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Australia: The pain of take-or-pay

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Report summary

Fixed cost provisions in infrastructure contracts otherwise known as 'take or pay' result in most miners in Australia paying for capacity regardless of tonnes actually shipped. In 2013 we estimate a weighted average transport and port charge of A$20/tonne for exporting mines. Of this we estimate miners will pay an average take or pay 'penalty' for underutilisation of capacity of approximately A$4/tonne. This translates to 21% of total transport and port costs but only 5% of total cash...

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    The pain of take or pay.xls

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Table of contents

Tables and charts

This report includes 6 images and tables including:

Images

  • Transport and port charges by mine, 2013
  • Port utilisation curve by mine, 2013
  • Share of production at 80% utilisation by year
  • Take-or-pay penalty charge (real 2013 terms)
  • Infrastructure take-or-pay charges by company, 2013
  • Assigned port capacity utilisation by company (%)

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