CONTRACT
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CONTRACT NO.:
DATE:
VALID UNTIL:
The Seller:
Tel: ++
Fax: ++
Email:
The Buyer:
Address:
Contact No: ++
Fax No: ++
Email:
This contract is
made out by and between the Buyer and the Seller, whereby the Buyer
agrees to buy and the Seller agrees to sell the under mentioned goods
for China on the terms and conditions stated below:
1. COMMODITY:
1.1. Name of
commodity: Iron Ore Fines ¨C Fe Content 63.5% - 64.5% FE
1.2. Country of Origin: Brazil Brasil Brasilian
Brazilian - South America - Various
1.3. Loading
Port: Major South American Ports and other (Schedule to be provided on
exchange of Contracts and RLC)
1.4. Discharge
Port: or any major capacity discharge Ports on mainland China
1.5. Packing: In bulk
2.
DELIVERY PERIOD AND QUANTITY
2.1. Delivery: C any
major discharge port in China
2.2. First Delivery
Period: 30 ¨C 45 days from receipt of payment instrument.
2.3. Quantity:
2.3.1. A
total quantity of 36,000,000 WMT wet metric tonnes of Iron Ore Fines
delivered by 240 (two hundred forty) shipments in 3 (three) year with
the first and average shipment of 150,000 wet metric tonnes. All
shipments shall be completed within 36 months. With exception of Force
Majeure causes specified in Clause 16 of this Contract.
2.3.2. 10% more or less delivery at Seller¡¯s
option on each vessel allowed. Seller shall notify Buyer such more or
less delivery during vessel nomination.
2.3.3.
Buyer shall establish an Irrevocable, Confirmed and Revolving Letter of
Credit in favour of Seller, as specified in Clause 6 of this Contract,
thirty to forty five (30-45) days prior to the first day window laycan
agreed between Buyer and Seller of each shipment. Seller shall only
nominate a performing vessel to Buyer for acceptance upon an Fully
Funded; Irrevocable; Confirmed and Revolving Letter of Credit (in terms
of Clause 6) being established. Failure to establish said Letter of
Credit, resulting in delay of the shipment or cancellation of the
Contract, shall be the sole responsibility of the Buyer. If an
acceptable Fully Funded; Irrevocable; Confirmed and Revolving Letter of
Credit is not duly received by Seller by the required date, the subject
Contract becomes null and void, unless parties are able to mutually
agree otherwise.
3. SPECIFICATIONS
Chemical Composition
(On
Dry Basis) Guaranteed (% by weight)
Iron Ore
Fines (Fe) 64.5% FE average minimum - rejection below 63.5 %
Silica (SiO2) 3.60 % max
Aluminium (Al2O2) 2.00 % max
Manganese (Mn) 0.10 % max
Phosphorus (P) 0.06 % max
Sulphur (S) 0.003 % max
Other Metals not mentioned above and excluding Ca
and Mg 0.01% max
Physical Specification
Typically 100% Iron Ore Fines to be delivered
shall be sized between 0.15 mm and 6.30 mm on a proper Aperture
Screening on a natural basis at the first transfer point.
Moisture Content
Free
moisture content loss at 105 degrees Centigrade shall be a maximum of
7%.
4. BASE PRICE
At
US$72.00 DMT C CQD Safe Ports ¨C China to be based on Fe 64% -65%FE
content for the 12 shipments of (+/- 10%) wet metric tonnes iron ore
fines. (Plus rolls and extensions)
Price to be
held firm for 12 months and then reviewed yearly in line with percentage
price increase as per world set base rate for iron ore.
5. NONCONFORMANCE TO SPECIFICATIONS
5.1. Fe Content ¨C In respect of any shipment of
Iron Ore Fines which does not meet any of the Fe specifications as set
forth in Clause 3 of this Contract, the Base Price referred to in Clause
4 of this Contract shall be adjusted in accordance with Fe content as
determined pursuant to the provisions of Clause 13 of this Contract as
follows:
¡°The Base Price shall be decreased by
twice (64 US Cents) the Base Price of Iron Ore Fines per DMT as per
Clause 4 of this Contract for each 1% Fe below 64% Fe for Fine Iron Ore,
fractions pro rata.¡±
And
¡°The Base Price shall be increased by (32 US
Cents) to the Base Price of Iron Ore Fines per DMT as per Clause 4 of
this Contract for each 1% Fe over 65% Fe for Iron Ore Fines, fractions
pro rata.¡±
5.2. If any shipment does not meet
any of the Chemical Specification provided in Clause 3 of this Contract
as finally determined in accordance with the provision of Clause 13 of
this Contract, the Base Price shall be decreased (fractions pro rata) as
follows:
5.2.1. For excess of Silica:
At the rate of five (5) U.S. Cents per dry metric
tonne for each 0.1% in excess of 3.60%.
5.2.2.
For excess of Aluminium:
At the rate of five (5)
U.S. Cents per dry metric tonne for each 0.1% in excess of 2.00%.
5.2.3. For excess of Manganese:
At the rate of five (5) U.S. Cents per dry metric
tonne for each 0.1% in excess of 0.10%.
5.2.4.
For excess of Phosphorus:
At the rate of five (5)
U.S. Cents per dry metric tonne for each 0.1% in excess of 0.06%.
5.2.5. For excess of Sulphur:
At the rate of five (5) U.S. Cents per dry metric
tonne for each 0.1% in excess of 0.003%.
5.3. If
free moisture loss at 105 degrees Centigrade as finally determined
pursuant to the provisions of Clause 13 of this contract exceeds the
guaranteed maximum referred to in Moisture Content of this contract,
Seller shall pay Buyer a reduction in the invoice value calculated on
half of the actual freight rate on the exceeded portion of moisture over
7% up to and including 8%; and a further reduction to be calculated on
the full actual freight rate on the exceeded portion of moisture over
8%.
5.4. If any shipment does not meet any of the
Physical Specification provided in Clause 3 of this Contract as finally
determined in accordance with the provision of Clause 13 of this
Contract, the Base Price shall be decreased fractions pro rata as
follows:
¡°By eighteen (18) U.S. Cents for each
metric tonne (natural basis) for that actual quantity of Iron Ore Fines
which does not meet any of the Physical Specification provided in Clause
3 at the first transfer point after unloading of ocean going vessel at
Discharge Port.¡±
5.5. If the shipment is proven
to be an extreme infringement of the specified limits in respect of iron
content, impurity and/or physical compositions (size), Buyers and Seller
shall confer in friendly discussions to mutually establish
counter?measures to be adopted.
6. PAYMENT
6.1. Letter of Credit:
Acceptance is predicated upon Sellers banks
acceptance of Buyers RLC or Bank Guarantee verbiage and payment terms.
Buyer shall open an Irrevocable, unencumbered,
unconditional Confirmed and Revolving Letter of Credit issued by
_________ (Major Prime Bank) ________ that is acceptable to the Seller
with all terms in conformity with this contract. To be CONFIRMED by
Prime western bank. The Payment Instrument will be activate at least
thirty to forty five (30-45) days prior to the first day window laycan
agreed between Buyer and Seller of each shipment and advise to:
Bank Name:
Address:
Account Name:
Account No:
SWIFT:
Sort Code:
Tel: ++
Fax: ++
and that is freely negotiable with any bank in
favour of:
The Seller:
Tel: ++
Fax: ++
Email:
in an amount in
U.S. Dollars sufficient to cover the full value of each monthly value of
each months total shipments with a provision for 10 percent in quantity
and amount. 12 (Twelve) equal monthly payments on the same date of the
month for the value of (One hundred and Fifty thousand) Metric tons,
less 5% value to allow for inspection and verification within 30
(Thirty) days of arrival at discharge port
Buyer
shall pay all Letter of Credit opening bank charges and reimbursing bank
charges, and Seller shall pay all bank charges arising outside of the
Bank at which this Letter of Credit is established.
Within 5 (five) working days after receiving the
Letter of Credit, Seller shall open a performance bond by a prime bank
that is acceptable to the buyer or buyer¡¯s transferee; designee or
assignee amounting at 2% of the contract value per each shipment to
activate the Letter of Credit.
BUYERS BANK:
Name:
Branch:
Address:
Tel No:
Fax No:
Email:
Account Name:
Account
Number:
Swift Number:
Name
of Officer:
6.2. Provisional Payment
The said Letter of Credit shall be payable by
telegraphic transfer by the opening bank against Seller¡¯s sight draft
for the amount of 95% of the value of each total month of shipments and
a set and pre-determined date as construed in Clause 4 of each
respective shipment accompanied by the documents stipulated in Clause 7
of this Contract.
The Draft Survey Certificate of
Weight issued by a qualified surveyor by survey of ship¡¯s draught,
where vessel is fully loaded with Buyer¡¯s cargo together with the
Certificate of Analysis of sample including the percentage of free
moisture loss at 105 degree centigrade issued by Seller shall be the
basis for Seller¡¯s provisional invoice.
6.3.
Final Payment
The balance 5% of the value of the
shipment due to Seller or Buyer after provisional payment shall be made
within thirty (30) days of completion of discharge at Discharge Port
against Seller¡¯s sight draft drawn under the same Letter of Credit,
accompanied by the following documents:
6.3.1.
Weight Certificate issued by CIQ in original or photocopy acceptable.
6.3.2. Certificate of Analysis issued by CIQ in
original or photocopy acceptable.
6.3.3.
Seller¡¯s signed final commercial invoice in three (3) copies.
The final invoice shall be based on certificates
issued by CIQ as provided in Clause 12 and Clause 13 of this Contract.
In the event that CIQ certificates are not made available to the Seller
within thirty (30) days of completion of discharge at Discharge Port,
the Seller shall be entitled to submit its sight draft against the said
Letter of Credit for payment with a declaration from Seller that the CIQ
certificates have not yet been received, accompanied by the following
documents:
6.3.4. Seller¡¯s signed final
commercial invoice in three (3) copies.
6.3.5.
Beneficiary Certificate to declare the non-availability of the
Inspection Certificates issued by CIQ within thirty (30) days after
completion of discharge.
In this instance, the
Draft Survey Certificate of Weight and Certificate of Analysis issued at
loading port shall form the basis for the invoice.
Where umpire analysis is required, payment
adjustment arising from this will be made when the umpire¡¯s certificate
is available.
7. DOCUMENTS
7.1. Seller shall provide the sellers bank or its
agent with the following documents for information and record within the
bank:
7.1.1. A complete set of Clean on Board
Third Party Bills of Lading in triplicate issued ¡°to order¡± and blank
endorsed, marked ¡°Freight Paid as per Charter Party¡±, notifying the
party as stipulated under the Letter of Credit.
7.1.2. Five (5) copies of Beneficiary¡¯s signed
Provisional invoices indicating Contract Number, name of carrying vessel
and number of Letter of Credit.
7.1.3.
¡°Certificate of Analysis¡± issued by Independent Public Surveyor and
¡°Draft Survey Certificate of Weight¡± of the contracted goods issued by
Independent Public Surveyor in triplicate each. Certificate of Analysis
to show actual result of tests on chemical composition and all other
tests called for in this Contract.
7.1.4. One
copy of facsimile advising shipment according to Clause 11 of this
Contract.
7.1.5. ¡°Certificate of Origin¡± issued
by Chamber of Commerce in three originals.
7.2.
One set of each of the above documents in copy to be distributed to
Buyer within three working days after completion of loading.
8. SHIPPING SCHEDULE
8.1.
Seller shall provide to Buyer for acceptance a shipping schedule
indicating a two (2) days laycan spread, at least forty-five (45) days
prior to the first day of the laycan.
8.2. At
least twenty (20) days prior to the commencement of the laycan as
indicated by the Seller under Clause 8.1, Seller will notify Buyer of
the nominated vessel or sub, indicating the particular(s) of the vessel
including, vessel name, year of build, nationality, LOA, beam, and ETA
at the loading port. The Seller has the option to substitute the
performing vessel at any time under the advice to Buyer without delay
provided such vessel intake is similar to the vessel originally
nominated and the laycan remains unchanged.
8.3.
Buyer shall confirm acceptance of nominated vessel with two (2) working
days after having received advice in writing from the Seller.
9. NOTIFICATION OF ARRIVAL
The Seller shall advise the Buyer and the
discharge port agent immediately upon departure of the vessel of the
tonnage loaded and expected time of arrival at the Port of Discharge.
Master of the vessel shall cable the discharge port agent upon departure
and will further notify the Buyer 7 days, 72 hours, 48 hours and 24
hours prior to the vessels estimated time of arrival at Port of
Discharge.
10. SUMMARY OF Discharging Terms
10.1. Discharging terms: Customary Quick Dispatch
(CQD).
10.2. Notice of Readiness may be tendered
in writing at any time ATDNSHINC WIFPON, WICCON, WIPON, WIBON after the
vessel has arrived at the Port of Discharge, or so near thereunto as she
may be permitted to approach whether in Port of Discharge or not and is
in every respect ready for discharging whether in berth or not.
10.3. Although appointed by the Seller,
stevedores shall conduct operations in accordance with the vessel¡¯s
Master¡¯s requirements. In any event, the Buyer shall always remain
responsible for stevedore damage caused to the vessel at the Port of
Discharge, whether by the stevedores¡¯ default or negligence howsoever
caused. Such damage shall be settled directly between the owners and the
stevedores and the Seller shall not be liable. In any event such damages
are to be reported promptly on occurrence and confirmed in writing to
the stevedores and or receivers prior to the vessels departure from the
Port of Discharge.
11. ADVICE OF SHIPMENT
Seller shall, within three (3) working days after
completion of loading, advises Buyer by telex or facsimile of the
contract number, name of commodity, invoice value, gross weight, name of
vessel and Bill of Lading date.
12. WEIGHING
At Loading Port, Seller shall, at Seller¡¯s
expense, determine the weight of the shipment of Iron Ore by draft
survey. The weight of Iron Ore as ascertained and certified together
with the Seller¡¯s analysis shall be the basis of invoice. Buyer may, at
Buyer¡¯s expense, have their representatives present during the draft
survey.
Buyer shall, at Buyer¡¯s expense, apply
to CIQ for weighing at Discharge Port. The weight of the shipment at
Discharge Port is to be ascertained by draft survey. The weight thus
determined by CIQ shall be final as to wet quantity of relevant
shipment. The dry quantity shall be determined by deducting the free
moisture loss at 105 degrees Centigrade referred to in Clause 13 of this
Contract from such wet quantity.
Seller may, at
Seller¡¯s expense, have their representatives present at the time of
such determination. If there are discrepancies in outturn weight on a
dry basis of over 0.5% compared to the inturn weight, then Buyer and
Seller may consult to settle the difference. If a draft survey is not
performed at Discharge Port, Seller¡¯s Certificate of Weight will be
regarded as final.
13. SAMPLING AND ANALYSIS
13.1. At Loading Port, Seller shall, at Seller¡¯s
expense, determine the specification of Iron Ore contained in each
shipment according to the latest International Standard Organisation
(ISO) procedures in respect of the chemical analysis, size structure and
the percentage of free moisture loss at 105 degrees Centigrade. Seller
shall provide a certificate showing details of the determination. Buyer
may, at Buyer¡¯s expense, have their representatives present at the time
of such determination.
At Discharge Port, CIQ
shall sample from each shipment according to the latest ISO procedures
and divide the sample into three parts, one for the Buyer, the second
for possible need of Seller and the third for possible umpire analysis
which shall be sealed and kept by CIQ. Seller may, at Seller¡¯s expense,
have their representatives present at the time of sampling and analysis.
CIQ shall analyse the sample for Buyer and within
thirty (30) days of completion of discharge issue and promptly forward
to Seller by airmail a certificate showing the percentage of chemical
elements, the percentage of free moisture loss at 105 degrees Centigrade
and the relevant screen analysis. CIQ¡¯s analysis shall be final except
as otherwise provided for in Clause 13.2 of this Contract.
In the event that Seller does not receive CIQ
Report within 30 days after completion of discharge, Seller¡¯s
Certificate of Analysis issued at Loading Port shall be regarded as
final and shall form the basis for final invoice.
13.2. If the difference in percentage of Fe
content between Buyer¡¯s and Seller¡¯s analysis made under Clause 13.1
of this Contract is more than 0.5% or if there exists a significant
difference between the two said analyses in respect of any one or more
chemical elements other than Fe, Seller shall consult with Buyer to
reconcile such difference. If, after consultation, the difference cannot
be reconciled, then at the request of Seller the sample for umpire
analysis shall be analysed by an umpire agreed between Buyer and Seller
and the Certificate of Analysis issued by such umpire shall be final for
Fe or relevant chemical elements and for physical size.
13.3. If no determination of analysis or physical
size is exercised at Discharge Port, Seller¡¯s certificate shall be
conclusive as to specification of the Iron Ore and shall form the basis
for final invoice.
13.4. The weighing, sampling,
chemical analysis, moisture determination and screen analysis performed
at the Discharge Port by CIQ shall be for Buyer¡¯s account. The cost of
the umpire analysis shall be for the account of the party whose own
analysis differs the furthest from the umpire analysis, and if the
result of such umpire analysis is the mean of the analysis of Buyer and
the analysis of Seller then such cost shall be equally borne by both
parties.
14. PROPERTY, TITLE AND RISK
14.1. The risk in Iron Ore shall pass to Buyer
when Iron Ore has effectively crossed the ship¡¯s rail at Loading Port.
14.2. Title shall pass from Seller to Buyer upon
payment being effected in accordance with Clause 6 of this Contract.
15. MARINE INSURANCE
To be
arranged by Buyer from the time the Iron Ore is loaded onto vessel at
loading port. For this purpose, Buyer shall advise Seller by fax before
the loading commence of Marine Cover Note and Buyer shall advise Seller
after completion of loading of the particulars as called for in Clause
11 of this contract.
16. FORCE MAJEURE
Either Seller or Buyer shall be relieved of and
excused from its obligation to perform hereunder during any period that
their or its performance is prevented or delayed by Act of God, war,
blockade, revolution, riot, insurrection, civil commotion, strike,
lockout, fire, flood, storm, tempest or other inclement weather
conditions, unforeseen blockade of the access channel at Loading Port,
maintenance practice of the port facilities by the duly constituted Port
Authority, government restriction, regulation or order. In the event
that such a Force Majeure condition occurs or is anticipated, the party
directly affected shall advise the other party by facsimile or telex as
soon as possible, and shall then submit a certificate issued by
Government Authority or Chamber of Commerce as evidence of the Force
Majeure condition within 10 days, if possible, after such Force Majeure
condition. If the Force Majeure lasts over three months, Buyer shall
have the right to cancel the tonnage involved. Seller¡¯s inability to
obtain export license shall not be considered as Force Majeure.
17. ARBITRATION
All
disputes in connection with this Contract or the execution thereof shall
be settled by friendly negotiation. If no settlement can be reached, the
case in dispute shall then be submitted for arbitration to the
International Chamber of Commerce Paris-Geneva in accordance with the
Rules of Arbitration of ICC. The decision made by the Commission shall
be accepted as final and binding upon both parties. The fee for
arbitration shall be borne by the losing party unless otherwise awarded
by the commission.
18. ASSIGNMENT
Seller may not assign this Contract in full or in
part without the written consent of Buyer, which consent will not be
unreasonably withheld. Buyer may not assign this Contract in full or in
part without the written consent of Seller, which consent will not be
unreasonably withheld. No assignment shall be in effect until the
assignee agrees in writing with the other party to be bound by and to
perform all of the obligations of this Contract assigned to it.
19. CONFIDENTIALITY
The
terms of this Contract and the cargo details and results are
confidential except as agreed between the parties which consent shall
not be unreasonably withheld.
20. OTHER TERMS AND
CONDITIONS
20.4 The following Contract Procedures
are to be adhered to strictly:
20.4.1 Seller
issues draft contract
20.4.2 Buyer signs and
returns it to the seller
20.4.3 Buyer issues a
Conditional non-operative Revolving Letter of Credit
20.4.4 Seller issues a fully operative 2%
Performance Bond to activate the RL/C on safe
receipt of the Payment Instrument at the
seller¡¯s nominated bank
20.4.5 The RLC is fully
activated.
20.4.6 The Seller provided Proof of
Product and delivery schedule.
20.4.7 Seller
nominates vessel or vessels and provides buyer with full vessel
particulars
20.4.8 Delivery begins as per
contract
IN WITNESS WHEREOF, the parties hereto
have executed this Contract as of the day and year first above written.
This Contract will take effect immediately upon two parties¡¯ signature
on fax copy.
Buyer: Seller:
For and on behalf of For and on behalf of
Authorized Signature Authorized Signature
Managing Director
brasil
Brazil Iron Ore offer export October 2004
========
www.chensihong.org
offer
Australia Lumps iron ore FOB 49usd/mt;
;
australia iron ore lumps /fines
all from Nov,2005 ' transport shipping from
Australia main port to China main port
