Iron Ore Procurement Contracts Assessments

Responsible procurement policy and procurement processes with steel mills.

A new iron ore producer on competition in world markets against the backdrop of dramatic
price increases over the past five years. Analysis of cases like these would benefit from a
reliable organizational understanding of competitive strategies in iron ore markets and for the
reason that welfare gains from productivity increases in both importing and exporting
countries. Responsible mining is understood as mining operations applying the best
international standards in terms of environmental and social management, health and safety
improvements, energy efficiency and revenue transparency and stakeholder engagement.
Through its involvement in the mining sector, the Giuelith Timantti td. has an opportunity to
promote environmentally and socially responsible mining across its portfolio and to provide
examples of best international practice to the relevant governments in areas such as
environmental and social management, health and safety improvements, energy efficiency
and revenue transparency as guiding principles. Giuelith Timantti td. recognises that mining
and the revenues that flow from it can offer uni!ue opportunities to develop more resilient
and diversified local economies which will continue to prosper after the closure of the mining
pro"ect. The bank#s and the mining companies involvement in these pro"ects can be an
important opportunity to help develop the mining value chain vertically through the
promotion. Achieving long$term economic development through company$supported
initiatives can be complex and challenging. Therefore successful initiatives meaning create
shared value by aligning mining clients# business goals with the development of the local
business market. Also, !uantitative analysis of trading behaviour is re!uired to put these
intuitive outsourcing into a framework that would enable alternative hypotheses to be tested
rigorously. Analysis of this type has been applied to world markets. The greater simplicity and
parsimonious data re!uirements of this approach brings dealing in materials advantages in
trading patterns over several years that can be examined efficiently, and the method can
therein be applied to other bulk commodities as well, even where little or no cost data are
available. This method fully exploits the richness of bilateral trade data sets. %aries on cost
schedules is been discussed earlier and we can see production costs and transport costs
vary accross supplies. Therefore choice can be represented by &'( price and ()* price.
+ake the ()* price procurement applied to seaborne trade in iron ore and of practical
preliminaries both &'( price and ()* price pertaining to iron ore procurement contracts
assessments like this, including the product specification, pricing, value of trade, distances
and transport costs. +arket participants evaluate the premium each brand commands,
incorporating chemical, physical and metallurgical properties, in large part based on prior
knowledge of these properties and experience using the products. +oreover, with the
provided iron ore procurement contract instrument the product specification will explain
chemical properties of iron ore. &hemical properties vary between deposits. As the principal
use of iron ore is the production of iron and steel, iron content is the principal determinant of
the value of the ore. ,ricing makes a distinction between iron ore -fines. and -lump.. The
latter is more valuable, other chemical properties being the same, but the former is more
commonly traded. %arious common contaminants, such as silicon, aluminium, phosphorus
and sulphur have some effect on the value of iron ore from a particular deposit as they affect
the properties of steel made from the ore or may lead to additional processing costs. All
these parameters is been determined for to short run cost efficient iron ore procurement
contracts, demand, and sustainable and risk free dealing in materials of certain origins.
Therein this priority in first case at the Giuelith Timantti td. office in ondon, /0 reflects a
methodology of estimating exporter costs and importer demand characteristics for bulk
commodities from bilateral data on the value of trade, coupled with data on shipping costs
and distances to the starting point where is aimed activity to negotiate contract prices
annually to establish an ()* benchmark price that then apply to all contract sales. +eaning
an outmost realistic coorelation for any fixed price may be applied relationsships between
iron ore prices and world crude steel production. The second priority is dealing spot supplies
to a growing demand in the world market. The purpose of thus agreement is to demonstrate
the conditions under which it might be optimal for the buyer and to make the procurement
contract instrument rely on the linearity of the importers demand for the commodity, and
competitiveness among exporters.
Iron Ore Procurement Contracts
Quality1 This standard allows to ensure
consistency in the price normalization process.
Iron Content (Fe)1 234
Moisture1 54
Loss on Ignition1
Silicon Dioxide1 6.74
Alumina1 8.94
Phoshorus1 7.7:94
Sul!ur1 7.734
Imurities normali"ation1
Si"ing1
Si"e o! concentrate1
Si"e o! ellets1 ;'ron ore blast furnace pellets<.
Si"e o! !ines1
Quantity1 +in. parcel size 97,777 metric tonnes.
Location1 (reight differentials and ()*.
#iming1 =elivery within 3$5 weeks from date of publication.
Payment1 8774 payment at sight.
$nit o! assessment1 /> =ollars per dry metric ton.
Statement o! Procurement Practice1
ump premiums vary from company to company, depending on when agreements are
reached, brands, volumes, and whether they are negotiated as a package with other
products.
+etallurgical properties have not been specified in line with current spot trading convention.
?ere is been determined specific export terminals from the main iron ore shipping countries,
wherein distances can be viewed from this link. http1@@e$ships.net@dist.htm
Transport costs in the *altic =ry 'ndex can since 8A59 be viewed at
http1@@www.balticexchange.com@
,rice changes to offers will be considered in the assessment process only if the
improvements in the price of offers are incremental in nature.
Be considers transactions, bids@offers and market indications that are reflective of typical
conditions and originating from sources deemed reliable.
%iuen In&est Management Ltd' (%MOL)
>tron ?ouse 877 ,all +all
>B8C 9DA ondon, /0
%AT1 7:6:8699
&D) @ ,')
Roger 0. )lsson
Dmail1 linershipEyandex.com
Bebsite1 http1@@deposit.homestead.com
A(out the Author
Roger 0. )lsson is based in ondon and leads the metals and mining division of the
commodity trading and mangement group. ?e has more than 37 years of experience as an
industry executive and consultant to the global metals and mining industries. ?e works with
leading companies in the areas of strategy, management and ac!uistitions, bussiness
intermediation and transformation. ?e is the founder of the Giuelith Timantti imited and is a
recognized specialist on mining issues and development.
%uidance documents last udated )*+,-*.-*+
The >tatement of ,rocurement ,ractice are a guideF thus are not intended to create any
contractual obligations or rights. Giuelith Timantti imited reserves the right to interpret its
policies and to vary its procedures when it determines it is appropriate. Giuelith Timantti
imited may at its sole discretion change, make exceptions to, or discontinue any of the
provisions in this document at any time, without advance notice.
This news portal provides an comprehensive source of information to complement the global
steelmarket. http1@@deposit.homestead.com@Gews$or$Reviews.html
T?D ,/*'& A,,DG='H 8. )(('&'A 3786
World Iron Ore Responsible procurement policy and procurement processes with steel
mills