Ann: Anglo American Agreement, page-27

Hi Stephen

I am pretty sure you are mistaken in terms of offtakes locking in any sort of price as a rule. I own several IO producers and they all have off takes for either their full production or part of it. One of them has recently signed a hedge so they have locked in a price for about 45% of their production. All other IO supplied through the off takes is supplied at a price based on formula using the current spot price so no locked in price.

Anglo American agreed to make an 8M prepayment. That is for 800.000T so it doesn't lock in anything. They essentially have agreed to prepay $10 per ton and the remainder on delivery I would assume. What the remainder is will depend on the IO price at that time.

Off takes just assure you have a buyer so you know where it has to go. And in some cases the off taker is willing to pay a premium for your product or do some sort of financing to get you to production (like a prepayment).

So not a hedge and no locked in price.