Global Metallurgical Coal Cost Curve

Synopsis

This report provides a breakdown of mining cash costs per tonne for individual metallurgical coal operations, company production and country production. Timetric's analysis covers 150 Metallurgical Coal operations accounting for over 340 Mt of metallurgical coal production globally, the majority of which is export production. Overall 30 companies have been included, ranging from the large producers, such Glencore, Anglo American and BHP Billiton, to smaller players, such as Whitehaven, and large steel producers, such as Arcelor Mittal.


Summary

This presentation and accompanying Excel data, provides an coal cost curve for 150 mines, with breakdown of costs into mining, processing, admin, land transport, port charges and royalties.
Specific datasets include:
• Global Mine Level Cost Costs
• Global Company Equity Production Costs
• Country level Production Costs
• BHP Billiton Cost Curve
• Teck Resources Cost Curve
• Anglo American Cost Curve


Scope

The report is based Timetric's proprietary cost estimation model and data from Timetric's Mining Intelligence Center.

Reasons To Buy

• Understand the global industry structure of metallurgical coal mines
• Analyze mines you may be working with, including how they compare against their peers
• Assess the performance of coal companies


Key Highlights

• Global metallurgical coal costs vary considerably. A contributing factor to this is that much lower quality
metallurgical coal (such as semi soft) is produced in predominately thermal coal mines.
• Hence some South African and Indonesian operations are low cost, but produce only a small quantity of
metallurgical coal. While the majors, such as BHP Billiton, Anglo American and Teck Resources, have relatively
higher costs, but these operations producing predominately metallurgical coal, and can run at higher prices
because they generate higher revenues.
• Low strip ratios will ensure most operations have low mining costs per tonne. Indeed strip ratios are often the
determinant for whether a metallurgical coal deposit is economically feasible. It also has led to operations in the
last five years closing, such as BHP Billiton's Norwich Park.
• BHP Billiton's decision to spin out South32 with its Illawarra coal assets, is justified in the data as these South32
operations have an average FOB Cash cost of US$70/t, while BHP Billiton's remaining assets have an average FOB
cash cost of US$58/t.
• Anglo American, which has announced its plans to divest itself of its metallurgical coal operations, has higher
than average operating costs, at US$76/t.
• Australia dominates the global production of metallurgical coal, the majority of which is exported. Canada and
the US, the two other major producers, are both at freight disadvantage (when exporting to North Asia) and have
higher average operating costs.