and tin. Indium’s contribution is important in determining the feasibility of the project; thus, we
allocate certain costs equally across all three coproducts. Therefore, as we progress through
allocating costs from the Mount Pleasant deposit, costs that are generally considered to be
necessary for the production of all coproducts or are fixed overheads are distributed equally
among all metals, while other costs that are directly related to the production of one of the metals
(such as marketing, packaging, or special refining) are allocated directly to that metal.
The overall summary effect of this cost allocation is shown in Table 27, where total costs are
shown in terms of a Canadian dollar (C$) per tonne processed and C$ per tonne of metal or
concentrate produced. Mining costs totaling C$30.03/tonne are shared equally among the metals.
Under case “B,” processing costs are borne disproportionately by zinc and indium metals. This is
because in case “B,” these metals are processed to a higher purity than the tin that is produced in
concentrate form. Site administration costs are borne principally by the indium metal, and to a
lesser degree, by zinc and tin, mainly because incremental differences are associated with going
from case “A” to case “B.” Similarly, capital costs
are borne disproportionately by zinc and
Cost per tonne by
Mine operating cost C$/t
Mine operating cost C$/kg
To convert capital costs to an annualized operating cost, the lump sum capital is treated as an annuity over the life of the Mount
assessment of the Mount Pleasant property.
Case A: Tin Concentrate, Zinc/Indium Concentrate. Case B: Tin Concentrate, Zinc Metal, Indium Sponge
Exchange rate of C$1.10/U.S.$ used in accordance with Thibault et al. (2010).
On the basis of this cost allocation we see that approximately 42% of the total costs are borne by
figure to $/kg of metal produced, we see that total on-mine costs for indium amount to C$350/kg.
Because the mine plans to produce an indium sponge of only 95% purity, additional refining
charges of $66/kg are require to upgrade the indium to commercial qualities of 99.998% (4N8),
bringing the total cost to C$416.00/kg of 4N8 indium. Converting this cost to U.S. dollars at a
rate of C$1.10/U.S.$ in accordance with the exchange rate used to compile the cost estimates
(Thibault et al. 2010), Mount Pleasant is likely to produce 40.5 tpa of indium at a total unit cost
of $378/kg of 4N8 metal. Once capital is sunk, the deposit would likely continue to produce
indium provided that price did not dip below U.S. $288/kg.
The estimates for Mount Pleasant are preliminary and according to the authors of that study,
have an accuracy level of –10%, +35%. (i.e., the costs could be underestimated by 35% or
overestimated by 10%). Furthermore, costs in the model are driven by key assumptions about:
Grades and recoveries of indium. Aside from determining the amount of indium metal
treated as a byproduct, coproduct, or main product mineral.
The percentage of costs that indium should bear depending on whether it’s treated
Life of mine and discount rate. Together these determine the capital cost allocated to
By varying these input deposits, the Mount Pleasant cost model can be used to simulate global
indium production. To ensure the validity of the simulation, we use the following inputs: (1) a
representative distribution of indium concentrations at known deposits compiled by Schwarz-
Schampera and Herzig (2002); (2) ranges of indium recovery at typical at each stage in the
recovery process; (3) known ranges for the cost of capital for companies in the extractive
industries; (4) typical ranges for the life of many mining operations; and (5) the cost estimate