Coal contracts and long-term supplies, CCC/258

Author(s): Paul Baruya

Ref: CCC/258
ISBN: 978-92-9029-581-5
Published Date: 01/10/2015
No. of Tables: 10
No. of Figures: 18
No. of Pages: 86

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Coal contracts can be typically split into two broad categories, spot contracts (single shipments) and term contracts (multiple shipments). Term contracts can span any period, but in China in 2014, the National Development and Reform Commission announced a desire for coal buyers to negotiate long-term contracts with suppliers. Similarly, in 2015 the government of Korea changed the coal procurement system, in part to encourage a greater use of long-term contracts, but the system reverted to the traditional method within months. Regardless of the success of such measures, security of supply of fuel and limiting exposure to shorter-term volatility in prices and fuel supplies are clearly a strategic aim of some Asian economies.

Long-term contracts cannot be defined precisely, but can vary in length from anything over a year to a contract that can secure coal supplies lasting more than 20 years. Obtaining access to the terms and conditions of such contract details is extremely difficult due to the commercial sensitivity. However this report provides an overview of coal procurement and contractual needs, and describes long-term coal contracts that are in operation around the world today.

Contracts and any other documents shown in this report are for information purposes only. Using these documents for commercial purposes is at the risk of the participants and the IEA Clean Coal Centre will not be responsible for any transactions, agreements or damages accrued that are carried out using these or other contracts. Advice, legal or otherwise, must be sought by the issuers of the contracts.

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