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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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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
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Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- VISA Power Limited - India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
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