AMAK Commitments and Contingencies |
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AMAK Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation
The Company is periodically named in legal actions arising from normal business activities. We evaluate the merits of these actions and, if we determine that an unfavorable outcome is probable and can be reasonably estimated, we will establish the necessary reserves. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.
Supplier Agreements
In accordance with our supplier agreements, on a recurring monthly basis, the Company commits to purchasing a determined volume of feedstock in anticipation of upcoming requirements. Feedstock purchases are invoiced and recorded when they are delivered. As of December 31, 2020 and 2019, the value of the remaining undelivered feedstock approximated $9.2 million and $12.4 million, respectively.
From time to time, we may incur shortfall fees due to feedstock purchases being below the minimum amounts as prescribed by our agreements with our suppliers. The shortfall fee expenses were $1.1 million, $0.6 million and $0.5 million for the years ended December 31, 2020, 2019, and 2018.
Environmental Remediation
Amounts charged to expense for various activities related to environmental monitoring, compliance, and improvements were approximately $0.9 million in 2020, $0.9 million in 2019 and $0.7 million in 2018.
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AMAK Commitments and Contingencies | Commitments and Contingencies Operating lease obligations
Our lease commitment for our surface mining lease was initially granted for a period of 30 years through 2024. The lease allows for renewal for an additional 20 years. We also have leases for our corporate offices and three residential villas in Najran through 2025. There is also a mining lease that covers the Guyan area for a period of 20 years through 2034.
A summary of these commitments are as follows:
Capital lease obligations
We lease certain equipment vehicles under capital lease obligations that are set to expire at various dates through 2022. The future minimum lease payments under the capital lease obligations as of September 30, 2020:
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