Background: A major Victorian Gold mine had been at a spot price to take advantage of the lower price versus the contract price for 2001, however, pricing fluctuations had caused the mine to shut down when spot prices were high.
The Process: TTEG was requested to determine contracts or mechanisms to overcome this problem while at the same time minimising costs to the mine.
The Result: TTEG tendered the mine's needs but the prices that were available in the market at that time did not produce a 'best value' result for the mine as far as we were concerned. Thus, TTEG re-entered the market to negotiate a successful outcome based on a mixture of spot prices but with a cap to minimise risk to the mine.
As part of the process the mine also gained from its ability to shutdown some equipment during summer peaks i.e. load shed, which at the time of writing this report was expected to provide additional windfall profit to the mine during the summer peaks.