<PAGE>

                                                               EXECUTION VERSION
                                                                     Exhibit 2.3

                               PURCHASE AGREEMENT

                      ------------------------------------

                            COMALCO ALUMINIUM LIMITED

                                       AND

                     KAISER ALUMINUM & CHEMICAL CORPORATION

                                       AND

                      KAISER ALUMINA AUSTRALIA CORPORATION

                          DATED AS OF SEPTEMBER 22 2004

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                                                                                <C>
1.    Definitions and Interpretation............................................    2

2.    Purchase and Sale of Assets Sold..........................................   19

3.    Purchase Price for the Shares in QAL......................................   19

4.    Purchase Price for Kaiser Bauxite, Kaiser Alumina and Other Items.........   20

4A.   Deposit...................................................................   21

5.    Estimated Purchase Price..................................................   22

6.    Final Purchase Price......................................................   25

7.    Assumed Interests and Obligations.........................................   30

8.    Closing...................................................................   32

9.    Post Closing..............................................................   36

10.   Foreign Acquisitions and Takeovers Act....................................   38

11.   Other Conditions Precedent................................................   39

12.   Further Assurances and other Matters Relating to Conditions Precedent.....   45

13.   Representations and Warranties by Kaiser and KACC.........................   51

14.   Representations and Warranties by Buyer...................................   58

15.   Indemnities...............................................................   61

16.   Currency Conversions......................................................   71

17.   Governing Law; Submission.................................................   71

18.   Termination...............................................................   73

19.   Stamp Duties; Withholding Taxes...........................................   76

20.   Costs.....................................................................   77

21.   Other Interests...........................................................   77

22.   Goods and Services Tax....................................................   77

23.   Disclosures...............................................................   79

24.   Counterparts..............................................................   79

25.   Notices...................................................................   80

26.   [Intentionally Omitted]...................................................   81

27.   Entire Agreement..........................................................   81

28.   Assignment................................................................   82

29.   Amendment.................................................................   82
</TABLE>

                                      -i-

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                                  EXHIBIT INDEX

Exhibit                    Title
-------                    -----

A                          Kaiser Alumina
B                          Kaiser Bauxite
C                          QAL Net Working Capital
D                          Kaiser Alumina Sales Contracts
E                          Kaiser Assignment and Assumption Agreement
F                          KAII Assignment and Assumption Agreement
G                          Alumina Supply Agreement
H                          Tax Values of QAL Assets
I                          [Intentionally Omitted]
J-1                        Knowledge of Kaiser and KACC
J-2                        Knowledge of Buyer
K                          Document Escrow Agreement
L                          Assumed Interests and Obligations
M                          Form of Guarantee
N                          Bidding and Auction Procedures

Schedules
---------
13.1(j)                    Certain Matters Related to the Kaiser Alumina Sales
                           Contracts
13.1(r)                    Special Notices
13.2(e)                    Financial Statements of QAL
13.2(f)                    Conduct of Business of QAL
13.2(g)                    QAL Compliance with Laws
13.2(h)                    QAL Litigation

<PAGE>

DATE September 22, 2004

PARTIES

      1.    COMALCO ALUMINIUM LIMITED, ABN 51 009 679 127, a Queensland
            corporation, of 25th Floor, 12 Creek Street, Brisbane, Queensland,
            Australia, (BUYER);

      2.    KAISER ALUMINUM & CHEMICAL CORPORATION, ABN 47 908 052 437, a
            Delaware corporation, of Suite 2500, 5847 San Felipe, Houston,
            Texas, USA (KACC); and

      3.    KAISER ALUMINA AUSTRALIA CORPORATION, ABN 15 009 757 546, a Delaware
            corporation, of Suite 2500, 5847 San Felipe, Houston, Texas, USA
            (KAISER).

            Buyer, KACC and Kaiser are sometimes referred to herein collectively
            as the PARTIES.

RECITAL

            Buyer has agreed to purchase, and Kaiser and KACC have agreed to
            sell, the Assets Sold (as hereinafter defined), and Buyer has agreed
            to assume the Assumed Interests and Obligations (as hereinafter
            defined), on the terms and conditions of this AGREEMENT.

                                     Page 1
<PAGE>

NOW THEREFORE, in consideration of the foregoing premises, and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the Parties agree as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   In this Agreement, except as provided in Clause 22 or unless the context
      otherwise requires the following terms have the meanings set forth below:

      2001 ASSIGNMENT AND ASSUMPTION AGREEMENT means the Assignment and
      Assumption Agreement - Consent, dated August 31, 2001, among the
      Participants and QAL.

      2001 PURCHASE AGREEMENT means the Purchase Agreement, dated June 15, 2001,
      among Comalco, CAL, Kaiser and KACC.

      ACT has the meaning set forth in Clause 10.1(a).

      ADJUSTMENT DATE has the meaning set forth in Clause 9(a).

      AGREEMENT BETWEEN PARENTS means the Agreement No. 1 Between Parents dated
      as of February 15, 1990, among KACC, Comalco, RTL and others.

      AGREEMENT COLLATERAL TO SHARE PURCHASE AGREEMENT means the Agreement
      Collateral to Share Purchase Agreement dated October 14, 1982 between RTL,
      KACC and Comalco.

      ALQUEEN means Alcan Queensland Pty. Limited, a Queensland corporation.

      ALUMINA PURCHASE PRICE has the meaning set forth in Clause 4.2.

      ALUMINA SUPPLY AGREEMENT has the meaning set forth in Clause 8.3(e).

      ASSETS SOLD means the Shares in QAL, the Kaiser Alumina and the Kaiser
      Bauxite.

                                     Page 2
<PAGE>

      ASSUMED DEBT ADJUSTMENT has the meaning set forth in Clause 3(b).

      ASSUMED INTERESTS AND OBLIGATIONS means each interest, right and
      obligation of Kaiser and KACC, as applicable, as at the Effective Date in,
      to and under each of:

      (a)   the Participants Agreement, including their respective obligations
            in respect of Bauxite Shipping Charge Credit Allowances;

      (b)   the Agreement Between Parents;

      (c)   the Gladstone Tolling Contracts, including their respective
            obligations in respect of Credit Allowances, Alternative
            Depreciation Credit Allowances and Gladstone Tolling Charge
            Prepayments;

      (d)   all Gladstone Bauxite Supply Agreements;

      (e)   the QAL Financing Agreements;

      (f)   the Interest Reimbursement Agreement;

      (g)   Article 5.1 of the Agreement Collateral to Share Purchase Agreement;

      (h)   the 2001 Purchase Agreement; and

      (i)   the 2001 Assignment and Assumption Agreement;

      but not including any obligations under such agreements to the extent such
      obligations are to be paid or performed on or prior to the Effective Date.

      AUCTION has the meaning set forth in the Bidding and Auction Procedures.

      AUCTION TRANSACTION has the meaning set forth in Clause 18.1(b)(v).

                                     Page 3
<PAGE>

      AUDITED FINANCIAL STATEMENTS means the financial statements of QAL as at
      December 31, 2003 and for the year then ended, including a statement of
      financial performance, a statement of financial position and a statement
      of cash flows, all as audited by PriceWaterhouseCoopers.

      AUSTRALIAN DOLLARS or A$ means lawful money of the Commonwealth of
      Australia.

      BACKUP BIDDER has the meaning set forth in the Bidding and Auction
      Procedures.

      BALANCE SHEET DATE means December 31, 2003.

      BANKRUPTCY CASES means the cases of Kaiser, KACC and certain of their
      affiliates under chapter 11 of the Bankruptcy Code, which have been
      consolidated for procedural purposes only and are being administered
      jointly by the Bankruptcy Court as Case No. 02-10429 (JKF).

      BANKRUPTCY CODE means chapter 11 of title 11 of the United States Code (as
      now in effect or hereafter amended).

      BANKRUPTCY COURT means the United States Bankruptcy Court for the District
      of Delaware.

      BANKRUPTCY COURT HEARING has the meaning set forth in Clause 12.8.

      BANKRUPTCY LAWS means the Bankruptcy Code, the Federal Rules of Bankruptcy
      Procedure, as amended, and the local rules of the Bankruptcy Court.

      BANKRUPTCY PLEADINGS means all pleadings relating to this Agreement filed
      with the Bankruptcy Court by Kaiser, KACC or any other Person.

      BASE SHARE PRICE means US$308,000,000.

                                     Page 4
<PAGE>

      BASKET has the meaning set forth in Clause 15.11(a).

      BAUXITE INVENTORY CHARGE means, in relation to each BOL Grade comprising
      the Kaiser Bauxite (referred to as the RELEVANT BAUXITE for the purpose of
      this definition), the aggregate of:

      (a)   the purchase price and any royalty payments paid or payable in
            respect of the Relevant Bauxite under the Gladstone Bauxite Supply
            Agreements, as most recently invoiced prior to the Effective Date,
            or, if not invoiced prior to the Effective Date, as invoiced under
            the preliminary invoices or preliminary royalty invoices (as
            applicable) delivered under Clause 6.1(b)(iii); and

      (b)   the amount of the Bauxite Shipping Charges paid or payable by Kaiser
            in respect of the Relevant Bauxite under the Participants Agreement
            in cash (net of any applicable Bauxite Shipping Charge Credit
            Allowances).

      BIDDING AND AUCTION PROCEDURES means the bidding and auction procedures
      attached to this Agreement as Exhibit N, as the same may be modified from
      time to time by agreement of the Parties.

      BIDDING AND AUCTION PROCEDURES ORDER has the meaning set forth in Clause
      12.8.

      BOL GRADE means that part of a Grade of bauxite that can be identified by
      reference to the month of issue of a bill of lading in respect of it.

      BREAKUP FEE has the meaning set forth in Clause 18.3.

      BUSINESS DAY means a day on which the major trading banks are open for
      business in New York, New York, Wilmington, Delaware and Houston, Texas,
      USA.

                                     Page 5
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      BUYER has the meaning set forth on the first page of this Agreement, or if
      not Comalco, the Successful Bidder or Backup Bidder, as applicable.

      BUYER ENTITY means an entity in respect of which Buyer is treated as a
      division or part for the purposes of Tax.

      BUYER INDEMNIFIED PARTIES has the meaning set forth in Clause 15.1.

      BUYER INDEMNITY PAYMENT means any payment made or which may be required to
      be made by Kaiser and/or KACC to the Buyer Indemnified Parties under
      Clause 15.4.

      BUYER'S PARENT means Comalco.

      CAL means Comalco Aluminium Limited, ABN 51 009 679 127, a Queensland
      corporation.

      CLASS A ORDINARY SHARES has the meaning set forth in Clause 13.2(a).

      CLASS B ORDINARY SHARES has the meaning set forth in Clause 13.2(a).

      CLASS C ORDINARY SHARES has the meaning set forth in Clause 13.2(a).

      CLASS D ORDINARY SHARES has the meaning set forth in Clause 13.2(a).

      CLOSING has the meaning set forth in Clause 8.1.

      CLOSING BALANCE SHEET has the meaning set forth in Clause 6.1(a)(i).

      CLOSING DATE has the meaning set forth in Clause 8.1.

      COMALCO means Comalco Limited, ABN 37 004 502 694, a Victorian
      corporation.

      COMALCO ALUMINA SUPPLY AGREEMENT has the meaning set forth in Clause 4.4.

                                     Page 6
<PAGE>

      COMMENCEMENT DATE means the date of entry of the Sale Approval Order;
      provided that if the Backup Bidder becomes the Buyer hereunder,
      Commencement Date (including for purposes of Clauses 18.1(b)(i) and
      18.1(c)(i)) means the date on which Kaiser and KACC notify the Backup
      Bidder that it has become the Buyer in lieu of the Successful Bidder.

      CONSORTIUM DOCUMENTS means:

      (a)   the Participants Agreement;

      (b)   the Agreement Collateral to Share Purchase Agreement;

      (c)   the Agreement Between Parents;

      (d)   the Gladstone Tolling Contracts;

      (e)   the Gladstone Bauxite Supply Agreements;

      (f)   the QAL Financing Agreements;

      (g)   the Constitution of QAL; and

      (h)   the 2001 Assignment and Assumption Agreement.

      DE MINIMIS THRESHOLD has the meaning set forth in Clause 15.11(a).

      DEFENDING PARTY has the meaning set forth in Clause 12.4.

      DEPOSIT has the meaning set forth in Clause 4A.1.

      DEPOSIT ESCROW AGENT means the escrow agent named in the Deposit Escrow
      Agreement.

      DEPOSIT ESCROW AGREEMENT means an escrow agreement relating to the
      Deposit, by and among Kaiser, KACC, Buyer and Deposit Escrow Agent, to be
      executed and delivered on

                                     Page 7
<PAGE>

      or prior to the date on which Buyer is required to make the Deposit
      pursuant to Clause 4A.1.

      DIP FACILITY means the Post-Petition Credit Agreement, dated as of
      February 12, 2002, as amended, among KACC, Kaiser Aluminum Corporation,
      certain financial institutions party thereto and Bank of America, N.A., as
      Agent.

      DOCUMENT ESCROW AGENT means the escrow agent named in the Document Escrow
      Agreement.

      DOCUMENT ESCROW AGREEMENT means an escrow letter in the form of Exhibit K.

      EFFECTIVE DATE means 11:59 p.m. at Gladstone, Queensland on the last day
      of the calendar month in which the last of the conditions precedent
      referred to in Clauses 10.1, 11.1, 11.2 and 11.3 is satisfied or duly
      waived and on which the sale of the Assets Sold under this Agreement is to
      take effect (or such later date requested by a Party and agreed to by the
      other Parties prior to that date).

      ESTIMATED BAUXITE RECEIVABLES has the meaning set forth in Clause 5.1(b).

      ESTIMATED PURCHASE PRICE has the meaning set forth in Clause 5.1.

      EXCESS ALUMINA means, in the event of Kaiser's termination of the Comalco
      Alumina Supply Agreement pursuant to Article 4.3(f) thereof with effect
      prior to December 31, 2005, the number of metric tonnes of alumina
      produced at QAL's Gladstone plant after the Effective Date that would have
      been delivered to Comalco under the Comalco Alumina Supply Agreement had
      such agreement not been so terminated.

      EXCESS KAISER ALUMINA CONSIDERATION means the US$ amount obtained by
      calculating, for each calendar month in which delivery of Excess Alumina
      would have been required

                                     Page 8
<PAGE>

      under the Comalco Alumina Supply Agreement, an amount equal to 3.50% of
      the product of (x) the forward LME price (in US$) on the Effective Date
      for the calendar month prior to such calendar month for delivery, and (y)
      the number of metric tonnes of Excess Alumina that would have been
      delivered in such calendar month, and adding all such US$ amounts
      together.

      FINAL BAUXITE RECEIVABLES has the meaning set forth in Clause 6.1(c).

      FINAL KAISER ALUMINA PRICE has the meaning set forth in Clause 6.1(b)(v).

      FINAL KAISER BAUXITE PRICE has the meaning set forth in Clause 6.1(b)(iv).

      FINAL ORDER means an order or judgment of the Bankruptcy Court, or other
      court of competent jurisdiction, as entered on the docket in any
      Bankruptcy Case or the docket of any other court of competent
      jurisdiction, that has not been reversed, stayed, modified or amended, and
      as to which the time to appeal or seek certiorari or move for a new trial,
      reargument or rehearing has expired, and no appeal or petition for
      certiorari or other proceedings for a new trial, reargument or rehearing
      has been timely taken, or as to which any appeal that has been taken or
      any petition for certiorari that has been timely filed has been withdrawn
      or resolved by the highest court to which the order or judgment was
      appealed or from which certiorari was sought or the new trial, reargument
      or rehearing shall have been denied or resulted in no modification of such
      order.

      FINAL PURCHASE PRICE has the meaning set forth in Clause 6.2.

      GENERAL TRUST DEED means the agreement identified as number 2 in Section
      IV of Exhibit L.

                                     Page 9
<PAGE>

      GLADSTONE BAUXITE SUPPLY AGREEMENTS means the agreements and other
      documents identified in Section III of Exhibit L.

      GLADSTONE CREDIT ALLOWANCES means Credit Allowances, Alternative
      Depreciation Credit Allowances, Bauxite Shipping Charge Credit Allowances
      and Alumina Delivery Charge Credit Allowances.

      GLADSTONE TOLLING CONTRACTS means the agreements and other documents
      identified in Section II of Exhibit L.

      GOVERNMENTAL ENTITY means any federal, state, local, municipal, foreign or
      other government or any provincial, departmental or political subdivision
      thereof, or any entity, body or authority exercising or entitled to
      exercise any administrative, executive, judicial, legislative, policy,
      regulatory or taxing authority or power of any nature, or any court,
      department, commission, board, bureau, agency, instrumentality or
      administrative body of any of the foregoing, including any arbitral body.

      GRADE means any one of the following grades of bauxite supplied under the
      Gladstone Bauxite Supply Agreements:

      (a)   trihydrate bauxite;

      (b)   Grade `A' monohydrate bauxite;

      (c)   Grade `C' monohydrate bauxite; and

      (d)   Grade `D' monohydrate bauxite.

      GST AMOUNT means the amount payable by Buyer to Kaiser under Clause 22.3
      in consequence of Buyer's purchase of the Kaiser Bauxite and the Kaiser
      Alumina reduced by the amount payable by Kaiser to Buyer under Clause 22.3
      in consequence of the

                                    Page 10
<PAGE>

      assumption by Buyer of Gladstone Credit Allowances. For the purposes of
      the meaning of GST Amount, no amount shall be payable by Kaiser to Buyer
      under Clause 22.3 in consequence of the assumption by Buyer of Gladstone
      Credit Allowances if before the Closing Date the Commissioner of Taxation
      issues a final ruling or similar final determination which, in the
      reasonable opinion of Buyer, would result in no GST (as defined for the
      purposes of Clause 22) being imposed on that assumption.

      INDEMNIFICATION CLAIM has the meaning set forth in Clause 15.12(a).

      INDEMNIFIED PARTY has the meaning set forth in Clause 15.12(a).

      INDEMNIFYING PARTY has the meaning set forth in Clause 15.12(a).

      INTEREST REIMBURSEMENT AGREEMENT means the (i) Financing Agreement dated
      as of March 30, 2001 among QAL, Kaiser, KACC, Pechiney Limited, Pechiney,
      CAL, Comalco, Alqueen and Alcan Inc., (ii) the Addendum to Financing
      Agreement, dated July 24, 2003, among QAL, Kaiser, KACC, Pechiney Limited,
      Pechiney, CAL, Comalco, Alqueen and Alcan Inc. and (iii) the Addendum No.
      2 to Financing Agreement, dated July 24, 2003, among QAL, Kaiser, KACC,
      Pechiney Limited, Pechiney, CAL, Comalco, Alqueen and Alcan Inc.

      KACC has the meaning set forth on the first page of this Agreement.

      KACC SHARE IN QAL means the Class A Ordinary Share in QAL held by KACC in
      trust for Kaiser.

      KAII means Kaiser Aluminium International, Inc.

      KAII ASSIGNMENT AND ASSUMPTION AGREEMENT has the meaning set forth in
      Clause 7.4(b).

                                    Page 11
<PAGE>

      KAISER has the meaning set forth on the first page of this Agreement.

      KAISER ALUMINA means the alumina produced by QAL for the account of Kaiser
      and/or KACC at calcination on or prior to the Effective Date. A pro forma
      calculation of the Kaiser Alumina, assuming the Closing occurred on
      December 31, 2003 is contained in Exhibit A.

      KAISER ALUMINA SALES CONTRACTS has the meaning set forth in Clause 7.2.

      KAISER ASSIGNMENT AND ASSUMPTION AGREEMENT has the meaning set forth in
      Clause 7.4(a).

      KAISER BAUXITE means each BOL Grade delivered to Kaiser under its
      Gladstone Bauxite Supply Agreements and not processed into Kaiser Alumina
      by QAL on or prior to the Effective Date (whether on board ship, in stock
      or in process) determined on the basis on which Exhibit B has been
      prepared.

      KAISER ENTITY means an entity in respect of which Kaiser is treated as a
      division or part for the purposes of Tax.

      KAISER INDEMNIFIED PARTIES has the meaning set forth in Clause 15.2.

      KAISER INDEMNITY PAYMENT means any payment made or which may be required
      to be made by Buyer to Kaiser under Clause 15.6.

      KAISER SHARES IN QAL means 442,399 of the Class A Ordinary Shares in QAL
      held and beneficially owned by Kaiser.

      KAISER'S SHARE OF QAL'S BORROWINGS means, at any time, the aggregate
      principal amount which would be payable by Kaiser as Gladstone Tolling
      Charge Prepayments (or, in the case of any Gladstone Tolling Charge
      Prepayment not denominated in US Dollars,

                                    Page 12
<PAGE>

      converted to US Dollars at its US Dollar Equivalent on the date two
      Business Days prior to the Effective Date) if the maturity of the
      aggregate principal amount of all borrowings by QAL evidenced by
      Debentures were accelerated pursuant to section 7.02 of the General Trust
      Deed.

      KNOWLEDGE, with respect to Kaiser and KACC, means the actual knowledge,
      information and belief of the individuals listed on Exhibit J-1 having
      made all reasonable inquiries, and with respect to Buyer, means the actual
      knowledge, information and belief of the individuals listed on Exhibit J-2
      having made all reasonable inquiries.

      LENDER CONSENT has the meaning set forth in Clause 11.1(d).

      LIABILITY means all costs, claims, charges, losses, damages, expenses,
      penalties and liabilities of any kind whether actual, contingent or
      prospective, including any reduction, limitation or restriction in the
      ability of a Person to claim a Tax Offset Item.

      LIBOR means the overnight rate displayed on the Reuters screen LIBOR01
      page on the Effective Date (or, if that rate is not displayed on the
      Effective Date, the last such rate displayed prior to the Effective Date),
      applicable to US Dollars.

      LIEN means, with respect to any property or asset, any mortgage, lien,
      claim, pledge, security interest or other encumbrance thereon.

      LME means the average London Metal Exchange 3-month price for 99.7%
      aluminum ingot in US Dollars per metric tonne for the calendar month
      immediately preceding the month in which the Effective Date occurs as
      reported by Platt's Metal Week. If the LME ceases to be published, the
      Parties shall agree on a substitute index intended to reflect the market
      price of primary aluminum ingot on a basis essentially similar to the LME.

                                    Page 13
<PAGE>

      NOTICE OF CLAIM has the meaning set forth in Clause 15.12(a)(i).

      ORDINARY SHARES has the meaning set forth in Clause 13.2(a).

      PARENT GUARANTEE means a guarantee and indemnity in the form of Exhibit M.

      PARTICIPANTS AGREEMENT means the agreements and other documents identified
      in Section I of Exhibit L.

      PARTICIPANTS CONSENT means the consent of the parties to the Participants
      Agreement (other than Kaiser and KACC) to the transfer of the Shares in
      QAL and the assumption and assignment of the Assumed Interests and
      Obligations pursuant to Section 30(D) of the Participants Agreement.

      PARTIES has the meaning set forth on the first page of this Agreement.

      PAYEE has the meaning set forth in Clause 22.4.

      PECHINEY LIMITED means Aluminium Pechiney Australia Pty. Limited, a New
      South Wales corporation.

      PERSON means any individual, corporation, trust, partnership, limited
      liability company, unincorporated body or other entity.

      PRELIMINARY KAISER ALUMINA PRICE has the meaning set forth in Clause
      5.1(c).

      PRELIMINARY KAISER BAUXITE PRICE has the meaning set forth in Clause
      5.1(b).

      PRIOR TAX has the meaning set forth in Clause 15.6(a).

      PROCEEDINGS has the meaning set forth in Clause 12.4.

      QAL means Queensland Alumina Limited, ABN 98 009 725 044.

                                    Page 14
<PAGE>

      QAL FINANCING AGREEMENTS means the agreements and other documents
      identified in Section IV of Exhibit L.

      QAL NET WORKING CAPITAL means the amount of the net working capital of QAL
      on the Effective Date determined in accordance with the accounting
      standards applied to the Audited Financial Statements and otherwise on the
      basis on which Exhibit C has been prepared, by reference to the Closing
      Balance Sheet.

      QAL NET WORKING CAPITAL ADJUSTMENT has the meaning set forth in Clause
      3(a).

      QAL PURCHASE PRICE has the meaning set forth in Clause 3.

      RECIPIENT has the meaning set forth in Clause 22.3(a)(i).

      RTL means Rio Tinto Limited, a Victorian corporation formerly known as CRA
      Limited.

      SALE APPROVAL MOTION means the motion seeking approval of the Sale
      Approval Order, as described in Clause 12.10.

      SALE PROCESS AND APPROVAL MOTION has the meaning set forth in Clause 12.7.

      SALE APPROVAL ORDER has the meaning set forth in Clause 12.10.

      SET-OFF AMOUNT means, where (i) Buyer has been notified by Kaiser and KACC
      that it is the Backup Bidder pursuant to the Bidding and Auction
      Procedures and is subsequently notified by Kaiser and KACC that they wish
      to consummate the Transaction with Buyer in lieu of the Successful Bidder,
      and (ii) the Base Share Price is equal to or greater than US$400,000,000,
      an amount equal to US$2,000,000 for each full 30 calendar day period
      (reduced pro rata for any lesser number of calendar days), beginning on
      the date that is 151 calendar days following the date of entry of the Sale
      Approval Order (as such term is

                                    Page 15
<PAGE>

      defined in the Bidding and Auction Procedures) and ending on the Effective
      Date (inclusive of both such dates).

      SHARES IN QAL means the Kaiser Shares in QAL and the KACC Share in QAL.

      SUCCESSFUL BIDDER has the meaning set forth in the Bidding and Auction
      Procedures.

      SUPPLIER has the meaning set forth in Clause 22.3(a)(i).

      TAX means any tax, duty, charge or levy imposed now or at any future date
      under the laws of Australia or any other country, including income tax,
      capital gains tax, payroll tax, fringe benefits tax, PAYG liability, sales
      tax, GST, customs duty and stamp duty, and also includes any associated
      penalties, fines or interest.

      TAX INVOICE has the meaning assigned to such term in the A New Tax System
      (Goods and Services Tax) Act 1999 (Cth).

      TAX OFFSET ITEM means any deduction, loss, credit, rebate, allowance,
      refund, set-off or other relief which may reduce, limit or defer a
      liability to Tax.

      TAX REFUND has the meaning set forth in Clause 15.6(b).

      TAX RETURN means any return, declaration, report, claim for refund,
      information return or other document (including any related or supporting
      estimates, elections, schedules, statements or information) filed or
      required to be filed in connection with the determination, assessment or
      collection of any Tax or the administration of any legislation relating to
      any Tax.

      TITLE CLAIMS means legal proceedings brought in any court of competent
      jurisdiction that is not a United States federal or state court seeking
      (i) damages from Buyer, or (ii) to impose a Lien upon the Shares in QAL,
      or (iii) to challenge or divest Buyer's legal or

                                    Page 16
<PAGE>

      beneficial ownership of the Shares in QAL, if success in such proceedings
      would render any of the representations and warranties made by Kaiser or
      KACC in Clauses 13.1(a) to (c) not being true and correct in all material
      respects on the date of this Agreement or on and as of the Closing Date.

      TRADE PRACTICES ACT means the TRADE PRACTICES ACT 1974 (Cth).

      TRANSACTION means the sale of the Assets Sold, the assumption of the
      Assumed Interests and Obligations and other liabilities, and the other
      transactions contemplated by this Agreement.

      TREASURER has the meaning set forth in Clause 10.1(a).

      TWENTY SECOND SUPPLEMENTAL TRUST DEED means the agreement identified as
      number 3 in Section IV of Exhibit L.

      UNISTAR ALUMINA SALES CONTRACT means the agreement identified as number 3
      on Exhibit D.

      UNISTAR PAYMENT has the meaning set forth in Clause 4.3.

      US DOLLARS or US$ means lawful money of the United States of America.

      US DOLLAR EQUIVALENT means, as at any date, the equivalent in US Dollars
      of an amount in Australian dollars converted at the rate displayed at or
      about 10:30 am (Melbourne time) on such date on the Reuters screen HSRA
      page.

      WORKING CAPITAL CEILING AMOUNT means A$35,000,000.

      WORKING CAPITAL FLOOR AMOUNT means A$15,000,000.

                                    Page 17
<PAGE>

1.2   In this Agreement, unless the context otherwise requires, capitalized
      terms not otherwise defined herein have the meanings assigned to such
      terms in the Participants Agreement.

1.3   Headings are for convenience only and do not affect interpretation. The
      following rules apply unless the context requires otherwise.

      (a)   The singular includes the plural and conversely.

      (b)   A gender includes all genders.

      (c)   If a word or phrase is defined, its other grammatical forms have a
            corresponding meaning.

      (d)   A reference to a person, corporation, trust, partnership, limited
            liability company or unincorporated body or other entity includes
            any of them.

      (e)   A reference to a Clause, Exhibit or Schedule is a reference to a
            Clause of, or an Exhibit or Schedule to, this Agreement. Disclosures
            made in any Clause, Exhibit or Schedule that are responsive to the
            requirements of any other Clause, Exhibit or Schedule are deemed to
            be incorporated therein by reference.

      (f)   A reference to an agreement or document (including a reference to
            this Agreement) is to the agreement or document as amended, varied,
            supplemented, novated or replaced.

      (g)   A reference to a party to this Agreement or another agreement or
            document includes the party's successors and permitted substitutes
            or assigns.

      (h)   A reference to legislation or to a provision of legislation includes
            a modification, amendment or re-enactment of it, a legislative
            provision substituted for it and a rule, regulation or statutory
            instrument issued under it.

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      (i)   A reference to WRITING includes a facsimile transmission and any
            means of reproducing words in a tangible and permanently visible
            form.

      (j)   The term INCLUDING means including without limitation.

2.    PURCHASE AND SALE OF ASSETS SOLD

      Subject to, and on the basis of, the representations, warranties and
      agreements contained in this Agreement, Buyer agrees to purchase from
      Kaiser and KACC, and Kaiser and KACC agree to sell to Buyer, the Assets
      Sold with effect from the Effective Date. For the avoidance of doubt, the
      intention of the Parties is that all incidents of ownership, including
      income, expenses and other results of operations represented by Kaiser's
      and KACC's proportionate ownership interest in QAL, except for certain
      specific financial arrangements set forth in this Agreement, shall be
      vested in Kaiser and KACC prior to the Effective Date and shall be vested
      in Buyer from and after the Effective Date.

3.    PURCHASE PRICE FOR THE SHARES IN QAL

      The purchase price for the Shares in QAL (the QAL PURCHASE PRICE) will be
      the Base Share Price, adjusted as follows:

      (a)   plus or minus the US Dollar Equivalent (determined on the date two
            Business Days prior to the date payment adjustment is to be made
            under Clause 9) of 20% of the amount by which the actual QAL Net
            Working Capital (computed in accordance with Clause 6):

            (i)   exceeds the Working Capital Ceiling Amount; or

            (ii)  is less than the Working Capital Floor Amount; and

                                    Page 19
<PAGE>

                  (If the actual QAL Net Working Capital exceeds the Working
                  Capital Ceiling Amount, an amount equal to 20.0% of such
                  excess amount will be added to the Base Share Price in
                  computing the QAL Purchase Price. If the actual QAL Net
                  Working Capital is less than the Working Capital Floor Amount,
                  an amount equal to 20.0% of such difference will be deducted
                  from the Base Share Price in computing the QAL Purchase Price
                  (QAL NET WORKING CAPITAL ADJUSTMENT).)

      (b)   plus the US Dollar amount, if any, by which Kaiser's Share of QAL's
            Borrowings immediately prior to the Effective Date (including
            obligations classified as current portion of long term debt) is less
            than US$60,000,000, determined on a dollar-for-dollar basis (ASSUMED
            DEBT ADJUSTMENT).

4.    PURCHASE PRICE FOR KAISER BAUXITE, KAISER ALUMINA AND OTHER ITEMS

4.1   The purchase price per dry metric tonne for the Kaiser Bauxite will be the
      aggregate of the Bauxite Inventory Charge for each BOL Grade comprising
      the Kaiser Bauxite, calculated on the assumption that bauxite is processed
      into alumina on a `first in first out' basis for each BOL Grade and on the
      basis on which Exhibit B has been prepared.

4.2   The purchase price for the Kaiser Alumina will be 12.5% of LME per metric
      tonne, calculated on the basis on which Exhibit A was prepared (the
      ALUMINA PURCHASE PRICE).

4.3   If the Effective Date occurs on or before Kaiser's shipment of 36,800
      metric tonnes of alumina during the fourth quarter of 2004 under the
      Unistar Alumina Sales Contract, Buyer will pay to Kaiser at the Closing
      US$1,786,000. If the Effective Date occurs after shipment of a portion
      (but less than all) of such 36,800 metric tonnes of alumina, Buyer will
      pay to Kaiser at the Closing US$1,050,000 plus an amount equal to US$20

                                    Page 20
<PAGE>

      multiplied by the number of metric tonnes of alumina remaining to be
      shipped during 2004 under such contract. If the Effective Date occurs
      after shipment of such 36,800 metric tonnes of alumina but prior to
      Kaiser's shipment of all or a portion of 105,000 metric tonnes of alumina
      during 2005 under such contract, Buyer will pay to Kaiser an amount equal
      to US$10 multiplied by the number of metric tonnes of alumina remaining to
      be shipped during 2005 under such contract. The amount determined in
      accordance with this Article 4.3 is referred to herein as the UNISTAR
      PAYMENT.

      4.4 If Kaiser notifies Comalco on or before the Effective Date that Kaiser
      has elected to terminate the Kaiser Alumina Sales Agreement identified as
      item number 1 on Exhibit D (the COMALCO ALUMINA SUPPLY AGREEMENT) pursuant
      to Article 4.3(f) thereof such that the effective date of termination is
      prior to December 31, 2005, Buyer will pay the Excess Kaiser Alumina
      Consideration to Kaiser.

4A.      DEPOSIT

4A.1  Within two business days after the entry of the Bidding and Auction
      Procedures Order, Buyer shall make a good faith deposit in the amount of
      US$29,000,000. If (i) there is no Auction, on the first Business Day after
      entry of the Sale Approval Order, or (ii) there is an Auction and Buyer is
      the Successful Bidder, on the first Business Day after completion of the
      Auction, or (iii) if there is an Auction and Buyer is the Backup Bidder,
      on the first Business Day after the Commencement Date (as applicable to
      the Backup Bidder), then in any such case Buyer shall pay an additional
      deposit of US$11,000,000, for a total deposit of US$40,000,000
      (collectively, the DEPOSIT). Buyer shall make the Deposit via wire
      transfer of immediately available funds to the account set forth in the

                                    Page 21
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      Deposit Escrow Agreement. Application of the Deposit shall be subject to
      the terms and provisions of this Agreement and the Deposit Escrow
      Agreement.

4A.2. Upon the Closing, KACC and Buyer shall deliver a joint written notice to
      the Deposit Escrow Agent directing the release of the Deposit to Sellers
      for application to the payment of the Estimated Purchase Price and Kaiser
      shall deliver a written notice to the Document Escrow Agent directing the
      release of the Documents in accordance with paragraph 3(b) of the Document
      Escrow Agreement.

4A.3. Upon termination of this Agreement pursuant to Clause 18.1(b)(ii), KACC
      and Buyer shall deliver a joint written notice to the Deposit Escrow Agent
      directing the release of the Deposit to the Sellers as liquidated damages
      and Kaiser shall deliver a written notice to the Document Escrow Agent
      directing the release and destruction of the Documents in accordance with
      paragraph 3(b) of the Document Escrow Agreement.

4A.4. Upon termination of this Agreement pursuant to any provision other than
      Clause 18.1(b)(ii), KACC and Buyer shall deliver a joint written notice to
      the Deposit Escrow Agent directing the release of the Deposit to the Buyer
      and Kaiser shall deliver a written notice to the Document Escrow Agent
      directing the release and destruction of the Documents in accordance with
      paragraph 3(b) of the Document Escrow Agreement.

5.    ESTIMATED PURCHASE PRICE

5.1   On the Closing Date, Buyer will pay to Kaiser, by wire transfer of
      immediately available funds, an amount on account of the purchase price
      for the Assets Sold (the ESTIMATED PURCHASE PRICE) equal to:

      (a)   in respect of the Shares in QAL, the Base Share Price, less the
            Deposit, less the Set-Off Amount (if any); plus

                                    Page 22
<PAGE>

      (b)   in respect of the Kaiser Bauxite, A$6,000,000 (converted to US
            Dollars at its US Dollar Equivalent on the date two Business Days
            prior to the Closing Date); provided, however, that at least 10 days
            prior to the Effective Date Kaiser and KACC shall deliver to Buyer a
            written statement in the form of Exhibit B stating the estimated
            Australian dollar amount of the Kaiser Bauxite as of the Effective
            Date (the PRELIMINARY KAISER BAUXITE PRICE) offset by a reasonable
            estimate of the amount due including GST (as defined for the
            purposes of Clause 22) to Buyer for bauxite invoiced but not paid
            (the ESTIMATED BAUXITE RECEIVABLES) and the amount stated in such
            written statement, if different, will be substituted for such
            A$6,000,000 amount; plus

      (c)   in respect of the Kaiser Alumina, US$6,000,000; provided, however,
            that at least 10 days prior to the Effective Date, Kaiser and KACC
            shall deliver to Buyer a written statement which states the number
            of metric tonnes of Kaiser Alumina that Kaiser and KACC estimate
            will exist on the Effective Date, calculated on the basis on which
            Exhibit A was prepared, multiplied by an amount in US$ equal to the
            Alumina Purchase Price (the PRELIMINARY KAISER ALUMINA PRICE) and
            the amount stated in such written statement, if different, will be
            substituted for such US$6,000,000 amount; plus

      (d)   on account of the GST Amount, A$1,800,000 (converted to US Dollars
            at its US Dollar Equivalent on the date two Business Days prior to
            the Closing Date); provided, however, that at least 10 days prior to
            the Effective Date Kaiser and KACC shall deliver to Buyer a written
            statement updating the estimated GST Amount to reflect any changes
            to the estimated Preliminary Kaiser Bauxite Price

                                    Page 23
<PAGE>

            in Clause 5.1(b) and the estimated Preliminary Kaiser Alumina Price
            in Clause 5.1(c), such written statement to also contain an estimate
            of the balance of the Gladstone Credit Allowances as at the
            Effective Date unless at least 10 days prior to the Effective Date,
            Buyer has delivered a written statement to Kaiser and KACC stating
            that the Commissioner of Taxation has issued a final ruling or
            similar final determination which, in Buyer's opinion results in no
            GST (as defined for the purposes of Clause 22) being imposed on that
            assumption. The estimated GST Amount determined from such written
            statements will be substituted for such A$1,800,000 amount. (For the
            purpose of estimating the GST Amount included in this Clause 5.1(d)
            to be A$1,800,000, it is assumed that the GST payable by Kaiser to
            Buyer under Clause 22.3 in consequence of the assumption by Buyer of
            the Gladstone Credit Allowances is zero.); plus

      (e)   A$0 as an estimate of the amount payable in respect of the QAL Net
            Working Capital Adjustment referred to in Clause 3(a); provided
            however that at least 10 days prior to the Effective Date Kaiser and
            KACC shall deliver to Buyer a written statement specifying the
            amount of the QAL Net Working Capital Adjustment that would be made
            if the Effective Date had occurred on the last day of the previous
            calendar month and the amount stated in such written statement, if
            different, will be substituted for such A$0 amount; plus

      (f)   US$0 as an estimate of the amount payable in respect of the Assumed
            Debt Adjustment referred to in Clause 3(b); plus

      (g)   the Unistar Payment, if applicable, plus any GST payable in
            accordance with Clause 22, if applicable; plus

                                    Page 24
<PAGE>

      (h)   the Excess Kaiser Alumina Consideration, if applicable, plus any GST
            payable in accordance with Clause 22, if applicable.

5.2   The Estimated Purchase Price will bear interest from, but not including,
      the Effective Date to, and including, the day immediately preceding the
      Closing Date, calculated at LIBOR.

6.    FINAL PURCHASE PRICE

6.1   As soon as practicable, and in any event within 30 days, following the
      Effective Date:

      (a)   the Parties will cause QAL to prepare and deliver to the Parties:

            (i)   a balance sheet for QAL as at the Effective Date (the CLOSING
                  BALANCE SHEET) containing line items, notes and schedules
                  similar to those included in the Audited Financial Statements,
                  but in any event setting forth specifically the amount of the
                  Gladstone Credit Allowances and, to the extent practicable,
                  prepared in accordance with Australian generally accepted
                  accounting principles without giving effect to any changes
                  therein that may have occurred after December 31, 2003, and on
                  a basis consistent with the Audited Financial Statements;

            (ii)  a computation of each BOL Grade comprising the Kaiser Bauxite
                  as at the Effective Date, detailing each BOL Grade and
                  relevant delivery months and whether such bauxite is in
                  stockpile, in transit or in process (in the form of Exhibit
                  B);

            (iii) [INTENTIONALLY OMITTED];

                                    Page 25
<PAGE>

            (iv)  a computation of the QAL Net Working Capital as at the
                  Effective Date (in the form of Exhibit C); and a computation
                  of the amount of the QAL Net Working Capital Adjustment
                  calculated in the manner set forth in Clause 3(a);

            (v)   a computation of Kaiser's Share of QAL's Borrowings
                  immediately prior to the Effective Date;

            (vi)  a computation of the Assumed Debt Adjustment; and

            (vii) a computation of the component referred to in paragraph (b) of
                  the definition of Bauxite Inventory Charge for each BOL Grade
                  comprising the Kaiser Bauxite, determined in accordance with
                  such paragraph (b) and Clause 4.1, showing the amount paid and
                  the amount payable in respect of the Kaiser Bauxite (in the
                  form in Exhibit B).

            All computations in this Clause 6.1(a) shall be set out in
            reasonable detail and, as applicable, include particulars of the
            applicable Bauxite Shipping Charges. In addition, Kaiser, KACC and
            Buyer will jointly request that QAL make all computations as of the
            Effective Date on the basis that the Effective Date will be treated
            as if it were a financial year end date of QAL. Any costs charged by
            QAL in preparing the Closing Balance Sheet and computations referred
            to in this Clause 6.1(a) will be borne equally by Kaiser and Buyer.

      (b)   Kaiser will prepare (or cause to be prepared) and deliver to Buyer:

            (i)   a computation of the component referred to in paragraph (a) of
                  the definition of Bauxite Inventory Charge for each BOL Grade
                  comprising

                                    Page 26
<PAGE>

                  the Kaiser Bauxite, determined in accordance with that
                  paragraph and Clause 4.1 (in the form of Exhibit B), such
                  computation to be set out in reasonable detail and to include
                  particulars of the BOL Grades comprising the Kaiser Bauxite;

            (ii)  a computation of the GST Amount, such computation to be set
                  out in reasonable detail;

            (iii) all preliminary invoices and preliminary royalty invoices
                  relating to Kaiser Bauxite which are delivered by CAL to
                  Kaiser or KACC prior to the Effective Date and, where
                  relevant, if the month in which the Effective Date occurs is
                  not the last month in a calendar quarter, a preliminary
                  royalty invoice in respect of the period since the end of the
                  preceding calendar quarter until the end of the month in which
                  the Effective Date occurs, which invoices will be used in the
                  calculation referred to in Clause 6.1(c); and

            (iv)  a calculation of the Kaiser Bauxite as of the Effective Date
                  in the form of Exhibit B, which shall indicate, based upon the
                  principles contained in Clause 4.1 and this Clause 6 and
                  otherwise on a basis consistent with the calculation of the
                  Preliminary Kaiser Bauxite Price set forth in Clause 5.1, the
                  final purchase price for the Kaiser Bauxite (the FINAL KAISER
                  BAUXITE PRICE). If the Final Kaiser Bauxite Price exceeds the
                  Preliminary Kaiser Bauxite Price, Buyer will pay Kaiser an
                  amount equal to the difference as part of the payment
                  adjustment to be made under Clause 9. If the Preliminary
                  Kaiser Bauxite Price exceeds the Final Kaiser Bauxite Price,

                                    Page 27
<PAGE>

                  Kaiser will pay Buyer an amount equal to the difference as
                  part of the payment adjustment to be made under Clause 9;

            (v)   a calculation of the Kaiser Alumina as of the Effective Date
                  in the form of Exhibit A, based on information contained in
                  the "blue book" of QAL financial and operating information
                  prepared by QAL management for the month ending on the
                  Effective Date, which shall indicate, based upon the
                  principles contained in this Clause 6, the final purchase
                  price for the Kaiser Alumina (the FINAL KAISER ALUMINA PRICE).
                  If the Final Kaiser Alumina Price exceeds the Preliminary
                  Kaiser Alumina Price, Buyer will pay Kaiser an amount equal to
                  the difference as part of the payment adjustment to be made
                  under Clause 9. If the Preliminary Kaiser Alumina Price
                  exceeds the Final Kaiser Alumina Price, Kaiser will pay Buyer
                  an amount equal to the difference as part of the payment
                  adjustment to be made under Clause 9; and

            (vi)  a computation of the amount by which the QAL Net Working
                  Capital Adjustment computed by QAL in accordance with Clause
                  6.1(a)(iv) exceeds or is less than the estimated amount
                  thereof determined in accordance with Clause 5.1(e). If the
                  amount of the QAL Net Working Capital Adjustment as so
                  computed exceeds the estimated amount paid pursuant to Clause
                  5.1(e), Buyer shall pay an amount equal to the difference to
                  Kaiser and KACC as part of the payment adjustment to be made
                  under Clause 9. If the amount of the QAL Net Working Capital
                  Adjustment as so computed is less than the estimated amount
                  paid

                                    Page 28
<PAGE>

                  pursuant to Clause 5.1(e), Kaiser and KACC shall pay an amount
                  equal to the difference to Buyer as part of the adjustment to
                  be made under Clause 9.

      (c)   Buyer will prepare (or cause to be prepared) and deliver to Kaiser a
            computation of the amount due including GST (as defined for purposes
            of Clause 22) to Buyer from Kaiser as at the Effective Date for
            bauxite invoiced but not paid (the FINAL BAUXITE RECEIVABLES), such
            computation to be set out in reasonable detail. If the Final Bauxite
            Receivables exceeds the Estimated Bauxite Receivables, Kaiser will
            pay Buyer an amount equal to the difference as part of the payment
            adjustment to be made under Clause 9. If the Estimated Bauxite
            Receivables exceeds the Final Bauxite Receivables, Buyer will pay
            Kaiser an amount equal to the difference as part of the payment
            adjustment to be made under Clause 9.

6.2   The final purchase price for the Assets Sold and the GST Amount (the FINAL
      PURCHASE PRICE), will be computed in accordance with Clauses 3, 4, 5.1 and
      22 based on the Closing Balance Sheet and on the computations and invoices
      delivered under Clause 6.1. For the avoidance of doubt, the Parties agree
      that there will be no purchase price adjustment due to implementation of
      changes in Australian accounting standards that may have occurred after
      December 31, 2003, including without limitation any such changes described
      in the Note appearing in Exhibit C.

6.3   If there is any dispute between the Parties as to the content or
      methodology of the Closing Balance Sheet or any computation delivered or
      to be made under this Clause 6, either Buyer or Kaiser may refer the
      matter to QAL's independent, external auditors. Any determination made by
      QAL's independent, external auditors will be conclusive and

                                    Page 29
<PAGE>

      binding on the Parties (in the absence of manifest error). The costs of
      any such determination will be borne equally by Kaiser and Buyer.

7.    ASSUMED INTERESTS AND OBLIGATIONS

7.1   In connection with the sale of the Shares in QAL, with effect on and from
      the Effective Date, Kaiser and KACC hereby agree to assign to Buyer, and
      Buyer hereby agrees to accept and assume, all of the Assumed Interests and
      Obligations; it being understood that there are no cure amounts owed with
      respect to the agreements comprising the Assumed Interests and
      Obligations. To the extent that any cure amounts shall be determined to be
      due and owing pursuant to Section 365 of the Bankruptcy Code, Kaiser and
      KACC shall pay any such cure amounts.

7.2   Additionally, as of the Effective Date, Kaiser and KACC will cause KAII to
      assign to Buyer, and Buyer will assume all of KAII's obligations under the
      contracts listed on Exhibit D attached hereto (KAISER ALUMINA SALES
      CONTRACTS) subject to third party consents or acknowledgements in
      accordance with Clause 11.1(e); it being understood that there are no cure
      amounts owed with respect to the Kaiser Alumina Sales Contracts. To the
      extent that any cure amounts shall be determined to be due and owing
      pursuant to Section 365 of the Bankruptcy Code, Kaiser and KACC shall pay
      any such cure amounts. The Parties agree, however, that the rights
      assigned to Buyer under this Clause 7.2 shall not include the right to
      receive payment on trade receivables in respect of alumina inventory
      shipped prior to the Effective Date. In the event that Buyer receives
      payment in respect of any such trade receivables, it shall as soon as
      practicable remit such payment to KAII. Kaiser and KACC will cause KAII to
      ensure that no amendments are made to the Kaiser Alumina Sales Contracts
      without obtaining the prior written consent of Buyer;

                                    Page 30
<PAGE>

      provided, however that no provision of this Clause 7.2 shall prohibit
      either Kaiser or KACC from taking actions in the ordinary course of
      business with respect to any such agreement or document so long as the
      economic effect of such actions does not extend beyond the Effective Date.

7.3   It is agreed, for the avoidance of doubt, that no consideration is payable
      by Buyer to Kaiser in respect of any rights forming part of the Assumed
      Interests and Obligations or under Kaiser Alumina Sales Contracts agreed
      to be assigned to Buyer under this Agreement or assigned to Buyer under
      the Kaiser Assignment and Assumption Agreement and the KAII Assignment and
      Assumption Agreement, as applicable.

7.4   The assignments and assumptions described in this Clause 7 will be made:

      (a)   in respect of Clause 7.1, under an assignment and assumption
            agreement in the form of Exhibit E (the KAISER ASSIGNMENT AND
            ASSUMPTION AGREEMENT) to be delivered on the Closing Date; and

      (b)   in respect of Clause 7.2, under an assignment and assumption
            agreement in the form of Exhibit F (the KAII ASSIGNMENT AND
            ASSUMPTION AGREEMENT) to be delivered on the Closing Date.

7.5   Kaiser and KACC agree with the Buyer that between the date of execution of
      this Agreement and the Effective Date:

      (a)   neither of them will, and they will procure that KAII does not,
            enter into any new contracts for the sale of Kaiser Alumina in
            addition to those listed in Exhibit D; and

                                    Page 31
<PAGE>

      (b)   neither of them will agree to any amendments being made to, or to
            any of the underlying documents which evidence, the Assumed
            Interests and Obligations without the prior written approval of the
            Buyer;

      if the economic effect of any such new contracts or amendments would
      extend beyond the Effective Date.

8.    CLOSING

8.1   The closing (the CLOSING) of the sale of the Assets Sold and the
      assumption of the Assumed Interests and Obligations will occur on the
      Effective Date if the Effective Date is a Business Day, or on the Business
      Day immediately following the Effective Date if the Effective Date is not
      a Business Day, at 11:00 am at the offices of Sullivan & Cromwell LLC, 125
      Broad Street, New York, New York, unless Buyer and Kaiser agree otherwise.
      The actual date on which the Closing is to occur is referred to as the
      CLOSING DATE.

8.2   (a)   Each of Kaiser and KACC (and Buyer, if it is a Participant or an
            affiliate of a Participant) will in the period between the date of
            signing this Agreement and the Closing Date use its commercially
            reasonable efforts to ensure that QAL conducts its business in the
            ordinary course of business consistent with past practices.

      (b)   Each of KACC and Kaiser will ensure that deliveries of alumina by
            QAL to Kaiser under Article 17 of the Participants Agreement are
            made so as to ensure that on the Effective Date there is a positive
            quantity of Kaiser Alumina.

                                    Page 32
<PAGE>

8.3   On the Closing Date:

      (a)   Kaiser will deliver to Buyer:

            (i)   a share certificate in respect of the Kaiser Shares in QAL;

            (ii)  an instrument of transfer of the Kaiser Shares in QAL in
                  registrable form duly executed by Kaiser and dated as of the
                  Effective Date; and

            (iii) Tax Invoices as defined in the A New Tax System (Goods and
                  Services Tax) Act 1999 (Cth) (TAX INVOICE) in respect of the
                  taxable supplies made by Kaiser under this Agreement.

      (b)   KACC will deliver to Buyer:

            (i)   a share certificate for the KACC Share in QAL;

            (ii)  an instrument of transfer of the KACC Share in QAL in
                  registrable form duly executed by KACC and dated as of the
                  Effective Date; and

            (iii) the Confidentiality Agreements referred to in Clause 12.13.

      (c)   Buyer will deliver to Kaiser a Tax Invoice in respect of Buyer's
            assumption of the Gladstone Credit Allowances, if applicable.

      (d)   The Parties will deliver the Kaiser Assignment and Assumption
            Agreement, as specified in Clause 7.4(a).

      (e)   Buyer and KACC or its designee will deliver the Alumina Supply
            Agreement (the ALUMINA SUPPLY AGREEMENT), in the form of Exhibit G;

      (f)   Buyer will deliver and KACC will procure KAII to deliver, the KAII
            Assignment and Assumption Agreement as specified in Clause 7.4(b).

                                    Page 33
<PAGE>

      (g)   Buyer will procure Buyer's Parent to deliver the Parent Guarantee.

      (h)   Kaiser and KACC will, by memorandum referred to in Article 40(a) of
            the Constitution of QAL, remove from office each director of QAL
            which they have appointed pursuant to such Article 40(a).

      (i)   KACC will deliver the assignment of all of KACC's rights and the
            delegation of all of KACC's obligations under each of the
            Confidentiality Agreements to Buyer.

      (j)   the Parties shall deliver, in form and substance reasonable
            satisfactory to Buyer:

            (i)   the assignments to, and assumption by Buyer and/or Buyer's
                  Parent, as applicable, of all the obligations of Kaiser and
                  KACC, respectively, under the QAL Financing Agreements (other
                  than obligations to be paid or performed prior to the
                  Effective Date); and

            (ii)  the assignments to, and assumption by Buyer and/or Buyer's
                  Parent, as applicable, of all the obligations of Kaiser and
                  KACC under the documents and other agreements listed on
                  Exhibit L, and the documents and other agreements identified
                  in Clauses (b), (f), (g), (h) and (i) of the definition of
                  Assumed Interests and Obligations and, in the case of KAII,
                  the Kaiser Alumina Sales Contracts.

      (k)   Upon the taking of the actions referred to in Clauses 8.3(a) to (j):

            (i)   Buyer will deliver to Kaiser the Estimated Purchase Price
                  (with interest as applicable) in US Dollars by wire transfer
                  of immediately available funds

                                    Page 34
<PAGE>

                  to the account(s) notified to Buyer by Kaiser no later than
                  three Business Days prior to the Closing Date; and

            (ii)  KACC and Buyer will instruct the Deposit Escrow Agent to
                  release the Deposit in accordance with Section 1.2 of the
                  Deposit Escrow Agreement.

8.4   All the actions taken as required by Clause 8.3 will be deemed to be taken
      simultaneously on the Closing Date, and no one such action will be deemed
      to be completed until all such actions are completed. No such action will
      have effect, and the Closing will be deemed not to have occurred, until
      Kaiser has received verification of receipt of the amounts mentioned in
      Clauses 8.3(k). On receipt of such verification, Kaiser will immediately
      notify Buyer and will instruct the Document Escrow Agent to release the
      documents held by it in escrow.

8.5   The documents mentioned in Clause 8.3 will, after delivery under Clause
      8.3, be held in escrow by the Document Escrow Agent, until released as
      contemplated by Clause 8.4 and provided for in the Document Escrow
      Agreement.

8.6   Once the Closing has occurred as contemplated by Clause 8.4, it will be
      deemed to have occurred as of the Effective Date.

8.7   At Buyer's request, Kaiser and KACC will do all other acts and things
      reasonably within their power to have Buyer registered as the holder of
      the Shares in QAL on the Closing Date. As between Kaiser, KACC and Buyer,
      ownership of the Shares in QAL will, if the Closing occurs, be transferred
      to Buyer with effect as of the Effective Date notwithstanding that the
      legal transfer of the Shares in QAL may be registered by QAL at a later
      date.

                                    Page 35
<PAGE>

8.8   Following entry of the Sale Approval Order, the Parties will as promptly
      as practicable, and will use their respective commercially reasonable
      efforts to cause QAL to, do all other acts and things necessary or
      advisable such that, as of the Effective Date, all third party consents in
      respect of the agreements and other documents identified in Exhibit L and
      the agreements and other documents identified in Clauses (b), (f), (g),
      (h) and (i) of the definition of Assumed Interests and Obligations shall
      have been obtained.

9.    POST CLOSING

      (a)   The Final Purchase Price for the Assets Sold including the final GST
            Amount, will be computed as provided in Clause 6.2 and any payment
            adjustment necessary to reflect the aggregate net differences
            between:

            (i)   the Base Share Price and the QAL Purchase Price (which
                  includes the QAL Net Working Capital Adjustment and the
                  Assumed Debt Adjustment);

            (ii)  the Preliminary Kaiser Bauxite Price and the Final Kaiser
                  Bauxite Price, as provided in Clause 6.1(b);

            (iii) the Preliminary Kaiser Alumina Price and the Final Kaiser
                  Alumina Price; and

            (iv)  the Estimated Bauxite Receivables and the Final Bauxite
                  Receivables;

            will, subject to Clause 9(b), be made by Kaiser or Buyer, as
            applicable, following written demand therefor sent no earlier than
            the date 30 days after the Effective Date, or, if that is not a
            Business Day, on the next Business Day (the ADJUSTMENT DATE). If the
            final GST Amount determined in accordance with Clause 6.1(b)(ii)

                                    Page 36
<PAGE>

            differs from the amount paid under Clause 5.1(d), then the Parties
            will issue GST adjustment notes as may be necessary to enable them
            to satisfy their respective GST obligations on the Adjustment Date.

      (b)   In the event of a dispute being referred to QAL's independent,
            external auditors as provided in Clause 6.3, any necessary payment
            adjustment with respect to the amount disputed will be made on the
            date seven days after the final determination of such dispute by
            QAL's independent, external auditors, or if that is not a Business
            Day, on the next Business Day.

      (c)   For the purposes of determining differences under paragraph (a) any
            amount computed or expressed in Australian Dollars will be converted
            to its US Dollar Equivalent on the date which is two Business Days
            prior to the Adjustment Date.

      (d)   As between Buyer and Kaiser, Buyer will be responsible for paying
            any Bauxite Shipping Charges referred to in Exhibit B.

      (e)   [INTENTIONALLY OMITTED]

      (f)   If the Final Purchase Price including the final GST Amount
            determined in accordance with Clause 9(a) exceeds the Estimated
            Purchase Price, Buyer shall pay the undisputed amount of such
            difference by wire transfer in immediately available funds to an
            account designated by Kaiser no later than 10 Business Days after
            Kaiser's written demand for such payment. If the Final Purchase
            Price including the final GST Amount is less than the Estimated
            Purchase Price, Kaiser shall pay the undisputed amount of such
            difference to Buyer by wire transfer in immediately available funds
            no later than 10 Business Days after Buyer's written

                                    Page 37
<PAGE>

            demand for such payment. Neither Kaiser nor Buyer may make a demand
            for payment of such difference, written or otherwise, prior to the
            expiration of the time period referenced in Clause 9(a). Payment of
            any disputed amounts related to the determination of the Final
            Purchase Price including the final GST Amount shall be governed by
            the provisions of Clause 9(b).

10.   FOREIGN ACQUISITIONS AND TAKEOVERS ACT

10.1  Except for this Clause 10 and the other Clauses referred to in Clause
      10.3, the provisions of this Agreement will not be binding unless and
      until either:

      (a)   the Treasurer of the Commonwealth of Australia (the TREASURER) has
            not made an order under Part II of the Foreign Acquisitions and
            Takeovers Act 1975 (Cth) (the ACT) (other than an interim order
            under Section 22 of the Act which has expired) within the time limit
            specified in Section 26 of the Act; or

      (b)   a notice in writing is issued by or on behalf of the Treasurer
            (without any term or condition which Buyer considers unacceptable)
            stating or to the effect that the Australian Government does not
            object to Buyer entering into this Agreement or acquiring an
            interest in the Shares in QAL, (whichever first occurs) in respect
            of a notice given by Buyer under that Act in relation to this
            Agreement.

10.2  Buyer will give the notice by it under the Act in relation to this
      Agreement mentioned in Clause 10.1 within 10 Business Days after the date
      of execution of this Agreement.

10.3  Except for this Clause 10, and Clauses 1, 17, 18.3, 19, 20, 21, 22, 23,
      24, 25, 27, 28 and 29, the provisions of this Agreement will be null and
      void and of no further effect if this Agreement does not become binding
      under this Clause.

                                    Page 38
<PAGE>

11.   OTHER CONDITIONS PRECEDENT

11.1  The obligations of the Parties to consummate the transactions contemplated
      by this Agreement will be subject to the fulfillment on or prior to the
      Closing Date of the following conditions precedent (except to the extent
      they are waived by both Buyer and Kaiser and KACC):

      (a)   the obtaining of:

            (i)   written advice from the Australian Competition and Consumer
                  Commission that it does not propose to intervene in the
                  transfer of the Shares in QAL;

            (ii)  approvals, consents or authorisations from Governmental
                  Entities under applicable competition legislation (such as the
                  US Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
                  amended), or other applicable laws or regulations that may
                  limit or restrict the ability of the Parties to consummate the
                  transactions contemplated by this Agreement, if any; and

            (iii) any approvals, consents or authorisations of Governmental
                  Entities for the transactions contemplated by this Agreement
                  made necessary by a change in applicable law after the date of
                  the Agreement, except where the failure to obtain any such
                  authorisation would not be reasonably likely to have,
                  individually or in the aggregate, a material adverse effect on
                  the ability of the Parties to consummate the transactions
                  contemplated by this Agreement or on the value of the Shares
                  in QAL or the interests and rights included in the Assumed
                  Interests and Obligations, the Alumina Supply Agreement or in
                  the Kaiser Alumina Sales Contracts, taken as a whole;

                                    Page 39
<PAGE>

      (b)   the Sale Approval Order shall have been entered and not stayed;

      (c)   there shall be no order, writ, injunction or decree of any
            Governmental Entity on any of the Parties prohibiting, and there
            shall be no actions, suits or proceedings pending in, before or by
            any Governmental Entity (other than an action, suit or proceeding
            which Buyer determines, in good faith and after consultation with
            external counsel, is without merit), seeking to prohibit, or
            challenging the validity of, the transactions contemplated by this
            Agreement;

      (d)   consents to the transactions contemplated by this Agreement
            necessary under the DIP Facility (the LENDER CONSENT) shall have
            been obtained;

      (e)   consents or acknowledgements from the other parties thereto that are
            necessary, if any, under the Kaiser Alumina Sales Contracts shall
            have been obtained; and

      (f)   the Participants Consent shall have been received.

11.2  Buyer's obligations to consummate the transactions contemplated by this
      Agreement will (unless waived by Buyer) be conditional upon the following:

      (a)   the representations and warranties of Kaiser and KACC in Clause 13
            being true and correct in all material respects on the date of this
            Agreement and on and as of the Effective Date with the same force
            and effect as if made on and as of that date, except for:

            (i)   changes contemplated by this Agreement;

            (ii)  those representations and warranties which address matters
                  only as of a particular date (which shall be true and correct
                  as of such date); or

                                    Page 40
<PAGE>

            (iii) to the extent that failure of a representation and warranty
                  (which was not actually known by Kaiser or KACC to be
                  incorrect on the date of execution of this Agreement) to be so
                  true and correct as of the Effective Date would not be
                  reasonably likely to have, individually or in the aggregate, a
                  material adverse effect on the ability of Kaiser and KACC to
                  consummate the transactions contemplated by this Agreement or
                  on (x) the value of the Shares in QAL, (y) the interests and
                  rights included in the Assumed Interests and Obligations,
                  taken as a whole, or (z) the Kaiser Alumina Sales Contracts,
                  taken as a whole,

            and each of Kaiser and KACC having delivered to Buyer a certificate
            to that effect, dated as of the Effective Date, signed by a
            principal financial or accounting officer of Kaiser and KACC in form
            and substance reasonably satisfactory to Buyer;

      (b)   each of Kaiser and KACC having performed or complied with all
            provisions of this Agreement to be performed or complied with by it
            on or prior to the Closing Date except where the failure to so have
            performed or complied would not be reasonably likely to have,
            individually or in the aggregate, a material adverse effect on (w)
            the ability of Kaiser or KACC to consummate the transactions
            contemplated in this Agreement, (x) the value of the Shares in QAL,
            (y) the interests and rights included in the Assumed Interests and
            Obligations, taken as a whole, or (z) the interests and rights under
            the Kaiser Alumina Sales Contracts, taken as a whole;

                                    Page 41
<PAGE>

      (c)   since the date hereof, there not having occurred any material
            adverse change in the business of QAL (including its assets) except
            for any changes:

            (i)   resulting from changes in general economic or market
                  conditions or changes that generally affect:

                  (A)   the production of and market for alumina and/or
                        aluminium generally; or

                  (B)   businesses of the same type as the business conducted by
                        QAL; or

            (ii)  in the general level of expenditures required, necessary or
                  desirable to be made in the operation of the business of QAL
                  as it is currently being carried on;

      (d)   the directors of QAL having duly resolved (subject only to
            production of the documents referred to in Clause 8.3(a)(i) and (ii)
            and 8.3(b)(i) and (ii), the payment of stamp duty on the documents
            referred to in Clauses 8.3(a)(ii) and 8.3(b)(ii) and the occurrence
            of the Closing) to register the transfer of the Shares in QAL, to
            cancel the existing share certificates for the Shares in QAL, and to
            issue a new share certificate for the Shares in QAL in the name of
            Buyer;

      (e)   no administrator having been appointed for QAL, no step preliminary
            to the appointment of an administrator having been taken, no
            application or order having been made or proceedings commenced or
            resolution having passed or proposed in a notice of meeting or
            application having been made to the court for the winding up,
            deregistration or dissolution of QAL, nor shall QAL have entered
            into any arrangement, compromise or composition with or assignment
            for the benefit of its

                                    Page 42
<PAGE>

            creditors and QAL shall not be insolvent within the meaning of
            Section 95A of the Corporations Act 2001 of Australia; and

      (f)   receipt (in form and substance reasonably satisfactory to Buyer) of:

            (i)   all consents required from the General Trustee and/or the
                  Special Trustee (as defined in the Twenty Second Supplemental
                  Trust Deed) for the delivery of the Kaiser Assignment and
                  Assumption Agreement;

            (ii)  consents to the assignment to, and assumption by the Buyer
                  and/or Buyer's Parent, as applicable, of all the obligations
                  of Kaiser and KACC, respectively, under the QAL Financing
                  Agreements (other than obligations to be paid or performed
                  prior to the Effective Date); and

            (iii) such other consents as Buyer deems reasonably necessary for
                  the assignment to, and assumption by the Buyer and/or Buyer's
                  Parent, as applicable, of all the obligations of Kaiser and
                  KACC under the documents and other agreements listed on
                  Exhibit L, and the documents and other agreements identified
                  in Clauses (b), (f), (g), (h) and (i) of the definition of
                  Assumed Interests and Obligations and, in the case of KAII,
                  the Kaiser Alumina Sales Contracts.

11.3  Kaiser's and KACC's obligations to consummate the transactions
      contemplated by this Agreement will (unless waived by Kaiser) be
      conditional upon the following:

      (a)   the representations and warranties of Buyer contained in Clause 14
            being true and correct in all material respects on the date of this
            Agreement, and on and as of the Effective Date as if made on and as
            of that date, except for:

                                    Page 43
<PAGE>

            (i)   changes contemplated by this Agreement;

            (ii)  those representations and warranties which address matters
                  only as of a particular date (which shall be true and correct
                  as of such date); or

            (iii) to the extent that failure of a representation and warranty
                  (which was not actually known by Buyer to be incorrect on the
                  date of execution of this Agreement) to be so true and correct
                  as of the Effective Date would not be reasonably likely to
                  have, individually or in the aggregate, a material adverse
                  effect on the ability of Buyer to consummate the transactions
                  contemplated by this Agreement, or on the value of the
                  consideration to be received by Kaiser and KACC under this
                  Agreement,

            and Buyer having delivered to Kaiser a certificate to that effect,
            dated as of the Effective Date, signed by a principal financial or
            accounting officer of Buyer in form and substance reasonably
            satisfactory to KACC;

      (b)   Buyer having performed or complied with all provisions of this
            Agreement to be performed or complied with by it on or prior to the
            Closing Date except where the failure to so have performed or
            complied would not be reasonably likely to have, individually or in
            the aggregate, a material adverse effect on the ability of Buyer to
            consummate the transactions contemplated in this Agreement, or on
            the value of the consideration to be received by Kaiser and KACC
            under this Agreement; and

                                    Page 44
<PAGE>

      (c)   Buyer shall have paid to Kaiser, via wire transfer of immediately
            available funds, an amount equal to the Estimated Purchase Price,
            and Kaiser shall have received the Deposit from the Deposit Escrow
            Agent; and

      (d)   receipt of:

            (i)   all consents required from the General Trustee and/or the
                  Special Trustee (as defined in the Twenty Second Supplemental
                  Trust Deed) for the delivery of the Kaiser Assignment and
                  Assumption Agreement;

            (ii)  consents, in form and substance reasonably satisfactory to
                  Kaiser and KACC, to the assignment to, and assumption by the
                  Buyer and/or Buyer's Parent, as applicable, of all the
                  obligations of Kaiser and KACC, respectively, under the QAL
                  Financing Agreements (other than obligations to be paid or
                  performed prior to the Effective Date); and

            (iii) such other consents as Kaiser, KACC and KAII deem reasonably
                  necessary for the assignment to, and assumption by the Buyer
                  and/or Buyer's Parent, as applicable, of all the obligations
                  of Kaiser and KACC under the documents and other agreements
                  listed on Exhibit L, and the documents and other agreements
                  identified in Clauses (b), (f), (g), (h) and (i) of the
                  definition of Assumed Interests and Obligations and, in the
                  case of KAII, the Kaiser Alumina Sales Contracts.

12.   FURTHER ASSURANCES AND OTHER MATTERS RELATING TO CONDITIONS PRECEDENT

12.1  Each of the Parties will use its commercially reasonable efforts to
      procure the satisfaction of all conditions precedent applicable to such
      Party, and will use its commercially

                                    Page 45
<PAGE>

      reasonable efforts to assist the other Parties in procuring the
      satisfaction of all conditions precedent applicable to such other Parties.

12.2  Each Party will use its commercially reasonable efforts to obtain, as
      promptly as practicable, all approvals, consents and authorisations of all
      Governmental Entities that may be or become necessary for its execution
      and delivery of, and the performance of its obligations pursuant to, this
      Agreement (including those referred to in Clauses 10.1 and 11.1(a))
      including responding to any inquiries, requests for additional information
      or other communications received from any Governmental Entity in
      connection with any such approvals, consents and authorisations.

12.3  Notwithstanding that a Party is not a Party which is obliged to use its
      commercially reasonable efforts to obtain an approval, consent or
      authorisation referred to in Clause 12.2, it will, to the extent
      reasonably requested, cooperate with the Parties which are so obliged with
      a view to obtaining such approval, consent or authorisation.

12.4  If prior to Closing any actions, suits or proceedings commenced against
      any Party (DEFENDING PARTY) or any other party, in any court, before or by
      any Governmental Entity, or before any arbitrator, seek to prohibit, or
      challenging the validity of, any of the transactions contemplated by this
      Agreement (PROCEEDINGS):

      (a)   the Defending Party will diligently and in good faith defend the
            Proceedings against it and the Parties will co-operate in the
            defense of the Proceedings;

      (b)   if the Proceedings are against a party other than a Party, the
            Parties will cooperate with a view to the Proceedings being properly
            defended; and

                                    Page 46
<PAGE>

      (c)   all reasonable legal costs and expenses incurred by any Party (after
            consultation with the other Parties) in performing its obligations
            under paragraph (a) or (b) will be borne equally between the
            Parties, except that KACC and Kaiser shall bear all of their own
            costs and expenses and any costs and expenses of KAII related to
            obtaining the entry of the Sale Process and Approval Motion, the
            Sale Approval Motion and the Sale Approval Order.

12.5  Each Party will take all necessary action to cause the conditions
      precedent referred to in Clauses 11.1, 11.2 and 11.3 to be satisfied as
      promptly as practicable, but in any event such that the Effective Date
      occurs no later than February 1, 2005.

12.6  Buyer will apply to the Australian Competition and Consumer Commission for
      the written advice referred to in Clause 11.1(a)(i) within 10 Business
      Days after the date of execution of this Agreement.

12.7  Promptly after execution of this Agreement, KACC and Kaiser shall file a
      motion with the Bankruptcy Court (the SALE PROCESS AND APPROVAL MOTION)
      (which shall be if necessary an expedited or emergency motion) seeking,
      among other things, (i) approval of the Bidding and Auction Procedures,
      (ii) authorizing the sale of the Assets Sold and the other transactions
      contemplated by this Agreement to the Successful Bidder or Backup Bidder
      in the event of an Auction or to Buyer without conducting an Auction if no
      Qualified Bid is received and (iii) scheduling a hearing on the approval
      of the Sale Approval Order. The terms and conditions of the Sale Process
      and Approval Motion shall be reasonably satisfactory to Kaiser, KACC and
      Buyer.

12.8  Promptly after the filing of the Sale Process and Approval Motion, KACC
      and Kaiser shall use their commercially reasonable efforts to obtain a
      hearing (the BANKRUPTCY COURT

                                    Page 47
<PAGE>

      HEARING) thereon at the earliest permissible date on which the Bankruptcy
      Court will hear the matter but in any event no later than September 27,
      2004. Upon obtaining a hearing date, KACC and Kaiser shall give notice of
      the Sale Process and Approval Motion and the Bankruptcy Court Hearing as
      and when required by applicable provisions of the Bankruptcy Laws and
      orders of the Bankruptcy Court. KACC and Kaiser shall promptly deliver to
      Buyer a copy of that notice and shall provide Buyer with copies of any and
      all objections or other Bankruptcy Pleadings relating to the Sale Process
      and Approval Motion promptly after KACC and Kaiser's receipt thereof. KACC
      and Kaiser shall use their commercially reasonable efforts to obtain the
      prompt entry of an order of the Bankruptcy Court approving the Bidding and
      Auction Procedures (the BIDDING AND AUCTION PROCEDURES ORDER) in form and
      substance reasonably acceptable to Kaiser, KACC and Buyer. Buyer shall use
      commercially reasonable efforts to assist KACC and Kaiser with responding
      to, and providing evidence with respect to, objections or challenges to
      the transactions contemplated by this Agreement.

12.9  Upon completion of the Auction, if Buyer is not the Successful Bidder or
      the Backup Bidder, Buyer hereby consents and agrees that (i) this
      Agreement may be terminated by Kaiser and KACC at any time thereafter as
      provided in Clause 18.1(b)(v) and (ii) the Auction Transaction may be
      consummated by Kaiser and KACC with the Successful Bidder or the Backup
      Bidder on the terms agreed pursuant to the Bidding and Auction Procedures,
      subject only to payment of the Breakup Fee as provided in Clause 18.3 and
      the Bidding and Auction Procedures Order; provided, however, that if Buyer
      is a party to the Participants Agreement, nothing in this Clause 12.9 or
      otherwise in this Agreement shall constitute or be deemed to constitute a
      waiver of the Buyer's consent rights under

                                    Page 48
<PAGE>

      Article 30(D) of the Participants Agreement or any rights pursuant to
      Section 365 of the Bankruptcy Code, including the right to demand adequate
      assurance of future performance from other parties to any assigned
      contract to which Buyer is a party.

12.10 If Buyer is the Successful Bidder, or if Kaiser and KACC do not receive
      any competing bids that conform to the Bidding and Auction Procedures,
      Kaiser and KACC will promptly seek the entry of an order of the Bankruptcy
      Court, the terms and conditions of which shall be reasonably satisfactory
      to Kaiser, KACC and Buyer (the SALE APPROVAL ORDER), which shall provide,
      among other things, that (i) the transfers of the Assets Sold by Kaiser
      and KACC to Buyer pursuant to this Agreement (A) are legal, valid and
      effective transfers of the Assets Sold, (B) vest or will vest Buyer with
      all right, title and interest of Kaiser and KACC in and to the Assets Sold
      and to the other transactions contemplated by this Agreement free and
      clear of any claims (as that term is defined in Section 101(5) of the
      Bankruptcy Code), interests, obligations, rights, mortgages, pledges,
      security interests, liens, charges, judgments, demands and other
      encumbrances (including any right of setoff, recoupment, netting or
      deduction accrued up to the Closing Date), whether absolute or contingent,
      matured or not mature, in law or in equity pursuant to Section 363(f) of
      the Bankruptcy Code, except as specifically provided or contemplated
      herein, and (C) constitute transfer for reasonably equivalent value and
      fair consideration under the Bankruptcy Code; (ii) the transactions
      contemplated in this Agreement are undertaken by Buyer and Kaiser and KACC
      at arm's length, without collusion, and in good faith in accordance with
      the provisions of Sections 363 and 365, including Section 363(m) of the
      Bankruptcy Code; (iii) Kaiser and KACC have complied with the notice
      requirements of Rules 2002, 6004, 5005 and 9014 of the Federal Rules of

                                    Page 49
<PAGE>

      Bankruptcy Procedure and any applicable rules of the Bankruptcy Court with
      respect to the transactions contemplated by this Agreement; and (iv)
      Kaiser and KACC have satisfied all the requirements of, and are
      authorized, pursuant to Section 363(b) and 365 of the Bankruptcy Code, to
      enter into this Agreement and consummate the transactions contemplated
      herein.

12.11 If in accordance with the Bidding Procedures, Buyer is determined to be
      the Successful Bidder, Kaiser and KACC shall (A) actively support, not
      oppose, and not object to, and use their commercially reasonable efforts
      to seek and obtain the approval of the Sale Approval Order and (B)
      cooperate with Buyer and its representatives in connection with seeking
      entry of the Sale Approval Order. Buyer shall use commercially reasonable
      efforts to assist Kaiser and KACC with responding to, and providing
      evidence with respect to, objections or challenges to the transactions
      contemplated by this Agreement.

12.12 Buyer, on the one hand, and KACC and Kaiser, on the other hand, shall, in
      respect of QAL, Kaiser's and KACC's ownership interest therein or the
      transactions contemplated by the Agreement:

      (a)   provide each other with any assistance that may reasonably be
            requested by any of them in connection with the preparation of any
            Tax Return, audit or other examination by any taxing authority or
            judicial or administrative proceedings relating to liability for
            Taxes in respect of QAL, the respective ownership interests of the
            Parties therein and the transactions contemplated by this Agreement,

      (b)   each retain and provide the others with any records or other
            information that may be relevant to that Tax Return, audit,
            examination or proceeding, and

                                    Page 50
<PAGE>

      (c)   provide each other with any final determination of any such audit,
            examination or proceeding that affects any amount required to be
            shown on any Tax Return of the other for any period.

      Without limiting the generality of the foregoing, Buyer, on the one hand,
      and KACC and Kaiser, on the other hand, shall retain, until the applicable
      statutes of limitations (including any extensions) have expired, copies of
      all records or information that may be relevant to Tax Returns filed by
      any other Party for all Tax periods or portions thereof ending before or
      including the Closing Date.

12.13 KACC has previously entered into certain confidentiality agreements with
      Persons (including Buyer) that expressed interest in consummating the
      Transaction (collectively, the CONFIDENTIALITY AGREEMENTS). Copies of all
      such Confidentiality Agreements, redacted in order not to disclose the
      names of the other parties thereto, have been provided to Buyer. Between
      the date of this Agreement and the Closing Date, KACC shall not enter into
      any additional such Confidentiality Agreements except pursuant to the
      Bidding and Auction Procedures. Any additional Confidentiality Agreements
      must be substantially in the form of the existing Confidentiality
      Agreements. Upon the occurrence of the Closing, KACC shall assign to Buyer
      all of its rights and delegate all of its obligations under each of such
      Confidentiality Agreements, and Buyer shall accept such assignment of
      rights and shall assume and perform all of such obligations of KACC under
      each of such Confidentiality Agreements.

13.   REPRESENTATIONS AND WARRANTIES BY KAISER AND KACC

13.1  Kaiser and KACC each represents and warrants to the Buyer as follows:

                                    Page 51
<PAGE>

      (a)   each of Kaiser and KACC has been duly incorporated and is validly
            existing as a corporation in good standing under the laws of the
            State of Delaware, except where the failure to be in good standing
            will not adversely affect the ability of Kaiser and KACC to perform
            all of their respective obligations hereunder, and, following
            receipt of all necessary approvals of the Bankruptcy Court, will
            have duly authorized, executed and delivered this Agreement and will
            have all necessary power and authority to perform all of its
            obligations hereunder;

      (b)   Subject to receipt of consents under the DIP Facility, Kaiser is the
            legal and beneficial owner, free from Liens, of the Kaiser Shares in
            QAL (except as otherwise provided in the Consortium Documents),
            Kaiser will be the legal and beneficial owner, free from Liens, of
            the Kaiser Shares in QAL, the Kaiser Bauxite and the Kaiser Alumina
            on the Effective Date (except as otherwise provided in the
            Consortium Documents), Kaiser will, if the Closing occurs, transfer
            to Buyer legal and beneficial ownership of the Kaiser Shares in QAL,
            the Kaiser Bauxite and the Kaiser Alumina, and there are no
            outstanding options, warrants or other rights to subscribe for or
            acquire from Kaiser the Kaiser Shares in QAL, the Kaiser Bauxite and
            the Kaiser Alumina (except as otherwise provided in the Consortium
            Documents);

      (c)   Subject to receipt of consents under the DIP Facility, KACC is the
            legal owner and Kaiser is the beneficial owner, free from Liens, of
            the KACC Share in QAL (except as otherwise provided in the
            Consortium Documents), KACC will be the legal owner and Kaiser will
            be the beneficial owner, free from Liens, of the KACC Share in QAL
            on the Effective Date (except as otherwise provided in the

                                    Page 52
<PAGE>

            Consortium Documents), KACC and Kaiser will, if the Closing occurs,
            transfer to Buyer legal and beneficial ownership of the KACC Share
            in QAL, and there are no outstanding options, warrants or other
            rights to subscribe for or acquire from KACC or Kaiser the KACC
            Share in QAL (except as otherwise provided in the Consortium
            Documents);

      (d)   Kaiser and KACC are the beneficial owners, free from Liens (except
            as otherwise provided in the Consortium Documents), of their
            respective interests in the agreements and other documents
            identified on Exhibit L and in Clauses (b), (f), (g), (h) and (i) of
            the definition of Assumed Interests and Obligations and Kaiser and
            KACC will, if the Closing occurs, transfer to Buyer good title to
            the extent of the Assumed Interests and Obligations;

      (e)   neither the execution, delivery or performance of this Agreement by
            Kaiser or KACC or the agreements referred to in Clauses 8.3(d), (e)
            and (f) by Kaiser, KACC or KAII, nor the consummation by Kaiser,
            KACC or KAII of the transactions contemplated hereby or thereby,
            will

            (i)   assuming all necessary approvals, consents or authorisations
                  from Governmental Entities referred to in Clauses 11.1(a) and
                  11.1(b) are obtained, conflict with, violate or result in a
                  breach of any material judgment, decree, award or order of any
                  court, other competent tribunal or arbitrator applicable to
                  Kaiser, KACC or KAII; or

            (ii)  conflict with, or result in a breach of, any provision of the
                  charter or by-laws of Kaiser or KACC or of any material
                  agreement, contract or commitment to which Kaiser, KACC or
                  KAII is a party or by which it is

                                    Page 53
<PAGE>

                  bound, or constitute a default thereunder (assuming the
                  receipt of the Lender Consent), which conflict, breach or
                  default would impair its ability to comply with the material
                  terms and conditions of this Agreement or the agreements
                  referred to in Clauses 8.3(d), (e) and (f) or to consummate
                  the transactions contemplated hereby or thereby;

      (f)   there are no actions, suits, proceedings or governmental
            investigations pending or, to the Knowledge of either Kaiser or
            KACC, threatened against or affecting Kaiser, KACC or KAII which
            might reasonably be expected to impair materially their respective
            ability to comply with the terms and conditions of this Agreement or
            the agreements referred to in Clauses 8.3(d), (e) or (f) or to
            consummate the transactions contemplated hereby or thereby.

      (g)   Kaiser has:

            (i)   a Project Percentage of 20.0%;

            (ii)  an Initial Plant Call Capacity Percentage of 31.1198%;

            (iii) a First Expanded Plant Call Capacity Percentage of 12.2593%;

            (iv)  a Second Expanded Plant Call Capacity Percentage of 15.0884%;

            (v)   a Third Expanded Plant Call Capacity Percentage of 16.5408%;
                  and

            (vi)  a Fourth Expanded Plant Call Capacity Percentage of 20.0%;

      (h)   Exhibit H sets out information supplied by QAL to Kaiser as to
            the written down tax values of QAL's assets as of December 31, 2003
            (in relation to the Assumed Interests and Obligations) in respect of
            each Plant in accordance with Appendix B

                                    Page 54
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                  of the Participants Agreement, and to the Knowledge of Kaiser,
                  Exhibit H is accurate in all material respects;

            (i)   neither Kaiser nor KACC is in material default in the
                  performance of any of its material obligations under the
                  agreements and other documents identified on Exhibit L and in
                  Clauses (b), (f), (g), (h) and (i) of the definition of
                  Assumed Interests and Obligations, including its obligations
                  to make or guarantee advances to QAL on open book account or
                  pay Gladstone Credit Allowances;

            (j)   Except as disclosed in Schedule 13.1(j), KAII is not in breach
                  of, or in default under, any of the Kaiser Alumina Sales
                  Contracts, and, to the Knowledge of KACC and Kaiser, no other
                  party to a Kaiser Alumina Sales Contract is in breach thereof
                  or default thereunder, except where any such breaches or
                  defaults would not have, individually or in the aggregate, a
                  material adverse effect on the benefits to be realized by
                  KAII, or the obligations of KAII under, the Kaiser Alumina
                  Sales Contracts.

            (k)   Kaiser has no Working Capital Loans or Improvement Notes;

            (l)   since January 1, 2003, Kaiser has not elected to use the
                  delivery method referred to in Article 13(C)(ii) of the
                  Participants Agreement;

            (m)   there is no current reduction by Kaiser of the rate at which
                  QAL is to toll bauxite into alumina for it under Article 14(A)
                  of the Participants Agreement, and Kaiser has not currently
                  elected to take Available Option Tonnage under Article 14(C)
                  of the Participants Agreement;

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<PAGE>

            (n)   Kaiser has not incurred any Standby Tonnage which may
                  currently be recalled under Article 16(A) of the Participants
                  Agreement;

            (o)   Kaiser has not requested any Alumina Delivery Special
                  Facilities under Article 17(L) of the Participants Agreement
                  in respect of which Alumina Delivery Charges are currently
                  payable;

            (p)   Kaiser has given no notice under Article 21 of the
                  Participants Agreement;

            (q)   Kaiser has given no notice under Article 34(A) of the
                  Participants Agreement;

            (r)   Kaiser is not a Defaulting Participant and, except as set
                  forth on Schedule 13.1(r), it has not received any Special
                  Notice from QAL under Article 35 of the Participants
                  Agreement; and

            (s)   there is no current dispute between QAL and Kaiser or KACC
                  under or in respect of the Gladstone Agreements.

13.2  With respect to QAL, each of Kaiser and KACC represents and warrants to
      Buyer, to its Knowledge, as follows:

            (a)   as of the date of this Agreement, the authorized capital stock
                  of QAL consists of (i) 442,400 Class A ordinary shares (CLASS
                  A ORDINARY SHARES), (ii) 473,122 Class B ordinary shares
                  (CLASS B ORDINARY SHARES), (iii) 442,400 Class C ordinary
                  shares (CLASS C ORDINARY SHARES), and (iv) 854,078 Class D
                  Ordinary Shares (CLASS D ORDINARY SHARES and, together with
                  the Class A Ordinary Shares, Class B Ordinary Shares and Class
                  C Ordinary Shares, the ORDINARY SHARES);

            (b)   all of the Ordinary Shares have been issued and are
                  outstanding and fully paid;

                                    Page 56
<PAGE>

      (c)   there are no outstanding subscriptions, options, rights, warrants,
            convertible securities or other agreements or commitments obligating
            QAL to issue any additional shares of capital stock of any class or
            any other securities of any kind;

      (d)   QAL does not own, directly or indirectly, any capital stock or
            equity securities or have any direct or indirect equity ownership
            interest in any Person;

      (e)   attached as Schedule 13.2(e) are the Audited Financial Statements of
            QAL. The Audited Financial Statements (x) have been prepared in
            accordance with the books and records of QAL, (y) are presented in
            accordance with the Corporations Act 2001 in Australia, Accounting
            Standards and other mandatory financial reporting requirements in
            Australia, and the Corporations Regulations 2001, and (z) give a
            true and fair view, as required by the Corporations Act 2001, of the
            financial position of QAL as at December 31, 2003, and of its
            performance for the year ended on that date;

      (f)   since the Balance Sheet Date, except as listed or described on
            Schedule 13.2(f), (i) QAL has not conducted its business in a manner
            outside the ordinary course of business in any material respect, and
            (ii) no event has occurred that would reasonably be expected to have
            a material adverse effect on the business, assets or condition
            (financial or otherwise) of QAL;

      (g)   except as listed or described on Schedule 13.2(g), QAL's conduct of
            its business is in compliance with all applicable legislation,
            except where noncompliance would not reasonably be expected to have,
            individually or in the aggregate, a material adverse effect on the
            business of QAL (including its assets);

                                    Page 57
<PAGE>

      (h)   except as listed or described on Schedule 13.2(h), there are no
            civil, criminal or administrative actions or suits pending or
            threatened against QAL, arising out of or relating to the conduct of
            QAL's business or otherwise pertaining to or affecting the Assets
            Sold that would reasonably be expected to have, individually or in
            the aggregate, a material adverse effect on the business of QAL
            (including its assets), if decided adversely.

13.3  In addition to the express limitations on certain of the representations
      and warranties of Kaiser and KACC herein as being to their Knowledge, all
      of Kaiser and KACC's representations and warranties in this Agreement are
      limited and qualified, and the ability of Buyer to bring any claim under
      this Agreement whether under Clause 15.1 or otherwise, are prohibited by
      matters which were disclosed to Buyer or came to the Knowledge of Buyer
      prior to the execution of this Agreement as a result of Buyer's
      investigation of the Assets Sold, the Assigned Interests and Obligations
      or the Kaiser Alumina Sales Contracts.

13.4  Without affecting Clause 15.1, no claim may be made by Buyer in respect of
      any representation or warranty by Kaiser or KACC contained in this
      Agreement, or the certificate required by Clause 11.2(a), after the date
      twelve (12) months after the Effective Date.

14.   REPRESENTATIONS AND WARRANTIES BY BUYER

14.1  Buyer represents and warrants to and agrees with Kaiser and KACC as
      follows:

      (a)   Buyer has been duly incorporated and is validly existing as a
            corporation under the laws of Queensland and has duly authorized,
            executed and delivered this

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<PAGE>

            Agreement and has all necessary power and authority to perform all
            of its obligations hereunder.

      (b)   neither the execution, delivery or performance of this Agreement or
            the agreements referred to in Clauses 8.3(d), (e) and (f) by Buyer,
            nor the consummation by Buyer of the transactions contemplated
            hereby or thereby, will

            (i)   assuming all necessary approvals, consents or governmental
                  authorisations from Governmental Entities referred to in
                  Clause 10.1 and Clause 11.1(a) are obtained, conflict with,
                  violate or result in a breach of any judgment, decree, award
                  or order of any court, other competent tribunal or arbitrator
                  applicable to Buyer; or

            (ii)  conflict with, or result in a breach of, any of the terms,
                  conditions or provisions of the organizational documents of
                  Buyer, or of any agreement, contract or commitment to which
                  Buyer is a party or by which it is bound, or constitute a
                  default thereunder, which conflict, breach or default would
                  materially impair its ability to comply with the material
                  terms and conditions of this Agreement or the agreements
                  referred to in Clause 8.3(d), (e) and (f) or to consummate the
                  transactions contemplated hereby or thereby;

      (c)   there are no actions, suits, proceedings or governmental
            investigations pending or, to the Knowledge of Buyer, threatened
            against or affecting Buyer which might reasonably be expected to
            impair materially its ability to comply with the terms and
            conditions of this Agreement or the agreements referred to in
            Clauses 8.3(d), (e) and (f) or to consummate the transactions
            contemplated hereby or thereby; and

                                    Page 59
<PAGE>

      (d)   to the best Knowledge of Buyer, no administrator has been appointed
            to Buyer, no step preliminary to the appointment of an administrator
            has been taken, no application or order has been made or proceedings
            commenced or resolution been passed or proposed in a notice of
            meeting or application been made to the court for the winding up,
            deregistration or dissolution of Buyer, nor has Buyer entered into
            any arrangement, compromise or composition with or assignment for
            the benefit of its creditors and Buyer is not insolvent within the
            meaning of Section 95A of the Corporations Act 2001 of Australia.

14.2  Buyer acknowledges that: (a) Buyer or its representatives have been
      furnished with all information regarding Kaiser, KACC, QAL, QAL's
      business, the Assets Sold, the Assumed Interests and Obligations and the
      Kaiser Alumina Sales Contracts that Buyer has requested; (b) Buyer has had
      an opportunity to make any inspections of QAL's facilities that Buyer has
      desired and to ask questions of and receive answers from Kaiser, KACC and
      their respective representatives regarding Kaiser, KACC, QAL, QAL's
      business, the Assets Sold, the Assumed Interests and Obligations and the
      Kaiser Alumina Sales Contracts; and (c) EXCEPT AS EXPRESSLY SET FORTH IN
      THIS AGREEMENT, THERE ARE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND
      (INCLUDING ANY REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY OR FITNESS
      OF THE ASSETS SOLD FOR THEIR INTENDED PURPOSES OR ANY PARTICULAR PURPOSE),
      EXPRESSED OR IMPLIED, WITH RESPECT TO KAISER, KACC, QAL, QAL'S BUSINESS,
      THE ASSETS SOLD, THE ASSUMED INTERESTS AND OBLIGATIONS OR THE KAISER
      ALUMINA SALES CONTRACTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,

                                    Page 60
<PAGE>

      KAISER AND KACC MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO (I)
      ANY PROJECTIONS, ESTIMATES OR BUDGETS DELIVERED TO OR MADE AVAILABLE TO
      BUYER OR ITS REPRESENTATIVES RELATING TO THE FUTURE RESULTS OF OPERATIONS,
      CASH FLOWS OR FINANCIAL CONDITION (OR ANY COMPONENT OF ANY OF THEM) OF QAL
      OR QAL'S BUSINESS OR (II) ANY OTHER INFORMATION OR DOCUMENTS MADE
      AVAILABLE TO BUYER OR ITS REPRESENTATIVES REGARDING KAISER, KACC, QAL,
      QAL'S BUSINESS, THE ASSETS SOLD, THE ASSUMED INTERESTS AND OBLIGATIONS OR
      THE KAISER ALUMINA SALES CONTRACTS. Buyer further acknowledges that this
      Agreement is subject to any applicable order or act of the Bankruptcy
      Court.

14.3  Buyer has unencumbered cash on hand or has or will have credit
      arrangements with financially responsible third parties, or a combination
      thereof, in an aggregate amount sufficient, when combined with the
      Deposit, to enable it to pay the Final Purchase Price including the final
      GST Amount and all fees and expenses payable by it in connection with this
      Agreement and the transactions contemplated hereby.

14.4  Without affecting Clause 15.2, no claim may be made by Kaiser or KACC in
      respect of any representation and warranty by Buyer contained in this
      Agreement, or the certificate required by Clause 11.3(a), after the date
      eighteen (18) months after the Effective Date.

15.   INDEMNITIES

15.1  Each of Kaiser and KACC hereby indemnifies and agrees to hold harmless
      Buyer and its officers, directors, partners, managers, members,
      representatives, employees, agents, successors and assigns (BUYER
      INDEMNIFIED PARTIES) from and against all Liabilities

                                    Page 61
<PAGE>

      (including reasonable legal fees and expenses, accounting fees and
      investigation costs) arising directly or indirectly from or in connection
      with:

      (a)   any failure by Kaiser or KACC to perform or comply with this
            Agreement or the Kaiser Assignment and Assumption Agreement, or any
            failure by KAII to perform or comply with the KAII Assignment and
            Assumption Agreement; or

      (b)   any breach by Kaiser or KACC of any representation or warranty in
            Clause 13.

      No claim may be made under this Clause 15.1 after the date eighteen (18)
      months after the Effective Date or with respect to performance or
      compliance with this Agreement, the Kaiser Assignment and Assumption
      Agreement, or the KAII Assignment and Assumption Agreement, the date on
      which such performance or compliance is required by the terms thereof, if
      later.

15.2  Buyer hereby indemnifies and agrees to hold harmless Kaiser and KACC and
      their respective officers, directors, partners, managers, members,
      representatives, employees agents, successors and assigns (including any
      creditors and creditors' representatives pursuant to the Bankruptcy Cases)
      (KAISER INDEMNIFIED PARTIES) from and against all Liabilities (including
      reasonable legal fees and expenses, accounting fees and investigation
      costs) arising directly or indirectly from or in connection with:

      (a)   any failure by Buyer to perform or fully comply with this Agreement
            (other than Liabilities governed by Clause 15.3); or

      (b)   any breach by Buyer of any representation or warranty in Clause 14.

                                    Page 62
<PAGE>

      No claim may be made under this Clause 15.2 after the date eighteen (18)
      months after the Effective Date or with respect to performance or
      compliance with this Agreement, the date on which such performance or
      compliance is required by the terms hereof, if later.

15.3  Buyer hereby indemnifies and agrees to hold the Kaiser Indemnified Parties
      harmless from and against all Liabilities (including reasonable legal fees
      and expenses, accounting fees and investigation costs) arising directly or
      indirectly from any breach by Buyer, on or after the Effective Date of any
      of its obligations under the Kaiser Assignment and Assumption Agreement or
      the KAII Assignment and Assumption Agreement, or the failure of Buyer to
      pay, discharge or perform any of the obligations included in the Assumed
      Interests and Obligations. It is expressly understood and agreed that the
      indemnity obligation set forth in this Clause 15.3 will survive forever,
      regardless of any applicable statute of limitations or otherwise.

15.4  Each of Kaiser and KACC hereby indemnifies and agrees to hold the Buyer
      Indemnified Parties harmless from any Liability (including reasonable
      legal fees and expenses, accounting fees and investigation costs) incurred
      by Buyer after the Effective Date in respect of any Tax payable by QAL in
      relation to the operations, acts or omissions of QAL before the Effective
      Date (except to the extent the Tax was accrued in the accounts of QAL as
      at the Effective Date or was otherwise taken into account by QAL before
      the Effective Date), but only to the extent that the Liability relates to
      Buyer's purchase of the Shares in QAL or the Assumed Interests and
      Obligations.

15.5  If an amount payable under Clause 15.4:

      (a)   arises because of a reduction in QAL's ability to fully claim a Tax
            Offset Item at one time, but QAL can claim the Tax Offset Item at
            different points in time; or

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      (b)   relates to the payment of Tax by QAL for which it can claim a Tax
            Offset Item,

      then the amount payable under Clause 15.4 will be reduced by an amount
      calculated by discounting the Tax Offset Item which QAL can claim,
      multiplied by the applicable corporate tax rate, to its net present value
      at the time for payment under Clause 15.4 at LIBOR and apportioning that
      amount to reflect Buyer's purchase of the Shares in QAL, the Assumed
      Interests and Obligations, or the Kaiser Alumina Sales Contracts.

15.6  If:

      (a)   QAL has paid Tax on or before the Effective Date in relation to
            operations, acts or omissions on or before the Effective Date (PRIOR
            TAX); and

      (b)   after the Effective Date, QAL receives a refund of any Prior Tax
            paid (TAX REFUND),

      then Buyer will pay Kaiser an amount representing the benefit to Buyer of
      the Tax Refund, but only to the extent that the benefit relates to Buyer's
      purchase of the Shares in QAL or the Assumed Interests and Obligations and
      only to the extent that the Tax Refund was not disclosed in the accounts
      of QAL as at the Effective Date.

15.7  In addition to any Buyer Indemnity Payment under Clause 15.4, Kaiser will
      pay, and KACC will ensure that Kaiser pays, to Buyer a once-only gross up
      payment equal to the additional income or capital gains taxes payable by
      Buyer or a Buyer Entity as a result of its receipt of the Buyer Indemnity
      Payment or any additional income or capital gains taxes that would have
      been payable by Buyer or a Buyer Entity had a Tax Offset Item not been
      applied by Buyer or the Buyer Entity to reduce or limit a liability to
      such tax.

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<PAGE>

15.8  In addition to any Kaiser Indemnity Payment under Clause 15.6, Buyer will
      pay to Kaiser a once-only gross up payment equal to the additional income
      or capital gains taxes payable by Kaiser or a Kaiser Entity as a result of
      its receipt of the Kaiser Indemnity Payment or any additional income or
      capital gains taxes that would have been payable by Kaiser or a Kaiser
      Entity had a Tax Offset Item not been applied by Kaiser or the Kaiser
      Entity to reduce or limit a liability to such tax.

15.9  The calculations required for the purposes of Clauses 15.4 to 15.8
      inclusive will be prepared by QAL's independent, external tax accountants
      and submitted to Kaiser and Buyer for review. If Kaiser or Buyer dispute
      any such calculation, they will confer to try to resolve the dispute. If
      Kaiser and Buyer cannot resolve such dispute, Kaiser and Buyer will refer
      the matter to an agreed firm of tax accountants (or if they do not agree,
      and at the request of Buyer or Kaiser, to a firm of tax accountants
      practicing nationally in Australia or internationally nominated by the
      President of the Institute of Chartered Accountants in Australia or his
      nominee) to act as an independent expert. Any determination made by the
      independent expert will be conclusive and binding on the Parties (in the
      absence of manifest error). The costs of the original calculations and any
      subsequent determination will be borne equally by Kaiser and Buyer.

15.10 Any payment required by Clauses 15.4 to 15.9 inclusive will be made 30
      days after the final determination of any such payment, or if that is not
      a Business Day, on the next Business Day. No cash payment will be made to
      a Party under Clauses 15.4 to 15.9 unless and then only to the extent that
      the cumulative amount owing to it under Clauses 15.4 to 15.9 inclusive,
      net of the cumulative amount owing by it under Clauses 15.4 to 15.9
      inclusive, exceeds US$1,000,000. For that purpose, any such

                                    Page 65
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      payment will be converted to US Dollars at its US Dollar Equivalent on the
      date two Business Days prior to the date on which it is to be paid.

15.11 Notwithstanding anything to the contrary contained in this Agreement:

      (a)   no Buyer Indemnified Party shall be entitled to receive any amount
            in respect of breaches of representations and warranties made by
            Kaiser or KACC in Clause 13.1(d) to (s) (inclusive) and Clause 13.2
            of this Agreement except to the extent, and only to the extent, that
            (i) the amount of such Liabilities in respect of a single inaccuracy
            or breach exceeds US$250,000 (DE MINIMIS THRESHOLD) and (ii) the
            aggregate amount of all such Liabilities incurred by the Buyer
            Indemnified Parties, exclusive of any and all such Liabilities for
            which indemnification is not available as a result of Clause (i),
            exceeds US$500,000 (BASKET), in which case Kaiser and KACC will only
            be liable for that excess. The aggregate liability of Kaiser and
            KACC with respect to Liabilities incurred by Buyer Indemnified
            Parties as a result of breaches of representations and warranties
            made by Kaiser or KACC in (i) Clause 13.1(a) to (c) other than Title
            Claims, (ii) Clause 13.1(d) to (s) (inclusive) and (iii) Clause 13.2
            shall not exceed US$10,000,000. The aggregate liability of Kaiser
            and KACC with respect to Liabilities incurred by Buyer Indemnified
            Parties as a result of breaches of representations and warranties
            made by Kaiser and KACC in Clause 13.1(a) to (c) in respect of Title
            Claims shall not exceed the Final Purchase Price (excluding any GST
            payable on relevant supplies).

      (b)   no Buyer Indemnified Party shall be entitled to indemnification from
            Kaiser or KACC for any Liabilities (i) unless and until Buyer and
            its affiliates have

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            pursued to final conclusion all claims for insurance available with
            respect to those Liabilities and (ii) to the extent of the amount of
            insurance recovered by Buyer or its affiliates with respect to those
            Liabilities.

      (c)   no Kaiser Indemnified Party shall be entitled to receive any amount
            in respect of breaches of representations and warranties made by
            Buyer in this Agreement except to the extent, and only to the
            extent, that (i) the amount of Liabilities in respect of a single
            inaccuracy or breach exceeds the De Minimis Threshold and (ii) the
            aggregate amount of all Liabilities incurred by the Kaiser
            Indemnified Parties, exclusive of any and all Liabilities for which
            indemnification is not available as a result of Clause (i), exceeds
            the Basket amount, in which case Buyer will only be liable for that
            excess. The aggregate liability of Buyer with respect to Liabilities
            incurred by Kaiser Indemnified Parties as a result of breaches of
            representations and warranties shall not exceed US$10,000,000.

      (d)   no Kaiser Indemnified Party shall be entitled to indemnification
            from Buyer for any Liabilities (i) unless and until Kaiser and its
            affiliates have pursued to final conclusion all claims for insurance
            available with respect to those Liabilities and (ii) to the extent
            of the amount of insurance recovered by Kaiser or its affiliates
            with respect to those Liabilities.

15.12 (a)   If a Party (an INDEMNIFIED PARTY) becomes aware after the Effective
            Date of any fact, circumstance or matter which gives rise to or
            could give rise to a claim by such Indemnified Party against any
            other Party (an INDEMNIFYING PARTY) under any indemnity in this
            Clause 15 (an INDEMNIFICATION CLAIM) the Indemnified Party will:

                                    Page 67
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            (i)   promptly give the Indemnifying Party a notice (NOTICE OF
                  CLAIM) full details of the fact, circumstance or matter giving
                  rise to the Indemnification Claim, and the Indemnified Party's
                  calculation or estimation of the loss suffered;

            (ii)  until giving the Notice of Claim, take reasonable steps to
                  mitigate any loss which does or may give rise to a claim
                  against the Indemnified Party for which indemnification may be
                  sought;

            (iii) not make any admission of liability, agreement or compromise
                  with any person in relation to the fact, circumstance or
                  matter without first consulting with and obtaining the
                  approval of the Indemnifying Party (such approval not to be
                  unreasonably withheld);

            (iv)  give the Indemnifying Party and its professional advisers
                  reasonable assistance to enable it and its professional
                  advisers to assess the fact, circumstance or matter and its
                  consequences and the loss suffered by the Indemnified Party;
                  and

            (v)   at the Indemnifying Party's expense, take all action in good
                  faith and with due diligence that the Indemnifying Party
                  (acting reasonably and in consultation with the Indemnified
                  Party) directs to avoid, remedy or mitigate the consequences
                  of the fact, circumstances or matter including disputing,
                  defending, appealing or compromising legal proceedings.

      (b)   The Indemnifying Party will indemnify the Indemnified Party against
            any Liability incurred by the Indemnified Party in respect of action
            taken by the

                                    Page 68
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            Indemnified Party at the direction of the Indemnifying Party under
            Clause 15.12(a)(v).

      (c)   Delay by an Indemnified Party to give a Notice of Claim to the
            Indemnifying Party as required under Clause 15.12(a)(i) shall not
            relieve the Indemnifying Party from any liability that it may have
            to an Indemnified Party hereunder to the extent the Indemnifying
            Party is not prejudiced by such delay.

      (d)   A Notice of Claim shall be given by the Buyer Indemnified Parties
            with respect to all Indemnification Claims satisfying the De Minimis
            Threshold, whether or not the Basket has been reached.

      (e)   The Indemnified Party will furnish to the Indemnifying Party such
            information (in reasonable detail) it may have with respect to such
            Indemnification Claim (including copies of any summons, complaint or
            other pleading that may have been served on it and any written
            claim, demand, invoice, billing or other document evidencing or
            asserting the same).

      (f)   In the event any Indemnification Claim set forth in the Notice of
            Claim is a claim asserted against an Indemnified Party by a third
            party, the Indemnifying Party will be entitled to meaningfully
            participate in the defense of such claim and, upon delivery by the
            Indemnifying Party to the Indemnified Party of written notice, the
            Indemnifying Party may assume and control the defense thereof with
            counsel of its choice, and thereafter the Indemnifying Party will
            not be liable to the Indemnified Party hereunder for any fees of
            other counsel subsequently accrued by the Indemnified Party in
            connection with the defense thereof. In the event a Notice of Claim
            is delivered under this Clause 15, the Indemnifying Party and the

                                    Page 69
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            Indemnified Party will cooperate fully with each other in connection
            with the defense, negotiation or settlement of the Indemnification
            Claim covered by such Notice of Claim. If the Indemnifying Party
            assumes the defense of an action, (i) the Indemnified Party will be
            entitled to participate therein at its sole cost and expense and
            (ii) no settlement or compromise thereof may be effected by the
            Indemnified Party without the consent of the Indemnifying Party,
            such consent not to be unreasonably withheld. If the Indemnifying
            Party does not assume the defense of an action, no compromise or
            settlement thereof may be effected at the expense of the
            Indemnifying Party without the consent of the Indemnifying Party,
            such consent not to be unreasonably withheld.

15.13 No Indemnifying Party shall have any liability under any provision of this
      Agreement for any Liabilities to the extent, but only to the extent, that
      such Liabilities relate to actions taken or omitted to be taken by the
      Indemnified Party after the Closing to the extent the Indemnified Party
      knew or reasonably should have known that its actions taken or omitted to
      be taken could reasonably be expected to give rise to Liabilities, and in
      no event shall any Indemnifying Party be liable for punitive,
      consequential, special, indirect, incidental or exemplary damages, whether
      for lost profits, lost revenues, injury to property, injury to reputation,
      loss of data, loss of use or otherwise.

15.14 Each Indemnified Party acknowledges and agrees that the sole and exclusive
      remedy of its respective Indemnified Parties from and after the Closing
      with respect to Liabilities and any and all claims for any breach or
      liability under this Agreement or any other agreement, instrument or
      certificate executed or entered into in connection herewith or otherwise
      relating to the subject matter of this Agreement and the transactions

                                    Page 70
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      contemplated hereby shall be solely in accordance with, and limited by,
      the indemnification provisions set forth in this Clause 15. In furtherance
      of the foregoing, each Indemnified Party hereby waives on its own behalf
      and on behalf of each other applicable Buyer Indemnified Party, to the
      fullest extent permitted under applicable legislation, any and all rights,
      claims and causes of action it or they may have against the Indemnifying
      Parties and their respective officers, directors, partners, managers,
      members, representatives, employees, agents, successors and assigns
      (including, in the case of Kaiser and KACC, the creditors and creditors'
      representatives pursuant to the Bankruptcy Cases) arising under or based
      upon any legislation.

16.   CURRENCY CONVERSIONS

      Where any amount under this Agreement is computed or expressed in
      Australian Dollars, for the purposes of any payment or adjustment that
      amount will be converted to its US Dollar Equivalent on the date two
      Business Days prior to the time for payment or adjustment as provided for
      in this Agreement.

17.   GOVERNING LAW; SUBMISSION

17.1  The governing law of this Agreement is the internal law of the State of
      New York, USA, without regard to principles of conflict of laws.

17.2  (a)   The Bankruptcy Court will have jurisdiction over any dispute arising
            out of or related to the transactions contemplated by this Agreement
            through the date of entry of the order approving the final decree in
            the last of the Bankruptcy Cases to be resolved. The parties to this
            Agreement consent to the exclusive jurisdiction of the Bankruptcy
            Court (and of the appropriate appellate courts therefrom) in any

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            such dispute or action related thereto, and irrevocably waive, to
            the fullest extent permitted by applicable legislation, any
            objection that they may now or hereafter have to the laying of the
            venue of any such dispute in the Bankruptcy Court or that any such
            dispute brought in the Bankruptcy Court has been brought in an
            inconvenient forum.

      (b)   Subject to the consent to the jurisdiction of the Bankruptcy Court
            described in Clause 17.2(a), each of the Parties irrevocably submits
            to the non-exclusive jurisdiction of the United States District
            Court for the Southern District of the State of New York, or if such
            court refuses to accept or does not have subject matter
            jurisdiction, then to the Supreme Court of the State of New York
            sitting in the County of New York, and the appellate courts having
            jurisdiction of appeals from such courts, over any dispute arising
            out of or relating to this Agreement or any of the transactions
            contemplated hereby (but not in respect of any other matter) and
            each Party hereby irrevocably agrees that (without prejudice to the
            jurisdiction of any other court) all claims in respect of such
            dispute or any action related thereto may be heard and determined in
            such courts. The Parties hereby irrevocably waive, to the fullest
            extent permitted by applicable law, any objection which they may now
            or hereafter have to the laying of venue of any such dispute brought
            in such court or any defense of inconvenient forum for the
            maintenance of such dispute. Each of the Parties hereto agrees that
            a judgment in any such dispute may be enforced in other
            jurisdictions by suit on the judgment or in any other manner
            provided by applicable law.

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      (c)   Each of the Parties hereto hereby consents to process being served
            by any Party to this Agreement in any suit, action or proceeding by
            the mailing of a copy thereof in accordance with the provisions of
            Clause 25.

18.   TERMINATION

18.1  This Agreement may be terminated and the transactions contemplated hereby
      may be abandoned at any time prior to the Closing:

      (a)   By mutual written consent of Kaiser and KACC, on the one hand, and
            Buyer, on the other hand.

      (b)   By Kaiser and KACC upon written notice to Buyer, (i) if the Closing
            has not occurred on or before 150 days after the Commencement Date
            for any reason other than a material breach of this Agreement by
            Kaiser or KACC, (ii) so long as neither Kaiser nor KACC is then in
            material breach of any of their respective representations,
            warranties or covenants in this Agreement, if Buyer is in material
            breach of any of its representations, warranties or covenants
            contained in this Agreement and such breach shall be incapable of
            being cured, or if capable of being cured, shall not have been cured
            within 30 calendar days following delivery to Buyer of written
            notice of such breach (specifying in reasonable detail the claimed
            breach and demand of its cure or satisfaction), (iii) if termination
            is directed pursuant to an order of the Bankruptcy Court or
            permitted pursuant to the terms of the Bidding and Auction
            Procedures, (iv) if the Sale Approval Order has not become a Final
            Order by (A) the date that is 30 calendar days after the date on
            which Sale Approval Order is entered, provided that such termination
            right can only be exercised until the 40th calendar day after the
            Sale Approval Order is

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<PAGE>

            entered, or (B) such later date as is agreed to in writing by the
            Parties; or (v) if Buyer is not the Successful Bidder pursuant to
            the Bidding and Auction Procedures and Kaiser and KACC determine to
            enter into the Transaction with the Successful Bidder (such
            transaction, an AUCTION TRANSACTION); it being expressly understood
            that, even in the circumstance contemplated by clause (v), if Buyer
            is the Backup Bidder, Buyer shall remain bound by the terms of this
            Agreement until the earlier of (A) delivery by KACC and Kaiser to
            Buyer of a written termination notice in accordance with this Clause
            18.1(b), or (B) delivery by Buyer to Kaiser and KACC of a
            termination notice in accordance with Clause 18.1(c)(v). Buyer
            hereby acknowledges that in the circumstance contemplated by clause
            (v) of the immediately preceding sentence, (i) KACC and Kaiser may,
            prior to any termination of this Agreement by Kaiser and KACC under
            Clause 18.1(b)(v) (but without prejudice to Buyer's right to
            terminate this Agreement under Clause 18.1(c)(v)), enter into an
            agreement with the Successful Bidder with respect to the Auction
            Transaction and (ii) KACC and Kaiser are not required to deliver to
            Buyer a written termination notice until the consummation of the
            Auction Transaction.

      (c)   By Buyer, upon written notice to Kaiser and KACC, (i) if the Closing
            has not occurred on or before 150 days after the Commencement Date
            for any reason other than a material breach of this Agreement by
            Buyer, (ii) so long as Buyer is not then in material breach of any
            of its representations, warranties or covenants contained in this
            Agreement, if Kaiser or KACC are in material breach of any of their
            respective representations, warranties or covenants contained in
            this

                                    Page 74
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            Agreement and such breach shall be incapable of being cured, or if
            capable of being cured, shall not have been cured within 30 calendar
            days following delivery to Kaiser and KACC of written notice of such
            breach (specifying in reasonable detail the claimed breach and
            demand of its cure or satisfaction), (iii) if termination is
            directed pursuant to an order of the Bankruptcy Court or permitted
            pursuant to the terms of the Bidding and Auction Procedures, (iv) if
            the Sale Approval Order has not become a Final Order by (A) the date
            that is 30 calendar days after the date on which the Sale Approval
            Order is entered, provided that such termination right can only be
            exercised until the 40th calendar day after the Sale Approval Order
            is entered, or (B) such later date as is agreed to in writing by the
            Parties; or (v) if Buyer is the Backup Bidder and Kaiser and KACC
            have not within 160 days after the date the Sale Approval Order is
            entered notified the Backup Bidder that it has become the Buyer in
            lieu of the Successful Bidder; provided that in such event the Buyer
            shall not be entitled to receive a Breakup Fee; (vi) if the Bidding
            and Auction Procedures are not approved by court order by the
            earlier of (A) the date on which the final Bankruptcy Court hearing
            to approve the Bidding and Auction Procedures is held, or (B)
            October 15, 2004; or (vii) if the Breakup Fee is not approved by
            court order by the earlier of (A) the date on which the final
            Bankruptcy Court hearing to approve the Bidding and Auction
            Procedures is held, or (B) October 15, 2004.

18.2  In the event of the termination of this Agreement pursuant to Clause 18.1,
      this Agreement, except for the provisions of this Clause 18.2 and Clauses
      1, 17, 18.3, 19, 20, 21, 22, 23, 24, 25, 27, 28 and 29, will forthwith
      become null and void and have no effect,

                                    Page 75
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      without any liability on the part of any Party to this Agreement or their
      respective affiliates. Nothing in this Clause 18 will, however, relieve
      any Party to this Agreement of liability for breach of this Agreement
      occurring prior to that termination or for breach of any provision of this
      Agreement which specifically survives termination hereunder. Moreover,
      notwithstanding the termination of this Agreement, the Deposit Escrow
      Agreement shall remain in full force and effect in accordance with its
      terms, including with respect to the distributions of the escrow funds
      held thereunder. Nothing in this Agreement shall require that the
      Bankruptcy Court approve the termination of this Agreement in order for
      such termination to be effective.

18.3  Subject to the provisions of any applicable order of the Bankruptcy Court,
      unless this Agreement is terminated pursuant to Clause 18.1(b)(ii) or
      18.1(c)(v) hereof, if Kaiser and KACC subsequently consummate an Auction
      Transaction with the Successful Bidder or Backup Bidder (other than Buyer
      or an affiliate of Buyer), Kaiser and KACC shall pay to Buyer promptly
      (and, in any event, within five Business Days) following the consummation
      of such Auction Transaction an amount equal to US$11,000,000 (the BREAKUP
      FEE), and any GST payable in accordance with Clause 22, if applicable.

18.4  The Breakup Fee and any associated GST until paid in full shall constitute
      an administrative expense of Kaiser's and KACC's bankruptcy estates in
      their Bankruptcy Cases under Sections 503(b) and 507(a)(i) of the
      Bankruptcy Code and shall be paid to the Buyer as and when due as
      described in Clause 18.3.

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19.   STAMP DUTIES; WITHHOLDING TAXES

19.1  Any stamp duties or like taxes payable on, or in connection with, or any
      transaction pursuant to, this Agreement will be borne in full by Buyer
      along with any associated penalties, fines, or interest.

19.2  All payments by Buyer to Kaiser or KACC under this Agreement shall be net
      of any deduction or withholding for or on account of any Australian
      withholding Tax in respect of capital or revenue gains, that Buyer is
      required by law to collect and remit to the Australian Taxation Office,
      and Buyer is not required to pay any amount to Kaiser or KACC for or on
      account of any such Tax deducted or withheld. The Parties acknowledge and
      agree that the amount of assumed Gladstone Credit Allowances subject to
      such withholding Tax, if any, shall be calculated in accordance with
      Clause 6.1(a)(i).

20.   COSTS

      Each Party shall bear its own costs in connection with the negotiation,
      preparation and execution of this Agreement.

21.   OTHER INTERESTS

      Nothing in this Agreement affects any rights or obligations which any
      Party may have against, or to, any other Party other than as set forth
      herein or (if the Closing occurs) as set forth in the Kaiser Assignment
      and Assumption Agreement, the KAII Assignment and Assumption Agreement and
      as provided for in the Alumina Supply Agreement.

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<PAGE>

22.   GOODS AND SERVICES TAX

22.1  Words or expressions used in this Clause 22 which are defined in the A New
      Tax System (Goods and Services Tax) Act 1999 (Cth) or, if not so defined,
      then which are defined in the Trade Practices Act 1974 (Cth), have the
      same meaning in this Clause.

22.2  The Parties acknowledge that all amounts payable under, or in connection
      with, this Agreement are expressed on a GST exclusive basis.

22.3  (a)   Despite any other provision in this Agreement:

            (i)   if a Party (in this clause, a SUPPLIER) makes a Taxable Supply
                  to another Party (RECIPIENT) under or in connection with this
                  Agreement (including a Taxable Supply under or in connection
                  with Exhibits E and F as executed); and

            (ii)  GST is imposed on the Taxable Supply;

                  then the Recipient must pay to the Supplier the amount
                  expressed in this Agreement as payable for that Taxable Supply
                  plus an additional amount in respect of the GST payable by the
                  Supplier on that Taxable Supply, or where no amount is
                  expressed to be payable, an additional amount equal to the GST
                  payable by Supplier on that Taxable Supply.

      (b)   The amount of GST which is payable with respect to any GST exclusive
            consideration must be paid to the Supplier by the Recipient without
            requirement for demand, at the same time as the GST exclusive
            consideration is payable or to be provided.

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22.4  If an amount that would otherwise be payable under this Agreement is
      calculated by reference to or otherwise relates to a cost, expense or
      other amount incurred by a Party (PAYEE), then that amount will be reduced
      by the amount of any Input Tax Credit to which the Payee is entitled in
      respect of that amount. The Payee will be assumed to be entitled to a full
      Input Tax Credit unless it demonstrates that its entitlement is otherwise
      prior to the date on which the payment must be made.

22.5  The Supplier will provide a Tax Invoice and any necessary adjustment notes
      and, if reasonably requested by the Recipient, reasonable evidence that
      the Supplier is registered for GST. Any payment under this Clause 22 shall
      be conditioned upon the receipt by Recipient of a Tax Invoice or tax
      adjustment note, as applicable.

22.6  If any Party is required to pay an amount to another Party under this
      Agreement, then it will be entitled to set-off any amount payable to it by
      the other Party under Clause 22.3 against such amount.

22.7  If an additional amount is paid by the Recipient pursuant to Clause
      22.3(a) (the GST SUM) and it is subsequently determined by the
      Commissioner of Taxation (at the request of any Party or otherwise) that
      the supply to which the GST sum relates is not a Taxable Supply, the
      Supplier must immediately refund the GST sum to the Recipient.

23.   DISCLOSURES

23.1  The Parties acknowledge that certain disclosures in relation to the terms
      of this Agreement will be required in connection with the filing of or
      obtaining Bankruptcy Court approval of the Sale Approval Motion or the
      Sale Approval Order, and the Parties will cooperate in respect of such
      disclosure.

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23.2  The Parties will cooperate as to the timing and contents of the media
      releases in respect of this Agreement previously agreed by the Parties to
      be issued promptly after execution of this Agreement.

24.   COUNTERPARTS

      This Agreement may be executed in any number of counterparts. All
      counterparts will be taken to constitute one instrument.

25.   NOTICES

      Any notice or other communication required or permitted to be given under
      the terms of this Agreement must be faxed or delivered to the other Party
      at the address shown below and will be effective and deemed received:

      (a)   if faxed, when received;

      (b)   if delivered via overnight courier service, on the day delivered; or

      (c)   if personally delivered, when delivered:

      If to KACC or Kaiser, to:

                           KAISER ALUMINUM & CHEMICAL CORPORATION
                           Suite 2500
                           5847 San Felipe
                           Houston, Texas 77057
                           Attention:  General Counsel
                           Facsimile:  1 (713) 267-3702

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      with copies (which shall not constitute notice) to:

                           JONES DAY

                           2727 North Harwood
                           Dallas, Texas  75201
                           Attention:  Tony Stewart, Esq.
                           Facsimile:  1 (214) 969-5100

      and

                           OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF KAISER
                           ALUMINUM & CHEMICAL CORPORATION

                           c/o Akin Gump Strauss Hauer & Feld LLP
                           590 Madison Avenue
                           New York, New York 10022
                           Attention:  Lisa G. Beckerman, Esq.
                           Facsimile:  1 (212) 872-1002

      If to Buyer:

                           COMALCO ALUMINIUM LIMITED
                           25th Floor
                           12 Creek Street
                           Brisbane, Queensland 4000 Australia
                           Attention:  Corporate Secretary
                           Facsimile:  61 7 3867 1651

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      or to such other person(s) at such address or addresses as may be
      designated by written notice to the other Parties.

26.   [INTENTIONALLY OMITTED]

27.   ENTIRE AGREEMENT

      This Agreement and the Confidentiality Agreement executed by the Buyer as
      of 18 February 2004 and the Deposit Escrow Agreement constitute the entire
      agreement of the Parties hereto with respect to the subject matter hereof
      and supersede all prior agreements and undertakings, both written and
      oral, between the Parties with respect to the subject matter hereof.

28.   ASSIGNMENT

      This Agreement may not be assigned without the express written consent of
      KACC and Buyer (which consent may be granted or withheld in the sole
      discretion of KACC or Buyer, as applicable).

29.   AMENDMENT

      This Agreement may not be amended or modified except by an instrument in
      writing signed by, or on behalf of, the Parties.

EXECUTED

Each attorney executing this Agreement states that he or she has no notice of
revocation or suspension of his or her power of attorney.

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BUYER

SIGNED for and on behalf of COMALCO ALUMINIUM LIMITED by its appointed attorney
in the presence of:

/s/Allen Isaacson - Attorney In Fact
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ATTORNEY'S SIGNATURE

Allen Isaacson
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PRINT NAME

KACC

SIGNED for and on behalf of KAISER ALUMINUM & CHEMICAL CORPORATION by its duly
authorized officer in the presence of:

/s/Edward F. Houff
------------------------------------------------------
OFFICER'S SIGNATURE

Edward F. Houff - Vice President
------------------------------------------------------
PRINT NAME AND TITLE

KAISER

SIGNED for and on behalf of KAISER ALUMINA AUSTRALIA CORPORATION by its duly
authorized officer in the presence of:

/s/Edward F. Houff
------------------------------------------------------
OFFICER'S SIGNATURE

Edward F. Houff - Vice President
------------------------------------------------------
PRINT NAME AND TITLE