Enter Scale Pricing for Charge Tiers

This activity is only applicable to contracts where the Contract Pricing Basis is Analyte Pricing. See Enter General Details for a Sales or Purchase Contract.

For base metal concentrates, it is common for contract charges or payable analyte charges (in particular, refining and treatment charges) to be based on the price of a payable analyte. In some cases, the pricing rules for a charge require different calculations than those used for the payable analyte on which it is based. Scale pricing (or 'payable analyte scale pricing') can be used to define pricing rules for the charge.

Scale pricing can be defined only if the charge is entered as a Tiered value, the Tier Concept is Payable Analyte Scale Price, and a Tier Analyte is selected.

Example 1

A tiered treatment charge is based on the price of lead (Pb). If the price is less than or equal to 2000 USD/mt, the treatment charge is 150 USD/mt of delivered mass. If the price is more than 2000 USD/mt, an additional 'scaled price' of 0.12 USD/mt applies.

The price series referenced in the QP configuration has the following average monthly prices (USD/mt): January = 2300, February = 2400, March = 2500.

For a delivery in January of 1000 mt, the QP is MOD(1,0) and therefore the applicable price is 2400 USD/mt.

The calculation for the scaled price is:

 0.12 USD * (2400 – 2000)/1 USD = USD 48

The calculation for the total treatment charge is:

 (150 USD/mt + 48 USD/mt) * 1000 mt = USD 198,000

To configure this tiered treatment charge in MineMarket, on the Tier Group tab of the charge:

  • Tier Concept—Select Payable Analyte Scale Price.
  • Tier Calculation—Select Accumulative.
  • Offset—Enter 150.

Configure the tiers as shown in the table below. On the Scale Pricing tab, configure the QP as required.

Applicable From $/t Applicable To $/t Value $/t Tier Summary Step Include Start
0 2000 0 0.00 < = x < = 2000.00 1 Checked
2000   0.12 x > 2000.00 1 Unchecked

Example 2

A tiered treatment charge is configured in a set of contract terms, as described in Example 1 above.

A despatch order (DO) is for 1000 mt and has a payable analyte content of 500 mt. For this DO, the charge is to be calculated based on different scaled pricing:

  • 200 mt with a fixed price of 2400 USD/mt
  • 300 mt with a fixed price of 2500 USD/mt

The weighted average price of the payable analyte is 2460 USD/mt.

The calculation for the scaled price is:

USD 0.12 * (2460 – 2000)/ USD 1 = USD 55.20

The calculation for the total treatment charge is:

(150 USD/mt + 55.20 USD/mt) * 1000 mt = USD 205,200

On the Contract Term Overrides tab of the DO, a new treatment charge is configured. The configuration on the Tier Group tab is identical to Example 1 above; however, the Scale Pricing tab needs to have two QP lines with the fixed price configuration.

However, contract charges added on the Contract Term Overrides tab of the DO are in addition to those configured in the applicable set of contract terms. See Add a Contract Charge to a Despatch Order. Therefore, a treatment charge that cancels the effect of the treatment charge configured in the set of contract terms also needs to be added to the Contract Term Overrides tab of the DO.

Quotation Pricing Header

Note: See Quotation Pricing Headers and Lines for descriptions of the fields in the list and the activity below.

The implied quotation pricing header has the following settings:

  • Quotation Pricing Type—Final
  • Quotation Pricing Iteration—Default
  • Pricing Method—Weighted Average
  • Weighting Type—Editable. See below.
  • Weighting Reference—Parent Analyte Content
  • Pricing Decimals—The number of Decimals defined in the Header Pricing field group on the charge.
  • Force QP Header—Checked
  • Price Approved—Checked
  • Include Forward Curve Prices—Checked

Security Note: For a contract charge template, you need the Allow the user to maintain contract charge templates security right in the Contracts domain security rights group for this activity. For a contract charge or payable analyte charge in a set of contract terms, you need the Allow contract maintenance security right in the Contracts domain security rights group for this activity.

Activity Steps

  1. Open the contract charge or payable analyte charge in the Contract Charge Templates, Sales Contract or Purchase Contract.
  2. Select the Tier Group tab. See Enter Tiers for a Charge for how to define the tiers. The Scale Pricing tab only displays if the Tier Concept is Payable Analyte Scale Price. A Tier Analyte must be selected.
  3. Select the Scale Pricing tab.
  4. Select the Weighting Type from:
    • Percentage
    • Quantity
  5. Define quotation pricing (QP) lines:
    1. To copy the QP lines from the payable analyte pricing configuration, right-click in the Quotation Pricing table and select Copy Tier Analyte QPs from the menu.

      Note: QPs can only be copied if the table is blank and if there is a final quotation pricing header for the payable analyte that is selected as the Tier Analyte on the Tier Group tab of the charge. For copied QP lines, if the source pricing method was not Average or Fixed Unit Price, the pricing method defaults to Average. The Weighting Type updates with the value selected on the QP header from which the QP lines were copied.

    2. To add a new QP line, right-click in the Quotation Pricing table and select New from the menu.
    3. To create optional QP lines, right-click a QP line and select New Optional QP from the menu. For scale pricing, optional QPs are evaluated; however, no declaration is required. See Quotation Pricing Certainty for information about optional QP lines.
  6. Select the Pricing Method from Average and Fixed Unit Price.
  7. If the Pricing Method is Average, complete the following fields.
    • Price Series—Displays price series applicable for the Tier Analyte that is selected in the Tier Group tab of the charge.
    • Quotation Period
  8. If the Pricing Method is Fixed Unit Price, enter the Price Value.
  9. Complete the remaining fields as required.
    • Floor
    • Cap
    • Fixed Price Charge
    • Decimal Places
    • Price Currency
    • Price UOM
    • Declare By
    • Weighting Value (% or Quantity)
    • Quantity UOM
    • Use All Fixed Weight
    • Applicable To Quantity Of Invoice
    • Invoice Iteration
    • Exchange Rate Source
    • Exchange Rate Method
    • Fixed Exchange Rates
    • Allow Incomplete Period to Invoice Date
  10. Click Save.