Halifax, Nova Scotia (March 19, 2015) Announced today, SNL Metals & Mining has released additional mine economics coverage, with comprehensive cost-curve charts for the mining industry.
SNL Metals & Mining has added coverage of four more metals to its detailed mine cost and production models. Lead, molybdenum, uranium and zinc are now covered, in addition to the existing models for copper, iron ore and nickel mines. The platinum group metals are to be added shortly, with gold, manganese and silver mines to be added later this year.
SNL is modelling over 500 mines, with coverage already exceeding 75% of global production for each metal, with forecasts and estimates to 2040. The output includes:
Production data — Ore and waste mined and milled, strip ratios, head grades, metal recovery and payability, and concentrate and intermediary products, including grade and metal content analysis.
Cost analysis — Mining/extraction, milling/beneficiation, smelting/refining (including TC/RCs), transport and royalty costs, including a split for labor, power, fuel and consumables (explosives, reagents, grinding media etc.).
Mines are modelled from 1991 to 2040, with forecasts derived from company information or analysts’ interpretation of geology, ore reserves, the mine plan, etc. Cost analysis includes an understanding of the key variables, including haulage distances, employee numbers, wage rates, productivity, consumption rates and ore hardness. Production forecasts are based on proven and probable reserves or specific company plans where available.
The cost data is “normalized” to allow like-for-like comparison. Few mining operations produce pure metal onsite, so the analysis is based on the paid-metal content, and this incorporates the discount of the metal price that producers receive.
SNL’s Mine Economics platform delivers total cash costs, which incorporate mine site cash costs, milling and processing costs, by-product credits, royalties and production taxes. These mine costs can be analysed on the basis of by-product costing (also known as “normal costing”, where revenue from secondary products is netted off the cost of producing the primary metal) or co-product costing (or “pro-rata costing” where costs are shared between all metals on a net revenue basis).
The charts below highlight the current mine capacity vulnerable to closure based on year-to-date average copper price and the evolution of copper total cash costs since 1991. SNL’s analysis concludes that during cyclical low points in metal prices, the copper price has fallen to at least the 9th decile of high-cost producers, which indicates that today’s copper price has further to fall before significant capacity becomes vulnerable to closure.
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SNL Metals & Mining is the most trusted source of global mining information and analysis. The company draws on more than three decades of comprehensive information and analysis, with an unsurpassed level of experience and historical data. To help clients reach better decisions more quickly, SNL supplies raw data and sophisticated analysis based on unbiased research, reporting and consulting. From worldwide exploration, development, and production to strategic planning, M&A activity and more, SNL’s databases and studies help clients make confident decisions and, ultimately, improve results.