In addition to providing a guaranteed market and a source of supply for its product, an acquisition agreement allows the manufacturer/seller to guarantee a minimum result for its investment. Because taketake agreements often help secure funds for the creation or extension of a facility, the seller can negotiate a price that guarantees a minimum level of return on associated products and thus reduces the risk associated with the investment. For futures contracts, the general orientation of the previous paragraph can serve as a starting point. A fixed-term contract can provide, for example. B, that the price be set on the basis of the average of the previous three months of an agreed index price. This basic market price is then adjusted to reflect the product specifications, the quality actually provided and all other relevant factors that the parties are able to negotiate. Purely commercial concepts, such as quantity discounts or exclusivity premiums, are also more common than cash contracts. Junior or start-up mines, which require long-term acquisition commitments to secure financing, can still offer additional discounts on mass or long-term contracts in order to obtain the type of commitments they need. By agreeing to give a discount to a large customer, the mine designer does not only guarantee a buyer for a long period of time; it may also have easier access to financing for mine development.
As a general rule, the longer a contract, the more valuable it is for both the mine (which provides a stable source of income) and the buyers (who ensure a constant source of supply). However, the longer a contract is, the more likely it is that something will go wrong during execution. As noted above, prices and other market conditions may vary. Buyers and sellers can see significant changes in operating conditions and costs, not to mention unforeseen developments and changes to legal and environmental restrictions. Very few disputes are due to cash contracts or very short-term weight loss contracts, and when they arise, they are generally of much lower and less complex value and rarely require the same level of expertise and tailored procedural tools. This chapter therefore focuses on long-term acquisition agreements and tailored agreements for mine financing.