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By A. J. MacKellar

The economic viability of any project is generally assessed on an evaluation of the total capital constructed costs along with operating costs, owner's costs and market conditions. This paper will be directed to the role that Cost Engineering plays in the development of the capital costs and the cost control techniques applied thereto.

Jan 1, 1975

By David C. Slack

In recent years public concern over the environment has grown enormously. A very aware populace has exerted pressure on its legislators to enact enforcement laws dealing with pollution. Among the different types of pollution, sulfur dioxide in the air is a large and readily identifiable constituent. Air pollution, according to the EPA, costs the U, S. billions annually with SO2 a major portion of this cost. Fossil fuel and oil fired power plants release better than 50% of the SO2 in the country. Thus great attention is being focused on the methods power plants are utilizing to control emissions. With a time schedule of compliance by early 1975, decisions are being made and systems chosen that will have to perform - and perform - and perform. Therefore, a large majority of the power plants are presently considering lime in the planning and operational phases of their stack gas desulfurization programs. The reasons for this are: Lime scrubbing has more development and pilot work completed than most other methods; the removal potentials are relatively high; the stoichiometric ratios are not excessive and, the process has relatively low capital and operating costs. Many pilot plant studies have been completed recently using lime and the first operational full scale lime scrubbing unit is now in the start-up phase at this time at Duquesne Light Company's Phillips Station here in Pittsburgh. Also, because of completed development work, the problem of solid waste disposal will also be tackled at this power station at the same time. There are various methods for the use of lime in scrubbing for S02, but for our purposes I would like to describe the cyclic wet lime process. This method called "Scrubber Addition of Lime" involves contacting the flue gas with a slurry of milk of lime.

Jan 1, 1973

By O. Schumacher

Guidelines for publication of information defining the amount and grade of resource material available in a deposit are well established in Australasia?s JORC Guidelines, Canada?s National Instrument 43-101 and similar documents in South Africa, Peru, Chile and elsewhere (Table 1). These guidelines provide standards to apply regarding the geologic and geostatistical basis for describing the level of confidence to be assumed for an estimate of the amount and grade of material. All of them provide for a strict distinction between material that has been demonstrated to be economically mineable and that which has not, and all of them provide terms such as ?resource? or ?exploration information? to be applied to data regarding material that has not been demonstrated to be economically mineable. It is not until an economic study has been completed that we are allowed to apply the powerful terms ?reserves? and ?ore? to our deposit material. Indeed, the application of these eye-catching labels immediately tells the reader that an economic study has been completed by a qualified person, and that the results of the study were positive. While extensive guidelines are established for describing the level of confidence in published geologic data, and the nature of the economic study that should be accomplished before using the terms ?reserves? or ?ore?, surprisingly little guidance is provided regarding the process to use, and the level of detail to attain, for estimating capital and operating costs for the study. The intent of this paper is to lay the groundwork for development of suitable guidelines for the cost estimating process. While the codes do not provide specific instructions for the cost estimate, they do provide numerous hints and clues to help determine the level of detail expected and the type of procedure to apply in preparing the estimate. This paper will first review the various codes to gain an insight into the thinking of the drafters of the codes regarding their unstated expectations for the cost estimating process. Based on this review, a series of guidelines are proposed for this purpose.

Feb 27, 2013

By A. J. Richardson

Before the development of the underground stoping and mining costs can be considered, certain facts about the ore body, the proposed mine, markets, etc., must be known or determined. In the case to be studied, the zinc-lead mineralization occurred with a narrow vertically dipping structure of undetermined length and vertical extent. Exploration completed to date has revealed 6.5 mil¬lion st t of proven reserves. A further 820,000 st of in¬dicated reserves has been outlined and this tonnage is considered capable of being expanded by a factor of approximately four after more detailed drilling. After studying the market conditions and completing a very preliminary feasibility study, it was decided that production would be 730,000 stpy (or 2000 stpd) of ore. First year production would be at the rate of 1500 stpd. The main design criteria for the selection of the min¬ing methods are minimizing surface subsidence, maxi¬mum recovery of the ore body, maximum degree of grade control, maximum productivity, and safe working conditions. Two basic extraction systems are considered capable of meeting these requirements: mechanized cut¬and-fill stoping and sublevel long-hole stoping with filling. The primary development system of the mine has been designed to give maximum flexibility in stoping systems and layout and to permit changes if considered necessary as a consequence of actual production ex¬perience. At the present time, access to the mine is by a circu¬lar concrete lined vertical shaft, 16 ft diam, sunk to a depth of 1380 ft. Two exploration levels have been driven within the ore zone at depths of 165 and 1246 ft below the surface outcrop. The development to date had the objective of sampling the mineralization and produc¬ing detailed information on the outline of the ore body and the distribution and controls of zinc and lead values. In an attempt to satisfy the basic design criteria for the mine, it was decided that production would be best achieved by a combination of 40% sublevel long-hole stoping and 60% cut-and-fill mining. Costs of exploration and capital development of per¬manent underground facilities are normally written off over the life of a mine. Production expenditures, on the other hand, are of a temporary nature and are normally charged as and when incurred as an operating expense. Reasonably accurate predictions of mine production costs can be built up from engineering design and estimates of individual mine activities for ultimate inclusion in the comprehen¬sive data required for financial decision making. The simulated operations can be costed on a detailed basis in the form of a monthly operating budget. The budget format can be generalized or detailed, depending upon the scope of the project. However, ex¬perience suggests that a fairly detailed format has the advantage of assuring that all significant cost items are included. For underground costing it is suggested that the budget structure include five major cost centers (i.e. development, diamond drilling, ore extraction, hoisting/ transportation, and general mine expense). These in turn are detailed under numerous subheadings. The mechanism for compiling an operating budget will be illustrated. Because of its relative simplicity, ore extraction under sublevel long-hole stoping has been chosen for illustration. All other activities, simple or complex, can be estimated in similar fashion. BLOCK AND STOPE DEVELOPMENT Long-hole blocks, used where advantageous, will be up to 250 ft in height, depending upon the vertical con¬tinuity of the mineralization, and approximately 300 ft long. Drawpoints will be at 36-ft intervals and serviced by loading crosscuts driven from a footwall drift parallel to and close to the ore zone. Pillars between the stopes will be 50 ft wide. Stopes will be drilled off with vertical rings of blastholes drilled from sublevels approximately 60 ft apart vertically. This drilling will be done by percussion drilling machines (31/2 in.) mounted on a trackless drilling rig. Load¬haul-dump (LHD) equipment will be used to move broken ore from the drawpoints to the orepass connecting to rail haulage systems. On completion, long-hole stopes will be backfilled to prevent caving and to facili¬tate later pillar removal. From a planned stope layout, a forecast of produc¬tion and development is made in Table 1. Table 1. Block Tonnage and Stope Development Quantity Ore Waste Total ore block 375,000 st 2 stopes 310,000 st 1 pillar 65,000 st Access crosscuts, 4 at 100 ft 400 ft Drill sublevel drifts, 6 at 300 ft 1800 ft Stope raises, 3 at 250 ft 750 ft Undercut sublevel drifts, 2 at 300 ft 600 ft Loadout crosscuts at 35-ft intervals 550 ft 100 ft 3300 ft 500 ft Total development footage 3800 ft Tons per ft of development 987 st

Jan 1, 1982

By William Grady

FACTORS entering into the market value of coal are its grade, and the cost of labor, material, and capital. Reduction in these costs cannot be expected in the future, and it therefore follows that greater economy in their use must be accomplished if it is desired to hold the present markets; more tons of product per unit must be obtained in a given time from both men and material, and means devised for increasing the percentage of lump and domestic sizes. This paper is presented for the purpose of inviting discussion and stimulating thought in regard to the influence of methods of procedure and plans of mining, upon the quality of coal, the economical use of labor, material, and capital, and the cost of production. Even the better methods of the. present day leave much to be desired, and a review of the reasons and necessities for their use may be of value in pointing the way to more economical mining. The writer does not attempt to discuss untried methods of mining, but rather to state clearly and concisely a summary of the results obtained under the several methods of procedure that have been adopted. In some instances a high degree of concentration has been effected, and comparisons of the results obtained with the results of lesser degrees of concentration form an interesting study. It is believed that much may be accomplished in improving the quality, and in the more economical use of labor, material, and capital, by concentration, and it is to concentration in particular that your study is invited. The writer, who .has occasion to visit many mines, most of which ire under different management, has been inclined to the opinion that improvement has been retarded in many ways and that mining has not as yet been entirely freed from the early-day practices which were forced upon it.

Jan 5, 1915

By Arthur F. Johnson

THE principal costs of making a pound of aluminum are for 9 kw-hr of electricity and for 1.9 Ib of the oxide (A1203) called alumina. A pound of alumina is made by digesting 2 or 3 lb of bauxite in hot caustic solutions, settling and filtering out the oxides of silicon, iron, and titanium and precipitating and calcining the A1203 as a pure, white powder. The cost of foreign bauxite delivered at an alumina plant in the U.S. may equal or exceed the cost of its chemical treatment to make alumina. Some of the principal factors affecting costs in the utilization of foreign bauxites are: transportation from mine to market, mineralogical and physical composition of the bauxite, thickness of the bauxite beds and their clay and forest overburden, amen- ability of the bauxite to beneficiation and to caustic extraction of the alumina, and lastly size of bauxite deposits and rate of mining employed.

Jan 6, 1954

By James E. Breland

Society's growing concern over the number of deaths and serious injuries occurring in coal mines, coupled with a growing sentiment to develop and promulgate improved mandatory health or safety standards, was no doubt the basis for passage by Congress of the Federal Coal Mine Health and Safety Act of 1969, being Public Law 91-173 approved December 30, 1969. Even prior to passage of the Act, strong reaction was quick to arise concerning the effect of such legislation upon the coal mining industry. Initial response varied from mild forms of criticism to' the expressed fear of complete suspension of operations and mine closings. Primarily responsible for these early forms of skepticism were speculative or fanciful cost estimates which led operators to contemplate a less than prosperous existence. However, in spite of this unfavorable outlook, the majority of the operators have faced up to the situation and have been striving to comply with the Act and the regulations issued thereunder. While encouraging strides have been made toward implementation of the Act, it must be recognized that noticeable results have been attained only through many months of determined effort and, as anticipated, at quite heavy expense to the operator.

Jan 1, 1973

By James E. Breland

A case study of tangible and intangible costs incurred by a coal mining company for meeting the requirements of the Federal Coal Mine Health and Safety Act of 1969 is discussed. For clarity, the data is presented on a "before and after" basis, with special emphasis on safety records, costs, and production performance. The cost figures have been subjected to outside verification.

Jan 1, 1975

By Bruno C. Boik

INTRODUCTION Cost Management is the evaluation and control of project scope, budgets, and costs with the objective to minimize costs and maximize the benefits to be derived from the use of project resources in conformance with Criteria stipulated or approved by the Owner. In order of importance, Cost Management is one of the most prominent Project Management functions because of its impact on the financial success of the venture. Cost Control and Cost Accounting are essential parts of Cost Management. The principal objectives of Cost Control are to monitor project commitments and expenditures, and measure performance for the detection of variances from acceptable standards and from control budgets so that timely action can be initiated to minimize costs. Cost Control is evaluation of current costs and projection of future costs, rather than the reporting of actual costs. Cost Control is not Cost Accounting. The primary objectives of Cost Accounting are the determination, classification, analysis and reporting in useful detail of actual costs. Following are some considerations on Cost Management and Cost Control as practiced by Owners and Contractors of industrial projects, Mining and Metallurgical projects in particular. COST MANAGEMENT Functions Conforming with the requirements of Owner's Criteria, the principal Cost Management functions are to • evaluate estimates of project costs and establish budgets for a scope of work and schedule; conversely, evaluate the scope of work that can be executed most effectively within a budget and schedule. • promote investigations and comparative evaluations of alternate designs and plans to find the most cost effective way to execute a project and minimize its operating costs. • based on Cost Control and Cost Accounting input, evaluate and initiate appropriate actions to correct deviations from approved budgets. assess project economics, the effect of changes on project economics and, if necessary, revise Project Criteria to modify their impact on costs.

Jan 1, 1986

By V. O. Tenorio, A. M. Sanzana

"INTRODUCTION This report summarizes a research about mines which are transitioning from surface to underground mines. It is a guide to make strategic decision in these increasing amount of mines. Capital and operating costs are linked with major strategic decisions in the exploitation of an ore body. This is the reason to analyze costs related to this transitioning world trend. There are multiple reasons for transitioning from Open-Pit (OP) to Underground (UG) mining. The primary economic incentive for going UG is that the cost per unit of ore from OP mining eventually exceeds that from UG extraction. This is due to the excessive amount of waste that must be extracted when the depth of the pit increases. In addition, the reduced footprint of UG operations contributes to diminish the environmental impact on the surface. Furthermore, it becomes more difficult to find new, easily accessible ore deposits. Then, a cost model helps to guide strategic decisions in the transition from OP-to-UG mines. Objectives • Propose a methodology to guide strategic decisions in the transition from OP to UG mining. • Create an integrated cost model based on existing OP and UG individual cases. • Identify and characterize a group of mines transitioning from OP to UG. • Analyze operating and capital costs of a particular transitioning from OP to UG mine. MAIN CONCEPTS Open Pit Mining (OP) The main decisions in OP mines are: Cut-off grade, Stripping Ratio (SR), equipment size, stockpiling, pushback sequencing and processing capacity. The stripping ratio is measured as the tonnage of waste required to be removed to reach and extract one tonne of ore. The material extracted from an OP exploitation can be classified as waste and ore. This classification depends on the cut-off grade. The cut-off grade indicates the minimum amount of material with economic value in a block. The waste from the mine is going to the waste dump and the ore is going to stockpiles where will be store and then going to the processing plant (leaching or concentrator). The waste of this process is going to the tailing pond big pools. And the product is sell in the market. Another important issue is the mining capacity which is going to define the investment in mining equipment. Underground Mining (UG) The first decision to be made in order to open an underground mine is selecting the mining method. Caving methods are the more productive and have lower operating costs. There are three caving methods: Block Caving (BC), Panel Caving (BC) and Sublevel Caving (BC). The access development could be an horizontal adit or a straight or downspiral decline. A shaft could be used for inclined or vertical access. Other key issues are: equipment capacity, cut-off grade and production sequencing."

Jan 1, 2016

The Leigh Creek Coalfield is owned and operated by the Electricity Trust of South Australia to supply fuel to the Northern Power Station. To supply electricity at lowest cost, a costing and decision process that establishes the role of the Leigh Creek Coalfield in the overall system planning and operation is required. The costing is integrated in that it is based not just on a particular mine plan but on the wider need to supply a particular electrical demand. The detail costing has evolved over time from manual to main-frame computer to microcomputer techniques. Now there is a choice between fast consistent costs and a slower but more detailed and flexible costing.

Jan 1, 1990

By M. Z. Emad, S. Raza, K. Jalil, M. A. Raza, M. U. Khan, S. A. Saki

Dimension stone mining is Increasing because of growing demand from the building and construction industries. Diamond wire saw cutting is a popular dimension stone mining technique around the world. Estimation of the production cost for this method is critical for these operations. n this research a production cost model was developed for the mining of granite using a diamond wire saw. Cost and production data were collected from a granitic dolerite operation in Pakistan for a 4.5-year period, and analysed to identify the cost components. Fuel (34%), labour (15%), consumables (40%), and maintenance (5%) were found to be the four major cost components in this operation. A regression-based dimension stone production cost model incorporating statistically significant variables was developed. The data presented a strong correlation of production cost with fuel, labour, and consumables costs. Finally, a production cost model based on the consumption cost of diamond wire is presented. The model was verified using actual production cost data, which indicated 95% (R2 = 0.95) variance in the data between the predicted and actual production cost values. The model may help field engineers in computing their dimension stone operational cost during the cutting phase.

Nov 6, 2023

By M. R. Khalesi, S. Arfania

"Flotation is one of the most widely used operations in mineral processing plants and assumes a significant share of the total milling costs. The purpose of this paper is to introduce a new set of capital and operating cost models for major flotation machines based on the application of single (SRA) and multiple regression analysis (MRA). Thirty-seven major flotation machines were analysed for this purpose. Depending on the machinery type, different technical variables such as diameter, required air flow rate, required floor space, cell volume, required air pressure, and power were considered as predictor variables, individually (in SRA) or simultaneously (in MRA). Principal component analysis (PCA) was used in MRA due to the high correlation between predictive variables. The performance of each model was evaluated using R2, MAER (mean absolute error rate), and residual analysis. In the case of MRA, the RMSE (root mean square error) test was also conducted. Maximum obtained MAER of 13.5% and minimum R2 of 0.86 indicated that these models could be applied as credible tools in estimation of capital and operating costs of flotation machines for design and feasibility studies.IntroductionMineral processing is a vital part of mining projects and mainly involves comminution, sizing, concentration, extractive metallurgical processes, and dewatering. Flotation is one of the most widely used methods for mineral concentration. Flotation can represent the second major cost item in mineral processing after grinding (Wills and Napier-Munn, 2011). Accordingly, it is a main concern of mining project managers to select and optimize flotation circuits in order to decrease costs and increase productivity. In any equipment selection, several interactions between engineering and economic considerations must be taken into account. Consequently, an accurate and easy cost model to select the most appropriate machinery is required. Moreover, cost models could be used in flow sheet simulations applied in design and optimization. Models of unit operations built into the simulators could be improved by linking the equipment cost models (Khalesi et al., 2015)."

Jan 1, 2017

By S. A., Taylor

IT is very difficult to arrive at exact figures for the cost of maintaining excess capacity of coal mines, but we can approximate the various items. To do this, I will take the Pittsburgh district of Pennsylvania and the other districts can be compared to this one. I believe we can take the depreciation item of plant ac- count as a whole and discount it over a period of 20 years; while this is high for some items it is low for others and I believe it is not far from a safe basis. This equals 5 per cent per year, and this depreciation will take place about as rapidly when not in use as when in operation. A fair value in the Pittsburgh district to- day for plant and houses is close to $4 per ton per annum. At 5 per cent this will equal 20 cents per ton per year. The item of keeping the mine in condition, free from water, etc., will be close to an average of 2y2 cents per ton per annum.

Jan 1, 1928

By Paul M. Tyler

Mineral raw materials, because they are essential to our industrial prosperity and military strength, must be made available in substantial quantities. regardless of cost. Variations in the cost of procuring minerals, as compared with the cost of obtaining other commodities, and changes in the cost of production of different minerals relative to one another, will naturally influence the quantities of a given mineral item that can be marketed readily. However, in the last analysis, the cost of winning minerals from the ground usually constitutes only a small fraction of the value of the end-use products and services derived from them. The miner's share of the cost of a typewriter, telephone circuit, or even a modem office building, is almost insignificant. Far more important to the ultimate consumer, therefore, than any minor saving in cost is the assurance of ample supplies of the minerals needed to aliment our expanding economy. To create a successful metal mining operation involves ( 1 ) the discovery and systematic development of a mineral deposit, (2) extraction of the ore, (3) the mechanical and metallurgical processing to eliminate worth- less or harmful impurities, and (4) the profitable disposal of the product. The first step of the technological process belongs chiefly in the realm of the geologist, the second is a mining engineer's job, the third is mainly up to the millmen and extractive metallurgists; whereas the fourth and equally important step poses a commercial problem that has aspects in common with the marketing of other products. Ore finding is far from being an exact science. There is no mathematical criterion for evaluating the efficiency of prospecting and exploration. Lady Luck shares the honors or assumes part of the blame along with the prospector and geologist. Marketing like- wise involves factors that seemingly defy engineering analysis. Although the other steps can be measured with some degree of mathematical accuracy, even they tend to vary so widely in basic principle, as well as in

Jan 1, 1959

By Paul M. Tyler

Mineral raw materials, because they are essential to our industrial prosperity and military strength, must be made available in substantial quantities regardless of cost. Variations in the cost of procuring minerals, as compared with the cost of obtaining other commodities, and changes in the cost of production of different minerals relative to one another, will naturally influence the quantities of a given mineral item that can be marketed readily. However, in the last analysis, the cost of winning minerals from the ground usually constitutes only a small fraction of the value of the end-use products and services derived from them. The miner's share of the cost of a typewriter, telephone circuit, or even a modem office building, is almost insignificant. Far more important to the ultimate consumer, therefore, than any minor saving in cost is the assurance of ample supplies of the minerals needed to aliment our expanding economy. To create a successful metal mining operation involves (1 ) the discovery and systematic development of a mineral deposit, (2) extraction of the ore, (3) the mechanical and metallurgical processing to eliminate worthless or harmful impurities, and (4) the profitable disposal of the product. The fist step of the technological process belongs chiefly in the realm of the geologist, the second is a mining engineer's job, the third is mainly up to the millmen and extractive metallurgists; whereas the fourth and equally important step poses a commercial problem that has aspects in common with the marketing of other products. Ore finding is far from being an exact science. There is no mathematical criterion for evaluating the efficiency of prospecting and exploration. Lady Luck shares the honors or assumes part of the blame along with the prospector and geologist. Marketing like- wise involves factors that seemingly defy engineering analysis. Although the other steps can be measured with some degree of mathematical accuracy, even they tend to vary so widely in basic principle, as well as in

Jan 1, 1964

By D. W. Alexander

Mine fires, explosions, spontaneous heating and inundations are among the leading causes of catastrophes (unplanned, temporary sealing and recovery of major mines). Many reports are available that detail company efforts to re-establish mining operations and agency efforts to regulate away the causes, but the associated costs are rarely included. The increasing scale of coal operations concentrates earning potential and the financial risk of business interruption in fewer locations. Underground coal mine catastrophes are low probability, high loss events that happen nearly every year. This paper will present an evaluation of coal mine catastrophes from case studies.

Jan 1, 2003

By L. B. Rothfeld, R. L. Dolzani

This paper presents preliminary results of a US Bureau of Mines (USBM) study of potential costs of compliance with possible federal regulations for copper heap and dump leaching. The regulations could arise under amendments to the Resource Conservation and Recovery Act (RCRA) and/or the General Mining Law. Estimates are given for the cost of compliance with possible technology standards that would require the use of liners and closure caps regardless of terrain and underlying geology and hydrology. This cost is compared to the cost of compliance with 1992 state requirements for terrains typical of those found at existing copper leach sites in the southwestern United States. Incremental compliance costs are found to widely exceed screening criteria used by the US Environmental Protection Agency (EPA) to denote significant economic impact.

Jan 1, 1995

By L. B. Rothfeld

This paper presents preliminary results of a Bureau of Mines study of potential costs of compliance with the federal Resource Conservation and Recovery Act for copper heap and dump leaching. Specifically, estimates are given for the cost of compliance with possible technology standards that would require the use of liners and closure caps regardless of terrain and underlying geology and hydrology. This cost is compared to the co lit of compliance with present state requirements for terrain a typical of those found at existing copper leach sites in the Southwestern U.S.A. Incremental compliance costs are found to widely exceed screening criteria used by the Environmental Protection Agency to denote significant economic impact.

Jan 1, 1993

By L. B. Rothfeld

In anticipation of RCRA reauthorization and subsequent rulemakings, the Bureau of Mines is studying potential economic impacts of RCRA on mining. For U.S. copper heap and dump leaching operations in a variety of terrains, the cost of liners and closure caps to comply with RCRA Subtitle D ranges from $55 million to $158 million per site, or about $500,000 per hectare ($200,000 per acre). If RCRA technology requirements and financial assurance had been required on current operations, 27 to 100% of production from heap and dump leaching would have been non-competitive at market prices between $2,310 and $1,650 per metric ton ($1.047 and $0.75 per pound) copper. This result is based on an analysis that considers return on capital, corporate overhead, marketing, and freight costs as well as operating and maintenance costs at the mine. Over the same price range, economic analysis using the IMPLAN input-output model on one-or two-county regions indicates potential net job losses of about 570 to 2,700 jobs. Total economic output of those counties could be reduced by about $180 million to $360 million.

Jan 1, 1994