IEC Intra Energy, page-44

The IEC coal price is not directly correlated to Richards Bay. The major customers are on take or pay contracts (1 to 2 years) that are usually set in July to September when the RB coal price was around US$100. Smaller customers take at spot and from what I hear they are selling at the stockpile at $65-$70/tonne as there is no other supplier in region. Agree if the RB coal price is sustained over the next 12 months at $70 then the gross margin will slip lower than $15. During this time though the mine will be hitting +100,000 tonnes per month and cost to produce will drop to maintain the margin around 410-$15/t.