New Buyer Procedures . . .

 

 

These are the procedures and terms that we follow when working with a new buyer.  If you do not agree with any of these terms or procedures please let us know right away so that we can avoid unnecessary work.

  1. We can only sell FOB Mother Vessel with Sight LC paid upon certification on Mother Vessel.  Sorry we cannot sell CIF.

  2. Buyer or Agent sends us their requirements giving specifications, quantity (per shipment), and number of shipments.

  3. We try to match Buyer’s requirements and then will send you our specifications and “soft” quote.  Please note we do not send out specifications for our coal without a first getting the requirements from the Buyer or buyer’s agent.

  4. If Buyer accepts our specification and price, then:

  1. Buyer or agent send formal letter (LOI) to us requesting formal quote from Seller.  The letter must state: specifications, reject levels, quantities (per shipment and total), and frequency of shipments.

  2. Please tell us the following about the Buyer:

  1. What is the business of the end buyer?

  2. What country is the Buyer in?

  3. About how much coal do they buy per year?

  4. Do they already buy from Indonesia?

  1. If you are an agent, please tell us:

  2. What is your relationship with the end buyer?  How well do you know them?  Are you in direct contact with the end Buyer?  Have you done business with them before? etc.

  3. Are they other agents between you and the end buyer?  How many?

  4. What commission to you want?  Usually there is a maximum of US$1 commission for all buyer agents.

Note: all of 4a, 4b, and 4c must be received before we will present the LOI to the Seller.

  1. Seller will respond with FCO giving specifications, price and terms.  The price will include all commissions.

  2. If FCO is acceptable and you are an agent, then we will send you an “Agents ND/NC Agreement”.  This must be signed by all buyer’s agents before we can proceed.

  3. We will send you a draft of the contract for the Buyer to review.

  4. After the contract terms have been negotiated and finalized (but not signed), we can arrange a mine site visit if wanted.

  5. At this point the names and addresses of the Buyer and Seller are revealed to everyone.  Seller may also want to investigate the viability of the Buyer further.

  6. Buyer and Seller sign contract and Letter of Credit instructions.  Buyer also sign ND/NC Agreement with all agents.

  7. Buyer issues Letter of Credit within specified time (usually within 7 days of contract signing) and arranges for shipping

  8. Seller prepares shipment within specified period of time (usually within 30 to 45 days of contract signing)

  9. We test our own samples of the material on the loading dock before loading to verify the specifications.

  10. Within 3 to 5 business days after the coal is delivered to the Mother Vessel and the Seller is paid, the Seller will pay the commissions.

  11. Indonesian law requires that the Seller must deduct a withholding tax from the commissions.  The amount of the deduction depends upon the country to which the payment is made.  It is usually 20%.  This tax with deducted from the agent's commission. Click here to go to the Indonesian Tax Ministry website.  Click here to download the regulation (PDF).  The applicable article is Pasal 26 (Article 26).

  12. In some cases the Seller will pay other agents directly, in other cases they prefer that we handle paying the commissions.  If that is the case, then we will distribute the commissions within 3 business days after we receive the commissions from the Seller.   Payment is by bank wire transfer.