Fior (predecessor of IBH) and VAI entered into an agreement for the marketing of the "Finmet process" (iron-ore direct reduction process), establishing the countries where each of Fior and VAI will have exclusive promotion and marketing rights with respect to the Finmet process and its improvements. In accordance with the provisions of this agrement, Fior (now Brifer) has the right to receive from VAI a minimum amount of US$6 per metric ton on the nominal design capacity of any new Finmet plant built in VAI´s jurisdiction; 50% of this royalty will be paid to Fior, or a subsidiary of Fior, when the electromechanical installations begin to be assembled and the remaining 50% shall be paid on the date of the provisional acceptance of the plant. In May 1997 Fior assigned certain of its rights and obligations under this agreement to Brifer (see Note 1); the Finmet process patents and rights are jointly owned by Brifer and VAI. In 1996 the Australian company BHP began the assembly of the electromechanical installations of a plant in Port Hedland, Australia, with a design annual capacity of 2,000,000 metric tons. Such plant will use the Finmet process, which represents a total potential royalty of US$12,000,000. Brifer (a wholly-owned subsidiary of Fior at that date) recognized in fiscal 1996 income of US$6,000,000 from royalties on this process. In 1999 it was determined that the capacity of this plant will be higher than originally estimated; therefore, Brifer recognized US$1,000,000 as income during 1999 as a complement to the royalty. The remaining US$6,000,000 will be payable to Brifer, and recognized as income, when the provisional acceptance of this plant has been obtained, which is estimated to happen in the year 2000. As a condition to formation of the Joint Venture with BHP, as mentioned in Note 7, 50% of the Brifer shares were sold to BHP in September of 1997.