Insight
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...
Table of contents
- Executive summary
- Introduction to 'take-or-pay'
- Infrastructure costs and utilisation in 2013
- Outlook: Higher utilisation, falling penalties
- Companies most impacted by take-or-pay
Tables and charts
This report includes 6 images and tables including:
- 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 (%)
What's included
This report contains:
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