CONTRACT FOR PERUVIAN IRON ORE FE 64.5%
(see detail specifications in Schedule 2)
Contract Ref. No.
The
Supplier’s representative (the Seller):
Contact:
Chen sihong
Name: sihong iron ore import export
Co.,Ltd
Tel:
http://www.chensihong.org
Fax: 0086-21-56069484/62769182
Email:
chensihong@chensihong.org;chensihong@cableplus.com.cn
The Buyer：
Name:
Address:
The Buyer’s
representative (the Buyer):
Contact:
Name:
Tel:
Fax:
Email:
Contact:
Tel:
Fax:
Email:
The Seller and Buyer taking Full Responsibility
and having full legal Authority, hereby certify under Penalty of
Perjury, under International Law, that the Seller is able to sell as
well the Buyer able to purchase the Commodity (as set out in Paragraph 1
below and Schedule 2), under the following terms and conditions. This
contract is signed on November ____, 2004 in _______________________.
Terms and Conditions:
1.
Commodity IRON ORE FINES FE 64.5%
1.1 Iron ore
fines with specifications set out in Schedule 2. Iron Ore is Peruvian in
origin.
2. Quantity, Duration, Delivery and.
2.1 The quantity delivery shall be shipments of
approximately 35,000 dry metric tons, +/-5% min. Larger shipments shall
be permitted upon agreement of the parties and arrangements with loading
and shipment equipment. Seller specifically warrants that the port
facilities in question are able to accommodate vessels of 30,000 to
35,000 metric tons.
2.2 The monthly delivery
shall be 67,000 dry metric tons per month for the first year.
Thereafter, deliveries shall be pursuant to the following schedule:
a. Year 2 – One Hundred Thousand (100,000) dry
metric tons per month for 12 months for a yearly amount of One Million
Two Hundred Thousand (1,200,000) dry metric tons per year +/-5%.
b. Year 3- One Hundred Twenty Thousand (120,000)
dry metric tons per month for 12 months for a yearly amount of One
Million Four Hundred Forty Thousand (1,440,000) dry metric tons per year
+/- 5%.
c. Year 4- One Hundred Twenty Thousand
(120,000) dry metric tons per month for 12 months for a yearly amount of
One Million Four Hundred Forty Thousand (1,440,000) dry metric tons per
year +/- 5%.
d. Year 5- One Hundred Fifty
Thousand (150,000) dry metric tons per month for 12 months for a yearly
amount of One Million Eight Hundred Thousand (1,800,000) dry metric tons
per year +/- 5%.
2.2.1 The total contract
quantity is 6,684, 000 metric tons (10PCT +/-) within 5 years starting
from the date the contract is signed.
2.3 The
Seller must deliver the first shipment within Seventy-Five (75) days
after Receipt of the first LC with terms specified in Paragraph 5 and
subject to terms set out in Paragraph 3. Thereafter, additional
shipments shall be made within thirty (30) days of receipt of a valid
and acceptable Letter of Credit
2.3 The Seller
reserves the right to deliver earlier than agreed in this contract
giving notice to all parties with the permission of the Buyer.
2.4 The Seller further advises buyers that
additional product may become available during the course of the
contract period. Seller hereby grants a right of first refusal for such
additional sums to the Buyer. In the event that Buyer shall wish to
purchase such additional amounts, the sale shall be governed pursuant to
the terms and conditions of this agreement.
3.
Price and Contract Value
3.1 The Price shall be
US$45.00 per dry metric ton FOB Callao, Peru.
The
total value of the Contracted goods for year 1 shall be shall be
Thirty-Five Million Three Hundred and Seventy-Six Thousand United States
Dollars ($ USD).
3.2 (The Price shall be adjusted
yearly by international market price as agreed between the parties.
Please Note: Price validity is to November 26,
2004. Prices are increasing everyday until contract is signed.
4． Price Adjustment and Rejection.
Chemical Content.
4.1 If
the Fe content is over 64.5%, a Fe premium shall be calculated at
US$0.522 per DMT of Fe content for each 1% over 64.5%, scale fraction
pro-rata.
4.2 If the Fe content is below 64.5%, a
penalty shall be calculated at US$0.522 per DMT of Fe content for each
1% below 64.5%, scale fraction pro-rata.
4.3 The
Buyer may reject cargo if the Fe content is below 63.0%.
4.4 If the shipment does not meet the chemical
specifications provided in Schedule 2 as finally determined in
accordance with the provisions of Clause 10, the base price shall be
decreased (fractions pro rata) as follows:
For
Excess Phosphorus (P)
At the rate of five (5) US
Cents per dry MT of iron ore for each 0.01% in excess of 0.08%.
For Excess Sulphur (S)
At
the rate of five (5) US Cents per dry MT of iron ore for each 0.01% in
excess of 0.03%.
For Excess Silica plus Alumina
(SIO2+AL2O3)
At the rate of five (5) US Cents per
dry metric tone of iron ore for each 1.0% in excess of 4.0%.
Moisture Content.
4.4 In
the event that the free moisture loss at 105 degrees Centigrade exceeds
the guaranteed maximum of 8.0% dry as set forth in Schedule 2 attached,
the Seller shall pay to Buyer freight cost for the corresponding
quantity of the excess moisture over the maximum calculated on the basis
of the final wet weight, as set forth in of Paragraph 11. Under such
conditions, the Buyer shall provide seller with evidence of the added
freight costs.
Physical Specification
4.5 If a shipment does not meet the physical
specification stipulated in Schedule 2, the price for the excess tonnage
of ore which is larger than the maximum size 10 mm, shall be decreased
at the rate of US Dollars 0.30 per dry metric ton
5. Payment.
5.1 The Seller
shall issue 2% non-operative performance bond of the value of the first
consignment of iron ore/value of the payment instrument within seven (7)
banking days after signing this contract. The performance bond shall
become activated upon receipt of the payment instrument at the Sellers
Bank.
5.2 The Buyer must open Irrevocable and
Revolving Letter of Credit at sight 100% within seven (7) banking days
after receiving 2% P/B. The said L/C shall be issued by a bank
acceptable to the Seller (hereinafter referred to as the “L/C”) and in
a form agreed to by the Seller. The Letter of Credit shall be equal to
67,000 metric tons of iron ore.
5.3 The L/C must
cover 100% value of each month’s shipments to cover the full value of
the goods with +/-10% allowed, both quantity and value. The L/C shall be
revolving through the entire period of this contract. Buyer shall, after
the initial Letter of Credit, shall deliver to Sellers bank additional
Letters of Credit equal to the monthly deliveries in prompt fashion.
5.4 The L/C should be opened by full telex.
Partial shipment allowed (to permit for each vessel) and transshipment
not allowed and third party as shipper allowed. Documents to be
presented within 30 days after the date of Bill of Lading will be
acceptable.
5.6 Provisional Payment
The L/C shall available against the Seller’s
sight draft for the 95% of the provisional invoice in accordance with
the weight and analysis as described in Paragraph 10 and Paragraph 11
respectively and calculated in accordance with Paragraph 3 and 4 and
Schedule 2, provided the sight draft is accompanied by the following
documents:
a) Seller’s invoice in three
originals, indicating Contract No.，Letter of Credit No., and Name of
Vessel.
b) Original of Certificate of Origin
issued by the Peruvian Chamber of Commerce, Peru in triplicate.
c) Original Draft Survey and Certificate of
Weight in three (3) copies issued by SGS Peru at Loading Port.
d) Original Certificate of Analysis three (3)
copies issued by SGS Peru at Loading port.
5.7
Final Payment-Differences Reconciled
Where
differences in weight and analysis are resolved by both parties, the L/C
shall available against the Seller’s sight draft for the balance
between:
i) The provisional invoice, and
ii) The final invoice calculated in accordance
with the weight and analysis as described in Paragraph 10 and Paragraph
11 respectively and calculated in accordance with Paragraph 3 and 4 and
Schedule 2, provided the sight draft is accompanied by the following
documents:
a) Seller’s invoice in three
originals, indicating Contract No.，Letter of Credit No., and Name of
Vessel.
b) Original Draft Survey and Certificate
of Weight in three (3) copies issued by CIQ at the loading port,
c) Original Certificate of Analysis three (3)
copies issued by CIQ at the loading port.
d)
Final statement of account made out by the Buyer accepting any
difference in weight or analysis. If no final statement is received from
the Buyer within 30 days of unloading and no CIQ is performed by the
Buyer, this document will not be necessary.
5.8
Final Payment—Re-Analysis by SGS.
Where a
Re-analysis is carried out, the L/C shall available against the
Seller’s sight draft for the balance between:
i)
The provisional invoice, and
ii) The final
invoice calculated in accordance with the weight and analysis as
described in Paragraph 10 and Paragraph 11 respectively and calculated
in accordance with Paragraph 3 and 4 and Schedule 2, provided the sight
draft is accompanied by the following documents:
a) Seller’s invoice in three originals,
indicating Contract No.，Letter of Credit No., and Name of Vessel
b) Original of Re-Analysis certificate by SGS.
6. Documents To Be Provided By The Seller To The
Buyer.
6.1 Seller shall at their own costs
provide an SGS Certificate for Quality, Quantity, and Weight at Port of
loading to the Buyer.
6.2 The Seller shall within
5 working days after completion of loading of the goods provide the
following documents to the Buyer.
a) Commercial
Invoice Three (3) Copies.
b) Packing List Three
(3) Copies
c) Copy of SGS Certificate issued at
Port of loading
d) Copy of Certificate of Origin
from Chamber of Commerce, Peru.
7. Cost and
Expenses ：
7.1 Buyer must bear all inspection
fees at the Port of Loading if wish to re-inspect the goods.
8. Terms of Delivery.
.
8.1 The date of bill of loading shall be
considered the date of the shipment and delivery. The date of B/L shall
be actual date of shipment and delivery.
8.2
Delivery is FOB.
9. Samples and Analysis
9.1 Seller’s Responsibility.
At the time of loading of each shipment, the
Seller shall appoint a license assayer (SGS), (and approved by Buyer),
who shall take representative samples in accordance with the ISO
Standard, subject to any addition and/or amendments to be mutually
agreed upon by Seller and Buyer before the shipment commences. The
representative samples shall be subdivided into four portions in
accordance with the ISO standard and one of the portions shall be
analyzed to determine the percentages of Iron, (Fe), Silica (SiO2),
Alumina (Al203), Phosphorus (P), Sulphur (S), physical composition and
the free moisture content at 105 degrees Centigrade as set forth in
Schedule 2. The analysis thus determined under this paragraph shall be
the basis for making out a provisional invoice.
The cost of such sampling and analysis shall be
for Seller's account.
The chemical composition,
physical composition and free moisture loss at 105 degrees centigrade as
set forth in Schedule 2 so determined shall be advised to the buyer by
fax followed by air mail to Buyer within 10 days after suiting of the
vessel at the loading port.
The Loading Analysis
Certificate shall be faxed and then Air Mailed to Buyer within 5 days
after completion of the shipment at the Loading Port.
The Buyer may, at their own expense send its
representative to be present at the time of such sampling and analysis.
9.2 Buyer’s responsibility
At the loading Port shall arrange for an
Inspection by the China Entry-Exit Inspection and Quarantine Bureau
(“CIQ”) to carry out analysis of chemical and physical composition and
for free moisture content at buyer's expense. The samples taken shall be
divided into 3 equal parts and sealed in accordance with accepted
practice and the third to be retained by Buyer for SGS RE-analysis if
required. The Buyer shall provide a certificate by CIQ stating the
percentage of Iron (Fe) Silica (SiO2), Alumina (Al203), Phosphorus (P)
Sulphur (S), physical composition and the free moisture content at 105
degrees centigrade. Such certificate shall be air mailed to the Seller
within 5 days after completion of the shipment at the Loading Port.
The Seller or Seller's representative approved by
the Buyer shall have the right to be present at such sampling at
Seller's cost.
9.3 Where the difference cannot be
reconciled in this manner, both parties agree to arrange for the sample
for a second SGS analysis (“the Re-Analysis) and the certificate of
analysis issued by SGS shall be final for Fe or other relevant chemical
content. The cost of the Re-analysis shall be for the account of the
party whose own analysis differs further from the SGS Re-analysis, and
if the result of such Re-analysis is the mean point of the analysis of
Seller, then such cost shall be equally borne by both parties. The
result of this Re-analysis forms the basis of the final invoice.
9.4 Before the settlement of any claim by the
buyer, the goods must not be resold.
10.
Weighing.
10.1. Seller’s Responsibility.
At loading port, the Seller shall, at their own
expense, appoint a Licenced Marine Surveyor (SGS) to conduct the
vessel’s draft survey for each shipment, in accordance with
international practice and issue a weight certificate, stating the Wet
Weight of the shipment. The Weight thus determined shall be the basis
for Seller’s provisional invoice. The Buyer may at buyer’s expense
have its representative(s) present during the draft survey.
10.2 Buyer’s Responsibility
The Buyer shall, at their own expense, apply to
CIQ for weighing at the port of loading. The weight of the shipment at
loading port is to be ascertained by draft survey. The weight thus
determined by CIQ shall be final as to wet quantity of the shipment. The
final dry shall be determined by deducting the free moisture referred
from such wet quantity. The Seller may at seller’s expense have its
representative(s) at the time of such determination.
10.3 If there are any differences of loaded
weight over 0.5 per cent points, the Buyer and Seller shall agree that
the relevant analysis for the final analysis shall be determined by
averaging the loaded results. The analysis so determined shall be the
basis for purpose of Seller’s final invoice and payment.
11. Final Invoice
11.1 If
no draft survey is performed at the discharge port or the CIQ report is
not mailed out to the Seller by Buyer within thirty (30) calendar days
after vessel arrives at discharge port, Seller’s weight and analysis
reports shall be regarded as final and form the basis of the final
invoice.
12. Arbitration
12.1 Any dispute between the Buyer and the Seller
shall be settled amicable at first, in case the goods is not in
conformity with contract stipulation, within 30 days after the goods
arrived the destination port, the buyer has to send the seller all
related documents attached with the claim for any reasonable faulty
materials, if accepted the claim full or in part, the seller is to
replace free of charge any faulty material. If the two parties cannot
come to a solution, the dispute shall be submitted to the International
Chamber of Commerce using the Rules of Arbitration.
12.2 The place of arbitration shall be in Hong
Kong. The language of the proceedings shall be the English language.
13 Loss of Cargo
13.1 In
event of partial loss of cargo, the Bill of Lading weight and analysis
carried out by buyer on the cargo discharged shall be treated as final
and shall form the basis of final invoicing and payment. In event of
total loss of cargo the analyses and the weight as determined at the
loading port shall be treated as final and shall be used for final
invoicing and payment.
14 Title and Risk
14.1 The title with respect to the shipment shall
pass from the Seller to the Buyer, when seller receives reimbursement of
the proceeds from the opening bank through the negotiating bank against
the relative shipping documents as set forth in this Contract. .
14.2 After completion of loading on board the
vessel at loading port, as certified by the shipmaster, all risk of
loss, damage or destruction shall be borne by the buyer.
15 Amendment of Contract
15.1 Any amendment or modification to this
contract shall be made in writing and subject to confirmation in written
by the contractual Parties.
16. INCOTERMS
16.1 For all terms and conditions not covered by
the above, Incoterms 2000 and any further editions or amendments shall
apply.
17. Force Majeure
17.1 In the event of delivery for all or any part
of one under this Contract being obstructed and/or delayed due to or
resulting from cause beyond the control of Seller and Buyer, such as
war, blockades, revolution insurrection, strikes lockouts, civil
commotion, riots, acts of God, plague or other epidemics, fire or flood
or unforeseen blockage of entrance channel of the port, the Seller or
Buyer shall be relieved of the responsibility for performance of this
Contract hereinafter to the extent to which such performance has been
obstructed.
17.2 The party whose performance of
any obligation is directly affected or who has reason to believe such
performance may be affected by reason of any the causes referred to in
Paragraph 16.1 shall give immediate notice thereof to the other party
concerned by facsimile transmission and shall also within ten days
thereafter provide details to the other party concerned by facsimile
transmission of particulars of the relevant event and if possible supply
supporting evidence so that the other party so affected shall also take
reasonable steps to reduce any loss or damages.
17.3 The party so affected shall give notice of
the termination of the event of force majeure to the other party
concerned as soon as practicable.
18. Notices
18.1 All Notices or Communication referred to in
this contract shall be in writing and shall first transmitted to the
other party by facsimile with the original dispatched by registered Air
mail to the registered address set out on page 1 of this Contract.
18.2 Notices and communications shall be deemed
to be served on the other Party on the date the facsimile is transmitted
to the other party.
19. Non-circumvention and
Non-Disclosure.
The undersigned parties hereby
accept and agree to the I.C.C. provisions of non-circumvention and
non-disclosure with regards all parties involved in this transaction,
additions, renewals, and third party assignments with full reciprocation
for a period of five (5) years from the execution of this agreement.
20 Banking Details.
SELLER
BANK
BANK NAME :
ADDRESS :
ACCOUNT NAME :
ACCOUNT
NUMBER :
SWIFT :
BANK
OFFICER :
BUYER BANK
BANK
NAME :
ADDRESS :
ACCOUNT
NAME :
ACCOUNT NUMBER :
SWIFT :
BANK TELEPHONE :
BANK FACSIMILE :
21 Late
Delivery and Penalty
Should the Seller fail to
make delivery within the contracted period for reason other than Force
Majeure specified in Clause 18 of this Contract, the Buyer has the right
to cancel the Contract and apply for arbitration.
IN WITNESS WHEREOF this Contract is made in
duplicate signed on _________________by the authorized and legal
representative of both parties and duly executed on behalf of the
Parties and the Intermediary.
For and on behalf
of Seller For and on behalf of Buyer
Signed by
Seller.……………………… Signed by: Buyer………………………
Date Date :
…………………………………
…………………………………….
Company Chop
Company Chop
Signed by Intermediary:
…………………………………
