<PAGE>   1
                                                                 EXHIBIT 10.18


                             OXYGEN SUPPLY AGREEMENT


                                     BETWEEN


                              GENEVA STEEL COMPANY

                                       AND

                         AIR LIQUIDE AMERICA CORPORATION







                                 Effective as of
                                  June 10, 1997


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                                TABLE OF CONTENTS

ARTICLE 1. - DEFINITIONS.................................................  1

ARTICLE 2. - EXISTING FACILITY...........................................  2
    2.1    Existing Facility.............................................  2
    2.2    Tie-In With Oxygen Distribution System........................  3
    2.3    Safety Standards; Restricted Access...........................  3
    2.4    Liens.........................................................  3
    2.5    Compliance with Law...........................................  3
    2.6    Argon Production Prohibition..................................  3
    2.7    Other Product Prohibition.....................................  3
    2.8    Power Credit..................................................  4

ARTICLE 3. - UTILITIES...................................................  4
    3.1    Site Utilities................................................  4

ARTICLE 4. - QUANTITY....................................................  5
    4.1    Oxygen Quantities.............................................  5
    4.2    Operation Level...............................................  5
    4.3    Reduced Demand................................................  5
    4.4    Title.........................................................  5

ARTICLE 5. - PRICES......................................................  5
    5.1    Monthly Facility Charge.......................................  5
                 5.1.1   Adjustment......................................  5
                 5.1.2   Required Documentation..........................  6
                 5.1.3   Definitions.....................................  6
    5.2    Payment.......................................................  6
    5.3    Disputes......................................................  6

ARTICLE 6. - SPECIFICATION...............................................  7
    6.1    Oxygen Specification..........................................  7
    6.2    Non-conforming Oxygen.........................................  7
    6.3    Limitation....................................................  7

ARTICLE 7. - DELIVERY PRESSURE...........................................  7

ARTICLE 8. - SELLER'S SHUTDOWN...........................................  7
    8.1    Ordinary Downtime.............................................  7
    8.2    Vaporization..................................................  7
    8.3    Right to Alternate Supply.....................................  8

ARTICLE 9. - METERING EQUIPMENT..........................................  8
    9.1    Oxygen Metering...............................................  8


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                 9.1.1  Calibration......................................  8
                 9.1.2  Buyer Tests......................................  8
    9.2    Electric Metering Equipment...................................  9

ARTICLE 10. - TAXES......................................................  9
    10.1   Sales and Other Taxes.........................................  9
    10.2   Property Taxes................................................  9

ARTICLE 11. - CONTINGENCIES..............................................  9
    11.1   Contingencies.................................................  9
    11.2   Reduced Delivery or Taking.................................... 10
    11.3   No Production................................................. 10
    11.4   Operational Inefficiency...................................... 10

ARTICLE 12. - LIABILITY.................................................. 11
    12.1   Acknowledgement............................................... 11
    12.2   Indemnity by Buyer............................................ 11
    12.3   Indemnity by Seller........................................... 11

ARTICLE 13. - ATMOSPHERIC CONTAMINANTS................................... 12

ARTICLE 14. - ENVIRONMENTAL CONDITIONS AND PERMITS....................... 12
    14.1   Site Condition................................................ 12
    14.2   Permitting.................................................... 12

ARTICLE 15. - FAIR LABOR STANDARDS ACT................................... 12

ARTICLE 16. - DEFAULT.................................................... 12
    16.1   Default by Seller............................................. 12
    16.2   Default by Buyer.............................................. 12

ARTICLE 17. - ASSIGNMENT................................................. 13

ARTICLE 18. - APPLICABLE LAW............................................. 13

ARTICLE 19. - RESOLUTION OF DISPUTES..................................... 13

ARTICLE 20. - TERM....................................................... 13
    20.1   Term.......................................................... 13

ARTICLE 21. - NOTICE..................................................... 14

ARTICLE 22. - ENTIRE AGREEMENT........................................... 14


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ARTICLE 23. - MISCELLANEOUS.............................................. 15
    23.1   Confidentiality............................................... 15
    23.2   Severability.................................................. 15
    23.3   Waiver........................................................ 15
    23.4   Power Rates................................................... 15


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<PAGE>   5
                             OXYGEN SUPPLY AGREEMENT


      THIS OXYGEN SUPPLY AGREEMENT (the "Agreement") is entered into September
10, 1997, effective as of June 10, 1997 (the "Effective Date"), between AIR
LIQUIDE AMERICA CORPORATION, a Delaware corporation ("Seller") and GENEVA STEEL
COMPANY, a Utah corporation ("Buyer").

                                    RECITALS:

      A.    Buyer is currently supplied a portion of the oxygen consumed at its
steel mill located in Vineyard, Utah (the "Geneva Works") from an air separation
facility which is owned and operated by Seller and has a rated capacity of 275
tons per day of oxygen production (the "Existing Facility").

      B.    Seller and Buyer desire to continue the supply to Buyer of oxygen
from the Existing Facility pursuant to the terms and conditions set forth
herein.

                                   AGREEMENT:

      NOW, THEREFORE, in consideration of the foregoing, the promises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller, intending to be
legally bound, agree as follows:

                            ARTICLE 1. - DEFINITIONS

      When used in this Agreement, each term below or defined elsewhere herein
shall have the indicated meaning unless such meaning is clearly precluded by the
context in which the term is used. Unless the context otherwise expressly
requires, the words "herein," "hereto," "hereunder," and other words of similar
import refer to this Agreement as a whole and not to a particular Article or
portion thereof.

      1.1   "ARGON" means liquid argon produced at the Existing Facility.

      1.2   "EXISTING FACILITY" means the air separation facility owned and
operated by Seller on the Facility Site at the Geneva Works, and all
modifications, improvements and expansions made to such facilities during the
term hereof, for the production, compression, storage and vaporization of Oxygen
and the production and storage of Argon.

      1.3   "FACILITY SITE" means that parcel of real property at the Geneva
Works depicted on Exhibit 1.2 hereto leased to Seller pursuant to the Ground
Lease and upon which the Existing Facility is located.

      1.4   "GENEVA WORKS" means Buyer's plant located in Vineyard, Utah, and
any additions or modifications thereto.


<PAGE>   6
      1.5   "GROUND LEASE" means that certain Amended and Restated Lease of even
date herewith executed by Seller and Buyer attached hereto as Exhibit 1.5 and
any modifications or amendments thereto.

      1.6   "MONTHLY FACILITY CHARGE" shall have the meaning set forth in
Article 5 hereof.

      1.7   "OXYGEN" means oxygen produced at the Existing Facility meeting the
specifications for oxygen set forth in Article 6 and delivered in gaseous form
hereunder up to the applicable maximum respective production rates specified in
Article 4.

      1.8   "OXYGEN DELIVERY POINT" means the location on the battery limits of
the Facility Site depicted on Exhibit 1.2 hereto.

      1.9   "OXYGEN DISTRIBUTION SYSTEM" means the system of trunk and service
pipelines currently existing at the Geneva Works to transport Oxygen from the
Oxygen Delivery Point to the various use points within the Geneva Works.

      1.10  "PSIG" means pounds per square inch gauge.

      1.11  "SCF" used as a measure of Oxygen means that quantity of Oxygen
which in gaseous form would occupy a volume of one cubic foot at 70 degrees
Fahrenheit temperature and 14.696 pounds per square inch absolute pressure.

      1.12  "TON" means 2,000 pounds avoirdupois or 24,160 SCF of Oxygen.

                         ARTICLE 2. - EXISTING FACILITY

      2.1   Existing Facility. Seller, at its sole expense, shall operate, own,
maintain and repair the Existing Facility on the Facility Site during the term
hereof pursuant to the Ground Lease. The Existing Facility shall be and remain
the personal property of Seller at all times. The Existing Facility shall at all
times during the term hereof include, but not be limited to, the equipment,
systems and facilities set forth on Exhibit 2.1 hereto. During the term of this
Agreement, Buyer shall not cause the Existing Facility or the Facility Site to
be sold, seized or encumbered in any way whatsoever, and Buyer shall cooperate
with Seller in any reasonable manner, without cost or expense to Buyer,
including the making of public filings or recordations, to ensure that no such
sale, seizure or encumbrance of the Existing Facility or the Facility Site takes
place; provided, however, that Buyer shall have the rights to encumber the
Facility Site as set forth in the Ground Lease. Seller reserves the right to
make changes, modifications, improvements, or expansions of the Existing
Facility, at any time during the term hereof provided that (i) Seller's
obligations hereunder are not diminished, (ii) the production capacities of the
Existing Facility as set forth herein are not diminished, (iii) the costs or
taxes to be paid or utilities to be furnished by Buyer hereunder are not
increased by such changes, modifications, improvements or expansions, and (iv)
such changes, modifications, improvements, or expansions do not adversely affect
Buyer, the Geneva Works or Buyer's operations.


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<PAGE>   7
      2.2   Tie-In With Oxygen Distribution System. Seller, at its expense, will
perform and provide all work, piping, valves, controls, racks and supports
necessary to maintain the connection of the Existing Facility to the Oxygen
Distribution System, all pursuant to specifications prepared by Seller and
approved by Buyer.

      2.3   Safety Standards; Restricted Access. Seller shall comply with all of
Buyer's safety and security standards and rules applicable generally to the
Geneva Works; provided, however, that such standards and rules shall not relieve
Seller of its responsibility for the safety of the Facility Site. Buyer will use
reasonable efforts to prevent Buyer's employees from entering the Facility Site
or altering, repairing, adjusting or otherwise tampering with the Existing
Facility without the prior consent of Seller. Buyer will prohibit smoking and
the use of open flames by its employees within fifty (50) feet of the Existing
Facility; provided, however, that Seller shall be and remain responsible for all
emergency response fire protection required for the Existing Facility.

      2.4   Liens. In express consideration of the terms, covenants and
undertakings set forth herein, and for other valuable consideration, Seller
knowingly and intentionally waives any and all rights it may have, now or in the
future, to assert liens or claims of liens against the Facility Site or the
Geneva Works; provided, however, that the foregoing shall not be a waiver of
Seller's right to payment hereunder but only the right to assert liens against
Buyer's property related thereto. Seller will cause all persons providing
equipment, materials or labor for the Existing Facility to similarly waive their
lien rights prior to performing any work on or for the Existing Facility. Buyer
shall indemnify, defend and hold Seller harmless from and against liens against
the Existing Facility due solely to its location on Buyer's premises. Seller
shall indemnify, defend and hold Buyer harmless from and against liens and
claims arising from the acts or omissions of Seller or its subcontractors,
employees, agents and invitees or due to the failure of Seller or its
contractors to timely pay amounts owed to contractors, subcontractors,
suppliers, materialmen or others.

      2.5   Compliance with Law. The Existing Facility shall at all times during
the term hereof conform with all applicable statutes, regulations, ordinances,
rules, standards and codes including, but not limited to, OSHA requirements
related to noise levels.

      2.6   Argon Production Prohibition. Seller agrees that it will not produce
or sell any Argon from the Existing Facility during any period when Seller has
not produced argon at the maximum possible levels from the facility which is the
subject of that certain Industrial Gas Supply Agreement dated as of June 6,
1995, as amended (the "1995 Agreement") and for which Buyer has provided certain
argon credits as outlined in the 1995 Agreement. Seller shall reimburse Buyer
for any power and utility costs incurred by Buyer as a result thereof, the power
cost to be calculated as set forth in Section 2.8 hereof.

      2.7   Other Product Prohibition. Unless so requested by Buyer to fill the
liquid oxygen storage tank that is a part of the New Facility, Seller agrees
that it will not produce or sell any liquid oxygen or gaseous or liquid nitrogen
from the Existing Facility unless otherwise approved in writing by Buyer, such
approval not to be unreasonably withheld, and Seller pays to Buyer


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<PAGE>   8
any power and utility costs incurred by Buyer as a result thereof, the power
cost to be calculated as set forth in Section 2.8 hereof.

      2.8   Power Credit. The Power Credit ("PC") used by Seller to produce
liquidous product (including Argon) shall be calculated as follows:

                              PC = ((D/730) + E) R

      Where: E = average price paid by Buyer for the energy portion of the power
                 purchased from PacificCorp for a demand rate in excess of 90
                 MW, expressed in dollars per kwh; and

             PC= credit per 100 SCF of liquidous product produced for Seller's
                 account.

             D = the demand charge (expressed in $ per kw) under Utah Power's
                 Schedule 9 rate or, if Schedule 9 is no longer available, a
                 successor tariff of Utah Power generally available to
                 industrial customers like Seller.

             R = 3.2 kilowatt hours per 100 SCF.

                             ARTICLE 3. - UTILITIES

      3.1   Site Utilities. Buyer will provide at no charge to Seller at the
locations depicted on Exhibit 1.2 hereto the following utilities and services
and in the estimated quantities shown for Seller's use:

Sanitary Sewer ........................ Domestic sewage that has been pumped to
                                        Buyer's system by Seller

Storm Drain and Waste Water Runoff1.... Storm and wastewater runoff that has
                                        been piped by Seller to Buyer's existing
                                        storm drainage system

All other water, except fire water which shall be provided by Buyer, and water
delivery systems for the Existing Facility, including potable, treated and
make-up water, shall be obtained by Seller from other sources without cost to
Buyer. In the event of a utility interruption, Buyer shall use reasonable
commercial efforts to minimize and eliminate such interruption as soon as
reasonably practicable. Notwithstanding the foregoing, Buyer shall not be liable
for any interruption of utility service to the Existing Facility.

--------

     Discharges to Buyer's 36" culvert shall be comprised of only cooling tower
blowdown containing no heavy metals, intermittent surface run-off from scuppers
around equipment which may contain only traces of oil, building floor drains
which may contain only traces of oil and detergents, and hub drains containing
only clean condensate.


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<PAGE>   9
                              ARTICLE 4. - QUANTITY

      Seller shall sell and deliver to Buyer, and Buyer will purchase and
receive from Seller, the following Oxygen:

      4.1   Oxygen Quantities. Seller will sell and deliver into the Oxygen
Distribution System such Oxygen from the Existing Facility as Buyer may from
time to time reasonably notify Seller it desires up to a maximum instantaneous
delivery rate at the Oxygen Delivery Point of 276,800 standard cubic feet per
hour (SCFH), such production and delivery rates adjusted for the design
conditions of 70 degrees Fahrenheit dry bulb, relative humidity of 24%,
barometric pressure of 12.4 PSIA, and cooling water temperature of 72 degrees
Fahrenheit.

      4.2   Operation Level. Under normal operating conditions, that is when no
contingency exists under Article 11 and no shutdown has been taken pursuant to
Section 8.1 hereof, Seller will operate the Existing Facility at the delivery
level for Oxygen of which Seller has received the notice specified in this
Article 4.

      4.3   Reduced Demand. Seller will take the Existing Facility out of
operation if so requested by Buyer to accommodate any reduction in oxygen demand
at the Geneva Works; provided, however, that such periods of non-operation at
the request of Buyer shall not exceed one hundred twenty (120) days during any
twenty-four (24) month period and shall not exceed an aggregate of three hundred
twenty (320) days during the term of this Agreement without Seller's consent,
which consent shall not be unreasonably withheld.

      4.4   Title. Title to Oxygen shall pass to Buyer upon delivery by Seller
of into the Oxygen Distribution System at the Oxygen Delivery Point.

                               ARTICLE 5. - PRICES

      5.1   Monthly Facility Charge. As promptly as practicable after the end of
each calendar month, Seller will invoice Buyer and Buyer will pay Seller a
monthly facility charge (the "Monthly Facility Charge") in the amount of
SEVENTY-FIVE THOUSAND DOLLARS ($75,000). The Monthly Facility Charge is intended
to fully compensate Seller for the Existing Facility and all Oxygen that Seller
is obligated to deliver to Buyer pursuant to this Agreement. During periods of
reduced demand, as contemplated in Section 4.3 hereof, the Monthly Facility
Change shall be reduced on a pro rata basis to FIFTY THOUSAND DOLLARS ($50,000)
for each month, or portion thereof, of reduced demand. The Monthly Facility
Charge shall be further adjusted pursuant to Sections 5.1.1, 5.1.2 and 5.1.3
below.

            5.1.1 Adjustment. The Monthly Facility Charge will be adjusted (the
"Adjusted Monthly Facility Charge") semi-annually on January 1 and July 1 (each
an "Adjustment Date"), commencing January 1, 1998, in accordance with the
following formula.


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            Adjusted Monthly Facility Charge = C(0) [0.40 L/16.32 + 0.40 P/127.2
            + .20] where:

                  C(0) = Monthly Facility Charge determined pursuant to Section
                  5.1 without adjustments.

                  L = Earnings Index, as hereinafter defined.

                  P = PPI, as hereinafter defined.

            5.1.2 Required Documentation. At the time Seller makes any
adjustment pursuant to this Section 5.1.1, it shall deliver to Buyer adequate
documentation (including mathematical calculations) supporting such adjustment.

            5.1.3 Definitions. As used herein, the term (a) "Earnings Index"
means the average of the Average Hourly Earnings for workers in Chemical and
Allied Industries for each of the three (3) months immediately preceding the
Adjustment Date, and (b) "PPI" means the average of the Producers Price Index
for Industrial Commodities, based upon 1982=100, for each of the three (3)
months immediately preceding the Adjustment Date, both of which indices are
published by the United States Department of Labor, Bureau of Labor Statistics.
If the computation of either or both of such indices is changed so that the base
year differs from that at the time the beginning index is first published, the
such index will be converted in accordance with the conversion factor published
by the Department of Labor, Bureau of Labor Statistics. If either or both such
indices are discontinued or revised, such government indices or computation with
which they are replaced shall be used in order to obtain substantially the same
result as would be obtained if the indices had not been terminated or revised.

      5.2   Payment. The terms of payment will be net twenty (20) days following
receipt of invoice. Buyer shall remit payments to Seller hereunder to the
address indicated on Seller's invoice. Seller shall have the right to charge
Buyer a late payment fee on any past due amount, such fee to be computed from
the date such payment was due at an interest rate of 3% above the prevailing
prime rate of interest of Texas Commerce Bank, N.A., Houston, Texas (or any
successor principal bank of Seller). Any billing dispute or claim must be made
in writing within thirty (30) days after receipt of invoice, otherwise the
amount indicated on such invoice shall be considered by both parties to be final
and binding. The first Monthly Facility Charge, prorated for any partial month,
shall commence on the Effective Date provided, that Buyer shall receive credit
against the Monthly Facility Charge for any amounts paid to Seller pursuant to
that certain letter of intent dated July 10, 1997 (the "Letter of Intent")
between Seller and Buyer.

      5.3   Disputes. In the event Buyer disputes, in good faith, any invoice of
Seller, Buyer shall timely pay the undisputed portion of such invoice and
include therewith a reasonably detailed explanation in writing of the reasons
Buyer disputes the balance of such invoice. If Seller disagrees with Buyer's
explanation, the matter shall be referred for dispute resolution pursuant to
Article 19.


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                           ARTICLE 6. - SPECIFICATION

      6.1   Oxygen Specification. Seller guarantees that Oxygen delivered at the
Oxygen Delivery Point shall be at least 99.5% pure by volume.

      6.2   Non-conforming Oxygen. Any Oxygen delivered hereunder by Seller
which does not conform to the specifications set forth in Section 6.1 hereof may
be rejected by Buyer by providing Seller with verbal notice within twenty-four
(24) hours and subsequent written confirmation within twenty (20) days after
delivery thereof, and the Monthly Facility Charge shall be reduced by the ratio
of non-conforming Oxygen delivered in Tons per day to 275. Buyer reserves the
right to review Seller's records and to confirm Oxygen conformity with the
requirements of this Agreement.

      6.3   Limitation. THERE ARE NO EXPRESS WARRANTIES BY SELLER OTHER THAN
THOSE SPECIFIED IN THIS AGREEMENT. NO OTHER WARRANTIES BY SELLER (OTHER THAN
WARRANTY OF TITLE AS PROVIDED IN THE UNIFORM COMMERCIAL CODE) SHALL BE IMPLIED
OR OTHERWISE CREATED UNDER THE UNIFORM COMMERCIAL CODE, INCLUDING BUT NOT
LIMITED TO, THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE.

                         ARTICLE 7. - DELIVERY PRESSURE

      Oxygen shall be delivered by Seller into the Oxygen Distribution System at
a minimum pressure of 450 PSIG at the Oxygen Delivery Point.

                         ARTICLE 8. - SELLER'S SHUTDOWN

      8.1   Ordinary Downtime. Seller will have the right from time to time to
shut down the production portion of the Existing Facility for such periods of
time as may be necessary for Seller to perform scheduled ordinary repairs for
maintenance and/or thawing necessary or consistent with proper operation, not in
any event to exceed twenty-one (21) days during any two consecutive contract
years during the term hereof; provided, however, that the foregoing period is
not intended to limit Seller's rights in the event of a contingency under
Article 11 hereof. Buyer and Seller will coordinate to the extent practicable
Seller's scheduled shutdowns under this Article 8 with Buyer's periods of
reduced Oxygen needs and when other oxygen production facilities at the Geneva
Works are on-line, and shall minimize any resulting downtime or reduced
production impacts on Buyer's operations. Insofar as possible, maintenance will
be completed during periods in which the Existing Facility is not in operation
during periods of reduced oxygen demand at the Geneva Works as contemplated in
Section 4.3 hereof.

      8.2   Vaporization. In the event from time to time Seller is unable to
supply all or part of the applicable quantities of Oxygen set forth in Article 4
by reason of shutdown under Section 8.1 or a contingency under Article 11, and
Buyer requires the use of Seller's storage and vaporization equipment for Oxygen
purchased from third parties, Seller, without charge to


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<PAGE>   12
Buyer, shall permit such storage, and shall also vaporize and deliver such
oxygen to the Oxygen Distribution System. Buyer hereby agrees to hold Seller
harmless and indemnify Seller against any loss or damage to its equipment, or
injury, illness or death of persons arising out of or incident to any deliveries
by another industrial gas supplier. Buyer's exercise of the rights specified in
this Section 8.2 shall not entitle Buyer to recover from Seller any part of the
purchase price paid to such other industrial gas supplier, including but not
limited to the difference between the price for Oxygen(s) charged by such other
industrial gas supplier and the price(s) specified in this Agreement; provided,
however, that if (a) such downtime under Section 8.1 exceeds eight (8)
consecutive days, (b) Seller is unable to supply to Buyer the required
quantities of Oxygen hereunder, and (c) Buyer is required to obtain Oxygen from
sources (including from third parties or Seller) other than the Existing
Facility to supply all or part of the applicable quantities of Oxygen set forth
in Article 4, then the Monthly Facility Charge specified under Section 5.1 will
be reduced by the costs incurred by Buyer in obtaining such Oxygen from sources
other than the Existing Facility and the term of this Agreement will be extended
for a period equal to twice the duration of such shutdown. Upon written notice
from Seller that the shutdown or contingency is concluded, Buyer's right to
obtain Oxygen from a third party and Seller's obligation to accept deliveries
and vaporize Oxygen obtained from third parties shall cease with respect to such
shutdown or contingency and the entire Monthly Facility Charge for subsequent
periods shall thereafter be paid to Seller by Buyer pursuant to the terms of
this Agreement. If the Monthly Facility Charge is reduced pursuant to this
Section 8.2, then any days of downtime under Sections 6.3 or 8.1 in excess of
eight (8) consecutive days shall not be counted for purposes of Seller's
twenty-one (21) days of ordinary downtime pursuant to Section 8.1.

      8.3   Right to Alternate Supply. When Seller is unable to supply all or
part of the applicable quantities of Oxygen set forth in Article 4 by reason of
shutdown under Section 8.1 or a contingency under Article 11, Buyer shall have
the independent right to purchase Oxygen, or any part thereof, from another
industrial gas supplier; provided, however, that except as specified in Section
8.2 all such deliveries of Oxygen made by such other industrial gas supplier
shall be made into equipment provided by such other industrial gas supplier.

                         ARTICLE 9. - METERING EQUIPMENT

      9.1   Oxygen Metering. Seller, at its expense, shall install and maintain
a gas-phase oxygen flow rate meter as a part of the Existing Facility at
locations within the Facility Site mutually acceptable to the parties for the
purpose of accurately measuring the quantities and instantaneous flow rates of
Oxygen delivered to Buyer hereunder. The meter shall be a billing quality meter
of a brand and type mutually agreed upon by Buyer and Seller.

            9.1.1 Calibration. Seller, at its expense, shall, upon notice to
Buyer, calibrate such metering equipment at six month intervals, and Buyer may
have its representatives present during any such tests.

            9.1.2 Buyer Tests. At any time requested by Buyer, but not more
often than once a year, Seller will test such metering equipment in the presence
of Buyer's representative,


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<PAGE>   13
and if the metering equipment is found on such test to be accurate as specified
above, then the cost and expense of such test will be borne by Buyer but if the
metering equipment is found on such test to be inaccurate as specified above,
then the cost and expense of such test and of correcting the inaccuracy in the
metering equipment will be borne by Seller.

      9.2   Electric Metering Equipment. Seller, at its expense, shall install
and maintain electricity meters of a mutually acceptable quality, brand and type
as a part of the Existing Facility at a location mutually acceptable to the
parties for the purpose of accurately measuring the power consumption of the
Existing Facility.

                               ARTICLE 10. - TAXES

      10.1  Sales and Other Taxes. If at any time during the term of this
Agreement any tax (other than a net income or excess profits tax, general
franchise tax imposed on corporations on account of their right to do business
within the state as a foreign corporation) is imposed on Seller by any
governmental authority upon, or measured by, the production, delivery, or use of
the Oxygen supplied to Buyer, which directly increases Seller's costs incurred
in the production, sale or delivery of any Oxygen to Buyer hereunder, Buyer will
reimburse Seller therefor to the extent that Seller can reasonably demonstrate
that its costs of production, sale or delivery hereunder are directly increased
thereby. Buyer shall pay any sales or use taxes imposed on the purchase and sale
of Oxygen hereunder.

      10.2  Property Taxes. Seller shall pay all real and personal property
taxes or assessments which may now or hereafter be levied on the Facility Site
or the Existing Facility, respectively, during the term of this Agreement.

                           ARTICLE 11. - CONTINGENCIES

      11.1  Contingencies. Neither party hereto will be liable to the other for
default or delay in the performance of any of its obligations hereunder due to
an act of God, accident, fire, flood, storm, riot, war, sabotage, explosion,
strike, work stoppage, concerted acts of workers, national defense requirement,
governmental law, ordinance, rule or regulation, whether valid or invalid,
extraordinary failure of equipment or inability to obtain sufficient quantities
of electrical power, steam, water or other utilities or type of energy, raw
material, labor, equipment or transportation or any similar or different
contingency beyond its reasonable control which would make performance
commercially impracticable whether or not the contingency is of the same class
as those enumerated above, it being expressly agreed that such enumeration shall
be non-exclusive; provided, however, that neither business downturn nor economic
conditions will qualify as a contingency within the meaning of this Article 11.
The party so prevented from performance shall, upon prompt, written notice to
the other party, be excused to the extent that its obligations are prevented,
interfered with or restructured because of such contingency event.
Notwithstanding the occurrence of such contingency, each party shall exert all
reasonable efforts to continue in the performance of its obligations hereunder
and bring any period of contingency to an end and as expeditiously as possible;
provided that any strike or


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<PAGE>   14
labor disturbance or similar difficulty of any kind shall be deemed to be beyond
the reasonable control of the party whose performance is affected thereby.

      11.2  Reduced Delivery or Taking. If, for any period, a contingency
covered by Section 11.1 reduces the delivery or taking of Oxygen from the
Existing Facility, the party affected thereby will give prompt notice to the
other party of the reduction or interruption, and the Monthly Facility Charge
will be reduced pursuant to the following formula:

      Reduction Amount =  0.80 x Monthly Facility Fee       A
                          ---------------------------  x  ----- x N
                                     30.4                  275

           where:    A =  Average Oxygen delivered in Tons per day during such
                          time of reduced delivery or taking.

                     N =  Number of days of reduced delivery or taking.

Buyer will accept and pay for any Oxygen, delivered before said notice is given.
Upon receiving said notice from Seller, Buyer will advise Seller to discontinue
said deliveries or request that they be continued. If advised by Buyer, Seller
shall deliver any Oxygen reasonably available from the Existing Facility and
shall use reasonable efforts to deliver in accord with Buyer's demand any Oxygen
which Seller has reasonably available for Buyer from other locations. Seller
will continue said deliveries, if so requested, to the extent and for as long as
Seller in its reasonable discretion determines that its own needs for
consumption of Oxygen and its pre-existing contract commitments to others will
permit. Buyer will pay for any Oxygen delivered by Seller from other locations
pursuant to this Section 11.2 at the price negotiated between the parties at the
time plus any additional costs related to special purchase, freight or handling.
Buyer shall have the right to obtain Oxygen from other suppliers during the
existence of any contingency under Section 11.1.

      11.3  No Production. During any period that no Oxygen is delivered or
taken from the production of the Existing Facility due to the occurrence of a
contingency covered by Section 11.1, Buyer will be fully relieved of its
obligation to pay the Monthly Facility Charge.

      11.4  Operational Inefficiency. Seller agrees to maintain and repair all
equipment at the Existing Facility in a manner to ensure that there is no
material degradation in the operational efficiency of such equipment. Seller
agrees to reimburse Buyer for any excess electrical consumption over the Base
Rate, as hereinafter defined, which results from Seller's failure to so maintain
and repair the equipment. As used herein, the term "Base Rate" means 3.2 kwh per
100 SCF when the Existing Facility is producing liquidous product, and an
electrical consumption factor ("ECF") in kwh per 100 SCF when the Existing
Facility is producing only gaseous product.

      The ECF will be established during a 24 hour test to be completed prior to
November 30, 1997 according to the following formula. (It is understood that the
test will not include the impact of a future instrument air compressor which
will be installed by Seller approximately one


                                       10
<PAGE>   15
year from the Effective Date. Subsequent to such installation, the ECF will then
be recalculated pursuant to the following formula to account for such
installation.)

                     ECF =   e  x 1.05
                            ---
                             v

           Where:    ECF =     KWH Electrical Consumption Rate per 100 SCF
                     e =       Electricity Consumed
                     v =       100 SCF of Gaseous Oxygen Produced

                             ARTICLE 12. - LIABILITY

      12.1  Acknowledgement. Buyer acknowledges that there are hazards
associated with the use of the Oxygen. Buyer agrees that its personnel concerned
with the Oxygen are aware of the hazards and assumes all responsibility for the
warning of its employees and independent contractors of all hazards to persons
and property in any way connected with Buyer's use, storage and handling of the
Oxygen. Buyer also assumes all responsibility for the suitability and the
results of using the Oxygen alone or in combination with other articles or
substances and in any manufacturing or other processes or procedures. Neither
Seller nor Buyer shall be liable under this Agreement for any incidental,
consequential, indirect, or special damages of any kind, including, but not
limited to, loss of profits, loss of use or loss of business, unless caused by
the willful or intentional acts of such party.

      12.2  Indemnity by Buyer. Buyer hereby covenants and agrees to indemnify
and hold Seller harmless from and against any and all claims, losses, damages,
actions, and causes of action, costs or expenses (including reasonable
attorneys' fees) of any nature or kind, brought against Seller arising from or
incidental to Buyer's activities or presence, including that of its employees,
contractors, agents, representatives, and invitees on or about the Facility Site
or Existing Facility; provided, however, that Buyer shall not be liable for, and
this indemnity shall not extend to, any such liability, loss, demand, action, or
cause of action to the extent that it results from or is attributable to the
negligent acts or omissions of Seller, or its employees, contractors, agents,
representatives and invitees.

      12.3  Indemnity by Seller. Subject to Section 12.1, Seller hereby
covenants and agrees to indemnify and hold Buyer harmless from and against any
and all claims, losses, damages, actions, and causes of actions, costs or
expenses (including reasonable attorneys' fees) of any nature or kind, brought
against Buyer arising from or incidental to Seller's activities or presence,
including that of its employees, contractors, agents, representatives, and
invitees on or about the Geneva Works; provided, however, that Seller shall not
be liable for, and this indemnity shall not extend to, any such liability, loss,
demand, action, or cause of action to the extent that it results from or is
attributable to the negligent acts or omissions of Buyer, or its employees,
contractors, agents, representatives and invitees.


                                       11
<PAGE>   16
                     ARTICLE 13. - ATMOSPHERIC CONTAMINANTS

      Buyer agrees to notify and consult with Seller concerning any process or
facility changes by Buyer at the Geneva Works which would cause an increase in
atmospheric contaminants at or near the Existing Facility.

               ARTICLE 14. - ENVIRONMENTAL CONDITIONS AND PERMITS

      14.1  Site Condition. In the event any hazardous or toxic materials or
substances are discovered on, in or under the Facility Site which would prevent,
delay or increase the cost of operation of the Existing Facility, Seller shall
promptly notify Buyer.

      14.2  Permitting. Seller, without cost to Buyer, will obtain all necessary
permits relating to air emissions and the modification, operation, and
maintenance of the Existing Facility and the delivery of Oxygen to the Geneva
Works.

                     ARTICLE 15. - FAIR LABOR STANDARDS ACT

      Seller represents that Oxygen delivered to Buyer hereunder will have been
produced in compliance with the Fair Labor Standards Act of 1938, as amended.

                              ARTICLE 16. - DEFAULT

      16.1  Default by Seller. If a voluntary or involuntary petition should be
filed by or against Seller under any bankruptcy law (including a petition for
reorganization, extension of payment, composition or adjustment of liabilities),
or if a receiver should be appointed for Seller, or if an attachment or
execution should be levied against all or part of the Existing Facility, or if
Seller should materially default in the performance of any material covenant or
obligation to be performed by it under this Agreement, and within ninety (90)
days after receipt of written notification thereof from Buyer, should Seller not
cure such default or if such default is not curable within ninety (90) days and
Seller has not commenced and is diligently pursuing such cure, then Buyer may,
without prejudice to any other right or remedy, terminate this Agreement by
written notice without further responsibility or liability.

      16.2  Default by Buyer. If a voluntary or involuntary petition should be
filed by or against Buyer under any bankruptcy law (including a petition for
reorganization, extension of payment, composition or adjustment of liabilities),
or if a receiver should be appointed for Buyer, or if an attachment or execution
should be levied against all or part of the Geneva Works, or if Buyer should
materially default in the performance of any material covenant or obligation to
be performed by it under this Agreement, and within ninety (90) days after
receipt of written notification thereof from Seller, should Buyer not cure such
default or if such default is not curable within ninety (90) days and Buyer has
not commenced and is diligently pursuing such cure, then Seller may, without
prejudice to any other right or remedy, terminate this Agreement by written
notice without further responsibility or liability.


                                       12
<PAGE>   17
                            ARTICLE 17. - ASSIGNMENT

      Any assignment of this Agreement without the prior written consent of the
other party, which consent shall not be unreasonably withheld, shall be void.

                          ARTICLE 18. - APPLICABLE LAW

      This Agreement will be governed by and construed in accordance with the
laws of the State of Utah and any action seeking to enforce or interpret the
terms hereof, or arising out of the breach hereof, shall be commenced and
maintained in the State of Utah.

                      ARTICLE 19. - RESOLUTION OF DISPUTES

      In the event that a party to this Agreement has reasonable grounds to
believe that the other party hereto has failed to fulfill any obligation
hereunder, such party will promptly notify the other party in writing of the
substance of its belief. Unless otherwise agreed in writing, the party receiving
such notice must respond in writing within fifteen (15) days of receipt of such
notice by (a) providing either evidence of cure of the condition specified or an
explanation of why it believes that its performance is in accordance with the
terms and conditions of this Agreement, and (b) specifying three (3) dates, all
of which must be within fifteen (15) days from the date of its response, unless
otherwise agreed in writing, for a meeting to resolve the dispute. The claiming
party will then select one (1) of the three (3) dates, and a dispute resolution
meeting will be held. At the conclusion of such meeting, the parties shall have
the right to pursue any remedy otherwise permitted in law or in equity.
Notwithstanding anything in this Agreement to the contrary, but subject to
Article 11 and Section 8.1, Seller agrees that it will provide uninterrupted
supply of Oxygen during any such dispute so long as all contractually required
payments are made.

                               ARTICLE 20. - TERM

      20.1  Term Subject to the provisions of Section 11.4, the term of this
Agreement will commence as of the Effective Date and expire sixty-four (64)
months after the Effective Date, and will continue in effect thereafter until
terminated by either party upon giving not less than twelve (12) months prior
written notice of such termination to the other party. Notwithstanding the
foregoing, Buyer shall have the right to terminate this Agreement at any time
after the expiration of thirty-six (36) months from the Effective Date if Buyer
determines it can no longer benefit from the use of oxygen from the Existing
Facility as a result of changed technology or obsolescence of equipment or
technology utilized at the Geneva Works, such termination to be effected by
Buyer giving written notice to Seller at least one hundred twenty (120) days
prior to termination. Buyer further agrees to use reasonable efforts to
communicate any decision by Geneva's senior officers to terminate this Agreement
pursuant to the immediately foregoing sentence if such decision is made prior to
such notice period but within one (1) year of the anticipated effective date of
such termination; provided, however, that the failure to communicate such
decision shall not be a default hereunder or affect in any way Geneva's right to
continue with or terminate this Agreement upon written notice as otherwise
provided herein.


                                       13
<PAGE>   18
Upon the expiration of the initial term of this Agreement, both parties agree to
renegotiate in good faith for a contract extension with terms which will reflect
capital depreciation, plant efficiency, technical obsolescence, expected plant
life, additional maintenance requirements, reasonable profit to Seller, and
other factors reasonably related to the production and price of Oxygen provided,
that neither party shall be obligated to enter into any such agreement or
extension.

                              ARTICLE 21. - NOTICE

      Any notice required to be given by either party to the other under any
provisions of this Agreement shall be in writing and shall be considered as
having been delivered on the date of personal delivery or by an acknowledged
facsimile transmission, addressed to the other party as follows:

      SELLER:   AIR LIQUIDE AMERICA CORPORATION
                2121 N. California Blvd.
                Walnut Creek, California 94596
                Attention:  Area Director On-Sites
                Facsimile No.: 510-977-6519

      BUYER:    GENEVA STEEL COMPANY
                10 South Geneva Road
                Vineyard, Utah  84058
                Attention:  General Counsel
                Facsimile No.: 801-227-9198

                With a required copy to:

                KIMBALL, PARR, WADDOUPS, BROWN & GEE
                185 South State Street, Suite 1300
                Salt Lake City, Utah 84111
                Attention:  Roger D. Henriksen, Esq.
                Facsimile No.: 801-532-7750

or to such other party or such other address as either party shall from time to
time designate for that purpose. Any notice by letter under this Agreement will
be deemed to be given as of the date such letter is received by the other party
hereto.

                         ARTICLE 22. - ENTIRE AGREEMENT

      This Agreement comprises the entire agreement between the parties hereto
and supersedes all previous and contemporaneous writings, oral understandings,
negotiations, and previous agreements with reference to the subject matter
hereof, including but not limited to the Letter of Intent, Section 2.10 of the
1995 Agreement (but no other provision of the 1995 Agreement), that certain
Oxygen Supply Agreement dated September 27, 1988, as amended, and that certain


                                       14
<PAGE>   19
Lease dated April 17, 1968, as amended. There are no other promises,
representations or warranties affecting this Agreement. There shall be no
modification or recision of this Agreement except by a writing signed by both
Buyer and Seller. Any terms and conditions appearing in any purchase orders,
even if signed by Seller and/or Buyer, shall be deemed null and void.

                           ARTICLE 23. - MISCELLANEOUS

      23.1  Confidentiality. Neither this Agreement nor any information relating
to this Agreement or the Existing Facility shall be publicized or disclosed by
Seller or Buyer without the prior written consent of the other party in each
instance, except as otherwise required by law.

      23.2  Severability. Whenever possible, each provision of this Agreement
shall be interpreted to be valid under applicable law. In the event that any
condition, covenant or other provision herein contained is held to be invalid or
void by any court of competent jurisdiction, the same shall be deemed severable
from the remainder of this Agreement and shall in no way affect any other
covenant or condition herein contained. If such condition, covenant or other
provision shall be deemed invalid due to its scope or breadth, such provision
shall be deemed valid to the extent of the scope or breadth permitted by law.

      23.3  Waiver. Either party may, by notice signed by an officer of such
party and delivered in the manner provided in this Agreement, but shall be under
no obligation to, waive any of its rights or conditions to its rights hereunder,
or any duty, obligation or covenant of the other party. To be effective, such
waiver shall specifically state the intention of the waiving party to waive such
rights or conditions to its rights. Such a written waiver shall not affect or
alter the other provisions of this Agreement.

      23.4  Power Rates. Upon the request of Buyer, Seller agrees to use
reasonable efforts to assist Buyer in obtaining the most favorable electrical
power rates possible for power to be utilized at the Existing Facility,
including but not limited to providing documentation, information and
consultation in connection therewith, and, if necessary, restructuring the
ownership of the Existing Facility and other provisions of this Agreement in a
mutually acceptable manner to take advantage of any available lower power rates.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.

AIR LIQUIDE AMERICA CORPORATION,        GENEVA STEEL COMPANY,
  a Delaware corporation                  a Utah corporation


By: /s/ Michael J. Smith                By: /s/ Ken C. Johnsen
    -----------------------------           ------------------------------
   Its: Area Vice President                Its: Vice President
        -------------------------               --------------------------


                                       15
<PAGE>   20
                                   EXHIBIT 1.2

                                       to

                             Oxygen Supply Agreement

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


                        FACILITY SITE AND BATTERY LIMITS


       The "Facility Site" and battery limits referred to in the foregoing
 Agreement are located in Utah County, Utah and are more particularly described
 as follows:

                            [See attached Exhibit A]


<PAGE>   21


                          [OXYGEN PLANT SITE MAPPING]


<PAGE>   22
                                   EXHIBIT 1.5

                                       to

                             Oxygen Supply Agreement

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


                                  GROUND LEASE

  The "Ground Lease" referred to in the foregoing Agreement is attached hereto.


                                        2