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.

Cobalt: leading producers?

Our global decarbonization models effectively burn through the world’s entirely terrestrial cobalt resources (data file here), mostly in EV batteries, making it one of the most crucial materials for an energy transition (data file here).

Hence this data-file reviews c25 mines around the world, and the resultant positions of 25 global cobalt producers. In each case, we tabulate the mine’s output, ore grade, processing technique and ownership details.

Two-thirds of global supply currently comes from the Democratic Republic of Congo, as a by-product of copper production, where the Katangan copper belt which has unique, stratiform sediment-hosted Copper-Cobalt ores.

The remainder is co-produced with nickel, in countries such as Australia, Canada, Cuba, Finland, Madagascar, Philippines, PNG, Russia, et al.

Full details are in the data-file, including our notes from an excellent, recent technical paper.

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.

Oil Sands CO2 Intensity

This data-file quantifies the CO2 intensity of oil sands production: disaggregating averge emission factors for both mining operations and SAGD. Emissions are estimated for running trucks, bitumen extraction, steam-flooding, upgrading, methane leaks, flaring, et al; based on real-world data.

A CO2 curve can also be derived from the data, ranking c2.5Mbpd of production across Alberta, in order to compare different facilities and different operators. Steam-oil-ratios explain c60% of the variance in SAGD assets’ emissions.

Copyright: Thunder Said Energy, 2022.