Contract Pricing

Pricing for the contract product can be based on the product or analytes, and is entered as quotation pricing (QP) lines within QP headers. See Quotation Pricing Headers and Lines. Pricing may have different levels of Quotation Pricing Certainty.

Product Pricing

Product pricing is used when the entire product is sold and there are qualities on the entire product that determine the pricing (for example, coal, where there may be price adjustments based on the quality).

Analyte Pricing

Analyte pricing is used for materials like base metal concentrates and semi-refined metals and iron ore, when the material is priced based on the elements in it. The quantities of specific analytes in the product determine the pricing.

Example: For copper or zinc concentrates, the standard practice is not only to pay for the copper or zinc content, but also for the trace amounts of gold and silver. A higher concentration of the elements returns a higher price. These elements are configured as payable analytes.

A metallurgical deduction is established to compensate for losses in the subsequent refining process. Normally, the metallurgical deduction is calculated as a percentage of the analyte content. A minimum deduction can also be specified. See Enter a Deduction for a Payable Analyte.

Example: "85% m/d 8" (85% minimum deduction 8 units) indicates that the seller pays the smallest out of 85% of the metal content, or the actual metal content less 8 grams per tonne.

Example: "Deduct 3.5/65%" indicates that the seller subtracts 3.5 units (for example, troy ounces), then pays 65% of the remaining value.

Payable analytes can have escalating tiers, where the payments are stepped depending on the metal content.

Example: An escalating tier for gold:

  • >20g/t then pay 96% of payable metal
  • >10g/t and <20g/t pay 95% of payable metal
  • >4g/t and <10g/t pay 93% of payable metal
  • <=4g/t pay 90% of payable metal

The payable percentage and deductions are applied against the analyte grade. A Fixed deduction is calculated first and then the payable percentage is applied. A Minimum deduction means that the two values (deduction and payable percentage) are compared, and the maximum one applied to determine the minimum price. See Enter a Payable Percentage for a Payable Analyte.

Payable amounts on analytes are defined for a particular invoice iteration type.

Payable amounts are always determined using dry mass. The analyte definition that is used to determine dry mass is Moisture.

Unit and Currency Conversion

A maximum of two currency units can be defined on a contract. These are the currencies that the invoice can display or that can be sent to a company's ERP system.

When prices are entered for a material in a particular unit, or defined in a particular currency, conversion factors are applied to calculate the prices to the required unit and primary currency. The exchange rates are used to convert prices in the price series to those required by the QP lines. Different currencies can be used across the QP lines, but when calculating the average price or taking the highest or lowest price to determine the QP header price, MineMarket converts the price to the currency defined for the payable analyte or contract product.

Calculation Order of Pricing

The calculation order of pricing during invoice calculation is as follows:

  1. Calculate mass modifications (wet to dry).
  2. Establish the base price, unless there is a contract charge that modifies the base price (that is, a mass adjustment).
  3. Calculate the base price.
  4. Add all contract charges.
  5. Add all service charges.
  6. Add applicable parities.
  7. Add taxes based on the invoice total.
  8. Apply payment terms to determine payable amounts.
  9. Add taxes based on payable amounts.