Blasting Economics

©Dr. B. C. Paul 2009

Note – The example contained in these slides was prepared by the author for use in the courses he instructs. It represents ideas and concepts believed by the author to be

commonly understood by those well studied in the subject. Cost figures were taken from a variety of published and unpublished discussion sources, though contributions

from Western Mine Cost Service and the U.S. Bureau of Mines are specifically recognized.

We Will Utilize A Standard Blast Design Cost Calculation

Spreadsheet• The Spreadsheet will consider

– The Ownership Cost of Your Drills– The Operating Cost of Your Drills– The Labor Cost for Drill Operations– The Ownership Cost of Explosives Trucks– The Explosives Supplies Cost– The Explosives Labor Cost– Management and Engineering Support Cost– Penalty Costs

• Wear and Tear• Secondary Breakage• Pit evacuations for Blasting

Why A Spreadsheet?

• Cost Estimating Calculations are generally simple math

• Just a tedious matter of estimating each thing and adding up totals– Spreadsheet avoids calculation errors and

differences in assumptions

The Basic Input

Pick your drill type

Use the table to enter your drill penetrationRate.

Get Other Parameters from your Have a Blast Spreadsheet

Plug Into Sheet

First Task Is To Get Ownership Cost of Drill

• Approach– Figure out how much time it will take to drill

the holes each year– Figure out how many drills you need and how

many hours they will work– Figure out how long the drill will last– Now you have Capital Cost for drills and the

life of the drills you can get an annual cost to own the drills

Our Spreadsheet

Here is the bottom line cost per year $294,606

Deciding How Much Drill Time

• Number of feet drilled– Required tonnage * specific

drilling• (specific drilling is ft of

drilling per ton)• Number of Holes Drilled

– Number feet drilled / length of a hole

• You know how long it takes to set up to drill a hole

• You know how long it takes to drill a foot of hole

• Add the two and you have the drilling time needed

(We had the time for each type of drill to set upOver 1 hole)

(We know how many feet of hole the drill can goAn hour when it is drilling)

Crunching Toward an Answer

• Drill crews don’t work 60 minutes an hour• Drills are not in working order 100% of the time• Drills are not assigned to work 100% of the time

they are available• Use these factors to find out how many hours you

will have to plan for a drill to get what you really need

• Compare that to hours one drill can be available• Now you know how many drills you need

And Getting There

• Divide up the hours between the drills needed• Divide the hours of drill life by the hours worked

per year to get the drill life• A/P converts the capital cost of the drills into

equal payments (with interest) over the life of the drill– We how have the drill Capital Cost broken down on an

annual basis.

Finding Out How Many Hours and Drills

With 8 months, 5 days a week and 10 hour shifts I have 1714 hoursMax available on one drill.

Other Ownership Costs

• Taxes and Insurance– These are commonly approximated as a percentage of

the value of the equipment

– Most mining equipment tends to be 4 to 7% of value depending on what it is.

– Problem is that the value varies with time as the asset grows old and wears out

– Idea is to get the average value at the start of each tax or insurance year

• Industry term is average annual investment.

Spreadsheet Gets Taxes as a Function of Average Annual Investment

Now we have our first cost – What is the Annual OwnershipCost of the drills we must have to meet production?

$294,606 per year

Drill Operations Cost

Energy Cost = Fuel Units/hr * #hours worked * Cost/Energy Unit

More Drill Operating Costs

Repair Cost = Cost/hr * # Hours Worked

The Stabilizer and Recorder Costs

Misc Parts Cost = Stabilizer+Recorder Cost/hr * # Hours

Bit and Steel Costs

Bit and Steel Cost = Cost Per Foot Drilled * # of feet of drilling

Total Up the Non-Labor Direct Drill Operating Costs

Getting Drill Labor Cost

Drill crew is assumed to consist of a head driller and helper.

Drill Labor Cost = (Head Driller/hr + Helper/hr) * # hours for crew

What Is Burden?

• In this case its not the amount of rock to blast• Employer pays

– Wage for hours worked– Also pay

• Social Security Match• Workmans Comp Insurance• Unemployment Insurance• Health Insurance• Vacation and Sick Leave• Other Benefits Company Pays

– Costs for employees that are not paid as a wage/hr are called Burden

• Commonly estimated as a % of work payroll

Getting The Capital Cost of Explosives Equipment

If you are bulk loading explosives you need an Explosives TruckIf using bagged explosive gels a heavy pick-up can be usedIf doing electric blasting need sequential blasting machine.

Calculation method is the same as was used in getting capital costOf drills.

Next You Choose Your Initiation System

• Electric – current passing through wire electric circuits ignite timing elements in caps that set off boosters that set off charge– Quite– Circuits can be tested from the initiation point– Delay Elements are down the hole in caps or from

delayed pulses sent out to circuits from blasting machine.

– Need to practice electrical design to make sure circuits are balanced

– Risk – large wire loops convert Electro-Magnetic waves into electricity which could set off some of the caps

Detonating Cord

• Cord is filled with high explosive• Shot is physically connected with cord and

initiation spreads by blast propagation through the cord.

• Just tying the cord around a booster can set-off the booster as the cord explodes – no caps needed

• Delays are usually fuse sections put into the lines on the surface

Det Cord Dark Sides

• It is very noisy – if you burry it you could break a connection

• Only way to check the system is to check every connection

• Usually have to top prime because det cord will burn powder around it as detonation wave goes through powder

• Pretty much need a direct lighting strike hit to set it off accidentally.

Non-El

• Uses caps in booster like electric• Network is connected by hollow cord with explosive on

the edges– Result is a lot less noise– Won’t burn surrounding powder so you can bottom prime– Also can use air pressure to check connections from one point

• Put delay fused in lines on the surface or down the holes.• Lines don’t generate stray electric currents from EM

pulses

Choosing on the Spreadsheet

Enter 1 for What EverSystem you use.

Indicate theNumber ofBooster per hole

Indicate theNumber ofInitiation points

Identify the number of surface or down hole delays used in yourPattern (needed for non-el and det cord)

Spread Sheet Calculations

Boosters = #boosters/hole*# of holes*cost/booster

Caps = #initiation points/hole*#holes*cost/cap(det cord systems have no caps)

Delays = #of delays/pattern*#of patterns*cost/delay

Final Explosives Cost Calculations

There is also a cost for connectingWires and cords.Spreadsheet uses a % of totalCost approach to estimateTakes subtotal for powder,Caps, boosters, delays and addsA percentage for cord.

It totals up everything to get the annual explosives cost.

We Need Workers to Load the Explosives and Hook-Up the Shot

We know the number of holesThe value of holes loaded per shift is from a number of published articlesA crew is expected to consist of a Blast Supervisor and two helpers

# Shifts needed = # of holes / holes per shift

Cost per Shift = (Sum of Labors cost/hour)*hours per shift

Labor Cost Per Year is = # Shifts needed * Cost per Shift

Engineering and Management Costs Are Estimated as a Percentage of

Other Labor Costs

Spreadsheet Charges Penalties for Impact on Other Operations

Secondary breakage on top of grizzly screen costs money. Take a cost/ton forSecondary breakage * tons needing breakage. (The percentage of your tonnageNeeding secondary breakage comes from Havablast Spreadsheet).

Note – Even if 2ndary breakage is within acceptable limits it still does not happenFor free.

Excess Wear Penalty

When rocks are too big it puts extra wear on trucks, bed-liners, suspensions, loaderTeeth and hydraulics and other things. Spreadsheet uses D50 from the HavablastSpreadsheet and a cost per inch for excess size to estimate. (Note that you couldChange values to tune a sheet like this to a specific operation).

Cost of Suspended Operations

When blasting is to be done, equipment is pulled back and workers not needed forThe blasting work are evacuated from the pit. Equipment not in service still hasAn ownership cost and workers still are paid. Even if the blast may be done in lessThan 10 minutes people slowing down before the blast and then getting “in the groove”After takes time.

(Note – this spreadsheet does not charge a lost production penalty)

Spreadsheet Totals the Annual Costs and Then Divides By the Annual

Tons

Result is the Cost Per Ton for Rock Blasting(The name of the game for your assignment #5 is to have the lowest costAnd a design that still works)

Assignment #5 is now issued