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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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Sunday, 29 September 13
SUB-BIT INDONESIA COAL SWAP FELL ON MONTH AND WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 3.93 percept month on month on Friday 27 September 2 ...
Friday, 27 September 13
TAIWAN'S FORMOSA TO IMPORT 140K MT OF BITUMINOUS COAL FOR Q4
COALspot.com : Taiwan's Formosa Plastics Group is inviting bids for 140,000 mt of bituminous coal for delivery in the Q4 for its China plant.
Ac ...
Friday, 27 September 13
CAPESIZES REGAINING PART OF THEIR FORMER GLORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The latest dry bulk market rally has been nothing short of spectacular, with freight rates more than doubling over the past few weeks. This growth h ...
Friday, 27 September 13
US PRODUCED 19.30 MMST OF COAL IN SEVEN DAYS
COALspot.com – United States the world’s second largest coal producer produced approximately 19.30 million short tons (mmst) of coal in ...
Thursday, 26 September 13
PANAMAX MARKET CONTINUE WITH STRONG RATES IN BOTH BASINS - FEARNRESEARCH
Handy
Feast rates are still firm, some fresh stems entered the market. Vessels trading around $15k passing Singapore for coal to India, and a bit l ...
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Showing 4096 to 4100 news of total 6871 |
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- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- VISA Power Limited - India
- White Energy Company Limited
- Economic Council, Georgia
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
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