shall be no charge to Glencore for storage of up to 12,000 MT in the aggregate
of Product at the Plant. If Glencore requests Nordural to store more
than 12,000 MT in the aggregate of Product, and Nordural is able to accommodate
Glencore’s request, Glencore shall pay Nordural the reasonable costs Nordural
incurs in making such accommodation.
1.15 Weights
and Analysis. Product to be delivered by Nordural to
Glencore shall be sampled and weighed by Nordural, and a certificate of such
analysis shall accompany each shipment. Weights and analyses so made
shall be deemed to be correct, but Glencore shall have the right to verify,
at
its expense, weights within 30 days after Aluminum Delivery and analysis within
30 days after delivery to final customer. In the event Glencore
disagrees with Nordural’s weight determination by an amount in excess of 0.2% or
its analysis, the parties shall promptly meet and confer in good faith to reach
agreement. Any weight mistake in excess of 0.2% shall be promptly
corrected by Nordural or Glencore, as the case may be. If Nordural’s
weight determination is 0.2% or greater less than the surveyor’s weight
determination, the costs of such surveyor shall be borne by
Nordural. In all other cases it shall be borne by
Glencore. If the parties disagree regarding Aluminum quality, the
procedure set forth for Alumina in Exhibit C (iii) shall apply mutatis
mutandis.
1.16 Loading
Costs; Shipping Arrangements.The parties agree that Nordural’s costs of
loading Product are less if Glencore ships Product by container. They
further agree they will cooperate with one another to the extent reasonably
possible in making shipping arrangements which are in the best interests of
both
parties. In this spirit, Glencore, at its option, shall arrange for
either container Vessels or bulk Vessels to be brought into the Aluminum Loading
Port. Nordural, at its expense, shall make arrangements for Product
to be containerized and transported, or transported in bulk, as the case may
be,
and in each case, from the Plant to the Aluminum Loading Port for delivery
onto
the Vessel arranged for by Glencore. Nordural shall be responsible
for stowing the Product on board such ship. All costs of shipping
shall be for Glencore’s account and paid directly by
Glencore. Nordural shall pay harbor fees, if any, associated with
shipping Product from the Aluminum Loading Port.
1.17 Point
of Delivery; Transfer of Risk of Loss. Risk
of loss and/or damage to any Product supplied by Nordural shall pass to Glencore
when the Product passes the Vessel’s rail at the Aluminum Loading
Port.
-2-
Article
V
CONVERSION
CHARGE AND PAYMENT TERMS
1.18 Conversion
Charge. The “Conversion Charge” for each MT
of Product delivered hereunder shall be as follows:
1.18.1 *
% of the LME Price plus the Metal Premium
(calculated in accordance with Exhibit E);
As
used
in this Agreement, the “LME Price” means the official London
Metal Exchange (“LME”) High Grade cash settlement quotation, as
published by Metal Bulletin, in U.S. dollars averaged over the Quotation
Period.
If
the
LME shall cease to trade aluminum or the aluminum settlement price of the LME
is
no longer published, “LME Price” shall mean the generally accepted substitute
for such published price. If there is no such generally accepted
substitute the parties in good faith shall select a substitute. If
the parties cannot agree on a substitute, then either party may refer the
determination to arbitration under Section 11.5.
1.19 The
Conversion Charge is based on Alumina delivery and covers the following
services:
1.19.1 unloading
Alumina Vessel at the Discharge Port at a minimum rate of 6,000 MT per weather
working day pro rata SHINC,
1.19.2 use
of
storage facility at the Plant for maximum 37,000 MT of Alumina subject at all
times to be within the physical constraints prevailing at the shipments/Vessel
is nominated. Nordural and Glencore to work together to avoid inventory issues
and constraints during the Contract Year;
1.19.3 production
of Product at the Plant;
1.19.4 additional
storage of up to 5'000 Mt of Product at the Plant at Nordural's option but
same
not to be unreasonably withheld.
1.19.5 loading
Product onto the Vessel pursuant to Section 4.6;
1.19.6 delivery
of Product as ingot in 1 MT bundles; and
1.19.7 delivery
of Product as sow in pieces.
1.20 Invoices;
General Payment Terms. The Conversion Charge shall be
invoiced weekly on Monday for Product produced by Nordural through the preceding
Sunday. Each invoice shall be payable by Glencore within five (5)
days after receipt of invoice and respective Holding Certificate.
1.21 Method
of Payment. All amounts required to be paid by Glencore to
Nordural under this Agreement shall be paid in U.S. Dollars by wire transfer
of
immediately available funds to a bank account designated by
Nordural.
* Confidential
information has been omitted from
this exhibit pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
-3-
Article
VI
TITLE,
STORAGE AND INSURANCE
1.22 Title;
Bailment.
1.22.1 The
bailment created by the performance of this Agreement shall commence when the
Alumina is delivered by Glencore to Nordural (passing the Vessel’s rail at the
Discharge Port) and shall terminate when the Product is delivered by Nordural
to
Glencore (passing the Vessel’s rail at the Aluminum Load Port) with the
provisions of Article IV, and includes any period during which Product belonging
to Glencore is stored at the Plant.
1.22.2 Nordural
covenants that all Bailed Property, shall be at all times free and clear of
any
Lien of any nature whatsoever, excluding only those Liens (i) created by or
attributable to Glencore, or (ii) arising by operation of law and, except during
the continuance of any breach by Glencore, Nordural shall not at any time
directly or indirectly assert for its benefit, or create, incur, assume or
suffer to exist for the benefit of any creditor, any Lien upon or with respect
to the Bailed Property, title thereto or interest therein. Nordural
shall promptly, at its own expense, take such action as may be necessary to
duly
discharge any such Lien.
1.22.3 Nordural
acknowledges and agrees that by execution of this Agreement it does not have
nor
will it obtain, and by its performance under this Agreement it does not have
nor
will it obtain, any title to the Bailed Property or any property right or
interest, legal or equitable therein, except for its right to possession for
purposes of transportation, storage and Conversion as provided in this
Agreement. All Alumina delivered by Glencore under this Agreement
shall be considered to have been delivered for Conversion only. No
Alumina or Aluminum shall be bought or sold hereunder, except as the parties
may
mutually agree in writing. No Alumina shall be redelivered as Alumina
except in the event this Agreement is terminated pursuant to Articles IX or
X. Nordural shall be deemed to be an ordinary bailee with respect to
the Bailed Property and shall be obliged to replace, at its own expense, any
Bailed Property which suffers any damage, loss, theft or destruction, partial
or
complete, while in the possession of Nordural. Such replaced Bailed
Property shall meet the specifications therefore required under this Agreement,
and shall constitute accessions to the Bailed Property and title thereto shall
vest and remain in Glencore. Notwithstanding the foregoing provisions
of this Section 6.1.4, in lieu of replacing any Bailed Property as provided
above, Nordural may at its option pay damages to Glencore with respect to such
Bailed Property to compensate Glencore for the loss or damage incurred. Any
Alumina redelivered and any payment in respect of the Bailed Property shall
be
based on the conversion ratio set forth in Section 4.1.
1.22.4 Nordural’s
duties and performance under this Agreement shall be those of independent
contractor and nothing contained in this Agreement shall be deemed to make
Glencore a partner, joint venturer or otherwise liable for the performance
of
Nordural’s obligations under this Agreement or any other agreement or with
respect to the operation of the Plant.
1.22.5 Title
and
ownership of all Bailed Property shall remain vested in Glencore. Title to
all
Alumina in the metal pads, residue, slag, dross, bath and process by-products
of
the Conversion process and all materials Nordural uses in the Conversion
process, and all alumina remaining after satisfying the conversion ratio set
forth in Section 4.1 of this Agreement, shall be and remain in Nordural.
Nordural shall be responsible for, and agrees to comply with all Applicable
Laws
relating to the disposition of such residue, slag, dross, bath, process
by-products and materials. Nordural will indemnify and hold harmless
Glencore from and against any liabilities, costs and expenses incurred by
Glencore resulting from the non-compliance by Nordural of Applicable Laws in
connection with Nordural’s Conversion operations hereunder.
1.22.6 Nordural
shall maintain accurate, detailed and current inventory records in respect
of
all Bailed Property at the Plant or elsewhere and shall submit the same to
Glencore on a weekly basis or upon Glencore’s request. Glencore shall
have the right, exercisable directly or through its accountants or other
representatives, and at its own risk and expense, to verify each such inventory
or Bailed Property during the Plant’s ordinary business office hours upon
forty-eight (48) hours prior notice.
1.22.7 Nordural
hereby grants and shall continue to grant a security interest in favor of
Glencore in and to all Bailed Property converted for Glencore
hereunder. Such grant of a security interest is intended by Nordural
and Glencore to be solely as a precaution against the holding by any court
of
applicable jurisdiction (notwithstanding the intention of the parties hereto)
that Glencore is not the owner of the Bailed Property. Nordural
agrees to execute and deliver to Glencore from time to time such documents
and
to take such other steps as are reasonably requested by Glencore to perfect
such
security interest.
1.23 Taxes. All
taxes levied on or with respect to the Bailed Property shall be paid directly
by
Glencore. Nordural shall promptly send to Glencore any notice or
other communication received by Nordural relating to any such tax.
* Confidential
information has been omitted from this exhibit pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission.
-4-
1.24 Segregated
Storage; Holding Certificates; Financing Statements.
1.24.1 Nordural
shall cause Product belonging to Glencore to be stored in segregated areas
which
may be out doors. Promptly after receipt of Glencore’s shipment
instructions, Nordural shall deliver Product to Glencore’s carrier at the
Aluminum Load Port in accordance with Article IV of this Agreement.
1.24.2 Nordural
shall take measures to confirm Glencore's ownership as of all Bailed Property,
including:
|
(a)
|
marking
such product with a distinctive ▇▇▇▇ acceptable to Glencore which
shall be
sufficient to identify that product as the property of
Glencore,
|
|
(b)
|
issuing
a holding certificate in customary form reasonably acceptable to
Glencore,
and
|
|
(c)
|
executing
and filing financing statements and documents of a similar nature
in favor
of Glencore.
|
1.25 Insurance. Nordural
shall maintain such insurance relating to Conversion and storage operations
of
the Plant as may be necessary to protect Glencore’s interests in the Bailed
Property. Nordural shall have no liability to Glencore for any loss
of, or claim, relating to Glencore’s Alumina or Product stored at Nordural’s
facilities, or any third party claims against Glencore, to the extent that
Nordural is not able to recover under its insurance policies as a result of
any
act, neglect, error or omission on the part of Glencore or any of its employees
or agents.
Article
VII
WARRANTIES;
LIMITATION OF LIABILITY
1.26 Warranties. Subject
to Section 7.2, Nordural warrants that Product delivered to Glencore under
this
Agreement shall conform to the Product Specifications, and shall be free from
defects in material and workmanship. Glencore warrants that the
Alumina it delivers for conversion under this Agreement shall conform to the
specifications set forth in Exhibit B.
1.27 Inspection
and Non-Conforming Product.
1.27.1 Provided
it is produced from alumina which meets Permitted Source Specifications, all
Product delivered hereunder shall meet the Product
Specifications. Product shall be subject to rejection by Glencore
upon presentation of sufficient evidence by Glencore to Nordural of a failure
to
meet such specifications. Should Glencore elect to reject any Product
delivered hereunder for failure to meet such specifications, Nordural shall
pay
damages to Glencore with respect to such rejected Product as provided in Section
7.2.3. All Product shall remain subject to Glencore’s inspection
rights notwithstanding any prior payment made therefore by
Glencore.
1.27.2 Glencore
will be deemed to have accepted the weight of an Aluminum Delivery if it fails
to give Nordural written notice of rejection within 30 days after Aluminum
Delivery and the quality if it fails to give Nordural written notices of
rejection within 30 after delivery to a final customer. Such notice
shall describe in reasonable detail the defects upon which rejection is
based.
1.27.3 If
any
Aluminum Delivery fails to conform to the warranties set forth in Section 7.1
of
this Agreement, and timely notice is given to Nordural, Nordural’s sole
liability shall be to pay to Glencore the amount, if any, by which the market
value of the Product as delivered is less than the market value of conforming
Product, in each case determined as of the delivery date. The
foregoing limitation on Nordural’s liability shall not in any way affect
Nordural’s obligation to deliver Product conforming to the specifications
applicable under this Agreement with respect to particular Product deliveries,
or limit Glencore’s right to treat Nordural’s repeated breach as an Event of
Default.
1.28 Warranty
Limitation. THE PARTIES EXPRESSLY AGREE THAT NO WARRANTIES
SHALL BE IMPLIED UNDER THIS AGREEMENT, WHETHER OF UTILITY OR OF FITNESS FOR
ANY
PARTICULAR PURPOSE OR MERCHANTABILITY OR OF ANY OTHER TYPE, AND FURTHER THAT
NO
WARRANTIES OF ANY SORT ARE MADE HEREUNDER EXCEPT THE WARRANTIES EXPRESSLY STATED
IN SECTION 7.1.
Article
VIII
FORCE
MAJEURE
1.29 Force
Majeure. If the performance of this Agreement by a party
(other than the giving of any notice required to be given or payment of monies
due under this Agreement) is hindered, delayed or prevented, directly or
indirectly, by reason of any war, conditions of war, acts of enemies, national
emergency, revolution, riots, sabotage or other similar disorders; failure
of
transportation; fire, flood, windstorm, explosion, or other acts of God;
strikes, lock-outs, or other labor disturbances; delay in construction of
electrical power plants or power transmission lines required to provide
electrical power to the Plant; breakdown of plants or equipment; inability
for
any of the reasons set forth herein to secure or delay in securing machinery,
equipment, materials, supplies, transportation, transportation facilities,
fuel
or power; orders or acts of any government or governmental agency or authority;
interference by civil or military authority; or any other cause whether or
not
of the nature or character specifically enumerated above which is beyond the
reasonable control of such party (“Force Majeure”) (i) such
party shall be excused from the performance of this Agreement (other than giving
of any notice required to be given or payment of monies due under this
Agreement) while and to the extent that such party is hindered, delayed or
prevented from so performing by Force Majeure, and (ii) the performance of
this
Agreement shall be resumed as soon as practicable after such Force Majeure
is
removed. In general, events, such as increases in the price of
electrical power, which prevent the Plant from operating profitably, shall
not
be considered events of Force Majeure. However, Nordural’s inability
to obtain power would be a Force Majeure.
1.30 Either
party shall give notice to the other as soon as practicable after the occurrence
of Force Majeure and insofar as known, the probable extent to which such party
will be unable to perform or be delayed in performing its
obligations. The party claiming Force Majeure shall exercise due
diligence to eliminate or remedy any such causes hindering, delaying or
preventing its performance and shall give the other party prompt written notice
when that has been accomplished; provided, however, that the settlement of
strikes or other events of labor unrest will be entirely within the discretion
of the party having the difficulty and that such party will not be required
to
settle such strikes or labor unrest by acceding to the demands of the opposing
party when such course of action is deemed inadvisable in the discretion of
the
party having the difficulty.
1.31 The
term
of this Agreement shall be extended for the duration of any Force Majeure and
the Conversion Charge for each Aluminum Delivery in effect for the extended
term
shall be the same as the Conversion Charge in effect for Aluminum Deliveries
scheduled but not delivered during the period of Force Majeure.
Article
IX
TERMINATION;
EFFECT OF TERMINATION
1.32 Termination. In
addition to any termination arising under Article X, this Agreement shall
terminate on the earliest of:
1.32.1 By
December 31st, 2014, or if any Force Majeure contemplated by Section 8.1 occurs,
such later date as is determined by extending the End Date by the duration
of
the period of Force Majeure, or such later date agreed to by the parties in
writing; or
1.32.2 The
date
on which Glencore or Nordural terminates this Agreement in accordance with
Article 10 by reason of an Event of Default.
1.33 Effect
of Termination.
1.33.1 Glencore’s
obligation to make Alumina Deliveries shall terminate as follows:
|
(a)
|
If
termination occurs under Section 9.1.1, on the date upon which Glencore
shall complete Alumina Delivery of the quantity of Alumina required
to
permit conversion and Aluminum Delivery by the relevant termination
date
under Section 9.1.1; or
|
|
(b)
|
If
termination occurs under Section 9.1.2, on the date upon which this
Agreement is terminated.
|
1.33.2 Termination
of this Agreement for whatever reason shall not affect:
|
(a)
|
Nordural’s
duty to complete the conversion of any Alumina then in process (unless
the
Plant’s operations have ceased), and to store and deliver to Glencore,
as
specified by Glencore, any Bailed Property in Nordural’s
possession;
|
|
(b)
|
Glencore’s
duty to pay Nordural any Conversion Charges with respect to Aluminum
Deliveries theretofore made by Nordural or for Aluminum Deliveries
thereafter made by Nordural for Alumina in process of being converted
at
the time of termination;
|
|
(c)
|
Any
other duties of either party which by their nature are to be performed
after termination of this Agreement;
or
|
|
(d)
|
Nordural’s
warranties regarding Product under Article
VII.
|
-5-
Article
X
TERMINATION
FOR DEFAULT
1.34 Grounds
for Termination. After the occurrence of any of the
following events (each an “Event of Default”), then the
non-defaulting party may terminate this Agreement by notice to the
other:
1.34.1 The
other
party fails to perform or breaches any provision of this Agreement (other than
any failure or breach excused by reason of Force Majeure under Article VIII),
and such failure or breach is not remedied within a period of thirty (30) days
after notice from the party not in default to the other party.
1.34.2 The
other
party:
|
(a)
|
consents
to the appointment of a receiver, trustee or liquidator of itself
or of a
substantial part of its property, or admits in writing its inability
to
pay its debts generally as they come due, or makes a general assignment
for the benefit of creditors; or
|
|
(b)
|
files
a voluntary petition in bankruptcy or a voluntary petition or an
answer
seeking reorganization in a proceeding under any bankruptcy or insolvency
law (as now or hereafter in effect) or any other now existing or
future
law providing for the reorganization or winding-up of corporations,
or
providing for an agreement, composition, extension or adjustment
with its
creditors; or
|
|
(c)
|
is
named the debtor or a defendant in any case, action or proceeding
under
any law referred to in clause (b) filed against the other party,
and such
action or proceeding is not withdrawn or dismissed within sixty (60)
days
after it is commenced.
|
1.34.3 Any
material provision of this Agreement shall at any time for any reason cease
to
be binding on or enforceable against the other party, or shall be declared
to be
null and void, or the validity or enforceability thereof shall be contested
by
the other party or any Regulatory Authority, or the other party shall deny
that
it has any further liability or obligation under this Agreement.
1.34.4 The
performance by the other party of substantially all of its obligations under
this Agreement is prevented by reason of Force Majeure which shall have
continued for a period of more than six (6) months.
1.34.5 Any
of
the Bailed Property is attached or seized pursuant to a court order in
connection with a legal proceeding instituted against the other party, or is
subjected to levy in execution of judgment, and such order or levy is not
vacated, dismissed or stayed within thirty (30) days.
1.35 Consequences
of Termination for Default. If this Agreement is terminated
by reason of an Event of Default as provided in Section 10.1, upon Glencore’s
demand and by the date specified in such demand, and upon payment of any
Conversion Charges and all other amounts then due and payable, Nordural shall
deliver all Bailed Property to Glencore at the Plant free and clear of all
Liens
created by Nordural and in the condition required by this
Agreement. The risk and all costs of assembling the Bailed Property,
ready for shipment, shall be borne by Nordural unless this Agreement is
terminated by Nordural, in which event all such risk and costs shall be borne
by
Glencore. Nordural consents and agrees that if it fails to perform
its obligations to deliver the Bailed Property to Glencore as required above,
Glencore may enter the Plant and surrounding property and remove all Bailed
Property at Nordural’s cost.
Article
XI
MISCELLANEOUS
1.36 Entire
Agreement; Amendment. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes any prior expressions of intent or understandings with respect to
such subject matter. This Agreement may only be amended, modified,
supplemented or released by an instrument in writing signed by a duly authorized
officer of each of the parties.
1.37 Headings. Headings
used in this Agreement are for convenience of reference only, and shall not
limit or otherwise affect the scope or interpretation of any
provision.
1.38 Waiver;
Cumulative Rights. The failure, or delay, of either party to
require performance by the other of any provision of this Agreement shall not
affect such party’s right to require performance of that provision unless and
until performance has been waived in writing. Each and every right
granted under this Agreement or any other document or instrument delivered
hereunder or in connection herewith, or allowed at law or in equity, shall
be
cumulative and may be exercised in part or in whole from time to
time.
1.39 Governing
Law. This Agreement shall be subject to and construed under
the laws of the State of New York, U.S.A., excluding the rules of conflicts
or
choice of law and excluding the United Nations Convention on Contracts for
the
International Sale of Goods.
1.40 Dispute
Resolution. Any controversy arising out of or relating to
this Agreement shall be settled by arbitration administered in accordance with
the commercial arbitration rules of the American Arbitration
Association. The arbitration panel shall consist of three (3)
arbitrators. The arbitration proceedings shall take place in New
York, New York, U.S.A. and shall be conducted in the English
language. The decision of the arbitral panel shall be final and
binding upon the parties and non-appealable. Judgment on the award
may be entered and enforced in any court having jurisdiction over the party
against whom such judgment is sought to be entered or enforced.
1.41 Notices. All
notices, demands or other communications (collectively,
“Notices”) required or permitted to be given under this
Agreement shall be in writing, either delivered by hand to the other party
at
that party’s address set forth below, or sent by prepaid air overnight or
express courier or by facsimile transmission, to the other party’s address and
facsimile number (if applicable) set forth below, and shall be effective on
the
date the hand delivery, air overnight or express courier or facsimile
transmission is received by the other party. A copy of the text of
any Notice given by facsimile transmission shall be sent by prepaid air
overnight or express courier or delivered by hand, to the address set forth
below within a reasonable time thereafter, provided such confirmation shall
not
be required if the recipient acknowledges receipt of the facsimile
Notice.
-6-
Notices
shall be sent:
If
to
Nordural:
Nordural
ehf
301
Akranes
Grundartangi
Iceland
Attention: Managing
Director
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
Century
Aluminum Company
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: General
Counsel
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
If
to
Glencore:
Glencore
AG
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇
▇.▇.
▇▇▇
▇▇▇
▇▇-▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: Alumina/Aluminum
Department
Phone: ▇▇
▇▇ ▇▇▇ ▇▇▇▇
Facsimile
No.: 41 41 709 3000
Any
change in the address or facsimile transmission number of a party (or copy
recipient) for the purposes of Notice under this Section shall be communicated
to the other parties in the manner set forth in this Section for providing
Notice.
1.42 Illegality;
Severability.
1.42.1 The
various provisions of this Agreement shall be considered legally severable,
and
if any provision of this Agreement or the application of any such provision
to
any party or circumstances shall be held invalid by a court of competent
jurisdiction, the remainder of this Agreement, including without limitation
the
remainder of the provision held invalid, or the application of such provision
to
any party or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
1.42.2 If
any
provision of this Agreement is prohibited or unenforceable in any jurisdiction,
such fact alone shall not render such provision invalid or unenforceable in
any
other jurisdiction.
1.42.3 To
the
extent permitted by Applicable Laws, each of Nordural and Glencore hereby waives
any provision of Applicable Laws which renders any provision of this Agreement
prohibited or unenforceable in any respect.
1.43 Counterparts. This
Agreement may be signed in any number of counterparts, and any single
counterpart or a set of counterparts signed, in either case, by all the parties
hereto shall constitute a full and original agreement for all
purposes.
1.44 Assignment. Except
as set forth below, no assignment, delegation or subcontracting of any of the
rights or duties of any party to a non-Affiliate of such party shall be
permitted without the written consent of the other party, and any purported
assignment without such written consent shall be null and
void. Nordural shall also have the right to assign its interest to
its lenders as may be required by Nordural’s loan agreements.
-7-
The
parties have caused this Agreement to be duly executed as of the date first
above written, whereupon it enters into full force and effect in accordance
with
its terms.
NORDURAL
EHF
By:
Name:
Title:
GLENCORE
AG
By:
Name:
Title:
-8-
EXHIBIT
A
LOADING/DISCHARGE
CONDITIONS IN GRUNDARTANGI PORT
Length
of
key: 400
meters
Draft: 13
– 14 meters
Cranes: No
cranes on harbor. Mobile cranes available
-9-
EXHIBIT
B
PERMITTED
SOURCE SPECIFICATIONS FOR ALUMINA
AUGHINISH
(AUG) ALUMINA SPECIFICATIONS
AUGHINISH/IRELAND
TYPICAL PRODUCER
GUARANTEES
------------ -------------------
Al2O3
98.500 MIN
Na2O % 0.370 0.500 MAX
Fe2O3 % 0.018 0.030 ▇▇▇
▇▇▇ % 0.008 0.025 MAX
SiO2 % 0.009 0.020 MAX
TiO2 % 0.001 0.005 MAX
V2O5 0.003 0.006 MAX
P2O5 % 0.001 0.0025 MAX
ZnO % 0.002 0.004 MAX
BET m2/gr 69.000 60
MIN/80 MAX
LOI
(300-1100
C) %
0.700 1.20 MAX
-
325
Mesh %
7.000 12.00 MAX
Attrition
Index 10.000 20.00
MAX
Alpha
Alumina <5.000
-10-
EURALLUMINA
(EUR) ALUMINA SPECIFICATIONS
PORTO
VESME/ITALY
TYPICAL PRODUCER
GUARANTEES
------------ -------------------
Al2O3 % 99.400 99.000
MIN
SiO2 %
0.010
0.020 MAX
Fe2O3 %
0.015
0.020 MAX
TiO2 %
0.003
0.004 MAX
V2O5 %
0.002
0.004 MAX
Na2O %
0.330
0.450 ▇▇▇
▇▇▇ %
0.019
0.030 MAX
P2O5 %
0.001
0.002 MAX
ZnO %
0.001
0.002 MAX
MnO2 %
0.001
0.001 MAX
LOI
(300-1000
C) % 0.820 1.00MAX
+
100
Mesh % 0.700 5.00 MAX
-
325
Mesh % 4.000 10.00 MAX
BET m2/gr 75.000 65
MIN/90 MAX
Alpha
alumina
% 5-10 4
MIN/20 MAX
Angle
of
repose ▇▇ ▇▇▇
-▇▇-
▇▇▇▇▇/▇▇▇▇▇▇▇
(▇▇▇) ALUMINA SPECIFICATIONS
SAN
CIPRIAN/SPAIN
TYPICAL PRODUCER
GUARANTEES
------------ -------------------
Chemical
Specification:
SiO2 % 0.007
0.020 MAX
Fe203 % 0.020
0.025 MAX
Na2O % 0.350
0.500 ▇▇▇
▇▇▇ % 0.005
0.030 MAX
TiO2 % 0.003
0.005 MAX
ZnO % 0.001
0.005 MAX
P2O5 % NR
0.003 MAX
V2O5 % 0.002
0.005 MAX
Ga2O3 % 0.010
0.020 MAX
Physical
Specification:
+
100
Mesh
%
3.0 10.00 MAX
-
325
Mesh
%
9.0 12.00 MAX
-
20
micron%
*
2.0
3.00 MAX
LOI
(300-1000oC)
%
0.6
1.20 MAX
Surface
Area (BET)
m2/g 70.0 60
MIN - 80 MAX
*
Effective March 01, 2000 measured by ▇▇▇▇▇▇▇ LS100Q Laser
instrument.
-12-
ALUNORTE
(ANO) ALUMINA SPECIFICATIONS
VILA
DO CONDE/BRASIL
TYPICAL PRODUCER
GUARANTEES
------------ -------------------
SiO2 % 0.015 0.025 MAX
Fe2O3 %
0.015
0.025 MAX
TiO2 %
0.002
0.005 MAX
V2O5 %
0.002
0.005 MAX
Na2O %
0.400
0.500 ▇▇▇
▇▇▇ % 0.025
0.050 MAX
P2O5 %
0.001
0.003 MAX
ZnO %
0.003
0.008 MAX
MnO
0.001
0.002 MAX
LOI
(300-1000o C)
% ---
1.00 MAX
+
100
Mesh %
0.50
2.00 MAX
-
325
Mesh %
8.00
10.00 MAX
BET
m2/gr 60.00
Alpha
Phase
%
5.00 10.00 MAX
Bulk
Density
(g/l)1000 1050
-13-
INTERALUMINA
(INT) ALUMINA SPECIFICATIONS
PORTO
MATANZAS/VENEZUELA
TYPICAL PRODUCER
GUARANTEES
------------ --------------------
Al2O3% 98.500 98.350 MIN
SiO2 %
0.011
0.030 MAX
Fe2O3
%
0.010
0.030 MAX
TiO2 %
0.002
0.005 MAX
V2O5 %
0.002
0.003 MAX
Na2O %
0.460
0.600 ▇▇▇
▇▇▇ %
0.025
0.050 MAX
P2O5 %
0.001
0.002 MAX
ZnO %
0.003
Moisture
(0-300
C)%
0.90
LOI
(300-1000 C)
%
0.85
1.00MAX
+
100
Mesh
%
3.00 10.00 MAX
-
325
Mesh
%
9.00 12.00 MAX
BET
m2/gr 74.00
Bulk
Density g/l 1200
-14-
SURINAM
(SUR) ALUMINA SPECIFICATIONS
PARANAM/SURINAM
TYPICAL PRODUCER
GUARANTEES
------------- --------------------
Al2O3 % 98.300
MIN
SiO2 % 0.015
0.030 MAX
Fe2O3 %
0.010
0.030 MAX
TiO2 %
0.003
0.005 MAX
V2O5 %
0.002
0.005 MAX
Na2O %
0.470
0.600 ▇▇▇
▇▇▇ %
0.045
0.060 MAX
P2O5 % 0.001
0.003 MAX
ZnO % 0.001
0.005 MAX
LOI
(300-1200
C) %
0.80
1.20 MAX
+
100
Mesh % 10.00 MAX
-
325
Mesh %
9.50 12.00 MAX
BET m2/gr 65.00
-15-
WINDALCO
JAMAICA (WIN) ALUMINA SPECIFICATIONS
PORT
▇▇▇▇▇▇▇▇/JAMAICA
TYPICAL PRODUCER
GUARANTEES
------------ -------------------
Al2O3 % 98.500 98.350 MIN
SiO2 %
0.022 0.030 MAX
Fe2O3 %
0.009
0.030 MAX
TiO2 %
0.001
0.005 MAX
V2O5 %
0.001
0.005 MAX
Na2O %
0.420
0.600 ▇▇▇
▇▇▇ % 0.040
0.070 MAX
P2O5 %
0.001
0.003 MAX
ZnO %
0.010
0.020 MAX
LOI
(300-1100 C)
% 0.95
1.20 MAX
-
325
Mesh
% 8.00 12.00 MAX
BET
m2/gr 80/90
-16-
ALPART
(ALP) ALUMINA SPECIFICATIONS
PORT
▇▇▇▇▇▇/JAMAICA
TYPICAL PRODUCER
GUARANTEES
------------ -------------------
Chemical
Properties:
SiO2 %
0.0110 0.0150 MAX
Fe2O3 %
0.0090
0.0140 MAX
Na2O %
0.3700 0.5000 ▇▇▇
▇▇▇ %
0.0350
0.0500 MAX
ZnO %
0.0090
0.0120 MAX
MnO2 %
0.0013
0.0020 MAX
TiO2 %
0.0012
0.0020 MAX
V2O5 %
0.0024
0.0045 MAX
P2O5 %
0.0008
0.0015 MAX
Physical
Properties:
Loss
on
Ignition
(300-1000
C)
%
0.85 1.10 MAX
-
45
microns (1) %
7.50 9.00 MAX
+150
microns %
7.00 11.00 MAX
-
20
microns %
1.20 1.80 MAX
Specific
Surface Aera
BET
m2/gr 75.00 60
MIN/85 MAX
Attrition
Index %18.00 25.00 MAX
-17-
JAMALCO
ALUMINA SPECIFICATION
|
Chemical
Specification
|
||
|
Typical
(%)
|
Guaranteed
(%)
|
|
|
SiO2
|
0.012
|
0.020
max.
|
|
Fe2O3
|
0.014
|
0.020
max.
|
|
Na2O
|
0.38
|
0.50
max.
|
|
CaO
|
0.050
|
0.060
max.
|
|
TiO2
|
0.002
|
0.005
max.
|
|
ZnO
|
0.013
|
0.020
max.
|
|
P2O5
|
0.0015
|
0.003
max.
|
|
V2O5
|
0.002
|
0.005
max.
|
|
Ga2O3
|
0.006
|
0.010
max.
|
|
Physical
Specification
|
||
|
+100
mesh
|
3
|
15
max
|
|
-325
mesh
|
8.5
|
12 “
|
|
-20
micron
|
1.7
|
3.0 “
|
|
L.O.I.
(300-1000ºC)
|
0.6
|
1.1 “
|
|
Surface Area (BET) (Reg.)
|
m2/g
67-77
|
m2/g
60min
–
80
max
|
Prepared
by :
W.H. Brancalhoni
Revision
# :
9.0
Revision
Date :
February 1st, 2005
Document :
h\data\tech\customers\current specs\jamspec2005.doc
-18-
EXHIBIT
C
PROCEDURES
FOR SAMPLING AND ANALYSIS OF ALUMINA
|
(i)
|
A
representative sample of each shipment of Alumina shall be taken
in
accordance with the sampling procedures applicable at the Alumina
Load
Port. Nordural shall have the right to have a representative
present (at Nordural’s expense) at such sampling. The sample so
taken shall be divided into three portions using generally accepted
laboratory techniques. One portion shall be promptly dispatched
to Nordural, one portion is for Glencore and one portion (the referee
sample) shall be held at the alumina production plant for ninety
days
after the date of the relevant shipment and then disposed of unless
Nordural or Glencore have requested (in writing) that it be retained
longer.
|
|
(ii)
|
Within
thirty days after receipt of the sample dispatched to Nordural, Nordural
may notify Glencore (with a copy to the production plant holding
the
referee sample) that the Alumina delivered does not conform to the
contractual specification set forth in Exhibit B and the extent of
that non-conformity. If Nordural does not notify Glencore
within this time the Alumina so delivered shall be deemed to comply
with
the above specification. If Nordural does notify Glencore
within this time, Glencore shall advise Nordural within twenty-one
days
after such notification is received whether or not Glencore agrees
with
Nordural’s analysis. If Glencore does not agree, the referee
sample will be analyzed as soon as possible by a referee laboratory
mutually acceptable to the parties. The referee laboratory will
analyze the referee sample in accordance with the applicable analytical
procedures adopted under the ISO standards and a copy of its analysis
shall be made available to both parties. The cost of any
referee analysis will be shared equally by Glencore and
Nordural.
|
|
(iii)
|
If
the analysis of the referee laboratory indicates that the referee
sample
does not conform to the contractual specification set out in Exhibit
B or if Glencore accepts that the alumina does not so conform,
Glencore and Nordural shall within twenty-one days of such decision
meet
in good faith to determine whether a reasonable or mutually acceptable
adjustment of the Conversion Charge can be made to compensate Nordural
for
the shipment of Alumina not meeting the contractual
specification.
|
In
any
case, such difference will not be regarded by Nordural as a cause of rejection
of the cargo. For the avoidance of doubt, in determining the
adjustment to be made to the Conversion Charge, regard shall be had to any
increase in production costs at the Plant resulting from the reduction of
alumina not conforming to the contractual specifications set out in Exhibit
B.
In
the
event Glencore and Nordural do not reach a mutually acceptable arrangement,
the
arbitration provisions under Section 11.5 shall apply.
-19-
EXHIBIT
D
PRODUCT
SPECIFICATIONS
Product
delivered under this Agreement shall conform to the following:
Al minimum
99.70%
Si maximum
0.10%
Fe maximum
0.20%
meeting
specifications for P1020
-20-
EXHIBIT
E
CALCULATION
OF METAL PREMIUM
The
metal
premium will be calculated for each shipment of Product as follows:
|
1)
|
In
the event that the 6% duty on imported aluminum into the European
Union
(“EU”) is in place and the European Commission has not
announced in the form of publication or otherwise that the duty will
be
eliminated, the metal premium shall be * % of the LME
+ (* % x (DP-UP)) . DP= The Rotterdam duty paid premium as
quoted by MB forthe month prior to the scheduled month of delivery.
UP=
The Rotterdam duty unpaid premium as quoted by MB for the month prior
to
the schedule month of delivery. Nordural
will be under no obligation to reimburse Glencore if the calculation
under
the above
metal premium formula is in favor of
Glencore.
|
|
2)
|
In
the event that a change to the duty or a change to Iceland's duty-free
status has been announced, Glencore and Nordural shall meet within
30 days
of such announcement to negotiate in good faith a premium to cover
Product
delivered during the transition period. The transition period
shall be defined as the period beginning with the month in which
the
change has been announced and ending in the month prior to the month
in
which the change will go into
effect.
|
|
3)
|
Once
a change to the duty or a change to Iceland's duty-free status has
gone
into effect, the metal premium shall be * % of the greater
of:
|
|
a)
|
The
European premium indicator /▇▇ ▇▇▇▇ bid as quoted in the final issue
of
Metal Bulletin for the contractual month of shipment minus the freight
rate from Grundartangi to Rotterdam (both parties shall discuss and
reset
the freight rate every 6 months to reflect the prevailing market
conditions);
|
or
|
b)
|
The
actual premium achieved by Glencore in taking the Product to a destination
other than Rotterdam. This premium shall be net of all expenses
Glencore actually incurs related to delivering the Product to the
alternate destination and selling the Product. These expenses
may include nominal interest Glencore may be charged internally for
inventory holding and receivable terms purposes. Such interest
shall not exceed LIBOR plus * %. At Nordural’s request, Glencore
shall provide Nordural with a detailed written explanation of such
costs,
and Nordural shall have the right to audit such
costs.
|
.
____________________
* Confidential
information has been
omitted from this exhibit pursuant to a request for confidential treatment
and
filed separately with the Securities and Exchange
Commission.
-21-