MARKET INTEGRITY

 

BEWARE of "Intermediaries / Brokers" Seeking Windfall Profits in Mine Sales and Commodity Deals!

In the world of mine sales and commodity trading, intermediaries often play a role in introducing and facilitating transactions between buyers and sellers. However, some intermediaries have been known to overreach, expecting very large commissions even when they provide minimal value to the deal.

This practice normally leads to deals falling apart, even before the buyer is made aware of the seller's offer. The issue arises when intermediaries insert themselves into transactions without adding any tangible value. They may simply act as middlemen, passing on information between the buyer and seller without providing any unique insights or services. Yet, they expect to receive substantial compensation for their involvement.

This behaviour is particularly egregious when intermediaries have no direct relationship with the end buyer. They may have obtained a buyer mandate but lack the necessary authority to negotiate or finalize a deal. As a result, they become mere obstacles, hindering communication and delaying the transaction process.

Greedy buyer mandates and even greedier third parties can sabotage deals that would otherwise be mutually beneficial. They create an artificial barrier between the buyer and seller, preventing them from directly engaging with each other. This can lead to misunderstandings, inflated prices, and ultimately, failed transactions.

To combat this issue, buyers and sellers should be wary of intermediaries who add no value to the deal.

They should refuse to pay excessive commissions to parties who merely pass on information or act as middlemen.

Instead, they should seek out intermediaries who provide genuine expertise, market insights, and value-added services.

It is important to remember that intermediaries are not entitled to a lottery ticket simply because they happen to be involved in a transaction.

Their compensation should be commensurate with the value they bring to the deal.

Buyers and sellers should be diligent in evaluating the contributions of intermediaries and only pay for services that are truly beneficial.

By refusing to deal with intermediaries who add zero value, buyers and sellers can create a more transparent and efficient marketplace.

 

They can reduce the risk of deals falling apart and ensure that both parties receive fair treatment.