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Capital intensity falling to pre-boom levels: iron ore project review 2016


Capital intensity falling to pre-boom levels: iron ore project review 2016

Report summary

The average capital intensity of iron ore projects is US$122/tonne of capacity, down from a peak of US$236/t of capacity for projects completed in 2014. The fall in capex since 2014 is because of lower energy and steel costs, favourable exchange rate movements, changed project scopes, and cancellation of capital-intensive projects. In 2016, only three projects were cancelled - compared to 18 in 2015 - as improved iron ore prices provide hope for project developers. But the outlook for project development is not promising. We expect prices to fall back to US$50/tonne over the next two years and the market to remain well supplied for the next decade. Faced with an oversupplied market, we expect a number of projects on our list are unlikely to be developed. We have identified a total of 65 projects with proposed capacity of 856Mtpa.

What's included?

This report includes 2 file(s)

  • Capital intensity falling to pre-boom levels: iron ore project review 2016 PDF - 2.39 MB 5 Pages, 1 Tables, 4 Figures
  • Projects for insight 2016.xls XLS - 548.00 KB

Description

This Metals Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For industry participants and advisors who want to look at the trends, risks and issues surrounding this topic, this report gives you an expert point of view to help inform your decision making.

Our analysts are based in the markets they analyse and work with high-quality proprietary data to provide consistent and reliable insight.

We provide unique in-depth analysis of the metals supply industry so you can make confident strategic decisions.

  • Executive summary
  • Project cancellations and deferrals
  • Project completions
  • Capital costs continue to decline
  • Project pipeline dominated by Australia and Brazil

In this report there are 5 tables or charts, including:

  • Executive summary
  • Project cancellations and deferrals
    • Proposed capacity and capital expenditure
  • Project completions
  • Capital costs continue to decline
    • Project capital intensity
    • Capital intensity trend
    • Capital expenditure changes
  • Project pipeline dominated by Australia and Brazil
    • Project capacity by status and country
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