Contract to Invoice Concentrate QM

1. Contract to Invoice Concentrate QM SAP Best Practices

2. Purpose, Benefits and Key Process Steps(I) • Purpose • In this scenario the mining company sells copper concentrates by ship on a FOB basis and performs quality analysis at the load and the discharge port. • Benefits • Contract definition (IS-Mining) incl. quotational pricing for various metal contents & penalty calculations using Commodity Pricing Engine • Quality Management for assay analysis incl. automatic inspection lot creation and lab results recording • Key process flows covered • Creating Sales Contract • Creating Call-off to Contract • Three Way Pegging • Maintaining Nomination • Creating Ticket

3. Purpose, Benefits and Key Process Steps(II) • QM Integration - Recording Results for Dispatch Samples • Displaying Batch Characteristic Values • Recording a Usage Decision for Dispatch Samples (Optional) • Creating Billing Document (Provisional Invoice) • QM - Recording Results via Matrix based Results Recording (Surveyor) • QM - Recording Results via Matrix based Results Recording ** Supplier ** • Printing the Results for Assay Exchange • QM - Recording Results via Matrix based Results Recording ** Customer ** • Recording Results – Contract Check • Displaying Batch Characteristic Values • Recording a Usage Decision for Discharge Samples • Review Status of Batch • Creating a Differential Invoice • Creating a Final Invoice (Optional)

4. Required SAP Applications and Company Roles • Required SAP Applications • SAP enhancement package 6 for SAP ERP 6.0 • Company Roles • Warehouse Clerk • Mining Trader and Scheduler • Sales Administrator • Quality Specialist • Batch Processes Administrator • Inspector • Billing Administrator

5. Detailed Process Description • Contract to Invoice Concentrate QM • A long term contract for multiple deliveries of concentrate has been signed with the customer. Pricing is done based on an average of LME copper quotations. In addition, other metal contents like Silver, Gold are priced. Penalties for Moisture or Arsenic contents that are out of the agreed range will be subtracted; same for treatment and refining charges, based on the metal contents. Assays analysis is performed by the vendor at the load port and the provisional invoice is based on the assay analysis and the various metal contents. There are also further inspection lots for the assay analysis at discharge port – to be analyzed by the surveyor, the customer, the vendor and in case of any disputed by the umpire. The final invoice is based on the agreed specifications.

6. Process Flow Diagram Contract to Invoice Concentrate QM Event sells copper concentrates by ship on a FOB basis and performs quality analysis Sales Administrator 4.1 Creating Sales Contract 4.2 Creating Call-off to Contract Mining Trader and scheduler 4.3 Three Way Pegging 4.4 Maintaining Nomination 4.5 Creating Ticket Quality Specialist 4.12 Printing the Results for Assay Exchange 4.14 Recording Results – Contract Check 4.6 QM Integration - Recording Results for Dispatch Samples Batch Processes Administrator 4.7 Displaying Batch Characteristic Values 4.15 Displaying Batch Characteristic Values 4.17 Reviewing Status of Batch Inspector 4.8 Recording a Usage Decision for Dispatch Samples (Optional) 4.10 QM - Recording Results via Matrix based Results Recording (Surveyor) 4.11 QM - Recording Results via Matrix based Results Recording ** Supplier ** 4.13 QM - Recording Results via Matrix based Results Recording ** Customer ** 4.16 Recording a Usage Decision for Discharge Samples Billing Administrator 4.9 Creating Billing Document (Provisional Invoice) 4.18 Creating a Differential Invoice 4.19 Creating a Final Invoice (Optional) Abbreviaton Legend

7. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision