A Draft of Letter of Intent

Please consider these issues while you are writing an LOI (Letter of Intent) for iron ores, or any commodity you wish to trade within our network. Of course, you are allowed to use your own format, but providing a preliminary offer of your trading conditions will allow us to match you with those who can offer what you’re looking for.

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[Buyer’s Letterhead]

[Date]

[Seller’s Name]
[Company Name]
[Address]
[City, State, Zip Code]
[Country]

Dear [Seller’s Name],

LETTER OF INTENT TO PURCHASE IRON ORE/OTHER COMMODITIES

We, [Buyer’s Company Name], with full corporate responsibility and authority, hereby express our intent to enter into a formal agreement to purchase iron ore from [Seller’s Company Name]. This Letter of Intent outlines the preliminary terms under which we propose to purchase the iron ore.

1. Product Details: We intend to purchase [specific type and grade of iron ore], complying with the following specifications:
   • Fe (Iron) Content: Minimum [XX]% by weight on a dry basis.
   • Moisture Content: Not to exceed [X]% by weight.
   • Alumina (Al2O3): Maximum [X]% by weight.
   • Silica (SiO2): Maximum [X]% by weight.
   • Phosphorus (P): Maximum [X]% by weight.
   • Sulfur (S): Maximum [X]% by weight.
   • Size: [Specify size requirements, e.g., “90% to be within 10mm to 30mm range”].
2. Quantity: The initial quantity of interest is [X] metric tons, with potential for future purchases based on mutual agreement.
3. Price: We propose a purchase price based on [specific price or pricing mechanism], e.g., “the Platts index for iron ore CFR China plus a premium of $X per ton”. Payment terms to be negotiated.
4. Delivery Terms: Delivery is expected to be [Delivery Term, e.g., CIF (Cost, Insurance, and Freight) to Port [Name], [Country]] by [date or period].
5. Inspection and Testing:
   • Pre-shipment inspection and testing will be conducted by [Name of Inspection Company] at the loading port to ensure compliance with the above quality specifications.
   • The buyer reserves the right to conduct or appoint a third party for post-arrival inspections and testing.
6. Payment Terms: Payment terms are anticipated to be [describe payment terms, e.g., “Irrevocable Letter of Credit at Sight”].
7. Governing Law and Dispute Resolution: This Letter of Intent and the subsequent purchase agreement shall be governed by the laws of [Governing Law Country/State]. Any disputes arising shall be resolved through [specify method, e.g., “arbitration in [Location]”].
8. Validity Period: This LOI is valid until [Expiration Date], unless extended by mutual agreement.
9. Confidentiality: Both parties agree to maintain the confidentiality of the negotiation process and the terms proposed herein.

This Letter of Intent serves as a preliminary indication of our intent and is not binding on either party except for the confidentiality clause, which is binding from the date of this letter. We look forward to your response and the opportunity to negotiate the final purchase agreement.

Please acknowledge receipt of this Letter of Intent and your agreement to proceed with negotiations based on the terms outlined above by signing and returning a copy of this letter.

Sincerely,

[Your Name]
[Your Title]
[Buyer’s Company Name]
[Contact Information]