Cost studies

Roskill has a dedicated cost team and an extensive portfolio of costed mines, projects and down-stream processing facilities across a range of the commodities that Roskill covers. Detailed cost models, cost reports or cost curves can be provided to our clients on a consultancy basis. Roskill’s clients use its cost services for due diligence, internal project benchmarking, external market intelligence within technical reports, IPO documents and marketing presentations.

Roskill has detailed cost data on lithium, cobalt, nickel, chromium, fluorspar, graphite, manganese, molybdenum, salt, silicon, vanadium and other markets.

Case study 1: Evaluation of advanced stage lithium projects

Scope

A major trading company wanted to evaluate advanced stage lithium projects and required an independent assessment of their economic and technical viability.

Approach

  • Production, cost and capital expenditure outlooks were developed for each asset from available technical documents or benchmarked from comparative operations.
  • This included detailed cost analysis of cost by sector (mining, processing, royalties, transport, etc.) and by key cost items including labour, power & utilities, reagents and consumables.
  • Further insight was leveraged from previous Roskill site visits to operations and projects in Western Australia and Canada.
  • The technical assumptions for each project were assessed and flexed accordingly, based on the above evaluation.
  • Analysis was compiled providing a comparative benchmarking of the projects across a broad range of cost and investment metrics.

Result

In-depth operating and construction cost analysis was presented to client, benchmarking the projects against each other and the incumbent major lithium producer globally.

Case study 2: Detail cost review of the cobalt chemical refining sector

Scope

A diversified mining company was reviewing the acquisition of a cobalt refining facility and needed strategic advice on its competitive position from which to base its downstream investment decision into the sector.

Approach

  • Given the dynamic nature of the cobalt chemical sectors (driven by demand for battery raw materials) firstly, detailed analysis of the sector was undertaken to fully understand the production and capacity of existing plants, planned expansions and new facilities.
  • Intermediate feedstock sources were identified, and plant flowsheets, recovery rates and consumable consumption ratios were outlined.
  • Detailed plant-by-plant analysis was undertaken for the major plants, detailing key operating cost item such as feedstock, labour, power & utilities, reagents, consumables, maintenance and realisation costs.
  • Capital construction costs were assessed for new plants and returns on investment for new capacity assessed.
  • Analysis was compiled providing a comparative benchmarking of the plants on an operating cost, capital intensity and incentive price basis.

Result

Detailed cost insight of the cobalt sulphate and tetroxide sectors (which is dominated by Chinese suppliers) were provided to the client from which they could compare the profitability and robustness of the subject business against; an acquisition was not forthcoming.

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If a specific commodity report does not provide a solution to your needs, then Roskill’s consulting division can provide deeper insight.

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