Price Sharing

Price sharing is standard for metal concentrates and compensates the buyer for increases in the expected price in contracts for materials that are priced based on a commodity. Price sharing is configured as a payable analyte charge in a set of contract terms. Price sharing is normally defined for the main analyte in the material (for example, only copper in copper concentrates), although other analytes can also have price sharing. Price sharing is a discount on the price that depends linearly by ranges of the price itself.

The price sharing can be entered as a fixed, calculated or tiered value, or determined from a premium matrix. The price sharing impacts the invoice value, unit price or payable analyte grade. For price sharings that impact the unit price, the resulting charge value is based on a mass, such as the wet mass or unloaded dry mass. The configuration of the resulting charge value includes settings for rounding of decimal places, minimum and maximum values, and how the price sharing affects invoices. For example, for a contract with product pricing, the price sharing may display on the invoice without affecting the total invoice value, or may be included as a separate line item, or included in the calculation of the revenue line item.

Price Sharing Example

• If the copper price is lower than 117 USC/lb, price sharing is 23% of the price.
• From 117 USC/lb to 150 USC/lb, price sharing is 26.91 (23% of 117) plus 15% of the excess price over 117.
• Over 150 USC/lb, price sharing is 31.86 (23% of 117 + 15% of (150-117)) plus 8% of the excess price over 150.

Under these conditions, if the price is 80 USC/lb, the applicable price sharing would be 23% * 80 = 18.40.