Mine trucks: transport economics?

There are around 50,000 giant mining trucks in operation globally. The largest examples are around 16m long, 10m wide, 8m high, can carry around 350-450 tons and reach top speeds of 40mph.

This data-file captures the economics of a mine haul truck. A 10% IRR requires a charge of $10/ton of material, if it is transported 100-miles from the mine to processing facility. Assumptions can be stress-tested overleaf.

Fuel consumption is large, around 40bpd, or 0.3mpg, comprising around 30% of total mine truck costs at c$1.5-2/gal diesel prices. Some lower carbon fuels are c5x more expensive, and would thus inflate mined commodity costs.

High utilization rates are also crucial to economics, to defray fixed costs, which are c50% of total costs, as our numbers assume each truck will cover an average of 500 miles per day for c20-25 years.

Copper: leading producers?

This data-file is a screen of the world’s largest copper miners and producers, covering 16 companies that produce half of all global output.

We have tabulated each company’s size, type, headcount, patent count, production, reserves, RP ratio, relative exposure, key assets and other notes.

The average company produces around 0.8MTpa of copper, has a 30-year reserve life, and derives 30% of its EBITDA from copper.

Copper: the economics?

This data-file quantifies the economics of producing copper, across a typical mining operation and a typical smelting/refining operation, to yield 99.99% pure copper output.

Marginal cost is likely around $7,000/ton ($3.20/lb) for a high-quality future project, with an emissions intensity close to 4 kg of CO2 per kg of copper.

But it depends heavily on ore grade. We estimate that a 0.1% reduction in future copper ore grading increases marginal cost by around 9% and CO2 intensity by around 10%, which matters as copper demand is set to treble in the energy transition.

Moreover, each $100/ton of CO2 prices would increase marginal cost by another 7.5%.

It is not unimaginable that copper prices could reach $15,000/ton in an aggressive energy transition scenario, if you stress-test the model.

Copper: global demand forecasts?

This data-file estimate the growth in global copper demand as a result of the energy transition:  specifically, the rise of renewables, electric vehicles and other new energies technologies (charts below).

Global copper demand stood at 27MTpa in 2019, and will mostly likely treble to 75MTpa by 2050, in our base case scenario.

The data-file allows you to stress test different scenarios, varying the ultimate share of electric vehicles in the vehicle fleet, the rise of long-distance power transmission, global GDP growth, reductions in copper intensity, and the ultimate share of renewables in the grid.

Copyright: Thunder Said Energy, 2022.