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...

What's included

This report contains

  • Document

    Australia: The pain of take-or-pay

    PDF 429.71 KB

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 (%)

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