Australia is the largest supplier of iron ore into the seaborne export market. Due to its large reserves, a robust iron ore industry has evolved that is dominated by three major producers; BHP Billiton, FMG and Rio Tinto.Australia's mining costs are the second lowest worldwide due to a combination of large scale operations that afford economies of scale, high grade material that requires little to no beneficiation, and owner-operated infrastructure. We estimate average Australian free-on-board (FOB) costs unadjusted for grade or moisture at US$21.64/tonne for 2017, marginally higher than in 2016 due to higher fuel prices and strip ratios edging up. Costs are expected to rise gradually over the next few years but will remain low with most internal cost cutting initiatives, sustainable. There will be further pressure on miners to cut costs this year with spot prices under pressure and large discounts on lower Fe grade ore characterising the current market.