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SALE & PURCHASING CONTRACT

OF
INDONESIA STEAM COAL
BETWEEN
PT.
(SELLER)
WITH
PT. KORINCO DERMAGA INDONESIA
(BUYER)

CONTRACT REFERENCE
No. 017/KDI-/XII/2013
Date: 17 DEC 2013

This contract for sale and purchase of Steam Coal, is made on 17 DECEMBER 2013 by and between
the SELLER and the BUYER:
PT. , A COMPANY INCORPORATED IN INDONESIA WHOSE REGISTERED OFFICE IS AT
(HEREIN CALLED SELLER),
And
PT. KORINCO DERMAGA INDONESIA, a company registered under the laws of Indonesia, JL. D. I.
Pandjaitan No.34 RT.85, Balikpapan 76124, Kalimantan Timur, Indonesia (hereinafter called
BUYER).

WHEREAS:
1. The Seller owns and operates Coal mine and Coal processing plants together with its
supporting facilities and intends to supply the Buyer Indonesian Steam Coal from :
a. Jetty Laut Merah, Kuaro, Kab. Paser, Kalimantan Timur
2. The Seller and the Buyer have agreed to enter into this Agreement to set out the rights and
obligations of the Parties and the terms and conditions of the Indonesian Steam Coal supply.
NOW, the Parties (Buyer and Seller) hereby agree as follows:
The Seller hereby agrees to sell and the Buyer agrees to buy from the Seller, Indonesian Steam Coal
subject to the following terms and conditions set out below.
Article 1: Definitions and Interpretations
In the Agreement, except where the context otherwise requires, the following words and phrases shall
have the meanings indicated below:
1.1 ASTM means American Society for Testing Materials.
1.2 Base Price shall mean the FOB Barge Price of the typical specification of Coal before
adjustments are made for variations in quality.
1.3 Invoice Price shall mean the price of the Coal for invoicing purposes after adjustments are
made for variations in quality.
1.4 Coal means INDONESIAN STEAM COAL meeting the quality specifications set out hereunder.
1.5 Shipment means a cargo of Coal shipped out under this Agreement.
1.6 Load Port means Jetty SKN / KP / RISMAYANTI / BK, Samarinda, East Kalimantan ,

Indonesia
1.7 Typical Specifications means the typical quality of the Coal set out in Article 5.
1.8 Ton or Tone or MT shall mean a metric tone of 1,000 kilograms.
1.9 US$ or USD refers to the currency of the United States Dollars.
Where a term has not been defined then it shall have the meaning as normally used by the Coal
industry. In this Agreement, where the context so allows, words and expressions importing the
singular include the plural and vice versa and words importing gender include all genders.

Article 2: Term of Agreement


2.1 This Agreement shall come into force on the date upon signing by both, Seller and Buyer and
shall be valid on delivery of the contracted tonnage and the Parties have fulfilled all of their
obligations under this Agreement.
Article 3: Quantity, Shipment and Penalty
The Seller and Buyer agree on the following terms
Quantity: 11,000 MT +/- 10% at Buyers option (Depend on the quantity of MV at load point)
3.1 Delivery schedule: 1 November 2013 ~ 31 January, 2014 (Must be depending on MV laycan)
The delivery schedule can be altered by mutual agreement between the parties.
3.2 Base price: Rp. 320,000,- / MT FOB Barge at the Load Port excluding penalty as set forth in
Article 6 of this Agreement. (Price will be adjustment following Market Price)
Unless otherwise specified herein, the price includes the entire expenses of the further loading
cost for loading barge, all export duties, export tax, and legal documents issued from the
Indonesia Government and arrange of loading duties should be the responsibility by the Seller at
loading point before unload the barge.
If the Parties interest in long term contract then, the price and the others terms and conditions set
forth herein will be apply with the rights of the Seller to review the price within 3 months / 3
shipments or at anytime subject to the regulation of government of Indonesia.
3.3 The exact lay can shall be mutually agreed between the Parties and the Buyer shall regularly
update the Seller on the location of the barge once it has nominated the barge.
Article 4 : Shipping Terms
4.1 Buyer to nominate a barge at the load port, stating the following:
A) NOMINATION OF BARGES
Buyer shall notify barge at least 1 (One) days prior to ETA of the performing barge.
B) NOTICE OF READINESS (NOR)
Notice of readiness shall be tendered by the barge on arrival at anytime any day SHINC.
C) LAYTIME
Lay-time for loading shall be commenced 12 (Twelve) hours after NOR tendered unless
sooner commenced in which case actual time used shall be counted.
D) LOADRATE
The loading rate is 2,000 MT (230ft & 270ft barge), 2500 MT (300ft barge) PWWD SHINC
(Saturday and Holiday included) / PWWD (Per Weather Working Day) (excluding major
Indonesian holidays). Notice of arrival shall be given 24 Hours before the arrival of the Barges
at the load port.
E) The Seller shall bear cost of demurrage if the loading of steam coal for the quantity stated in
Article 3 of this Agreement, into the barge more than the guarantees of the loading rate for the
working days of the notice of readiness to load the steam coal at the port of loading point
given. If the laytime used is more or less than the laytime allowed, then demurrage shall be
paid by Seller will be as follows:

Demurrage Rate
- Barge size of 230 ft - 4,000 MT
- Barge size of 270 ft - 5,500 MT
- Barge size of 300 ft - 7,500 MT

: USD 1500.00/day
: USD 2000.00/day
: USD 2500.00/day

F) The Seller shall bear cost of Dead Freight if the loading of steam coal for the quantity stated
asf for the min quantity, into the barge. If the seller load the cargo quantity less than the Min
quantity, then Dead Fright shall be paid by Seller will be as follows:
Min Quantity for the DeadFright
- Barge size of 230 ft - Barge size of 270 ft - Barge size of 300 ft -

3,500 MT Min
5,300 MT Min
7,500 MT Min

Dead Freight rage base on Charter Party and GENCON CHARTER PARTY As Revised In
1994 signed between the Buyer, Seller and The Owner of Barge.
Article 5: Quality
5.1 The Surveyors
The quality of Coal to be supplied under this Agreement shall conform to the following typical
specifications, which according the ASTM standards and the specification of Coal should be
sample and analysis by the following Independent SurveyorPT Geo Services. Seller may, on its
own cost appoint other independent surveyor.
5.2 Specifications
Quality
Parameter Test
Total Moisture (Arb)
Inherent Moisture (Adb)
Ash Content (Adb)
Volatile Matter (Adb)
Fixed Carbon (Adb)
Total Sulfur (Adb)
Gross Calorie Value
(ARB)
HGI
Size
(crushed/sizing)

Guarantee

PENALTY

36% Max

Over 37%

13% Approx.
6% Max
Over 6%
40~42% Approx.
By Difference
0.8% Max
Over 0.8%
Under GAR
4200Kcal/Kg
4000Kcal/Kg
50 Approx.
0~50mm 90%min

BONUS

Rejection Level
Over 37%
Over 8%
Over 0.8%
4000Kcal/Kg

Article 6: Price Adjustments for Quantity and Quality


In the event of the quality of Coal issued by the above Surveyor mention on 5.1, in respect to the Coal
supplied differs from the specified typical quality set out in Article 5.2, the price shall be adjusted on
the invoice with the following provisions accordingly:

6.1

Total Moisture
If the actual Total Moisture (ARB) as determined by Independent Surveyor at Sellers loading port
is in excess of 36% (ARB), then the following of penalty on quantity shall apply:
Penalty Quantity = B/L Quantity x (100% Real Total Moisture)
( 100% 36% )
No adjustment to be applied if total moisture is less than 36%.

6.2 Gross Calorific Value


If the actual Gross Calorific Value (ARB) of the Coal shipment as determined by the Independent
Inspection Authority per Specification 5.2 hereof is over or below 4200 Kcal/Kg (ARB), then the base
FOB Barge price shall be adjusted by applying the following formula:
If 4200 Kcal/Kg GCV(ARB) 4300 Kcal/Kg, then the adjustment formula is :
Bonus = (FOBT PRICE x Actual GCV (ARB) / 4200 Kcal/kg (ARB)) FOBT PRICE
INVOICE PRICE = FOBT PRICE + (Bonus X 120%)
If 4300 Kcal/Kg GCV(ARB) 4400 Kcal/Kg, then the adjustment formula is :
Bonus = (FOBT PRICE x Actual GCV (ARB) / 4200 Kcal/kg (ARB)) FOBT PRICE
INVOICE PRICE = FOBT PRICE + (Bonus X 150%)
If actual GCV is over than GAR4400, the calorific Value (ARB) is deemed as 4400 kcal/kg
If 4100 Kcal/Kg GCV (ARB) 4200 Kcal/Kg, then the adjustment formula is :
Penalty = FOBT PRICE (FOBT PRICE x Actual GCV (ARB) / 4200 Kcal/kg (ARB))
INVOICE PRICE = FOBT PRICE (Penalty X 150%)
If 4000 Kcal/Kg GCV (ARB) 4100 Kcal/Kg, then the adjustment formula is :
Penalty = FOBT PRICE (FOBT PRICE x Actual GCV (ARB) / 4200 Kcal/kg (ARB))
INVOICE PRICE = FOBT PRICE (Penalty X 200%)
If GCV (ARB) 4000 Kcal/Kg and reject, then the adjustment formula is :
Penalty = FOBT PRICE (FOBT PRICE x Actual GCV (ARB) / 4200 Kcal/kg (ARB))
INVOICE PRICE = FOBT PRICE (Penalty X 300%)
6.3 Ash Content
In the event that the actual Ash Content (air dried) at the loading port is above 8%, Seller will pay Buyer
penalty of USD 0.10 (US$ Ten cents) per 1% ash above 8%, fractions of, pro rata.
If actual Ash Content > 6%, then the adjustment formula is :
Penalty = (actual Ash Content (ADB) 8%) x 100 x US$ 0.10
INVOICE PRICE= FOBT PRICE Penalty
No adjustment to be applied if the Ash Content < 6%
6.4. Sulphur Content (Air Dried Basis)
Should the actual Total Sulphur exceed 0.8% then deducted US$ 0.1 (US$ Ten cents) from the base
price for each 0.1 %.
If actual Total Sulphur > 0.8%, then the adjustment formula is :
Penalty = (actual Total Sulphur (ADB) 0.8%) x 1,000 x US$ 0.1
INVOICE PRICE= FOBT PRICE Penalty
No adjustment to be applied if the Sulphur Content < 0.5%

6.5

If GCV below 4200, Ash Content above 8%, and total sulphur above 0.8% but still
below rejection limit; the Invoice Price will be equal to:
FOBT PricePenalty on GCV Penalty on Ash Content Penalty on Total Sulphur.

6.6 Rejection:
Total Moisture (ARB): over 38%
Gross Calorific Value (ARB) under 4,000 kcal/kg
Ash Content (ADB) over 8%
Total Sulphur (ADB) over 0.8%
If the specifications that is in the Certificate of Sampling and Analysis issued by Independent Surveyor
(by PT. GEOSERVICES) reach to the rejections according to the article 5 the buyer have the right ask
for the Five times of total indemnity (Buyer option) for the penalty from the balance payment or Reject
the shipment. And the seller has no right to reject.
If the rejection clause is applied and buyer determines not to reject the cargo then the total cargo
value after adjusted with price adjustment above shall be further deducted 10 Percent. In this case,
the adjustment formula is as below:
Adjustment Cargo Value= Adjustment of Price X Adjustment of Quantity
Invoice Value= Adjustment Cargo Value - 10% X Adjustment Cargo Value
Seller is not allowed to sell blended coal to buyer, If the seller supply to the buyer with blended coal
source (non single coal coming from a same mine seam), then it reaches rejection clause as a
protection precautions to buyer, and if buyer determines not to reject the cargo then the total cargo
value after adjust with price adjustment above shall be further deducted for 10 Percent. Then the
adjustment formula is:
. In this case, the adjustment formula as below:
Adjustment cargo value = Adjustment of Price x Adjustment of Quantity
Invoice value = Adjustment Cargo Value 10% x Adjustment cargo value
Article 7: Weight Determination
7.1 A Certificate of Weight for the shipment shall be issued by international independent certified
surveyor PT Geo Services.
7.2 The Certificate of Weight shall be based upon the determination of weight by draft survey of the
carrying barge issued by PT Geo Services. In case there is a doubt on the result, the Seller may
appoint another independent surveyor whereby for discrepancy on report (if any), the Parties
agree to use the report that issued by the second independent surveyor appointed by Seller as a
binding and final result for weight certificate.
7.3 All actual inspection costs incurred pursuant to this Article shall be borne by and charged to the
Sellers account.
Article 8: Quality Determination
8.1. It is mutually agreed that the Seller at its own cost shall appoint the PT Geo Services as the
independent international surveyor to carry out at the Load Port the sampling and analysis of the
Coal shipment. In case there is a doubt on the result, the Seller may appoint another independent
surveyor whereby for discrepancy on report (if any), the Parties agree to use the report that
issued by the second independent surveyor appointed by Seller as a binding and final result for
quality certificate.
8.2. The samples shall be extracted and analyzed in accordance with ASTM Standards.
8.3. Each representative sample shall be divided into four parts to provide and signed by the surveyor
appointed by the Parties:
One sample for shipment analysis

One sample for the Buyer. The Buyers sample will be placed in airtight and suitable container,
properly sealed, labeled and signed by the inspection authority and to be sent to the Buyer by PT
Geo Services or other surveyor referred to article 8.1. within 7 (seven) days after loading
completion.
Two sample that shall be retained by the International Independent Surveyor PT Geo Services or
other surveyor referred to article 8.1. in a suitable airtight container properly sealed and labeled
until 60 (sixty) days after the completion of loading.
Article 9: Payment Terms
(a)

1st payment 50% PRICE FOBT BARGE Quantity of Each Barge (depend on the Size of
Barge or Buyers nominated Quantity) shall be paid (Barge by Barge) immediately within an
hour by telegraphic transfer to Seller bank account upon the barge along side the jetty and start
loading. In addition to that, Seller should provide the invoice with the full detail of the bank
account to the Buyer.

(b)

2nd payment 40% total tonnage load as per Copy Provisional Report of Draft Survey issued
by PT. SUCOFINDO Surveyor at load-port (Barge by Barge) shall be paid immediately within
an hour by telegraphic transfer to Seller bank account upon loading completion after Buyer
receive the e-mail jundird@korinco.com of follows documents:
In addition to that, Seller should provide the invoice with account Details for the buyer.
(i)

(ii)

(iii)

(iv)

Copy Surat Keterangan Asal Barang (SKAB) issued By Mine Owner. Addressed to
ECO SINEWS COMPANY LIMITED. for and on behalf of Fu and Lee Coal Holding Co.,
Ltd. (The Original Document of SKAB must be given to Barge Captain upon loading
completion)
Copy Surat Keterangan Asal Barang (SKAB) issued by Distamben. Addressed to ECO
SINEWS COMPANY LIMITED. for and on behalf of Fu and Lee Coal Holding Co., Ltd.
(The Original document of SKAB must be given to Barge Captain upon loading
completion)
Copy Surat Keterangan Pengiriman Barang (SK) issued by Mine Owner. Addressed to
ECO SINEWS COMPANY LIMITED for and on behalf of Fu and Lee Coal Holding Co.,
Ltd. (The Original document of SKAB must be given to Barge Captain upon loading
completion)
Copy Provisional Report of Draft Survey issued by PT. GEOSERVICES Surveyor upon
barge load completion at load port.
Seller not responsible for the entire export documents aboard (barge/mother vessel)
upon loading/unloading completion at load port/load point, in case of delay to sail due to
Seller not present the above document then the barge lay time lost will be sellers
account. Besides, the Buyer reserve the right to detain/deduct the further lost from the
Final Balance.

(c) Final Balance of 10% of the total cargo value using the base price and after all the
adjustments stated in article 5 & 6 shall be paid immediately by telegraphic transfer to Seller
bank account upon received of the Container of Umpire Sample (as per Article 8.3) and the
whole of following documents:
(1)
(2)
(3)
(4)

1 Original Provisional Report of Draft Survey


1 Original and 2 Copies Draft Survey Report
1 Original and 2 Copies Certificate of Sampling and Analysis (COA).
1 Original and 2 Copies Certificate of Weight (COW).

(5)

3 Original - Final Invoice with the Sellers account Details for the Buyer that
incorporates the Invoice price and the Invoice quantity.
(6) 1 Original Certificated of Pemberitahuan Export Barang (PEB).
(7) 1 Original and 2 Copies Certificate of Origin (COO) by Issue Government
Article 10 : Seller Nominated Account for remittance
Payment should be made to the following bank account of Seller:
BANK
:
ACCOUNT NAME
:
ACCOUNT NUMBER
:
SWIFT CODE
:
BRANCH LOG
:
Tel /Fax
:
Article 11 ; Force Majeure
Except as otherwise herein provided, Seller and Buyer will be relieved from performance of this
agreement to the extent that performance is prevented, through reduction of, or interference with, the
production of delivery of Coal, as a result of Force Majeure, such as regarding delays in all
confirmation of the cargo, blockade of the ports of loading, war, riots, strike, suspension of labor or
measures adopted to counteract the same, lockouts/shortage of labor, breakdown, fires, accidents,
epidemics, floods, fuel shortage on account of Government act, rules or regulations, action of any
Government Institution and/or any other causes whether of the kind and nature herein enumerated or
otherwise, if such causes are beyond the control of the Seller or Buyer as the case maybe.
In the event of a Force Majeure situation, Buyer and Seller shall immediately confer in good faith to
discuss and decide the best practical and cost effective solution in both parties interests. And
provided however further that if the disability resulting from the Force Majeure lasts longer than 30
days from its commencement and either or both parties are suffering economic hardship as a result
thereof the parties shall confer in good faith to determine whether or not the parties should terminate
this agreement.
Article 12 : Special Article
12.1

Amendments
Any amendments to this Agreement shall be in the form of an addendum to be signed by
Buyer and Seller. Such addendum if so signed shall thereinafter form an integral part of this
Agreement.

12.2

Waivers
a. Failure of either party to enforce at anytime any of the provisions of this Agreement or to
require at any time the performance by any party of any of the provisions hereof, shall in
no way be construed as waiver of such provisions nor in anyway to affect the validity of this
Agreement or any part of it or the right of either party thereafter to enforce each and every
provision.
b. Waiver by either party of any default, breach or non-performance hereunder shall not
constitute nor be construed as a waiver of any succeeding default, breach or non
performance, whether of the same type or kind as before or not.

Article 13 : Address for Service

All communication and/or notice provided for in this Agreement shall be deemed to have been duly
received in accordance with the terms of this Agreement should such notification has been sent to the
mentioned address below.
The Buyer:
The Seller:
Mr. J. R. Danny
Title: President Director
PT. KORINCO DERMAGA INDONESIA
JL. Pupuk Utara V, Pupuk Kaltim
Complex, Balikpapan 76114, East Kalimantan, Indonesia

Tel : +62 542 7049557


Fax : +62 542 7204773
Email : jundird@korinco.com
Article 14 : Title and Risk
All Coal shall be deemed sold and delivered to the Buyer and the risk of loss or damage thereto or
destruction thereof shall pass on to the Buyer upon loading of such Coal passing over the rail of the
barge or on loading of the barge at the port of loading. The title with respect to the shipment shall
pass from the Seller to the Buyer, when Seller receives full payment of the consideration.
Article 15: GOVERNING LAW & ARBITRATION
15.1

GOVERNING LAW
This agreement and the rights, privileges, duties and obligations of the parties herein under shall
be construed to be in accordance with the law of the Republic of Indonesia.

15.2

ARBITRATION
Any dispute, difference or disagreement between the parties arising under or in relation to this
contract, including (but not limited to) any dispute, difference or disagreement as to the meaning
of the terms of this contract or any failure to agree on any matter required to be agreed upon
under this contract shall, if possible, be resolved by negotiation and mutual agreement by the
parties within 30 days. Should no agreement be reached, then the dispute shall be finally settled
by arbitration upon the written request of either party hereto in accordance with the rules of
conciliation and arbitration in BANI by three arbitration in English language. The result of all such
arbitration shall be final and binding for the parties and for all purposes.

Article 16: Entire Agreement


16.1 This Agreement is the final and entire agreement between the parties in respect to the Coal to
be purchased and sold under this Agreement and there are no representations understandings
or agreements, oral or written, which we are not included herein.
16.2 No modification or amendment of this Agreement shall be effective or binding unless it is in
writing signed by duly authorized representative of both parties.
The Agreement constitutes the entire agreement of the Parties with respect to the subject matter
thereof and supersedes any prior expression of intent or understanding with respect to the
transactions contemplated in the Agreement. Should there be any unforeseen circumstances during
the course of activities performed under this Agreement, both parties shall discuss in good faith to
address the issues, which may arise and make necessary amendments to this Agreement.
IN WITNESS WHEREOF the parties here to have executed this Agreement on the day and year first

herein before written.


Authorized Signed For and On Behalf of
the Seller
PT.
Date : December 17, 2013

Authorized Signed For and On Behalf Of


the Buyer
PT. KORINCO DERMAGA INDONESIA
Date : December 17, 2013

.
Name :
Title : President Director

Name : J. R. Danny
Title
: President Director

Witness,

H. Andi A. Sanusi

Budi Haryanto

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