Ann: Peru Iron Ore Update and Hedging Position, page-6

It is not unnatural for new shipments to have significant clauses especially where there is significant time delay. My gut feeling is due to the restrictions placed on smelters, this a clause might have been inserted to protect the mill that the advance is the lower end and by time of delivery if conditions in China change the remainder doesn’t need to be paid.
just be thankful srk made money out of that transaction. The key here is there is a premium. The supply to China is unviable at these rates due to shipping costs. The Sth American buyer is critical.