Capital and Operating Cost
Capital Cost Estimate
The capital estimate covers the design, procurement, management, construction and commissioning of the mining unit, primary concentrator, mineral separation plant, export facilities and infrastructure.
Additional geotechnical and marine studies are required to finalise the design study for the stand alone jetty. These studies will determine the piling requirements for the jetty. The port consultants quantified the range of possible outcomes for the cost of piling and have determined that they fall within a US$12m range. The base, low and high cases for capital expenditure reflect the geotechnical uncertainty in the piling cost of the jetty ($12m) described above.
|Mine + Primary Concentrator||19||19||19|
|Mineral Separation Plant||26||26||26|
|Road + Port||71||69||77|
|Indirect + Other||7||7||7|
|Process Plant and Infrastructure||136||134||143|
Capital Cost Summary.
Sustaining capital expenditure of less than US$1 million pa and the capital for the concentrator moves planned for years 9 and 16 (US$6 million each move) have been included in the project financial evaluation.
Working capital for operational labour prior to start-up, operating costs prior to the first sales revenue being received and other owners’ costs is estimated at US$24 million.
Operating Cost Estimate
Operating cost estimates have been developed over the life of the project. These estimates are based upon information provided by WTR, supplier quotes and cost information from TZMI’s database.
|Mineral Separation Plant||10.4||23|
|Product Transport and Handling||8.9||20|
|Administration and Marketing||5.0||11|
Operating Cost Summary by Area.
Mining is the largest component of the operating cost estimate, accounting for around 31% of annual operating costs. This cost includes clearing and stripping, contract ore mining and delivery of ore slurry to the wet plant, mine site administration, tailings management as well as rehabilitation.
|Power & Fuel||15.6||35|
Operating Cost Summary by cost driver.
The major operating cost drivers of the annual operating costs over the life of the project are shown in Table 4. Power and fuel account 30% of annual operating costs, based upon a delivered diesel price of US$1.125 per litre. Annual fuel consumption for the project is estimated at 14 million litres, inclusive of fuel consumed in generating power.
Contract mining is next largest cost component, accounting for 22% of annual project operating costs. If fuel and power costs associated with the mining operations are included, contract mining proportionate share of annual operating costs increases to 29%.