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Delivering Lower $/t Iron Ore Through "New World of Resource"

We caught up with Dan Webber, CDE Regional Manager for Australasia, to get his thoughts on the current state of play for iron ore operators, and how they can achieve a lower $/t cost on the ore.

 

I read with interest this week an article written by Krystal Chia on mining.com claiming that the current US$70/tonne selling price of iron ore is not sustainable and that a slide back to more modest values is inevitable. I suspect that this is relevant to investors but probably not a big shock to iron ore producers, whom over the last half a decade have had a laser focus on production costs and continually put downward pressure on their mining operations. 

 

During this period I have seen a majority of the focus from iron ore miners on controlling or reducing their mining costs to achieve a reduction in their $/t cost base; this makes sense, as during the mining boom, costs did get out of control, wages were inflated and sometimes sub-optimal (and costly) primary equipment was deployed into the field to help keep production levels up.

 

How can you reduce your cost base?

Iron ore processing plantSo what role can CDE Meta play in helping iron ore producers reduce their cost base? We don’t supply contract mining labour, and we don’t lease trucks or dozers, so none of the typical operating costs are in our gambit. But what we can do is help iron ore producers divert sellable iron ore from the tails stockpile and get it on a ship to their customers.

 

CDE’s mantra, a “New World of Resource” refers to our drive to unlock resources that have previously been seen as “too hard to get” or “not worth getting”, but at the end of the day increasing recovery has the same effect as reducing operating costs, as the same input costs are spread across more sellable tonnes. 

 

CDE’s modular approach to mineral processing plants has also proven to be extremely capital effective, so there is no hidden depreciation or opportunity cost. When it comes to value from waste, we are constantly working with our clients to identify new opportunities and we have repeatably shown an ability to recover and beneficiate ore from marginal and low-grade overburden piles, oversize stockpiles and aged fines dams. We have also seen uneconomic marginal greenfield projects turn around and produce large NPVs by unlocking the potential for overburden waste and turning it into minable and profitable material.

 

A New World of Resource

Lastly, our “New World of Resource” approach is more than skin deep: we are constantly looking to save power and recover water. Our weldless Infinity range of screens are lighter and use less power than traditional vibrating screens. Meanwhile, our cyclones, AquaCycle™ thickeners, filter presses, and centrifuges look to return every litre of water possible back to the circuits they are working in. These input costs (water and power) are significant, so once again we see that what is good for the environment is also good for business, and it’s pretty inspiring to be a part of. 

 

So yes, the price of iron could be about to go down, but those companies that are looking to the “New World of Resource” with a commitment to unlocking value from waste are well positioned to deliver iron ore at a lower cost per tonne; delivering both social, environmental and financial returns for their stakeholders whilst mitigating the economic risks that come with a fluctuating iron ore price that may be a feature of the market for some time to come.