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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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Friday, 20 September 13
DRY BULK MARKET REACHES NEW HEIGHTS THIS WEEK STANDING AT THREE-YEAR HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The biggest rally of the dry bulk market in more than three years have brought back joy among ship owners, especially those active in the Capesize m ...
Friday, 20 September 13
US COAL PRODUCTION SLIGHTLY UP WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer produced totalled approximately 20.30 million short tons (mmst) of ...
Friday, 20 September 13
COLOMBIA SHIPPED 31.14 MILLION TONS OF THERMAL COAL IN H1
COALspot.com : Colombia’s coal exports fell by 20.59 percent in June 2013 compared to Colombia’s May's export of 7,633,579 MT.
Colom ...
Thursday, 19 September 13
CAPESIZE : AVERAGE DAILY EARNINGS HAVE GAINED ALMOST USD 6K WOW - FEARNLEYS
Handy
The rates in Feast are still firm this week even the activity calmed down a bit as chrtrs are not in a rush to cover even their end Sept carg ...
Wednesday, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
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Showing 4111 to 4115 news of total 6871 |
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- Indika Energy - Indonesia
- Australian Coal Association
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Minerals Council of Australia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- London Commodity Brokers - England
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
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