iron ore production cost

bhp billiton and iron ore unit costs: a peer comparison

Iron ore makes up 45.0% of BHP Billitons (BHP) (BBL) underlying EBITDA (earnings before interest, tax, depreciation, and amortization) and 38.0% ofits revenues. Since its the single largest commodity produced by BHP, its important to look at the costs since this division determines the companys profitability and ultimately impacts BHP stock.

BHPs iron ore asset WAIO (Western Australia Iron Ore) contributes more than 90.0% of the companys total iron ore production. Production at this site rose 4.0% to 231.0 million tons in fiscal 2017, mainly due to strong productivity measures across the supply chain. The commissioning of a new primary crusher and additional conveying capacity at the Jimblebar mine also supported higher production.

The company expects WAIO production to rise between 239.0 million and 243.0 million tons in fiscal 2018. The rise is expected due to continued productivity improvements and improved reliability across the supply chain. BHP expects production to be weighted more toward the last three quarters of fiscal 2018 due to scheduled port de-bottlenecking activities and lower inventory levels.

BHP has improved its unit costs, but theyre still higher than its closest peer, Rio Tinto (RIO), which reported unit costs of $13.80 per ton for its Pilbara operations in the first half of 2017. Vale (VALE) had slightly higher C1 cash costs of $15.20 per ton. Its unit costs have a significant improvement potential as its S11D project reaches full production. Cliffs Natural Resources (CLF) costs for its US iron ore division rose 5.7% year-over-year in 2Q17.

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global iron ore cost curve

This presentation and accompanying Excel data provide an iron ore cost curve for 70 mines contributing to over 90% of the seaborne iron ore market, with breakdown of costs into mining, processing, admin, freight and royalties. Specific datasets include: Global Mine Level Cost Costs Global Company Equity Production Costs Country level Production Costs Rio Tinto Cost Curve Vale Cost Curve BHP Billiton Curve.

Scope The report is based GlobalData's proprietary cost estimation model and data from GlobalData's Mining Intelligence Center. Reasons to buy Understand the global industry structure of iron ore minesAnalyse mines you may be working with, including how they compare against their peersAssess the performance of iron ore companies Companies mentioned BHP BillitonLabrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

Reasons to buy Understand the global industry structure of iron ore minesAnalyse mines you may be working with, including how they compare against their peersAssess the performance of iron ore companies Companies mentioned BHP BillitonLabrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

Analyse mines you may be working with, including how they compare against their peersAssess the performance of iron ore companies Companies mentioned BHP BillitonLabrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

Assess the performance of iron ore companies Companies mentioned BHP BillitonLabrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

Companies mentioned BHP BillitonLabrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

BHP BillitonLabrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

Labrador Iron Ore Royalty CorporationMitsubishi CorporationSinosteel CorporationHancock Prospecting Pty LimitedRio TintoSumitomo CorporationMitsui & CoNippon Steel & Sumitomo Metal CorporationValeCliffs Natural Resource IncFMGMount

1 Introduction2 Methodology3 Cost Components4 Key Highlights5 Global Iron Ore Cost Curve, 20156 Company Cost Curve, 20157 Country Cost Curve 20158 Rio Tinto Cost Curve, 20159 Vale Cost Curve, 201510 BHP Billiton Cost Curve, 201511 Further Information

2 Methodology3 Cost Components4 Key Highlights5 Global Iron Ore Cost Curve, 20156 Company Cost Curve, 20157 Country Cost Curve 20158 Rio Tinto Cost Curve, 20159 Vale Cost Curve, 201510 BHP Billiton Cost Curve, 201511 Further Information

3 Cost Components4 Key Highlights5 Global Iron Ore Cost Curve, 20156 Company Cost Curve, 20157 Country Cost Curve 20158 Rio Tinto Cost Curve, 20159 Vale Cost Curve, 201510 BHP Billiton Cost Curve, 201511 Further Information

4 Key Highlights5 Global Iron Ore Cost Curve, 20156 Company Cost Curve, 20157 Country Cost Curve 20158 Rio Tinto Cost Curve, 20159 Vale Cost Curve, 201510 BHP Billiton Cost Curve, 201511 Further Information

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Your data will never be shared with third parties, however we may send you information from time to time about related third party products that may be of interest to you. You may contact us at any time to opt-out.

GlobalData uses the information in this form to provide you with occasional updates on new products and reports in accordance with your preferences. You are in control of the communications you receive from us and you can update your preferences anytime to make sure you are receiving information that matters to you. Please check our Privacy Policy to see how we protect and manage your submitted data.

Your data will never be shared with third parties, however we may send you information from time to time about related third party products that may be of interest to you. You may contact us at any time to opt-out.

GlobalData uses the information in this form to provide you with occasional updates on new products and reports in accordance with your preferences. You are in control of the communications you receive from us and you can update your preferences anytime to make sure you are receiving information that matters to you. Please check our Privacy Policy to see how we protect and manage your submitted data.

top iron ore producer forecasts 50% fall in price

China consumes 57% of the worlds iron ore and controls more than two-thirds of the seaborne trade. Australias share of world trade is 53% and although relations between the two countries have soured, when it comes to iron ore they are joined at the hip.

Australias department of industrys quarterly report outlines a bonanza for the country with annual iron ore export values expected to peak at A$136 billion ($103bn) in 202021 and stay above A$100 billion for the next five years.

Some price falls are expected, as Vales Brazilian operations steadily return to output levels prior to the January 2019 Brumadinho dam collapse. Overall, Brazilian output is expected to recover to normal levels by the end of 2021. More rapid progress on this front could lower prices more swiftly.

Chinese steel mills, which are facing severe pressure on margins, may also seek to postpone some output in order to manage price pressures over the coming months. Chinese Government stimulus measures could also be phased down in the second half of 2021, reducing the imperative for rapid purchases of iron ore to meet production schedules and allowing some build-up of iron ore at ports.

While price spikes are likely as a result of disruptions due to extreme weather in the two main supply regions of Western Australia and Brazil, the longer term outlook for the iron ore price is squarely in double digits.

iron ore boom generates 700% gross profit margins for big miners

Despite multiple forecasts over the past 12-months that the iron ore price was overdue for a fall it has done exactly the opposite, rising this week to a new 2020 high of $107 a ton, up 30% over the past four months.

As well as stronger-than-expected Chinese demand for steel as it stimulates its economy out of the Covid-19 slowdown, iron ore has been aided by continued production problems in some exporting countries, particularly Brazil.

Investors are expecting a strong result and generous dividend, lifting Rio Tintos share price by 31% over the past four months as the twin effects of Chinese demand and a slowdown in Brazilian exports drove the price of its major commodity steadily higher.

BHP follows next week with its fourth quarter operational review on Tuesday and annual results statement on August 18 and while the companys underlying profit is expected to be similar to last year at $9.4 billion thanks to reduced earnings from oil production, the dividend is expected to rise from $1.08 to $1.31 a share with yield chasers keenly bidding the stock up by 48% since mid-March.

Fortescue Metals, a pure-play iron ore miner, will be last to report but almost certainly with the most impressive result because it is not held back by other interests such as BHPs oil and Rio Tintos aluminum.

After its July 30 operations report Fortescue is scheduled to release its profit statement on August 24 with underlying earnings forecast to be up 51% at $4.7 billion, good enough to lift the annual dividend by 55% to $1.77 a share delivering its founder an chairman, Andrew Forrest, a $1.77 billion dividend pay-day on his one billion shares in the company.

Investment banks have been uncertain how to value the iron ore miners because their models have consistently predicted a steep fall in the price of the commodity and even now, after being wrong all year, the consensus view of the banks is that iron ore miners will fall.

The latest research notes on the iron ore stocks is a mixed bag. Credit Suisse says sell Rio Tinto while being neutral on BHP and Fortescue. RBC Capital Markets has just upgraded its view of Fortescue from sell to hold.

J.P. Morgan has restricted its latest iron ore research report published yesterday to noting the year-high price for the steel-making material at $107/t while also pointing out that all of major producers are operating on massive profit margins given that their cash cost per ton is running at around $14/t with BHP and Fortescue the leaders at $13/t.

According to J.P. Morgans research note the high ore price is all about Chinese steel output which was up 4% in May compared to the same month last year with the overall steel production rate at an annualized 1.1 billion tons.

I studied geology in the 1960s and worked for a small mining company before getting a start in journalism during the 1969 nickel boom. Since then I've covered repeated booms and busts in the commodities sector for a passing parade of newspapers, magazines and website. I am also a regular contributor to radio and television news services in Australia.

I studied geology in the 1960s and worked for a small mining company before getting a start in journalism during the 1969 nickel boom. Since then I've covered repeated booms and busts in the commodities sector for a passing parade of newspapers, magazines and website. I am also a regular contributor to radio and television news services in Australia.

bhp flags higher iron ore costs, lower production - mining journal

Earlier this month, BHP flagged a 6-8 million tonne impact from Tropical Cyclone Veronica, and confirmed that today by cutting 2019 financial year iron ore guidance to 235-239 million tonnes, or 265-270Mt on a 100% basis.

BHP also lifted cost guidance for New South Wales energy coal from $43-48/t to $51/t due to a change in mine plan to reduce cycle times, focus on higher quality product and address challenges with labour hire attraction and retention.

"We approved Atlantis Phase 3 and now have five major projects under development. Those projects, our work on transformation, technology and culture, and our successful petroleum and copper exploration and appraisal programs will grow value and returns for years to come."

Aside from Atlantis, the other projects are the $2.1 billion Mad Dog Phase 2 in the Gulf of Mexico, the $2.46 billion Spence growth option in Chile, the $3 billion South Flank iron ore project in the Pilbara, and the $2.7 billion Jansen potash project in Canada.

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china iron ore cost summary report | wood mackenzie

Our 2020 average total cash cost of Chinese iron ore mines is US$0.5/tonne higher compared to 2019 due to higher royalties and levies because of higher iron ore prices in 2020. We expect costs to increase to US$70/tonne due to the strong RMB in 2021. Iron ore prices were stronger than expected in 2020 and again this year which has meant positive margins for most producers. We anticipate weaker iron ore prices from 2022 onward, which will impact Chinese margins and lead to closures of domestic mine capacity over the medium term. In this report, we review China's iron ore costs, margins, infrastructure, quality, and reserves and outline some of the changes we see happening. For the first time, we have included CO2 emissions estimates for iron ore mining in China, including a China emissions curve by mine and product and a global emissions curve highlighting where Chinese mines are positioned.

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global iron ore cost summary report | wood mackenzie

Average seaborne cash costs in 2020 fell to US$29/tonne, compared to US$31/tonne in 2019 and global C1 operating costs were 9% lower than last year. The lower costs were a direct result of plummeting fuel prices in the first half of the year and lower exchange rates which were enough to offset additional costs associated with operating in a COVID-19 environment. We don't expect costs to rise much going forward as productivity and efficiency gains from automation continue to keep costs low.

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a cost comparison: production and smelting of prereduced vs. iron ore pellets | springerlink

The major capital expenditure in a plant to make prereduced pellets is for kilns and coolers. Other items, beyond those required for conventional pellets, such as reductant bins and conveyors, add little to the depreciation charge per ton of product. Prereduced pellet plants cost more per product ton than those for oxide spheres largely because there is more iron in the metallized pellets. A plant cost of near $12 per annual ton is estimated in this paper. It is possible that the investment requirements may be decreased as operating experience more sharply defines the the engineering data.

Based on assumptions in this paper, it is thought that prereduced pellets can be made on the Mesabi range with lignite and smelted in lower lake blast furnaces at overall savings of almost $2 per ton of hot metal as gauged by conventional practice, ignoring blast furnace depreciation. In lieu of building (and depreciating) a new blast furnace for increased hot metal, a savings of $6 per ton could be effected on the added production by using a partial prereduced burden.

iron ore

The first known steel application dates as far back as 11th century BC, in Cyprus where archaeologists found material suggesting that steel knives were already being made. Four centuries later, the Greek historian Herodutus made reference to steel-inlaid bowls and, in the 3rd century BC, South Indian craftsmen were known to produce steel by smelting wrought iron with charcoal, using clay containers.

The Bessemer process to manufacture steel was developed by British inventor Henry Bessemer in the mid-1850s. In the middle of the twentieth century, the Bessemer process was refined into the Basic Oxygen Process that is still used today in blast furnaces.

Today, we produce five iron ore products in Western Australia including the Pilbara Blend, the worlds most recognised brand of iron ore used in steelworks as sinter plant feed or direct blast furnace feed.

Our Pilbara Blend products are the worlds most recognised brand of iron ore, and are known for their high-grade quality and consistency. Our Pilbara Blend products make up approximately 70% of our iron ore product portfolio. It is also the largest and most liquid iron in the market today, known as the US dollar of iron ore. Our higher grade ores also contribute to reducing GHG and other air emissions, which, along with its liquidity and consistent quality, makes our products the preferred iron ore for the steel industry in China.

Our iron ore operations in the Pilbaracomprise a world-class, integrated network of 16 iron ore mines, four independent port terminals, a 1,700-kilometre rail network and related infrastructure. Insights from data help us to explore and extract our iron ore efficiently. Our Operations Centre in Perth uses next-generation technologies, including artificial intelligence, automation and robotics, to run operations in real-time and respond quickly to changes. Our AutoHaul train system is the first fully autonomous, long-distance, heavy-haul rail network one of the worlds largest robots.

Since its first loaded run in July, we have safely and steadily increased the number of autonomous trips across our iron ore operations in Western Australia. AutoHaul have travelled more than1.6 million kilometres in 2018.

AutoHaul improves safety by reducing risk at level crossings and through its automated responses to speed restrictions and alarms. It also eliminates the need to transport drivers to and from trains mid-journey saving almost 1.5 million kilometres of road travel each year. It also improves cycle times by using information about the train and rail network topography to calculate and deliver a safe, consistent driving strategy.

In 2018, the Rio Tinto board approved $2.6 billion in funding for Gudai-Darri (Koodaideri), set to be our most technologically advanced mine, as well a high-quality, long-life, low-cost and expandable asset. For the very first time, we will leverage technology already in use across our business, such as autonomous trucks, trains and drills, and implement systems that connect all components of the mining value chain. And in 2019, we completed the first fully integrated paperless trade in iron ore. The whole process integrated intelligent contracts, electronic documents and a trade finance blockchain resulting in a faster, more streamlined transaction. Total transaction time was reduced from six days to 24 hours. This trade built on our first fully-digitised trade finance transaction completed in 2018. Each of these elements works together to deliver high-quality iron ore to our customers reliably and safely.

We will use fully integrated mine operation and simulation systems, such as digital twin technology. Pioneered by NASA, digital twins are virtual models of a physical environment like a space station that let you quickly test different situations. These twins combine data from actual processing plants with historical information about things like design and production. This gives our people in the field and at our remote operations centre the ability to access the same information and make decisions, based on real-time data, in seconds instead of hours or days. We can also safely test ways to increase production without breaking parts or disrupting operations.

Our Iron Ore Company of Canada(IOC) is a leading North American producer and exporter of premium iron ore pellets and high-grade concentrate. Our operations include a mine with five operational pits, a concentrator and a pelletising plant located near Labrador City, in the province of Newfoundland and Labrador, Canada, in the region known as the Labrador Trough, an established basin with significant deposits for the supply of high-grade iron ore products. We also operate a wholly-owned railway that links our operations to our port facilities in Sept-les, Quebec.

Our IOC business targets niche, high-value segments of the seaborne iron ore market; our high-grade, low-impurity IOC products allow steelmakers to operate more productively and produce higher quality steels while meeting increasingly stringent environmental standards.

In 2019, we partnered with Chinas largest steel producer, China Baowu Steel Group, and Tsinghua University, one of Chinas most prestigious and influential universities, to work on a joint action plan supported by the China Iron Steel Association to explore ways to improve environmental performance across the steel value chain. We will combine our strengths on everything from research and development, technologies, processes, equipment, logistics, industry coordination and policy advisory capacities to bring together solutions to help address the steel industrys carbon footprint.

In 2021 we announced a partnership with Paul Wurthand SHS-Stahl-Holding-Saar (SHS) to explore the viability of transforming iron ore pellets into low-carbon hot briquetted iron, a low-carbon steel feedstock, using green hydrogen generated from hydro-electricity in Canada. The feasibility study is expected to be complete in late 2021, with an investment decision on a hydrogen based direct reduction plant at industrial scale expected to follow.

Our integrated operations, which include port facilities, ensure we can supply the right quality product to our customers, when they need it. We blend our products at our own ports, which allows us to produce a reliable and consistent product. And because we have dedicated shipping operations, we are able to better control the delivery of product to our customers.

Our mine plans are built to create value from our ore bodies and we use market signals to flex our production mix. We use real-time data analytics and artificial intelligence to respond quickly to market demand, and to help us anticipate future market conditions.

With the exception of the use of cookies, Rio Tinto generally does not seek to collect personal data through this website. However if you choose to provide personal data to Rio Tinto through this website (for example, by sending us an email), we will process that personal data to answer your query and if relevant, to manage our business relationship with you or your company. We won't process that personal data for other purposes except where required to meet our legal obligations or otherwise as authorised by law and notified to you.

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With the exception of the use of cookies (explained below), Rio Tinto generally does not seek to collect personal data through this website. However if you choose to provide personal data to Rio Tinto through this website (for example, by sending us an email), we will process that personal data to answer your query and if relevant, to manage our business relationship with you or your company. We won't process that personal data for other purposes except where required to meet our legal obligations or otherwise as authorised by law and notified to you.

Part 1 of this Privacy Policy contains the Rio Tinto Data Privacy Standard, which provides an overview of Rio Tintos approach to personal data processing. There is additional information in the appendices to the Data Privacy Standard, including information about disclosures, trans-border data transfers, the exercise of data subject rights and how to make complaints or obtain further information relating to Rio Tintos processing of your personal data.

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With your consent, our website uses cookies to distinguish you from other users of our website. This helps us to provide you with a good experience when you browse our website and also allows us to improve our site.

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As some data privacy laws regulate IP addresses and other information collected through the use of cookies as personal data, Rio Tintos processing of such personal data needs to comply with its Data Privacy Standard (see Part 1 of this Privacy Policy), and also applicable data privacy laws.

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