- Metro Mining (MMI) has secured several contracts, including an additional offtake agreement with Chinese company Xinfa Aluminium Group for one million dry metric tonnes (DMT)
- In addition, Metro has signed Contracts of Affreightment (COA), securing two million WMT for 2022 which includes a three-year contract with Berge Bulk for around 1.5 million
- These agreements are believed to substantially mitigate Metro’s exposure to the freight market
- Managing Director and CEO Simon Wensley says the company’s strategy to mitigate risk is to move a proportion of sales to a free on board (FOB) basis and to build a rolling book of forward freight contracts
- MMI shares are up 7.14 per cent, trading at three cents per share
Metro Mining (MMI) has secured additional offtake deals amount to one million dry metric tonnes (DMT) and 5.8 million wet metric tonnes (WMT) for 2022.
Metro has landed a further offtake agreement with Chinese company Xinfa Aluminium Group for one million DMT, half on a cost, insurance and freight (CIF) basis and half free on board (FOB).
In addition, Metro has signed Contracts of Affreightment (COA) securing two million WMT for 2022, including a three-year contract with Berge Bulk for around 1.5 million WMT per year with fixed price and bunkers.
These agreements are believed to substantially mitigate Metro’s exposure to the freight market.
“As Metro approaches the operations restart in early April, almost all of 2022 target production is now under contract,” Managing Director and CEO Simon Wensley said.
Mr Wensley stressed that even though the company has substantially mitigated Metro’s exposure to the freight market, Metro is doing more.
“To further mitigate risk, our strategy is to move a proportion of sales to FOB and to build a rolling book of forward freight contracts.
“With the freight and fuel market still tight and increasingly volatile as the Ukraine crisis develops, the COAs with Berge Bulk result in favourable rates compared with 2022 forward prices which are critical to help lock in the margin at the vessel level.”
MMI shares were up 7.14 per cent, trading at three cents per share as of 12:26 pm AEDT.