Total Drilling Cost (TDC) includes everything it takes to run a drill:

Labor

Power: fuel or electricity

Drilling tools and supplies

Maintenance labor & parts

Supervision, administration

Cost of equipment ownership (lease, purchase, or rental payments)

With all things considered, drill operating costs can exceed US$300 (Rs.16,800

approx.) per operating hour.

Methods for the determination of Total Drilling Cost (TDC)

Method 1: Utilizes the following concept:

TDC = (Bit Price / Meters Drilled) + (Drill Operating Cost per Hour / ROP)

t

Example #1:

Bit cost = US$5,000

Bit life, meters = 6,500

Penetration Rate = 52 meters/hour

Rig Cost = US$200 per hour

TDC = (Bit Cost / Bit Life) + (Rig Cost /

Pen Rate) [Productivity]

TDC:

= ($5,000 / 6,500m) + ($200/52 m/hr.)

= $0.77/meter + $3.84/meter

=$4.61/meter

Example #2:

Bit cost = US$5,000

Bit life, meters = 8,000

Penetration Rate = 40 meters/hour

Rig Cost = US$200 per hour

TDC:

= ($5,000 / 8,000 m.) + ($200 /40 m/hr.)

= $.625 + $5.00

= $5.63 / meter

$1.02 MORE!

For a bit that is less productive but has

longer life

(52 vs. 40 m/hr., 8,000 m vs. 6,500 m)

Method 2: Utilizes the following concept:

TDC = (Bit Price / Meters Drilled) + Fixed Cost + (Variable Cost / Rate of

Penetration)

Where:

Fixed Cost = Annual Overhead Cost / Annual Meter Budget

Variable Cost = Labor + Fuel + Supervision + Repair Parts + Repair Maintenance

+ Repair Labor

Fixed Cost Calculation: For example: $1.50/meter fixed cost

$1.50 / meter = $900,000 overhead cost for drill fleet / 600,000 annual budget

meters

It includes:

Ownership cost of the drill fleet (lease, rent, purchase payments)

Drill Maintenance budget for fleet (PM parts, fluids, normal wear parts, etc.)

Budgeted drilled meters.

Example A:

Bit cost = US$5,000

Bit life, meters = 6,500

Penetration Rate = 52 meters/hour

Fixed Cost = $1.50 / meter

Variable Cost = $95 / hour

TDC = ($5,000 / 6500) + $1.50 +

($95 / 52)

TDC = $.77 + $1.50 + $1.83

= $4.10

Example B:

Bit cost = US$5,000

Bit life, meters = 8,000

Penetration Rate = 40 meters/hour

Fixed Cost = $1.50 / meter

Variable Cost = $95 / hour

TDC = ($5,000 / 8000) + $1.50 +

($95 / 40)

TDC = $.63 + $1.50 + $2.38

= $4.51

$.41 / meter MORE for every meter drilled!

($246,000 per year based on 600,000 m drilled/yr.)

What is the cost of producing a single blasthole?

Cost = Drill Cost per Hour x Time spent drilling in hrs.

Case-I When penetration rate less Case-II Comparatively high ROP

Productivity costs less! If the ROP is high then cost of drilling per hole is low

With Total Drilling Cost calculated by any method, the productivity (ROP) and

drill cost are the “drivers” of the calculation.

Bit Price per Meter is a small part of the TDC.

Ex. 1, bit price/m, $.77 is 17% of $4.61/m.

Ex. 2, bit price/m, $.63 is 11% of $5.63/m.

Ex. A, bit price/m = 19%, FC + VC = 81%

Ex B, bit price/m = 14%, FC + VC = 86%

The cost of productivity is the largest part of TDC

Spend less time drilling each hole.

Choose faster drilling bits.

Run bits to give high Penetration Rate and reasonable bit life.

This will keep the TDC low.

$$ = $150 per hour x 30 minutes

$$ = 150 x .5

$$ = $75 per hole drilled

$$ = $150 per hour x 20 minutes

$$ = $150 x .33

$$ = $50 per hole drilled

0%

25%

50%

75%

100%

Ex. 1 Ex. 2 Ex. A Ex. B

17% 11% 19% 14%

37% 33%

83% 89%

45% 53%

% C

ost

% of TDC Cost Breakdown

Bit Cost/M Fixed Cost Variable Cost