Cadence Minerals (KDNC ) has reduced projected mining costs at the Amapá iron ore project in northern Brazil after a re-quote from one of Brazil’s largest mining contractors, lowering both Free on Board (FOB) and Cost and Freight (CFR) estimates.

Mining costs fall by 36.7% to US$11.17 per dry metric tonne (DMT) from US$17.65/DMT, with FOB costs down to US$27.28/DMT. The updated CFR cash cost is US$55.46/DMT, placing Amapá among lower-cost producers. Estimated savings are about US$33.3 million per year and around US$500 million over the life of mine. 

The reassessment followed identification that earlier mining quotes were high given the project’s low strip ratio and limited blasting. Under the proposed arrangement, the contractor provides personnel and equipment; costs are based on a plan to produce a premium Direct Reduction (DR) grade iron ore product that typically secures a price premium. 

The mining schedule used in the cost reassessment is the same as that applied in the revised PFS published in December 2024.

The Ore Reserve for Amapá is 195.8 million tonnes at an average grade of 39.34% iron and a cut-off grade of 25% iron. 

The Life of Mine (LOM) schedule supports 15 years of production, with a strip ratio of about 0.4:1 (waste:ore) and an average ore delivery to the plant of 13.99 Mtpa.

Cadence holds a 35.1% equity interest in Amapá and had invested about US$14.8 million as at the end of June 2025. 

“These revised mining costs represent a major improvement in the economics of the Amapá Project. With a CFR cost base of just over US$55 per tonne, we believe Amapá is positioned among the lowest-cost iron ore operations globally,” said Kiran Morzaria, Cadence’s chief executive.

“Importantly, these savings are based on the production plan for a premium DR-grade iron ore product, which is expected to capture higher market pricing than standard 62% Fe products. This combination of low costs and premium pricing potential delivers significant annual and life-of-mine savings, strengthens our competitiveness, and further de-risks the project as we progress towards development.”

 

View from Vox

The revised mining cost estimate improves the project’s cost outlook and aligns with the December 2024 study assumptions. The next milestones are confirmation of the contractor terms, clarity on logistics and permitting, and progress on funding. If these advance as indicated, the lower unit costs should support the project’s economics without changing its overall development timeline.