Global Coal Mine Gate Cost Curve

Synopsis

This report provides a breakdown of mining cash costs per tonne for individual coal operations, company production and country production. Timetric's analysis covers 270 coal operations accounting for over 1,000Mt of coal production globally. Overall 30 companies have been included, ranging from the large producers, such Peabody Energy, Shenhua Energy, and Glencore, to smaller players, such as Whitehaven.

Summary

This presentation and accompanying Excel data, provides an coal cost curve for 270 mines, with breakdown of costs into mining, processing, admin, royalties.

Specific datasets include:

• Global Mine Level Cost Costs

• Global Company Equity Production Costs

• Country level Production Costs

• Peabody 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 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 coal mine gate costs vary considerably. Large opencast operations in the US Powder River Basin, can have costs below US$10/t, while deeper pits in Australia can have costs closer to US$50/t.

• Processing costs make a difference in mine gate cost. Indonesian thermal coal, with its low ash content (below 5%) does not need to be washed, reducing costs by up US$10/t in comparison to Australian and US operations.

• Low strip ratios will ensure most operations have low mining costs per tonne. Indeed strip ratios are often the determinant for whether a coal deposit is economically feasible. Many of the higher strip operations produce high quality metallurgical coal, which generate higher revenues to cover their operating costs.

• Large US producers in the powder river basin, like Arch Coal and Peabody Energy dominate the first quartile of the cost curve. Major exporting companies such as Glencore, BHP Billiton and Anglo American are in the second and third quartiles: they produce higher quality coal, which is becoming rarer.

• Country level average mine gate cash costs reflect the nature of their respective coal industries. For instance the US has high cost operations in the Appalachian basin, however these are offset by their large opencast operation in the powder river basins. Australia is firmly in the second half of the curve, due to its higher strip ratios, and processing costs.