<PAGE>

                                                               EXECUTION VERSION
                                                                     Exhibit 2.5

                               PURCHASE AGREEMENT

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

                         ALUMINA & BAUXITE COMPANY LTD.

                                       AND

                     KAISER ALUMINUM & CHEMICAL CORPORATION

                                       AND

                      KAISER ALUMINA AUSTRALIA CORPORATION

                          DATED AS OF OCTOBER 28, 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....................................  39

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

12.   Further Assurances and other Matters Relating to Conditions Precedent.....  46

13.   Representations and Warranties by Kaiser and KACC.........................  53

14.   Representations and Warranties by Buyer...................................  60

15.   Indemnities...............................................................  63

16.   Currency Conversions......................................................  73

17.   Governing Law; Submission.................................................  73

18.   Termination...............................................................  75

19.   Stamp Duties; Withholding Taxes...........................................  78

20.   Costs.....................................................................  78

21.   Other Interests...........................................................  78

22.   Goods and Services Tax....................................................  79

23.   Disclosures...............................................................  82

24.   Counterparts..............................................................  82

25.   Notices...................................................................  82

26.   [Intentionally Omitted]...................................................  85

27.   Entire Agreement..........................................................  85

28.   Assignment................................................................  85

29.   Amendment.................................................................  85
</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 October 28, 2004

PARTIES

      1.    ALUMINA & BAUXITE COMPANY LTD., a British Virgin Islands company, of
            Premises of Commonwealth Trust Limited, Drake Chambers, Tortola,
            British Virgin Islands (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.

      ASSUMPTION RULING has the meaning set forth in the definition of GST
      Amount.

      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 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$401,000,000.

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

                                     Page 4
<PAGE>

      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.

      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.

      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.

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

      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.

                                     Page 5
<PAGE>

      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 RUSAL Holding.

      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.

      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.

      CONFIDENTIALITY AGREEMENTS has the meaning set forth in Clause 12.10.

      CONSORTIUM DOCUMENTS means:

                                     Page 6
<PAGE>

      (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 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.

                                     Page 7
<PAGE>

      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 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.

                                     Page 8
<PAGE>

      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.

      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.

                                     Page 9
<PAGE>

      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 22.4
      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 22.4
      in consequence of the 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 22.4 in consequence of the assumption by
      Buyer of Gladstone Credit Allowances if before the Effective Date the
      Commissioner of Taxation issues a final ruling or similar final

                                    Page 10
<PAGE>

      determination (the ASSUMPTION RULING) which 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).

      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

                                    Page 11
<PAGE>

      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, 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

                                    Page 12
<PAGE>

      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.

      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).

                                    Page 13
<PAGE>

      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.

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

                                    Page 14
<PAGE>

      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.

      RUSAL HOLDING means RUSAL Holding Ltd., a British Virgin Islands company.

      SALE APPROVAL ORDER has the meaning set forth in Clause 12.7.

      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 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.

                                    Page 15
<PAGE>

      SUPPLIER has the meaning set forth in Clause 22.4(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 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.

                                    Page 16
<PAGE>

      TOGC GST RULING has the meaning set forth in Clause 22.2(b).

      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.

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.

                                    Page 17
<PAGE>

      (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.

      (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.

                                    Page 18
<PAGE>

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

            (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

                                    Page 19
<PAGE>

            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
      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

                                    Page 20
<PAGE>

      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  Buyer shall make a good faith deposit in the amount of US$40,000,000 (the
      DEPOSIT) in accordance with the terms of the Deposit Escrow Agreement and
      Bidding and Auction Procedures. Buyer shall make the Deposit via wire
      transfer of immediately available funds to the account set forth in the
      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

                                    Page 21
<PAGE>

      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

      (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), if any, to CAL 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

                                    Page 22
<PAGE>

      (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 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 the Assumption Ruling which results in no GST
            (as defined for the purposes of Clause 22) being imposed on that
            assumption. The estimated GST Amount, if any, 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

                                    Page 23
<PAGE>

            Clause 22.4 in consequence of the assumption by Buyer of the
            Gladstone Credit Allowances is zero.). Notwithstanding the
            foregoing, if (i) the TOGC GST Ruling has been received by Buyer and
            written notice thereof has been received by Kaiser or KACC within
            the 10 days prior to the Effective Date or (ii) the Assumption
            Ruling has been received by Kaiser or KACC within the 10 days prior
            to the Effective Date, the estimated GST Amount shall be adjusted to
            take into account the determinations made under those rulings; 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

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

                                    Page 24
<PAGE>

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
                  otherwise 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];

            (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

                                    Page 25
<PAGE>

                  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 and the applicable Bauxite
            Shipping Charge Credit Allowances. 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 the Kaiser Bauxite, determined in accordance with
                  that paragraph and

                                    Page 26
<PAGE>

                  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)  unless the TOGC GST Ruling and the Assumption Ruling were
                  issued prior to the Effective Date, a computation of the GST
                  Amount, such computation to be set out in reasonable detail
                  and to take into account the determinations made under the
                  TOGC GST Ruling and the Assumption Ruling, if received;

            (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

                                    Page 27
<PAGE>

                  part of the payment adjustment to be made under Clause 9. If
                  the Preliminary Kaiser Bauxite Price exceeds the Final Kaiser
                  Bauxite Price, 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

                                    Page 28
<PAGE>

                  made under Clause 9. If the amount of the QAL Net Working
                  Capital Adjustment as so computed is less than the estimated
                  amount paid 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 and Kaiser will jointly request CAL to 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 CAL 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, if applicable, 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.

                                    Page 29
<PAGE>

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 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

                                    Page 30
<PAGE>

      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; 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 or KACC 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
      and Buyer's Parent under the Kaiser Assignment and Assumption Agreement
      and to Buyer under 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.

                                    Page 31
<PAGE>

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

      (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 the Deposit Escrow Agent,
      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.

                                    Page 32
<PAGE>

      (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.

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 unless
                  the TOGC GST Ruling has been issued prior to the Effective
                  Date; and

            (iv)  a letter of resignation from each director appointed by Kaiser
                  or KACC to the board of directors of QAL and from each member
                  appointed to represent either Kaiser or KACC on each committee
                  of the board of directors of QAL together with a memorandum in
                  writing nominating those directors of Buyer as advised by
                  Buyer to Kaiser or KACC at least 10 days prior to the
                  Effective Date to the board of directors of QAL in compliance
                  with Article 40(a) of the Articles of Association of QAL.

      (b)   KACC will deliver to Buyer:

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

                                    Page 33
<PAGE>

            (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 12.10.

      (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).

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

      (h)   The parties shall deliver all of the consents received pursuant to
            Clauses 11.1(e), 11.2(f) and 11.3(d).

      (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

                                    Page 34
<PAGE>

                  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 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.

                                    Page 35
<PAGE>

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.

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, if any, will be computed as provided in Clause 6.2 and any
            payment adjustment necessary to reflect the aggregate net
            differences between:

                                    Page 36
<PAGE>

            (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)
            differs from the amount paid under Clause 5.1(d), if any, 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.

                                    Page 37
<PAGE>

      (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, if
            applicable, 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, if applicable, 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
            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, if applicable, shall
            be governed by the provisions of Clause 9(b).

                                    Page 38
<PAGE>

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, 19, 20, 21, 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.

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):

                                    Page 39
<PAGE>

      (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
                  (w) the ability of the Parties to consummate the transactions
                  contemplated by this Agreement, or (x) the value of the Shares
                  in QAL, or (y) the interests and rights included in the
                  Assumed Interests and Obligations, or (z) the interests and
                  rights, taken as a whole, under the Kaiser Alumina Sales
                  Contracts;

      (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

                                    Page 40
<PAGE>

            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

            (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

                                    Page 41
<PAGE>

                  aggregate, a material adverse effect on (w) the ability of
                  Kaiser and KACC to consummate the transactions contemplated by
                  this Agreement, or (x) the value of the Shares in QAL, or (y)
                  the interests and rights included in the Assumed Interests and
                  Obligations, or (z) the interests and rights, taken as a
                  whole, under the Kaiser Alumina Sales Contracts,

            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, or (x) on the value of the Shares in
            QAL, or (y) the interests and rights included in the Assumed
            Interests and Obligations, or (z) the interests and rights, taken as
            a whole, under the Kaiser Alumina Sales Contracts;

      (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:

                                    Page 42
<PAGE>

                  (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 (i) (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; and (ii) to accept the resignation(s) of the directors
            appointed by Kaiser or KACC and to accept the written memorandum by
            Kaiser and/or KACC of the directors nominated by the 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 creditors and QAL shall not be insolvent
            within the meaning of Section 95A of the Corporations Act 2001 of
            Australia; and

                                    Page 43
<PAGE>

      (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:

            (i)   changes contemplated by this Agreement;

                                    Page 44
<PAGE>

            (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

      (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

                                    Page 45
<PAGE>

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

                                    Page 46
<PAGE>

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

      (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

                                    Page 47
<PAGE>

            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 Closing 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  If Buyer is the Successful Bidder, 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

                                    Page 48
<PAGE>

      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 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.

12.8  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.

12.9  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

                                    Page 49
<PAGE>

            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

      (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.

12.10 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

                                    Page 50
<PAGE>

      such assignment of rights and shall assume and perform all of such
      obligations of KACC under each of such Confidentiality Agreements.

12.11 Kaiser and KACC shall after execution of this Agreement and up to the
      Effective Date:

      (a)   promptly place into the data room maintained for the purposes of the
            Transaction, a copy of (i) each notice of meeting of the
            shareholders of QAL, along with all accompanying papers; (ii) each
            notice of meeting of the board of directors of QAL and of any
            committee of the board of directors of QAL, along with all
            accompanying papers; and (iii) copies of all accounts, including all
            management accounts, and of all management reports issued by QAL;

      (b)   promptly on all decisions required to be made at any shareholders
            meeting of QAL or at any meeting of the board of directors of QAL
            and of any committee of the board of directors of QAL, consult with
            and (i) to the extent consistent with such directors' fiduciary
            duties vote in accordance with the directions of the Buyer which in
            any way (x) impact upon the Transaction; (y) relate to operational
            and financial policy matters of QAL on, and from, the Effective
            Date; and (z) any decision which requires either all, or three
            fourths, of the voting power of the board of directors of QAL; and
            (ii) on all other decisions, take into account the views of the
            Buyer;

      (c)   promptly notify Buyer of the occurrence of any event that, to the
            Knowledge of Kaiser or KACC, is expected to lead to a breach of any
            representation or warranty set out in Clause 13; and

                                    Page 51
<PAGE>

      (d)   promptly notify the Buyer in writing of all events, circumstances,
            facts and occurrences of which Kaiser or KACC has received written
            notice which challenge the transactions contemplated hereby or the
            entry of the Sale Approval Order. Kaiser and/or KACC shall promptly
            notify Buyer of the commencement of any investigation, inquiry or
            review of which Kaiser or KACC has received written notice by any
            Governmental Entity with respect to QAL or if any such Governmental
            Entity notifies Kaiser or KACC in writing that it contemplates such
            investigation, inquiry or review, to the Knowledge of either Kaiser
            or KACC becomes contemplated.

12.12 Between the date of this Agreement and the date on which Kaiser and KACC
      have duly performed their respective obligations hereunder, Kaiser and
      KACC shall take such actions as are necessary to provide that their
      respective plans of reorganization or plans of liquidation in conjunction
      with the Bankruptcy Cases will not alter the rights and obligations of the
      Parties under this Agreement, or affect the validity and continuing force
      and effect of this Agreement.

12.13 For a period of twenty-four (24) months following the Closing Date,
      neither Kaiser nor KACC shall without the prior written consent of Buyer,
      reveal or make accessible to any Person (other than disclosures of
      information to the statutory committee of unsecured creditors appointed in
      the Bankruptcy Cases for purposes of dealing with any disputes relating to
      the transactions contemplated by this Agreement) any confidential
      information relating to the Assets Sold. For purposes of this Clause
      12.13, the term "confidential information" shall not include information
      (a) which is already available to the public or becomes available to the
      public other than as a result of a breach of this Clause 12.13, (b)

                                    Page 52
<PAGE>

      which is the proprietary information of Kaiser or KACC, or (c) which is
      used by Kaiser or KACC or any of their Affiliates in conjunction with any
      of its or their respective businesses. Notwithstanding the foregoing,
      Kaiser or KACC may disclose such confidential information to the extent
      required to comply with any valid or effective subpoena or order issued by
      a Governmental Entity, with applicable law or regulation or with any
      requirement of any exchange upon which the securities of any of Kaiser or
      KACC or any of their Affiliates are traded; provided that in the event
      Kaiser or KACC receives any such request or demand to disclose all or any
      part of the confidential information, such party shall promptly notify
      Buyer of the existence and terms of such request or demand, and, at
      Buyer's request and reasonable expense, shall cooperate with buyer to
      obtain a protective order or other appropriate remedy to maintain the
      confidentiality of such information; and, provided further, if such party
      is required to disclose confidential information for any such reason, such
      party shall disclose only such portion thereof which, in the opinion of
      its legal counsel, it is legally required to disclose, and shall use its
      commercially reasonable efforts to obtain confidential treatment of such
      disclosed information.

13.   REPRESENTATIONS AND WARRANTIES BY KAISER AND KACC

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

      (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

                                    Page 53
<PAGE>

            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
            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);

                                    Page 54
<PAGE>

      (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),
            (f), (i) and (j) 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 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), (f), (i) or (j) or to consummate the transactions
                  contemplated hereby or thereby;

                                    Page 55
<PAGE>

      (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), (f), (i) or (j)
            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 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

                                    Page 56
<PAGE>

            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;

      (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;

                                    Page 57
<PAGE>

      (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;

      (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

                                    Page 58
<PAGE>

            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);

      (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

                                    Page 59
<PAGE>

      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
            company under the laws of the British Virgin Islands and has duly
            authorized, executed and delivered this 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), (f), (i) and (j)
            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,

                                    Page 60
<PAGE>

                  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), (f), (i) and (j) 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), (f), (i) and (j) or to consummate the
            transactions contemplated hereby or thereby; and

      (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

                                    Page 61
<PAGE>

            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 has been placed into the data room
      maintained for the purposes of the Transaction; (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,
      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

                                    Page 62
<PAGE>

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

                                    Page 63
<PAGE>

      (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.

      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.

                                    Page 64
<PAGE>

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

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

                                    Page 65
<PAGE>

      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.

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

                                    Page 66
<PAGE>

      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 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.

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<PAGE>

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 pursued to final conclusion all claims for
            insurance available with respect to those

                                    Page 68
<PAGE>

            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 69
<PAGE>

            (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 70
<PAGE>

            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 71
<PAGE>

            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 72
<PAGE>

      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

                                    Page 73
<PAGE>

            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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<PAGE>

      (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

                                    Page 75
<PAGE>

            entered, or (B) such later date as is agreed to in writing by the
            Parties; or (v) if Buyer is not the Backup 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 in such event 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 Agreement and such breach shall be incapable of being cured, or
            if capable of

                                    Page 76
<PAGE>

            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.

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, 19, 20, 21, 23, 24, 25, 27, 28 and 29, will forthwith become null
      and void and have no effect, 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

                                    Page 77
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      Agreement shall require that the Bankruptcy Court approve the termination
      of this Agreement in order for such termination to be effective.

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.

                                    Page 78
<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

      (a)   The Parties agree that the supplies made by Kaiser and KACC to Buyer
            under this Agreement constitute the supply of a going concern as
            defined in Section 38-325 of A New Tax System (Goods and Services
            Tax) Act 1999 (Cth).

      (b)   Subject to Clause 22.2(c), Buyer will, at Buyer's expense and within
            25 business days of execution of this Agreement, apply to the
            Australian Taxation Office for a GST private ruling (TOGC GST
            RULING) that Section 38-325 applies to the supplies made under this
            Agreement.

      (c)   Not later than 15 business days after the execution of this
            Agreement, Buyer shall provide to Kaiser and KACC a draft of the
            application for the TOGC GST Ruling which Buyer proposes to submit
            to the Australian Taxation Office in accordance with Clause 22.2(b)
            together with an outline of all the documents referred to in or
            contemplated by this Agreement or which Buyer proposes to submit
            with the application. Buyer must incorporate into the draft
            application such amendments as Kaiser and KACC may reasonably
            require before it is submitted to the Australian Taxation Office
            (including in relation to the documents to be submitted with the
            application).

                                    Page 79
<PAGE>

      (d)   If, despite Clause 22.2(a), any of the supplies made by either
            Kaiser and KACC to Buyer under this Agreement do not constitute the
            supply of a going concern or the TOGC GST Ruling has not been
            received by Buyer and written notice thereof has not been received
            by Kaiser or KACC prior to the Effective Date, then Clauses 22.3
            through 22.8 will apply.

22.3  If GST is due from Buyer pursuant to Clause 22.2(d), Buyer shall pay such
      amount, together with any penalties and interest thereon, to Kaiser and/or
      KACC on demand no later than the earlier of:

      (a)   the Closing Date and the Adjustment Date, if applicable;

      (b)   the seventh day after the Australian Taxation Office has issued a
            ruling that (or to the effect that) GST is payable on the provision
            of any of the supplies by Kaiser or KACC to Buyer under this
            Agreement; or

      (c)   the seventh day after the Australian Taxation Office has notified
            Buyer that GST is payable on the provision of any of the supplies
            made by Kaiser or KACC to Buyer under this Agreement.

22.4

      (a)   Except as otherwise specifically provided herein, the Parties
            acknowledge that all amounts payable under, or in connection with,
            this Agreement are expressed on a GST exclusive basis.

            (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

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<PAGE>

                  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 the 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.

22.5  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.

22.6  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.

                                    Page 81
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22.7  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 22.4 against such amount.

22.8  If an additional amount is paid by the Recipient pursuant to Clause
      22.4(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.

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:

                                    Page 82
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      (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

      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

                                    Page 83
<PAGE>

      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:

                               ALUMINA & BAUXITE COMPANY LTD.
                               Premises of Commonwealth Trust Limited
                               Drake Chambers, Tortola, British Virgin Islands
                               Attention:  Natalia Bogush
                               Facsimile:  +350 75982

      with copies (which shall not constitute notice) to:

                               SKADDEN, ARPS, SLATE, MEAGHER & FLOM (UK) LLP
                               40 Bank Street, Canary Wharf
                               London E14 5DS, U.K.
                               Attention:  N. Lynn Hiestand, Esq.
                               Facsimile:  +(44-20) 7072-7120

                                    Page 84
<PAGE>

      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, the Confidentiality Agreement executed by Open Joint Stock
      Company Russian Aluminium, an entity related to Buyer and Buyer's Parent,
      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 ALUMINA & BAUXITE COMPANY LTD. by its appointed duly
authorized officer in the presence of:

/s/ Natalia Bogush
----------------------------------------------------
OFFICER'S SIGNATURE

Natalia Bogush, Director
----------------------------------------------------
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, Secretary and General Counsel
---------------------------------------------------------------
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, Secretary and General Counsel
--------------------------------------------------------------
PRINT NAME AND TITLE