CRU: Keeping Costs in Check is a Challenge for Australian Copper Mines
LONDON, Sept. 7, 2018 /PRNewswire/ -- Australia has comparatively high conversion costs relative to other top copper producing countries. But CRU cash costs at Australian mines are in line with the global average, due to Australian mines typically benefitting from high by-product credits.
Australian mines in aggregate will remain less competitive on a conversion costs basis than operations in most other regions. However, while they will increase, Australian CRU cash costs including by-product credits are expected to be lower than the global average.
Australia has comparatively high conversion costs
Keeping mine operating costs in check is a challenge for the Australian mining industry. Australian copper mine conversion costs are in the upper cost quartile, at $4,616/t in 2018 on an annualised basis. This compares to a global average of $3,761/t. There are several causes of this, but average power costs (which will average 114.64/MWh this year) and average labour rates (which will be close to $91,000 /man-year during 2018) are particularly high, relative to many other top copper producers. The majority of Australian mines are underground, which also can have cost implications, and although copper grades are comparatively high, many Australian mines are small, implying that they do not benefit from the economies of scale seen at larger operations.
CRU cash costs in line with the global average
Australia's average CRU cash costs (including by-product credits) is in line with the global average, due to Australian mines typically benefitting from high by-product credits. This offsets the higher cash conversion costs.Average Australian CRU cash costs (including by-product credits) stand at $2,482/t across all mining operations for 2018, compared to:
- $3,228/t for Chile
- $3,271/t for the United states
- $2,264/t for Peru
- -$901/t, for the DRC
- $2,514/t global average
Australian mines are distributed in a broad range throughout the cost curve on a CRU cash cost basis, with a number of operations located in both the first and fourth quartiles of the cost curve.
Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2018/keeping-costs-in-check-is-a-challenge-for-australian-copper-mines/
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About CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.
CRU employs over 260 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004.
When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.
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