IMX Resources has updated the benchmark pricing in its sales contract with Jilin Tonghua Iron and Steel Group for iron ore produced at its Cairn Hill mine.
The definition of the benchmark has been revised to reflect the current index-based pricing mechanism used for long-term iron ore sales contracts.
The company signed the life-of-mine contract with Tonghua in August 2008 and had previously made alterations in February this year.
“This latest variation to the sales contract updates the sales contract to reflect the current index-based iron ore pricing mechanisms as a result of the demise of the traditional iron ore benchmark pricing,” IMX managing director Duncan McBain said.
There was a provision in the original sales contract to move to an alternate pricing mechanism in the event the traditional annual iron ore benchmark pricing ceased to exist.
The new pricing mechanism is index based and adjusted for freight to provide a FOB equivalent price.