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12 Pages

China's copper mines: Identifying key cost drivers


China's copper mines: Identifying key cost drivers

Report summary

Over the past 18 months, the global copper mining industry has announced cuts of 865kt of metal from the market in response to lower prices. We currently estimate 75kt, or 9% of these curtailments have taken place in China. On face value, this seems consistent with the country's overall market share; China is expected to contribute over 1.6Mt of mined copper this year, equivalent to 8% of total global supply. But when we consider that many view China's mines as much higher cost than the global average, why haven't we seen more of them closing?

In this Insight we have reviewed some of the key characteristics of China's copper mines. In doing so, we have found a number of areas where the cost base seems to be highly competitive when compared to international peers. We identify some key cost drivers to help us infer the likely profitability of China's industry relative to global peers.

What's included?

This report includes 1 file(s)

  • China's copper mines: Identifying key cost drivers PDF - 1.17 MB 12 Pages, 0 Tables, 13 Figures

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
  • Introduction
  • An overview of copper deposit characteristics in China
  • An overview of key cost drivers for copper mining in China
    • Realisation and concentrate freight costs
    • Labour costs
      • Average salary of mine employees compared to country average (China vs Chile) and average wages for major countries
    • Fuel costs
    • Power costs
    • Consumable costs
    • Service Costs
    • Conclusion

In this report there are 13 tables or charts, including:

  • Executive Summary
    • Key identifiable cost metrics for copper mines in China compared to global averages
  • Introduction
    • Chinese mines currently analysed by Wood Mackenzie and their position on the C1 plus capex cost curve
  • An overview of copper deposit characteristics in China
    • China's copper mines: Identifying key cost drivers: Image 3
    • Economies of scale in the mining industry, compared to the China "standard" for operation size classification
    • Percentage of production from open pit vs underground mining for the top 20 mines
    • Percentage of production from mill vs SxEw processing plants for the top 20 mines
  • An overview of key cost drivers for copper mining in China
    • Comparison between global combined TC/RC and China TC/RC equivalent
    • Smelter capacity vs mine production capability: Top global and top Chinese copper mining companies
    • Chinese and global smelter and refinery costs, compared with TC/RCs
    • China's copper mines: Identifying key cost drivers: Image 10
    • Average on-cost rate in top 10 copper producing countries
    • Diesel price changes in China
    • Power cost change: 2015 vs 2014
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