What is your mine coverage?

Our focus is seaborne traded export metallurgical and thermal coal. We do not cost mines that are only domestic producers. Our seaborne traded coal sample comprises over 300 mines and over 180 companies in 10 countries producing more than 300 Mt seaborne traded export metallurgical coal and  800Mt seaborne traded export thermal coal.

Where do you get the data?

For technical information about the mine we rely on public data sources such as mining engineering journals and other industry publications, mine descriptions and equipment lists when available, plus government publications such as the NSW Coal Industry Profile, the Queensland Government business portal, the Indonesian Coal Book, the TEX Report, the US Energy Information Administration and other sources. Mine production data is collected from quarterly and annual  reports from coal mine operators where available, plus supplementary production data from national industry bodies.

The data quality varies according to country. In order of reliability and completeness are mines in Australia, Canada, South Africa,  Colombia, the USA, Indonesia, Mongolia and Russia. At present much US production data is unobtainable because so many producers have stopped reporting while they are in Chapter 11 administration. For these producers we must use EIA mine production reporting which is about a year out of date.  As the US industry is re-organised we expect the data flow to improve.

Why don’t you have Chinese mines?

China does not normally produce seaborne traded coal exports which is our costing focus. In practice Chinese individual mine production data is unobtainable there are close to 11,000 mines of which most are effectively artisanal producers. Major companies produce about 10 percent of Chinese coal. These company is do not as a rule report individual mine production numbers. While It is possible to rank the major coal producer companies on cost this covers only a representative sample of Chinese production and is clearly not on a mine-by-mine basis as we are able to do for other countries.

How reliable are the cost estimates?

Metalytics coal cost curves are derived from engineering-based coal cost models for each mine. The models cover the full range of surface mining methods - draglines, rope/hydraulic shovels, excavators and truck fleets, drilling and blasting, loading and hauling. For underground mining the models cover longwall, continuous mining and bord and pillar mining, plus of course coal preparation and washing as required. Offsite rail costs are estimated from gross and net tonne-kilometre costs specific to each rail network used for coal haulage in each producer country. Port costs are derived from reported port charges where available, and ocean freights are calculated for capesize, panamax and handymax vessels using current bunker and diesel prices, time charter costs and toll charges. Royalties are calculated according to statutory formulas. For mines producing more than one saleable product, cash costs are value-weighted according to saleable product prices.

For the purposes of ranking and cost comparison the CFR cost curves are drawn on the assumption that all exports got to the port specified in that particular cost curve.  

Each mine model draws cost estimation data from look-up tables for each country, where table costings are estimated from survey data and the Cost Estimation Handbook published by the Australasian Institute of Mining and Metallurgy. Look up table cost estimates for the various mining methods and processing routes are driven by labour, fuel and power costs indices and by up to eight separate equipment operating cost indices.

The Metalytics coal mine cost modelling was initially created by Marc Gersteling, an accomplished mining engineering professional and coal industry specialist, with over 15 years’ experience in the mining industry. He has worked throughout Australia’s major coal basins for producers including the BHP Billiton Mitsubishi Alliance, Rio Tinto Coal Australia and Xstrata Coal in site-based detailed mine planning and design roles. This included working at various times as a Truck and Shovel Mine Planning Engineer, Drill and Blast Engineer, Coal and Partings Scheduling Engineer and Mid-Term Mine Planning Engineer.

Naturally we reconcile our modelled costs with reported costs and operating cash flow measures such as EBITDA from coal producers so far as are available.

Are all the cost curves in US dollars?
Yes! All cost curves and data use US dollar prices and costs. Mine costs for non-US operations have all their prices and costs converted to US dollar equivalents at the exchange rates shown in the Readme section of the cost curve files.

What years do the cost curves cover?
We have modelled all years since 2010 out to 2020. The downloadable cost curves on the website contain three year estimates for last year, this year and next year.

How often are the cost curves updated?
All of our models and cost curves are constantly under review. As new production and other data come in, the cost curves are re-estimated and posted back onto the site.  Normally the models are re-estimated four times a year following publication of quarterly reports by the major producers.

Copyright and Fair Usage
Metalytics retains intellectual property rights to all Metalytics cost curves and other software products downloadable from the website. Fair usage rights pass to the purchasers of Metalytics products. These rights entitle users to retain Metalytics products for their own exclusive use for any purpose within their own organisations except for re-sale. Cost curves and data may be freely published by users in their own documents and reports. All we require is the usual acknowledgement of the source of the information used.


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