Question-and-Answer Session
Operator
(Operator instructions). Our first question comes from Peter Homans with Parkman, please proceed with your question.
Peter Homans – Parkman
I have two sort of single word answer type question and one other. Where is contract to the extent that the contract deals are being made versus spot? And my understanding as a non lawyer is that the only court that can overrule a Supreme Court ruling is the Supreme Court itself. The EPA definition of Indian country which basically sent the case back to the 10th Circuit whose ruling the [Venity] case unanimously overruled in 98, flies in the face of the 98 ruling.
It seems to be given the ability of lower courts, the inability of lower courts to overrule the Supreme, there’s no way that the 10th Circuit can affirm the EPA definition of Indian country. Is that your view? And final question is even though the governor did veto the legislation of the $0.50, am I correct in believing there’s nothing impeding you or the industry from negotiating directly with the Navajos absent any legislation once this study is done and when would that be done? A higher price which would be acceptable to them and they could without any legislation drop the moratorium.
Dave Clark
Let me go back to your first question was between spot and long term, I didn’t quite catch that.
Deborah Pawlowski
Are you asking Peter what our current selling price that we’re getting now or?
Peter Homans – Parkman
No, sort of market wide, not just you guys but sort of wide, is there a generic or industry wide contract price per pound which is different than spot and what is that?
Dave Clark
The long term price is $95 and all I can tell you from my market experience there’s very few contracts that are the same, they’re all different.
Peter Homans – Parkman
Okay, but long term is something on the order of $20 above where spot is?
Dave Clark
That is correct. And that is either straight base escalated contracts of which apparently is in vogue also is using a base escalated component and a market related component.
Peter Homans – Parkman
Right, okay.
Dave Clark
As to your second on the Supreme Court, that’s my understanding as well. The Supreme Court will hear cases, the 60-70 cases out of 8,000 that comes in basically on constitutional issues. And whether they want to expand this, certainly if it comes to then and they’re going to overturn it they will hear it.
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