Average cost of domestic iron ore was 471 yuan / mt in the second quarter of 2021, down 0.9% from the quarter_SMM

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SHANGHAI, Aug 9 (SMM) – The average cost of national iron ore stood at 471 yuan / mt (wmt, actual grade) in the second quarter of 2021, down 0.9% from the quarter against a backdrop lower mining costs, wages, other consumables and management costs.

The mining cost decreased as the ROM content increased and the mining cost per tonne decreased. The decrease in the concentration ratio resulted in a decrease in the extraction cost required to produce 1 mt of concentrate.

The decrease in management costs and salaries is mainly due to the decrease in amortized costs as production increases.

The cost of other consumables decreased as the consumption of liners, belts, and water decreased.

However, the costs of electricity, steel balls, diesel, resource tax, taxes and charges, and maintenance and depreciation (M&D) have tended to increase.

The decrease in unit consumption has led to an increase in the cost of energy. Surface mines have to be mined mechanically in some areas due to disapproved explosives resulting in relatively large ROM size. Enrichment plants need to add a crushing process before crushing, which will lead to increased energy consumption.

The costs of steel balls and diesel increased due to higher prices.

The cost of the resource tax has increased due to higher concentrate prices.

Zhangjiakou Chicheng County stipulated that the exit toll dropped from 38.8 yuan / mt to 82.4 yuan / mt from April 1. The concentrates have to be transported elsewhere as there is no steel plant in the area.

M&D has increased as some mines have moved from surface mining to underground mining, or deep excavation to maintain a stable supply of ROM.

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