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CRU has recently published the Lead and Zinc Mining Cost Report 2022, titled “Lead and Zinc costs in the year of soaring inflation”. This yearly report covers all aspects of lead and zinc costs trajectory now, and in the mid-term future.

Rising costs amongst all drivers, energy costs and royalties standing out

Operating margins seem intact for producers. However, as inflation hits hard and metal prices follow a downward trend, the focus on costs may return.

The cost curve shifts this year are linked to the inflationary pressure in all cost drivers and rising realisation costs. By-product credits support was the main story in 2021. However, this year, credits coming from lead, copper, silver and gold will try hard to keep pressure off miners in the currently less positive metal prices environment.

Furthermore, realisation costs, which include treatment and refining charges (TCRC), freight, and marketing costs has by far been a significant driver behind the costs’ increase this year.

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Dimitris Zomas

Analyst View profile