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What is a LOI?
A LOI is a Formal document stating "Intent" or "Interest" to do Business. LOI commonly refers to Letter of Intent or Letter of Interest. Depending on what is written on a LOI, such LOI can have absolutely NO meaning at all, or it can be written is such a manner as to Impress the Sellers with the Buyers' serious intent and commitment,  to normally do business once certain requirements, conditions, quality requirements, dates or prices have been confirmed.

What is a Proper LOI-the LOI we require to bring Sellers to the Table to meet with Buyers?

• It must be on the Buyers Letterhead

• Must be made out to "The Mine / S.A.N.C.E.

"

• Full contact details and registration Number of the PTY (sanitized docs mean nothing and will be ignored)

• Proper Names of the Buyers

• Details of the product they require (A Grade FOB at RBCT, or Chrome FOT Rustenburg)

• The Price they are willing to pay (say RBI+3.5% or R1220 per m/t FOT)

• The Spec range of the product required

• Buyers VAT number (for the Invoice)

• The Buyers' Banking Co-Ordinates

• Permission to the Mines Bank to do a Bank probe to confirm that the Funds do exist

• Signed by the Buyers
  PLEASE NOTE: We do NOT EVER use such LOI 's to go and source product from mines (such actions are prohibited by SANCE's code of conduct). We do offer it to the Mines that have already offered us their product.

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All CHROME transactions - Procedures must please be adhered to:

• Buyers sign NCNDA

• We forward LAB Report to the Buyers

• Buyers issue Proper LOI to the Mine / S.A.N.C.E.

• Sellers (the mine) issue Contract and Invoice to the Sellers

• Buyers sign Contract and Invoice - then Prove Funds (POF)

• Viewing of Product at the mine -Buyers are welcome to do further Lab Tests to confirm the quality

• Buyers Pay and lift the Chrome

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All COAL transactions - These basic Procedures below must please be adhered to:

• Buyers sign NCNDA

• Buyers issue Proper LOI to the Mine / S.A.N.C.E.

• The Mine probes the Buyers account to verify sufficient funds

• Sellers (the mine) issue Contract and Invoice to the Sellers

• Buyers sign Contract and Invoices

• Viewing of Product (POP) at the mine (when necessary / applicable)

• Contract is honored by the Mine and Coal is transferred as per the Contract to the Coast/ Buyers lift the Coal as per Loading Instructions

 

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Article: Why Ghost Coal? Written by Louis Kearney (Chairman of S.A.N.C.E.)

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Main Abbreviations used: (See also Incoterms ®  2010)
m/t - Metric Tons
RBCT - Richards Bay Coal Terminal
RBI - Richards Bay Index
RB - Richards Bay Harbour (not RBCT) 
TRF or TFR - Transnet Rail Freight Numbers

Loading Terms
FOB - Free on Board (Mine has own TFR and RBCT slots)
FOT - Free on Truck (Lorry) It means the Mine loads Buyer's trucks at the mine  FAS - Free along Ship CFR - Cost and Freight 
CIF  - Cost  Insurance and Freight

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Address: Chrome from Rustenburg and Steelpoort, South Africa

Links: Manganese for sale, Mines for Sale, Coal Peas, Mines wanted,  Coal for Sale, Slots RBCT, Coal slots wanted

Contact: Louis Kearney
Chairman/Voorsitter
      
S.A.N.C.E.  (The South African National Commodity Exchange)
Register as a SANCE Broker today at www.SANCE.co.za

Office: +27(0)12-807 0330
Fax: 0866 124 303
Mobile Number: +27(0)79 872 3339

louis@listall.co.za