IRON ORE PRODUCTION COSTS IN Q2 2012

摘要

Before discussing our results for Q2 2012,3 we provide a brief definition of the different pricing conventions in use in the industry. Pricing of iron ore and freight is typically done using three measurements: Contract prices are expressed in US cents per dry metric tonne units (c/dmtu). A dmtu equals 1% of iron contained in a tonne of iron ore. The equivalence with the typical spot price, expressed in $/tonne (US dollars per dry metric tonne), is obtained multiplying the price expressed in C/dmtu by the ferrous content of the dry iron ore. The new quarterly contract prices are initially established in US dollars per dry tonne for a specific grade (62% Fe for fines) and then adjusted back to an FOB basis by deducting freight costs.