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Wednesday, 18 September 13
IRON ORE AND ZINC ARE BEST PERFORMING MINING SECTORS IN CURRENT LOW PRICE, HIGH COST ENVIRONMENT - WOOD MACKENZIE
 With the fall in commodity prices, cash margins in the mining industry have come under pressure. Accordingly, producers and investors are placing intense focus on both operating and capital costs. Wood Mackenzie's report titled 'Who hurts most' analyses cash costs and margins across the bulk commodities as well as base and precious metals. The report reveals that the iron ore and zinc sectors will perform best on average; while copper, export metallurgical coal and gold will be most challenged. Based on this, companies may have to make important decisions to protect their overall margins.
Wood Mackenzie finds that amongst the bulk commodities, iron ore stands above the rest. Despite pulling back from 2012 levels with a 19% cash margin decline, iron ore still has a very strong average industry margin of US$49/tonne (52% of average price) in 2014, enabling continued large cash generation in this high volume business. This supports the on-going focus by the major producers like Rio Tinto, BHP Billiton and Vale, on pushing ahead with expansions at their low cost iron ore operations. It is also in stark contrast to coal and bauxite, both of which have average margins of less than 25% in 2013 - the outlook is particularly bleak for export thermal coal with an average margin of only 19% in 2014.
Mr Steve Hulton, Principal Mining Analyst for Wood Mackenzie, says, "The sectors that fare the worst, with biggest average falls in margins from 2012 to 2014 are copper, export metallurgical coal and gold. Nickel has the lowest average industry margin of only 13% of price in 2013. This rises slightly in 2014, but it is still the worst of all commodities studied. As such, the nickel industry is under severe pressure. In 2012, one-third of industry production generated negative margins after taking into account total cash and sustaining capex costs."
The zinc mining sector has a very high average margin as a percentage of the metal price due to the large contribution of by-product credits like copper, lead, silver and gold, which offset operating costs. While remaining relatively high, the average zinc margin is expected to decrease to 83% in 2014, even with a rising zinc price, due to the lower value of by-product revenue in this polymetallic sector.
For the copper and gold industries, lower prices will continue to put pressure on overall operational cash-flow. In Wood Mackenzie's analysis, average industry margins in 2014 fall to 39% for copper and 44% for gold, down from 49% and 50% respectively from 2012. In export met coal, margins in 2014 are only 25% of average price, down from 30% in 2012.
Mr Hulton explains the importance of this analysis to producers, "Operating costs in the mining industry have risen rapidly over recent years, but now that prices have dropped there is a renewed focus from mining companies on reducing costs and trying to protect margins."
"To compare overall operating margins, we examine total cash cost plus sustaining capital. For producers to accurately assess cash margins at the mine level, just examining the basic C1™ operating cost can be misleading. Total cash cost plus sustaining capital is a better full cash cost measure. This comprises the C1™ operating cash cost plus indirect cash costs such as royalties & levies, and the cash spend on capital required to sustain production." The industry standard C1™ cost is the direct cash cost of mining, processing and offsite realisation costs, including any by-product credits. It is primarily used to compare the relative underlying cost efficiency of production between mines.
Mr Hulton concludes, "Individual mining companies will be variously affected depending on their exposure to the different commodities, and where their particular mines sit on the respective industry cost/margin curves. As price takers, there are limited tunes the producers can play and one of them will be to slow down on capital spend, and prioritise the commodities that have the best returns."
*Note: The base and precious metals commodities covered in the analysis are copper, nickel, zinc and gold. The bulk commodities covered in the analysis are metallurgical export coal, thermal export coal, bauxite and iron ore.
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Tuesday, 23 May 23
INDIA: COAL OUTPUT UP 8.9%, SUPPLY RISES 11.7% IN APRIL - FINANCIAL EXPRESS
India’s coal production jumped 8.85% to 73.14 million tonne (MT) in April 2023 and the total coal despatch during the month went up 11.66% to ...
Tuesday, 23 May 23
CHINA COAL OUTPUT UP 4.5 PCT IN APRIL - XINHUA
China’s raw coal output posted stable expansion in April, official data showed.
The country produced 380 million tonnes of raw ...
Saturday, 20 May 23
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
In 2022, non-OPEC supply is estimated to have increased by 1.9 mb/d y-o-y. Out of this, US liquids production increased by 1.2 mb/d, mainly on the ...
Saturday, 20 May 23
GLOBAL COAL TRADE HAS REALLY PICKED UP PACE IN RECENT MONTHS, NOW FULLY BACK TO PRE-COVID LEVELS - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels. In Jan-Apr 2023, total global seaborne coa ...
Saturday, 20 May 23
MARKET INSIGHT - INTERMODAL
India is one of the world's largest coal producers and one of the world's largest importers of coal. The country uses coal mainly for power ...
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Showing 101 to 105 news of total 6871 |
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- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Economic Council, Georgia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
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