Energy and natural resources
C1 cash cost
A mine's direct cash cost to produce one unit of metal, after by-product credits.
Last reviewedWhat does C1 cash cost mean?
It leaves out sustaining capital spending, depreciation, royalties and head office costs. The measure was developed by the consultancy Brook Hunt, now part of Wood Mackenzie. Example: a copper mine spends 2.20 per pound on mining and processing and 0.40 on treatment and freight, and earns a gold by-product credit of 0.60, so its C1 cost is 2.00 per pound. C1 costs are used to build industry cost curves.
Example
C1 cash cost is the direct cash cost of producing a unit of metal at the mine: mining, processing, site administration, and charges to get the metal to market such as treatment and refining charges and freight, minus revenue from by-products (for example gold found with copper).
Where does it come up in case interview prep?
Related terms
- AISC (all-in sustaining cost)A gold miner's full cost to keep producing an ounce, including sustaining capital.
- Cost curve (industry supply curve)All producers ranked from lowest to highest cost, showing who is the marginal producer.
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- Variable costA cost that rises and falls with how much you make.
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- Lifting costThe cost of producing oil or gas from wells that already exist, per barrel.
- Full-cycle breakevenThe oil price a project needs to cover all its costs, including building it, and earn its required return.
- Fiscal breakeven oil priceThe oil price a government needs to balance its budget.