~~~~~~-~~~~~!!!!!!RISK ANALYSIS IN MINING

Quick guides to the evaluation of orebodiesT. ALAN O'HARA

Manager, Development Group . .Hudson Bay Mining and Smelting Co., LI~'lI~ed

Anglo American Corporation of Canada LimitedToronto, Ontario

ABSTRACT

Annual mining revenue can be computed by formulae relatingmetal prices, smelting schedules, concentrate grade andrecovery to known ore grade and an assessment of coresamples. Operating costs at different daily tonnages are relatedto orebody shape, mining method, milling process and generalplant services. Capital costs are related to sizing of miningequipment, mine development, plant-site topography, climateand accessibility, plant services and personnel housing.

IntroductionA crude guide to the average 1978 cost of mine projects isshown in Figure 1, but the costs of many mine projects havediffered widely from the graphed average costs of $800,000"[0.6 for underground mine/mill projects and $400,000 "[0.6 forlow-grade open-pit mine/mill projects.

High mine project costs and high operating costs arecharacteristic of open-pit mines with high stripping ratios,underground mines with thin orebodies, mills with complexmetallurgy, and projects located in isolated regions with severeclimate, mountainous topography, and lacking access to ex­isting roads, towns and electric power. When none of theseadverse conditions prevailed, the mine project cost wastypically much less than the graphed average cost. Virtually all

T.A. O'Hara

T. Alan O'Hara was born in NewZealand and graduated with B.Sc.,B.Eng., A.O .S.M. and M.S. degreesfrom the Universities of New Zealand,Otago and Missouri. He immigratedto Canada in 1947 and for the next 17years was employed in miningengineering and mine operations at

Cominco Ltd., San Antonio Gold Mines Ltd ., Hudson Bay Miningand Smelting Co ., Limited and Upper Canada Mines Ltd .. In 1946, he joined the consulting engineering firm of Wright

Engineers Limited and , as staff consultant, he was engaged in field in­vestigations, feasibility studies and project design for mining projectsin Canada, Mexico, Australia, Peru, Bolivia, Ireland, France, Moroc­co and Iran.

Mr. O'Hara returned to Hudson Bay Mining in 1970 and for thelast nine years has managed the Development Group of seniorengineers responsible for the evaluation of major mining andmetallurgical projects, and corporate acquisitions for Hudson BayMining and Smelting and Anglo American Corporation of Canada.

Keywords: Orebodies, Evaluation, Open-pit mines, Undergroundmines, Process plants, Capital costs, Operating costs, Revenues,Equipment, Storage, Transportation, Housing , Manpower, Cost for­mulae.

elM Bulletin, February 1980

the conditions likely to cause high capital and operating costsare known from knowledge of the local topography, climate oraccessibility, or can be assessed by tests on core samples, assoon as the orebody has been outlined by drilling .

A more accurate estimate of over-all project capital cost andoperating cost can be made from a summation of items of costafter judging the effect of specific local conditions on eachitem of capital and operating cost. This paper offers guides injudging the effect of local conditions on the sizing and 1978cost of specific items of capital cost and operating cost andoperating cost of mine projects. When the specific items ofcapital cost and operating cost are totalled ~nd measu~ed

against expected net revenue and taxes over the life of the rmneusing the net-present-value or discount-cash-flow methods, theresult should show whether the mine project development isclearly feasible, doubtfully feasible or clearly uneconomic. Ifthe development of the mine project is clearly feasible, or pro­bably feasible, a detailed feasibility study by experienced co.n­suiting engineers should be commissioned before any financialcommitments are made; but if project development appears tobe uneconomic, the time and cost of a detailed feasibility studyis not warranted.

The chief variable affecting all items of capital cost, revenueand operating cost is the daily tonnage of ore that is treated bythe process plant. The guides to capital and operating cost of­fered in this paper are based on the assumptions that the pro­cess plant will be operated continuously for seven days perweek but mining operations and crushing plants will operatefor only five days per week, with only necessary maintenanceservices on weekends. Thus, the daily ore tonnage mined andcrushed will be 40010 greater than the daily ore tonnage milled.

260

240

20

2000 5000 10000 15000 20000 30000

FIG I. T =TONS MINED a MILLED DAILY

87

Estimates of the number of employees required, theoperating costs per ton and some items of capital costs will re­quire adjustment if the plant operates with seasonal shutdownsor if the mine and the mill operate on the same shifts per week.

Capital Cost Estimation-Open PitsIf the ore deposit is judged to be amenable to open-pit miningmethods, an estimate must be made of the amount of soil androck overburden that must be stripped before ore mining canbe started, and an estimate must be made of the average ratioof waste tonnage to ore tonnage when the open pit is produc­ing ore at the selected daily miUing rate.

Site Preparation, Plant and Pit RoadsThe cost of site preparation , as shown in Figure 2, will dependon the area, the topography and tree growth on the site of theproposed open pit , waste dumps and process plant. The areaof the site and length of the access road to be prepared will :typically vary with the square root of the size of the open-pitmine as expressed in terms of the tonnage of ore and waste (Tp)to be mined daily.

Pre-Production Stripping CostsFigure 3 shows the cost of stripping soil and rock overburden,assuming that soil will be stripped by contractors usingscrapers, and rock overburden will be removed by drilling,blasting , loading and haulage of rock by readily available sizesof drills, loaders and trucks. Because the size and condition ofequipment readily available for rock overburden stripping israrely suitable for production mining, the cost of this equip­ment must be amortized over the pre-production period.

~!- ' I I ( I •

20000 40000 60 0 00 80 0 0 0 10 0 0 0 0

Tp =TONS OF ORE a WASTE PER DAY

20

VlzQ

::J~

1.5-;;:; (jll"\'"s ~

~<v<vF , "\'"a: y..~~~ o~[0{ I'!' ffF"\'a:

c, lO r rfS!",<{Y' • ':Jw r,"\Co>- ~ c,oiii

1<-<:>>- I "GOa: r '1'zw Ic,0u, 5 r0 Ai>-~ .3u

.2

0 .1

FIG 2

20

I B

16

14

FIG. 3

OPEN PIT PREPRODUCTON STRIPPING

Cost " $ BOO T~' (Soi l)

" $ B500 T.O' ( Rock)

SOIL OVERBURDEN--12 3 45 6 7

To = TONS OF OVERBURDEN (MILLIONS)

Open-Pit Equipment-Sizing and CostThe most important items of pit equ ipment are usually the pitshovels and haulage trucks, and because the size and numberof haulage trucks depends on the size and number of shovels,selection of shovel size affects all other items of pit equipment.Figure 4 shows the typical selection of shovel size and numberof shovels for different daily pit tonnages. Although some pitsmay have conditions suitable for partial replacement ofshovels by front-end loaders at lower capital cost and improv­ed flexibility, this study assumes that only shovels will be usedfor loading rock.

The size of haulage trucks should be matched against theshovel size so that a unit number of shovel loads fills thewaiting truck. In general, the truck size in tons is about ninetimes the shovel size (in cubic yards) for small shovels, andabout ten times the shovel size for large shovels as shown bythe formula t = 8 SJ.I .

The cost of open-pit equipment is shown in Figure 5 as afunction of tons of ore and waste mined daily (T»)

Figure 5 shows that the two major items in pit equipmentcost are the fleet of shovels, each of which costs about

FlG. 4

SIZES 6 NUMBER OF PIT SHOVELS(5 ) Size = 0 .13 T

,IO. 4

TpO.8No. " 0 007 S

TRUCK $IZ£ (r)= 8 S l 1 In ton s

L-.L.-...L I __ L I ! 1 ! I I I I ' I ! I J r20000 40 000 60000 80 000 100000

Tp c TONS OF ORE a WASTE PER DAY

12

II

10

~ 9Vlzs B..J..J

~ 7z;: 6zw~ 55~ 4!::

a. 3 0007 T,°• S 230 000 Son~ S ;t •

~ 2 (5 is shovel size in cubic yards )VloU I

5000 0000 20000 30000 40000 50000 60 000 70000

FIG.5 (Tp) TONS OF ORE a WASTE MINED DAILY

BB

1000 2000 3000 4000 5000 6000 7000

FIG 6 TONS OF ORE HOISTED PER DAY (T)

Hoisting Plant Sizing and CostThe guides for estimating size and cost of hoisting facilities forunderground mines are based on the assumption that a double­drum hoist will be used. It is recognized that for many largemines hoisting ore from great depths, friction hoists may bemore suitable than double-drum hoists. Nevertheless, double­drum hoists have a technically wider application to shaft sink­ing, to multiple-level service requirements and to all sizes ofmines.

The hoisting plant size and cost shown graphically is based

Rq

Nt ~j Wi ~i roi ~i ~I oj ~ i ~ i mi N i ~ i Wi

~ ! ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ md • DIAMETER OF CONCRETE SHAFT REQUIRED

CONCRETED SHAFT 01

CIRCULAR dO'+ $228 F d .80 000

COST" '[F • Fl. of shaft sunk]

.. F AO...o AO.'8>+ ~B5

COST ' $60,00ECTANGULAR SHAFTTlt/l8ERED R

A' SQ. FT OF RECTANGULAR SHAFT REQUIRED

N ~ m ~ ~ ~ ~ 2 ~ ~ ~ ~ ~ ~N w m ro ~ ~ ~ N N N ~ Q ro ~

~ ~ ~ 2 ~ N ~ ~ ~ ~ ~ ~ ~ ~1000 2000 3000 4000 5000 6000 7000

T c TONS OF ORE TO BE HOISTED PER DAY

320

300

~ 250 ~I-- I--lJJlJJ lJJu, W

u,lJJ 200

~c::« I--::> 150 u,(f) «~

150 14 I(f)

« 13 u,lJJ 0a:: 12 a::« 100 A (sq. tI)· 17 TO." wI-- 11 I--u, [FOR RECTANGULAR SHAFTS WITH SETS]

w« 10 ~I «(f) d (in fl.)' 5.2 TO.I • 15

50[FOR CIRCULAR CONCRETE SHAFTS]

FIG. 7

(f)

5 2.2::J~ 2.0~

~

t« 1.5Viu,o

t 10

§~52~ 0.5

15I--

S

(Fd) of 8- by 8-ft drift or the equivalent in costs for ramps,raises and miscellaneous excavations.Fd (in feet of equivalent 8x8 drift) = 270 T/Wo.8, where T is tons ofore milled daily and W is average stoping width in feet.

The average cost per foot of 8x8 drift, as of January 1979, isestimated to be about $150, including all direct labour andmaterial costs, as well as proportionate amount of general ex­penses (administration, supervision, general supplies, fringebenefits, etc.) incurred during mine development.Capital cost of mine development = S.w,OOO T/Wo.8 (Fig. 8).

It will be noted that "mine development" does not includethe driving of stope development drifts, crosscuts and raises,because this is essentially an operating cost associated with theneed to develop future new stopes to replace those stopes cur­rently in production.

$230,000 SO.73, and the fleet of trucks, each of which costsabout $9,000 to.8' .

Open-Pit Maintenance FacilitiesThe cost of building and equipping facilities for the garagingand maintenance of open-pit equipment will be dependentchiefly on the sizing and numbers of pit haulage trucks . Thehaulage truck size varies directly with TpO.44, and the numberof haulage trucks varies directly with TpO.36. The cost ofmaintenance facilities will vary with the square of haulagetruck size and directly with the number of trucks required, andconsequently the cost of maintenance facilities will vary ap­proximately with the 0.3 power of tons of ore and waste mineddaily, as shown in Figure 15.

Capital Cost Estimates-Underground MinesIf the orebody is amenable to underground mining, knowledgeor" the shape and attitude of the orebody will enable a judg­ment to be made on: the hoisting distance necessary to extractthe lowest ore, and the average stoping width of the mineableore.

If the nature of the ore boundary and the competence of thewall rock are known from drill core samples, a judgment canbe made on the appropriate stoping method.

It is assumed that almost all underground orebodies can bedeveloped by vertical shaft access and lateral levels, but it isrecognized that under some conditions development by inclin­ed ramps may be more appropriate. Nevertheless, the capitalcosts estimated for development by a vertical shaft could beused as a measure of whether or not alternative developmentmethods would be preferable. Generally these alternativemethods would be appropriate only when they are bothphysically feasible and less costly than shaft development.

The capital cost estimates and operating costs forunderground mines are based on the higher productivity at­tained by mechanized equipment for drilling, drifting, raising,stope mucking, drawpoint mucking and trackless haulage.This equipment would be suitable for room-and-pillar stopesover 8 ft high, and for blasthole stopes and cut-and-fill stopesover 15 ft wide. A partially mechanized mine would attainlower productivity for shrinkage stopes, for blasthole stopesand cut-and-fill stopes less than 15 ft wide, and for room-and­pillar stopes less than 8 ft high, and consequently manpowerrequirements and operating costs are substantially higher insuch mines.

Cost of Shaft SinkingIf the ground through which the shaft is to be sunk is known tobe fractured, waterbearing, or weak and incompetent, theshaft will probably need to be a circular concrete-lined shaft.If the shaft sinking will be in strong competent rock, a rec­tangular shaft with multi-compartment shaft sets 8 feet apartand blocked to the bare rock excavation will probably be mostappropriate. The size of the rectangular shaft, or the diameterof concrete shaft, required to hoist the daily tonnage of oreand service the mine is shown in Figure 6.

The cost of shaft sinking, as shown in Figure 7, consists ofmobilization and demobilization costs (which will be virtuallyindependent of shaft sinking distance) as well as unit shaftsinking costs, including shaft supplies per foot of shaft.

Cost of Mine DevelopmentMine development for mechanized mines will consist of rampsas well as shaft crosscuts, ore and waste passes, raises, andmiscellaneous excavations for pump stations, loading pockets,lunchrooms, etc. Because of the larger size of openingnecessary for mechanized mines, the development cost perfoot will be higher than for conventionally equipped mines. Itis assumed that the initial mine development will develop orereserve tons equal to 2000 times the daily mill tonnage. Theamount of mine development is expressed in terms of footage

elM Bulletin, February 1980

on the use of one double-drum hoist for dual duty in hoistingore and providing service facilities to all mine levels 24 hoursper day. In practice, however, the larger mines, hoisting over4000 tons of ore daily, will rarely depend on one large hoist forall skip hoisting and cage service requirements. Normally,

T =TONS PER DAY HOISTED500 10 0 0 20 00 3000 4000 5000 6000 7000

~-=,,~~

~~I,, ~_\ri' _\'1' --,

.t'?o/ [ 0 ]3 0331..... Heod"ame hei<jhl = 0 25 .0 • 5 5 100 • 6 . 3 T .

D =holst drum die

200

"i 180~... 160{!

>-140

u,

;; 120>-:r~ 10 0:rw 80;:,

~u, 600<{w

40:r

20

FIG. II

HEADFRAME HEIGHT vs. T P.0 8 HOIST SIZE

large mines will use one hoist for ore hoisting only and a se­cond hoist for cage service.

The drum size of a double-drum hoist required for hoistingT tons of ore daily from a hoisting depth of h feet is shown inFigure 9. The rated horsepower of the motor installed on thehoist will be dependent on the hoisting rope speed S (in feet perminute), but the formula shown in Figure 9 assumes that theappropriate hoisting speed for hoisting T tons of ore over adistance of h feet will be about 1.6 hOSr°.4.

A hoisting speed slower (or faster) than this will require ahoist drum diameter slightly larger (or smaller) than D as com­puted by the formula in Figure 9, but the motor horsepowerrequired would be somewhat smaller (or larger) than the sizetypically used on hoist s of diameter D.

The motor horsepower suitable for driving a hoist ofdiameter D at a rope speed of S f.p .m, is:

Motor horsepower (HI) = 0.5 (DIl00)2·45

Figure 10 shows the capital cost of a fully equipped double­drum hoist of diameter D and HI motor horsepower, includingall electric equipment. The cost of installing hoists, and thecost of constructing a hoistroom to house the hoisting equip­ment, is also shown in Figure 10. The hoistroom cost is basedon the assumption that the hoistroom will have an area of0.125 D2.2square feet, which will be sufficient for the installa­tion of mine compressors in addition to hoisting equipment.

The height of the head frame must be sufficient to permit theskips to dump into orebins sized in relation to daily tonnagehoisted in addition to a safe distance for skip overtravel andhoist braking distance. Headframe height for different dailytonnages and hoist sizes is shown in Figure II. The weight ofstructural steel (in pounds) in a headframe of height h feet andsafely designed for hoisting ropes of 1/80 of the hoist drumdiameter D will be approximately 0.12 h3 (D11(0)2. The cost oferecting the structural steel, headframe sheathing, piping andelectrical equ ipment, deckhouse, sheaves, cages, skip dumpsand orebins is shown in Figure 12.

Mine Compressor PlantThe size and cost of the mine compressors installed in thehoistroom building complex is shown in Figure 13. The sizeand consequently the cost of the compressor may be somewhathigher if the mine expects to utilize air-powered slushers andmucking machines instead of diesel-powered LHD equipment.

Underground Mining EquipmentThe cost of equipment and equipment installation forunderground development, stoping, loading, haulage, pump­ing, ventilation, crushing and miscellaneous mine services willincrease as the daily tonnage increases, as shown in Figure 14.In the older conventionally equipped mines using portable

10 50 0

HOIST DRUM DIAMETERSIZ IN,~G _

02.8 . 40T + l00ho.5 TO.6

+ho·'T I.2

COST . S 40 ,000 TWoe

W is average ore widt h

o =Hoist dio. in in

T = Tons per doyhoisled

!' =Hoisllng dis!. in f l.

72 " 84 " 90" 100" 110" 120" 1'52" 144" 156"

2000 40 0 0 6000 80 0 0

T =TONS HOISTED PER DAY

.l:l0 IST COSTS

11.:r

~_-::::::::.---

2000 3000 4000 50 00 6000 7000

T= TONS OF ORE MINED PER DAY

Hoist equipment = S 340 0 1 4 H0..2

Hoist ost'n ,. S 40 Ol.e

Hoistroom ,. 50.0940 3. 2

Where .!:! is hoist rrctcr H P

D=HOIST DRUM DIAMETER IN INCHES

2 .0

1.8

.. 1.6....0 1.4CJ)z0 1.2::J-':i! 1.0;;l;

>- .8CJ)0u

. 6

.4

. 2

FIG 10

26

24

22

20

18

16

;; 14

>-CJ) 120o>- 10zw;:,n, 80-'w> 6w0

4

FIG. 9

FIG 8

5000

4000I-wWu,

~

I 3000l-o,w0

t?Z 2000~If)

(5I

".c:1000

90

FIG. 12 h =HEIGHT OF HEADFRAME IN FT. (tosheave ct.) T" TONS MINED PER DAY7000

12000

:rALLATIONQ!i..:OO~ST:.----.",-",-",,-~PR 5

C.F.M. COMFflESSOR CAPACITY6000 8000 102000

0 4

'"u,o

'"5 0 .3:::;.J~

~ 0 .2....su

FIG. 13

0 .1

0. 6

0 .5I

Cost 01 heodlromo comple, I'S0475 hI.· 0'"

o Is hoist diameter in inches

70' eo 90 100' 110 120 ' 130' 140' 150' 160' 170

2 .4

~ 1.6

1.8

2 .0

2 .2

'"z01.4:::Jd~ 1.2;;;t; r ,0

88

~

E 6o«w:I:

4 .01f>o

Zo:J..J

~~ 3 . 0

(f)wf=:JUL1 2 .0wuZ<!ZWf­Z<i 1 0::;: .8u,o 6

f- •(f)o 2U

500 1000 2000 3000 4000 5000 6000 700 0T ' TONS MINED DAILY (UNDERGROUND MINES)

10,000 20 ,000 30,000 40 ,000 50,000 60 ,000 70, 000

FIG. 15 Tp ' TONS ORE 8 WASTE DAILY (OPEN PITS)

T = TONS MINED PER DAY

100 0 2000 3000 4000 5000 6000 7000

FIG. 14

...u, 40o

50

6

~ 20

f-(f)

ou

1.0

jacklegs and stopers for drilling, slushers for stope mucking,mucking machines for drawpoint loading, and rail haulage,somewhat more equipment was required for mines with nar­row stopes. If, however, modern mechanized equipment isemployed whenever the stope width is adequate for its use, thecost of equipping a mine will depend primarily on the dailytonnage required.

Underground MineMaintenance FacilitiesThe cost of constructing and equipping facilities for repair andmaintenance of equipment drilling, loading, haulage andgeneral mine services is shown in Figure 15.

It should be noted that the mine maintenance facilitieswould not include facilities required for maintenance of pro­cess plant equipment or general surface equipment. Most ofthe larger process plant equipment would be repaired withinthe mill repair bay, and only the smaller electrical items wouldbe removed from the mill for repair in the general servicesmaintenance facilities.

Capital Cost ~stimation-Process PlantsPlant-Site Clearing andMass ExcavationClearing and excavation costs will vary .widely depending onthe topography and type of ground to be excavated, but for

similar site conditions costs will vary with the plant-site area,which will be approximately proportional to the 0.3 power ofthe plant tonnage rate, as shown in Figure 16.

As compared with a flat plant site with less than 10 feet ofsoil overburden, excavation costs will be increased by 50070when the plant site is moderately sloping and some rockblasting is necessary to attain a level excavated area; excava­tion costs will be increased by 150% when the plant site issteeply sloping and extensive rock blasting is necessary to at­tain a terraced excavation area for the plant.

Concrete Foundations andDetailed ExcavationThe cost of detailed excavation, compacted backfill, form­work, reinforcing steel, and concrete foundations for the plantand process equipment will be primarily dependent on thevolume of concrete required. Mass excavation will havemodified the localized site topography to levelled areassuitable for plant construction, and concrete volume does notdepend on site topography.

The volume of concrete will, however, depend on the bear­ing capacity of the excavated ground; if this excavated groundis all in sound rock, concrete volume will be minimized, but ifthis excavated ground consists of compressible soil, the con­crete volume and cost required will be substantially increasedby the need for piled foundations and massive concrete slabs

elM Bulletin, February 1980

CONCENTRATOR BUILDINGPLANT SITE CLEARING 8

EXCAVAT ION1.2

... 1.0

LLo

~ 0 8

o::::;....J

~ 0 6zt-lfl

8 0 4

....J

I':!~ 0 2u

Cosrs > $ 40 ,000 T0 3Fs

Where FS " 10 for f10t si tes

" I 5 fo- moderate slopes::: 2.5 for steep slopes

5 .0

40

u,oV>is 3.0:::;..J

~

Z- 2 .0....V>ou

1.0

FIG. 19

lAI\"O C I,------~

Cost " S 30,000 T~' Fel

Wh«e Fel " 1.0 mild clim:rte

1.8 cold climl2e

2 .5 seere d imote

10 0 0 2000 3000 40 00 5000 6000 70 00

T = TONS MILLED PER DAY1000 2000 3000 4000 5000 6000 7000

FIG 16 T = TONS MILLED PER DAY

CRUSHING PLANT , COARSE ORE STORAGE 8 CONVEYORS

T = TONS MILLED PER DAY

CONCRETE FOUNDATIONS BDETAILED EXCAVATION

to support the process equipment, as shown in Figure 17.

Crushlnq Plant, CoarseOre Storage and ConveyorsFor any specific tonnage rate, there could be many differentdesign configurations of primary, secondary and tertiarycrushing units linked by conveyors and ore storage to take ad­vantage of site topography. In general, however, there will bean optimum design that minimizes capital cost in relation todaily tonnage capacity without compromising the availabilityof fine crushed ore for continuous 24-hour-per-day milling,This optimized capital cost will be approximately as shown inFigure 18.

Concentrator BuildingAssuming that concrete foundations have been completed forthe plant, the cost of constructing, sheathing, insulating andheating the concentrator building to house the fine ore bins,grinding section, flotation or 'cyanidation leaching section,thickening and filtration section, as well as offices,laboratories and supplies storage, will be approximately asshown in Figure 19.

The cost of the concentrator building will be substantiallyaffected by the regional climate and winter snowload. In in­creasingly severe climates, building costs will be increased bythe need for insulated sheathing and roofdeck, provision ofheating equipment, structural strength to support snowloading or wind loading, and increased construction costunder severe climatic conditions.

7=5000 6 =

Costs " $ 20 ,000 TO~FcWhere Fe = I 0 sol id rock

= I 8 gr avel / sond:: 3 ~ moist soil

2000 3000 40001000

FIG 17

60

50

t­lfloU

10

lflZ0 3 0::::;....J

~

.~ 20

...4.0

LLo

T =TONS OF ORE MILLED DAILY

4 .0

3 .0

...oV>zo:::;~ 2 .0

~

....:go

1.0

FIG. IS

1000 2000 3000 4 0 00 SOOO 6000

Grinding Section and Fine Ore StorageThe capital cost of installing grinding mills, classifiers, fine orebins and all accessory equipment for storage reclaim and grin­ding on previously prepared concrete foundations will be ap­proximately as shown in Figure 20.

The cost of equipment and equipment installation will be in­creased when the ore needs fine grinding or is diffi cult to grind(i.e ., has a high work index). Soft ores may be considered asores which have a work index below 12, medium ores have awork index of about 15 and hard ores have a work index of 17or greater. The fineness of grain of the ore and the degree ofintergrowth with other sulphide minerals will determine thefineness of grind that will be necessary prior to flotationseparation of the valuable minerals into several saleable con­centrates. The fineness of grind is usually determined bymetallurgical testwork on drill core samples, but a microscopicexamination of core samples will normally suggest whether ornot fine grinding will be necessary to separate several valuableminerals from the gangue.

92

60 PROCESS SECTION CAPITAL COSTS

GRINDING SECTION 8 FINE crlE STORAGE

7000

Cost ' 8 a.ooo T O.T F.

When F, = 1.0 so 11 ores 55% - 200 '"1. 5 mediumores 70 % -200 IIfI

1.8 hord ores 80 % - 200 ""

3000 4 0 00 5000 600020001000

T "TONS MILLED PER DAY

1.0

2 .0

'0

FIG. 2 1

FIG. 20 T" TONS MILLED PER DAY

4.0

' 0 COST · s 2 ,50 0 T OT r,

5 .0

3 0

~ 4 0

(f)

Zo~ 3 0--'::;;:

~ 2 0

f-(f)

8

It should be noted that the costs graphically shown in Figure20 allow for sufficient fine ore storage to permit the mill tooperate seven days per week on ore which has been crushed forfive days per week. If the crushing plant will be operated eachday that the mill is operating, less fine ore storage will be re­quired and the cost of the fine ore storage and grinding sectionwill be reduced by 25070.

Flotation and/or Processing SectionThe capital cost of installing the processing equipment to con­centrate the valuable minerals from the waste in the finelyground ore will depend on the type of separation process andthe degree of complexity in the flowsheet. Figure 21 illustratesthe cost of the process section for several different types ofprocess and flowsheet complexity.

Thickening and Filtering SectionThe capital cost of the thickening and filtration sectiondepends on the volume of concentrates to be thickened andfiltered , which in turn is a function of the process plant ton­nage multiplied by the grade of ore being processed.Capital cost = $5,000 Fr'fO·S, where the filtering factor :Fr = 1.0 for low-grade straight Cu ores .Fr = 1.6 for high-grade Cu ores with recoverable zinc valuesFr = 2.0 for complex Pb-Zn-Ag ores or Cu-Zn-Pb oresFr = 3.0 for cyanided gold ores

Concentrate Storage and LoadingThe capital cost of concentrate storage depend s on the dailytonnage of concentrate T, produced by the proces s plant. Thiscan be computed by multiplying the daily ore tonnage process­ed by the mill recovery and by the ratio of the ore grade (or oregrades) to the concentrate grade (or concentrate grades) .Cost of concentrate storage and loadout = $4,000 T eO.S.

This cost would be appropriate for concentrate storage atthe mill site from which concentrates will be transported to thesmelter at frequent intervals by truck or rail. If, however,ocean shipment of concentrates will be envisaged, a tidewaterstorage and shiploading facility will be rquired. It may bepossible to lease suitable facilities at an existing port; if leasedfacilities are not available, they must be constructed at a costwhich may vary from several hundred thousand dollars for asmall terminal at an existing port to several million dollars fora major terminal and port in a new location. It is not possibleto suggest a rough cost for a tidewater concentrate terminal,because this cost will be greatly dependent on localized condi­tions of land access, tidal range, water depth, shipping access,etc.

PEAK LOAD IN KW

u~oOO eobo .ol>oo I~ 2O~OOO ~ ~ooo 4 0'.000

,he, 000 zOoo x:oo «>00 sooo 7hoo 10000 OPEN PIT 6 MILLUNDERGROUND MINES 8 MIL L

T' TONS MILLED PER DAY

CAPITAL COSTUTILITY SUBSTATION • S 35OIKW)Oej

LV. DISTRIBUTION • S 6()(~)(W)o~

DIESEL GENERAT~S • S 4.~KW)O ~

COAL FIRED GENERATOR · $ 46 .cx:::O'KW)°·

25 (XX) 30 00015 000LOAD IN KW

. 2 7 T O,7 I U~O£AOROcJNOMINE a M IL L I

• 13 6 T 0 5 (CP£N PITa MILL!

20

' 8

'6

,...' 2

I>-0

Ul 10z0:J 8-'~

6;;

...Ul0U

' 0.8. 6

•2

FIG.22

Capital Cost Estimates forPlant Utilities and General Services

Electric Power Supply and DistributionThe peak load for mine I mill plants, as shown on Figure 22, in­creases with increased daily tonnage, but the rate of increase isslower for open-pit mines mining lower-grade ore than it is forunderground mines which typically mine ore of higher graderequiring more complete processing.

The cost of electric power supply depends on the peak loadrequirements and also on whether the power is generated by acoal-fired plant (for large isolated mines) or by dieselgenerators (for small isolated mines), or is supplied by an ex­isting utility through an extended transmission line andtransformer station. The cost of each of these sources of elec­trical power is shown in Figure 22.

If utility power is available, an additional cost may be re­quired to ' extend the transmission line to the plant site. Thismay cost about $60,000 per mile of line. For large mining pro­jects consuming a large amount of electric power, the electricutility will typically install the transmission line and stepdowntransformer station on the assured basis that future revenuefrom mine plant consumption of electric power will repay the

elM Bulletin , February 1980 93

T' TONS MILLED PER DAY ( FRESH WATER REO' D )

1.0

0 9

0 8

0 7u,0

06Ulz0

0 ':::;...J

:E 0 _

;':0 3

f0-Ul0 02U

01

G.P M ( FRES H WATER) • 12 TO&

G P M (RECLAIM WATER) • O.0 26T1.2

PIPE DIAMET ER flNCHES l • 0 .15 (GP M l0 6

COST PER MILE OF PIPE . $ 35Q (G P.M j 0 8

COS T a: FRESH w. PUMPS · S 2300 CG.PMJ O&

COST OF REQ..AJM W PUMPS . $ 3000 (G.PM )O&

r:f!;~~'"...O~

500 1000 2000 3000 4 000 5000 6000 7 000G P M, IMPERIAL GALLONS PER MINUTE

I~ 2000 4000 6000 OOoo.qooo e ,~oo '10:000 ~:ooo yJ.ooo

FIG 2 3 ~.6bo IO,()(X) 1!5.000 20,000 2' ,000 30 ,000

T , TONS MILLE D PER DAY (RECLAIM WATER REO'D )

capital costs of the transmission line and transformer substa­tion. For small mines, however, the mine may have to bear thecost of the extension of the transmission line and substation,either directly or effectively by payment of higher operatingcosts for electric power consumption during the initial years ofoperation.

The capital costs of the low-voltage electrical distributionfrom the main substation to the mine, mill and plant utilitieswill be approximately as shown in Figure 22. This cost will becommon to all types of electric power sources: utility power ,diesel or coal-fi red generators.

Tailings StorageThe capital cost of pipelines and pumps to deliver mill tailingsto the tailing storage area, and the cost of damming the storagearea and preparation of settling and treatment ponds , is alwaysdifficul t to estimate even when there is complete topographicdata on the area selected for tailings storage. The cost of tail­ings storage can be drastically affected by environmental con­straints and by stringent requirements imposed by regulatoryagencies.

If it is judged that an environmentally acceptable tailingsbasin in moderate topography can be developed by dammingwith local material within 2 miles of the mill site, the cost oftailings storage for a mill treating T tons of ore daily will beabout:Cost = $8,000 '[0.5.

This cost represents the cost for which suitable tailingsstorage can be developed under favourable conditions oftopography, accessibility and minimum environmental effects.Capital costs may, however, be many times larger when localtopography is steep and rugged , when the selected tailingsbasin is many miles from the millsite and uphill pumping is re­quired , or when the nature of the tailings imposes extremelystringent requirements for tai lings treatment and containment.

The capital costs may be effectively increased by the ad­ministrative and techn ical costs of preparation of stud ies ofenvironmental impact, planning of several alternative tailingsstorage facilities, and delay and uncertainty in obtaining ap­proval of tailings storage planning.

Water SupplyMines use large quantities of water for mining and milling andmost of this water flows to the tailings storage, from whichwater reclamation may be necessary to avoid downstreampollution. The reclaimed water may be recycled in a portion ofthe mill circuit that is not adversely affected by the reagentcontent of the reclaimed water. The smaller mines frequently

94

operate with fresh water only, whereas the larger mines, whichcould have much more effect on the regional stream drainage,are usually required to minimize their consumption of freshwater by recycling clarified water from the tailings pond .

In the Precambrian Shield area of Canada, where there istypically a plentiful supply of fresh water within a mile of theprocess plant, the volume of fresh water required for a minewhich mills T tons of ore daily is about 121'0.6 gpm.

In the drier areas of British Columbia, where large-tonnagelow-grade open-pit mines have been developed, water conser­vation is critically important and fresh water usage is typicallyonly 2.5 1'0.6 gpm.

Figure 23 shows the typical requirements for fresh water andreclaim water for mines and mills of varying tonnages. Thecost of the pump stations and pipeline cost per mile of pipe arealso shown in the chart in Figure 23. These costs would be ap­propriate to the low-relief topography typical of the Precam­brian Shield area of Canada, but in moun tainous country,where high pumping heads are frequent, the cost of pump sta­tions and pipelines would be much higher.

Capital Costs of General Plant ServicesThese costs include the costs of constructing and equipping thegeneral administration offices, general warehouse, mainte­nance shops for the mill and surface facilities, vehicle garages,security stations and fencing, employee parking lots,changehouses and the cost of general-purpose vehicles. Ingeneral , these costs will vary as a function of the total numberof company employees, which is not necessarily uniformlyrelated to the plant capacity. The numbe r of employees re­quired for differing types of mining, milling and general ser­vices can be computed as described under operating costs, and,if this number is N employees, the total capital costs of generalplan t services can be computed as a function of N:Costs of general plant services = $8,000 NO.8.

Capital Cost of Access RoadIf the mine is not readily accessible by an all-weather road , aroad suitable for subsequent truck haulage of concentratesmust be constructed before major project construc tion can getunderway. A 30-ft-wide gravelled road with adequatedrainage, curvature and gradients to permit satisfactory con­centrate haulage conditions will cost roughly $200,000 per milein regions with moderate topography, some rock outcrops andlocal sources of gravel. Under ideal conditions of flattopography, absence of exposed rock and well-drained gravel­ly soil, the cost per mile would be less; alternatively, in steeptopography requiring heavy rock cuts, the cost of road con­struction could be much greater.

Bridges to span creeks or rivers where the total bridge lengthis L b feet will cost approximately $130 Lbu (for each bridge).

Townsite and Housing CostIf the mine site is within commuting distance of an existingtown which has available housing and acceptable communityfacilities for N mine employees, the cost to the mining com­pany may be limited to provision of housing for key staff only.Th is cost may be:Existing townsite cost = $4,000 N.

Whenever a mining project is to be developed in an isolatedregion , a decision must be made as to whether the minetownsite will be developed as a bunkhouse camp (lower capitalcost, high operating cost and transient work force) or as adeveloped townsite for family living (high capital cost, moreattractive lifestyle, more permanent work force). Because atownsite must be of a certain minimum size before it can ser­vice the schooling, medical and recreational needs of families,the family townsite will be preferred only for mines employingin excess of 100.

When the number of employees (N) is less than 100, thebunkhouse camp will consist of single accommodation, mess

Estimation of Operating Costs

Operating Personnel-Open-Pit MinesThe number of men employed in open-pit operations, asshown in Figure 25, typically varies as the 0.5 power of thetons of ore and waste (Tp) mined daily, but the number of menrequired on truck haulage and road maintenance tends to varywith the 0.7 power of daily tonnage chiefly because, in thelarger-tonnage pits, haulage distances are generally longer, and

needed to attain mineral unlocking, by the grade of the orebeing milled and by the response of the mineral to the specificconcentration process. Assuming that the valuable mineralscan be fully separated from associated waste minerals at aneconomic fineness of grind, the recoveries and grades ofmetallic concentrates and precious metal ores will be about asshown by the formulae shown in Table I. Somewhat higherrecoveries will be attainable if the metallic ores are coarsegrained, and lower recoveries will be inevitable if fine grindingdoes not fully unlock closely associated minerals, or if thevaluable sulphide minerals are coated with oxidized mineralsor slimes.

Net Smelter Revenue forBase Metals (as of January 1979)The net smelter revenue (at the mine), in $ per ton of basemetal concentrates grading G% metal, is a function of themetal content of the concentrates (either a percentage P or afixed unit deduction U) multiplied by a standard publishedmetal price (M) less a specific deduction d in cents per lb (toallow for cost of refining and selling the smelted product), lessa smelter charge S in $ per ton, less a freight cost F in $ per tonof concentrates transported from the mine to the smelter.$ per ton = (PIlOO) $20 (G-U) (M-d)/IOO - S - FTypical Values:

Where P = IOOl1Jo for Cu, 9511Jo for Pb, 8511Jo for ZnU = 1.3 for Cu, 3 for Pb, 0 for ZnM = 9O¢ for Cu, 52¢ for Pb, 39¢ for Zn (as of January 1979)d = 12.0; for Cu, 12.0; for Pb, 2.5¢ for Zn (as of January1979)S = $60 for Cu , $50 for Pb, $145 for Zn (approx.) (as ofJanuary 1979)F = freight cost per ton of moist concentrates from mine tosmelter, assuming that concentrates are trucked Tm miles byroad, Rm miles by railroad and (if applicable) shipped by15,OOO-ton freighter for Do days of loading, ocean travel andunloading.Approximate freight cost F in $ per ton of concentrates= $0.17TmO.9 + $0.26 RMO.7 + $0.80 Do.

70

---

60

BLA 5 THOlE STOPES

SHRINI( AGE STOP£S

cur a f iLL S TOPES

ROO.,. 8 P\lLAR STOPES

ST OPE WIDT H I,.. fEE T

DIP Of" OREBOQY

"I. DILUTI ON

50

W

A'

70

~

60

WO'lin A-

4 030

STOPE WIDTH IN FEET

20

"I.

JO

25

>-lD 20

w0:0u,0

15Z0;:::::>..J0

10

WC)<I>-Zw

5u0:W0.

10

FIG 24

Estimation of Revenue

facilities and leisure facilities for 950/0 of the employees at$12,000 each as well as family accornodation for the remaining5%, consisting of senior staff at $50,000 each, and minimumtownsite facilities at 20% of housing cost :Bunkhouse townsite cost = $20,000 N.

A family townsite accommodating 65% of the marriedemployees in detached or apartment housing with facilities forschools, commercial, medical and recreational needs of thecommunity as well as single accommodation for 35% of theemployees and housing for townsite service employees willcost:Family townsite cost = $55,000 N.

Project Overhead CostsA. Feasibility studies, design engineering and technical plan­ning: 4% to 6% of all mining pre-production costs , sitepreparation, excavation and road building costs, as well as 6%to 8% of all other project costs.B. Project supervision, contract management, expediting andgeneral construction facilities, including camp costs : 8% to10% of all direct project costs.C. Administration, accounting, legal and pre-productionemployment of key operating staff: 4% to 7% of all directproject costs.D. Working capital for capital spares, supplies inventory andoperating costs for the period between plant start-up andreceipt of smelter payment for initial concentrate shipment;typically 4 months of operating costs on full production basis.

In general, the higher percentages for design engineering,project supervision and administration would be applicable tosmaller mine projects, whereas the lower percentages would beapplicable to major mine projects costing $100 million ormore.

Mill RecoveryThe recovery of metallic minerals by flotation, cyanidation,leaching or gravity methods is affected by the fineness of grind

The revenue produced from mining and milling ore from anorebody that contains geologically estimated reserves of TR

tons grading GR% metal is adversely affected by four factors :

I. Not all the ore reserve tonnage will be recoverable in prac­tice by the planned type of open pit, or the practical shapes ofunderground stopes. It is difficult to offer any guide to thepercentage of ore reserves that can be recovered by practicalopen-pit or underground stoping methods, because thispercentage will vary greatly depending on the irregularity ofthe shape of the ore reserve blocks.

In general, if the ore reserve blocks are reasonably regular inshape and dip and are above the planned open-pit limits or thelowest underground level, a mineable recovery of over 95% ofthe ore reserve blocks could be expected. .

2. Dilution of waste rock off the underground stope walls willvary with the type of stoping employed, the width of the stopein feet, the angle (A0) at which the stope is dipping and thecompetence of the stope wall rock. For stope wall rocks ofaverage competence in relation to the type of stoping methodemployed , the dilution (D%) expressed as a percentage ofwaste rock in the mined ore will be approximately as shown inFigure 24.

When the stope wall rock is regular and competent, dilutionmay be only 0.7 of that shown in Figure 24, but if it is unusual­ly weak and incompetent the dilution could be as much as 1.5times the dilution shown .

Dilution has an adverse effect on operating costs becausemore tons must be mined to yield the same metal content as theundiluted ore, but it also has an adverse effect on revenuebecause the metal grade of each ton of diluted ore is reducedand mill recovery will consequently be somewhat lower thanfor undiluted ore.

elM Bulletin, February 1980 95

TABLE 1. Base metal ores milled by flotation (head grades in %)

Recovery FormulaeTypical

Cone. Grade

Cu in straight chalcopyr ite oresin oxidized copper ores (sulphides)in oxidized copper ores (oxides)in copper-zinc oresin lead-zinc-copper ores

MoS2 in straight molybdenite oresin copper-moly ores

Zn in straight sphalerite o resin lead-zinc ore sin copper-zinc oresin copper-lead-zinc ores

Pb in straight galena oresin lead-zinc oresin copper-lead-zinc ores

Miscellaneous OresTungsten ores (gravity separat ion)Nickel in nick el-copper oresUranium ores (flotation-leaching)Iron ores (gravity-magnet ic)

Precious Metal Ores and Precious Metals inBase Metal Ores: (head grades in oz per ton)

Gold in siliceous oresin pyr ite oresin base metal ores

Silver in straight silver oresin base metal ores (-1.0 oz/t)

R 100% (1-0.07 Cu·0.8)

sco, = 100% (1-0.08 Cus·0.8)

ncu, = 100% (1-0.40 Cuo·0.3)

R 100% (1·0.16 CU-Q8)R 100% (1-0.22 Cu·0.8)

R = 100% (1-0.04 MOS2·0 8)

R 100% (1-0.06 MOS2·0 8)

R 100% (1-0.25 Zn·0.6)

R 100% (1·0.32 Zn-o·6)

R 100% (1-0.45 Zn·0.6)

R 100% (1-0.55 Zn·0.6)

R 100% (1-0.13 Pb·0.8)

R 100% (1-0.18 Pb·0.8)

R = 100% (1-0.28 PbO.8)

R = 100% (1-0.33 W03·0.5)

R = 100% (1-0.20 Ni·0.6)

R = 100% (1-0.16 U30S·0.S)

R = 100% (1-1.5 Fe·0.6)

R = 100% (1-0.013 AU·o.s)R = 100% (1-0.03 Au·0.8)

R = 100% (1-0.3 Au ·0.8)

R = 100% (1-0.22 Ag·0.6)R = 100% (1-0.40 Ag·0.6)

28.5% CuVariableVariable25.5% Cu22.0% Cu88.0% MoS2Variable

56% Zn53% Zn52% Zn50% Zn60% Pb53% Pb45% Pb

75% W0310% Ni77% U308

65% Fe

ProcessCyanidation onlyFlot.! Roast.!Cyan.FlotationFlot.!Grav. Separat ionFlotation

600 MIN E OPERATI NG CREW

500

700060004 000 50003000

T = TONS MINED PER DAY

20001000

100

400

20 0

FIG. 26

ct:W:;:o~ 300

<lL

300

26 0

<n 220

"""">-0..J 180a.::;;url-ii 140zuja.0u, 1000

g60

20

consequently the ratio of men employed in haulage as com-pared with those employed in other pit operations tends to in- TABLE 2. Underground mining personnelcrease in larger open pits.

Percentage Distribution of Mine Crew

staff - $lO.40/hr, and an alIowance of 350/0 of basic pay hasbeen added to allow for fringe benefits . Cost of supplies perton decreases less rap idly than labour costs as the daily minedtonnage increases.

Operating Personnel­Underground MinesThe number of men employed underground, as shown inFigure 26, varies for different stoping methods, different stopewidths (W in feet) and different daily tonnage rates (T in tonsper day) (Table 2). .

Operating Costs-Open-Pit MinesThe operating costs per ton for open-pit mines are shown inFigure 27. Labour costs are based on basic pay rates asfollows: operators - $9.50/hr, maintenance - $8.90/hr, and

DevelopmentStopingMine ServiceMaintenanceMine Staff

Blasthole Cut & Fill Shrinkage Room & Pillar17% 12% 9% 14%23% 31% 31% 45%22% 20% 29% 12%23% 23% 18% 13%15% 14% 13% 16%

100% 100% 100% 100%

96

~o

LABOUR/ J O~:> t ~ t'- qQT °"w° ~

SUF'PLI£S/TON _~2.Q..yOI W 0 'l

Vi IS SToPt:. ·...,IOTH IN ~1

,000DAY

I

40 0 01

! OOO

CUT 80 F ILL M IN ING COS T / TON

T· TONS MI NED PER

I.

rt G 2 9

>-v>0 ' 1u

:j20

"" Ie

rr e.u;a

100,00080 ,00060.000

SUPPliES COST

OPERATING COSTITON

LABOUR COST . 58 ~J Tp.o, . 3'91T ,,· 0 3

SUPPLIES COST " 13 " 0 l'p ,O'. 124 1',,'° ' - .')Olp 0 2

4 0 .000

T ~ TONS OF ORE AND WASTE PER DAY

20 ,000

FIG 27

10

02

~ 08

z~

0 60::W0-

l-V} O 'oU

OPEN PIT MINES

BLASTHOLE MINING COST; TON24 SHRINKAGE MINING COST; TON

20

18ffl

Z 16

0"W

Z~ 12

Z 10

~0:: 8W0- 6

I-

13 4U

LABOUR COST/ TON • ~lTW)o ,

$UPPUES COS TI TON •~

T • TONS MINEO PER OAY

W · STOPE WIDTH IN FEET

22

20

18

16

~ 14Z

~12

z~ 10

a:U;<t 8

>-Ulo 6u

? lJPP lICS COST _ ~ fr WID[

SUPPLIES COST 2'0 rr. WIDE

~~~~ ~ LA BOUR COST

!~? ':o l . SUPP U ES COS T

[ SUPP\' I[S cosT - 10 II weeI

1000 2000 3000 4000 5000 6000 7000

T = TONS MINED PER DAY

FIG 28T = TONS MINED PER DAY

FIG. 30

1000 2000 '000 4 000 5000 6000 7000

Administration and GeneralServices- EmployeesThe employees required for administration and general plantservices will tend to vary as a function of the total number of

T ' TONS MINED PER DAY

W • ORE WIDTH IN FEET

7000600050004000

COST/ TON

S 205 soL A BOUR • TO ~w0 5

SUPPU ES · ~~~ :~ 2

ROOM B PIL LAR MININ G

1000 20CXl

Z 18

o~ 16

:;;: "

z~ 12

ffi '00-

I-IJl

8 6

... 20

FIG 3 1

Operating Costs-Underground MinesThe operating costs for mines using blasthole, cut-and-fill,shrinkage or room-and-pillar stoping methods are shown onFigures 28 to 31. Labour costs are based on average basic payrates of $8.50/hr for mine crew and $10.25/hr for mine staff,with an allowance of 35l1Jo to cover fringe benefits. The cost ofsupplies for development, stoping and general mine servicestypically varies with the number of men employed in thesefunctions .

Employees Required-Process PlantsThe number of mill employees and mill staff is shown in Figure32 for differing process flowsheets. Typically, mills treatinggold ores will require more employees in the cyanidation pro­cess than mills using flotation , and mills using selective flota ­tion to produce two or more concentrates will require moreemployees in the flotation section than mills which produceonly one flotation concentrate.

Mill Operating Cost per TonThe operating costs of mills using differing processes areshown in Figure 33. Labour costs are based on an average payof $7.40/hr for mill crew and $9.50/hr for mill staff, plus 35%to allow for fringe benefits. Grinding and 'cru shing suppliesnormally constitute the largest item of mill supplies, and arealso the most variable in terms of cost per ton because of dif­ferences in hardness and fineness of grind required for dif­ferent ores.

elM Bulletin, February 1980 97

A. Electrical services-wages

B. Surface plant servicesC. Townsite employees

Administration & General Services­Operating Costs per Day

= $68 (0.03 to 0.08 Nm)(depending on type of electricpower)= $53 (0.04 Nm)= $50 (up to 0.05 Nm) (de­pending on townsite type)

D. General administration = $85 (0.07 Nm)

E. Fringe benefits: 35010 of above wages and salaries.F. The electric power consumption and cost of electric power is

shown in Figure 34 for underground mines and mills, and foropen-pit mines and mills. Most of the electric power is usually con­sumed in the process plant, but the underground mine hoistingplant and compressor plant could be a significant consumer ofelectric power. Open-pit mines normally consume only a smallfraction of the electric power required by the mill.

G. Supplies-general plant services = $6 TO·s per dayH. Townsite operating cost

(a) = $13 Nm (bunkhouse camp subsidy)(b) = $ 5 Nm (subsidized family townsite)

I. General administration expenses, including office and warehousesupplies, telephone, travel expenses, property taxes, insurance,and legal, auditing and consulting fees:Cost per day = $4 Nm

staff, operating crew and maintenance crew in the mine andmill, and will be relatively independent of the tonnagethroughput of the mine and mill (except insofar as the tons perday influences the size of the mine and mill crew).

Assuming total staff and crew of the mine and mill = Nm men

Employees required:A. a) Electrical services = 0.03 Nm (power supplied by utility)

b) Electrical services 0.05 Nm (power diesel generated)c) Electrical services = 0.08 Nm (power generated by coal-firedplant)

B. Surface plant services & road maintenance = 0.04 NmC. (a) Townsite employees = none for existing town

(b) Townsite employees = 0.03 Nm (bunkhouse-type mine camp)(c) Townsite employees = 0.05 Nm (family townsite-subsidized)

D. Concentrate transport (contracted out)E. General administration = 0.07 NmTotal employees N = Nm + (0.14 to O.24)Nm, depending on type oftownsite and electric power supply.

Notes on Computation of FormulaeVirtually all the formulae shown in this paper for estimatingsize, quantity and cost of the major components of a mine pro­ject have been developed by the author from detailed data onmany Canadian and foreign mining projects over the last fif­teen years. Size and quantity data from foreign projects wereused in determining requirements for mine projects under dif­fering physical conditions of climate, topography, orebodyshape, etc., but cost data from foreign projects were utilizedonly when unit costs were judged to be comparable to Cana­dian unit costs . Cost data from completed Canadian mine pro­jects and foreign projects with comparable unit costs havebeen escalated to 1978 by using appropriate indices, and ex­pressed in terms of 1978 Canadian dollars, which had anaverage 1978 exchange rate of $1.00 Canadian = $0.877 U.S.

Most of the operating cost data utilized in computingoperating cost formulae were from Canadian undergroundmines in the Canadian Precambrian Shield, or from open-pitmines in Western U.S.A. and Canada. Operating cost datafrom foreign mines, where the cost of labour and supplies wasvery different from that of North America, were not used incomputing average operating costs, but foreign data wereutilized in analyzing trends relating consumption of suppliesand labour to increases in tonnages mined and milled.

The relationships between mine project requirements andcosts relative to plant capacity, operating costs of supplies andlabour relative to daily tonnage mined and milled, andoperating performance and mill recovery relative to mill-headgrade, were determined by computerized statistical analyses of

15 000

7000

70 0 0

60C0

6000

12 000

METAL S

OPEN PIT MINES 8 MILLS

POWER COST/ TON

, 9 1 00 OI[SH POW£ATO'

I ~6r Cl».L FIRED POWER

S ~~ ~o ~ I ~~T;' I IPOWE R

5000

5000

4 000

4000

MILL OPERATI NG COST/TON

<'(

LABOUR SUPPl..I£S

SIMPLE BASE METALS , so r?" S 18 8 r O.)

COMPLEX BASE METALS S93r{)~ S 2 1 5 r oO,3

GOLD ORES S 97r° :S , 15. 2 r -0 3

Co"I (

sono

2000

T " TONS M ILL ED PER DAY

20 0 a

T " TONS MILLED DAILY

3000 5000 7000 10 (X)()

T ,TONS MILLED PER DAY

PROCESS PLANT EIYLPLOYEES

1000

1000

UNDERGROUNDMlli.fS.J:\~POWER COST/ TON

1000

~ DIESEL POWER

W ~II;I~~IIPOWER

~

~

w>

~~

k0

txwrn

3z

20

T

n G 32

FIG. 34

S 14

0: 0 8

'"a.

12

4 0

0 2

owj 10

~

>­Vlou o.0:

~U 0 4Q'>-e...J

'"

'"3 0

~

Z0f-

rzwD- 20

f-(/)0U

(!)zta::w

1011.0 r

FIG 33

98

the best fit of the data to an equation of the form Q = K'P,where Q represents the actual data on quantities required orcost, and T represents the tonnage rate, milled head grade orother physical condition causing changes in quantities or costs.

The x values were determined to yield the lowest range ofvariation in K values across the widest range of T values forwhich reliable data were available . The x values tested werewithin a relatively narrow range which was judged to be consis­tent with technical considerations and operating exper ience.Whenever changes in the quantity Q were judged to resultfrom simultaneous changes in two physical cond itions T 1 and

Ti, the K, values were first determined for the most influentialcondition T 1 to fit Q = KIT." and then changes in the K.values were computed to fit the equation KI = K2T2Y, so thatQ = K2T2YT\' where K2 is a constant.

Because of the inevitable dispersion of data, themathematical analyses did not rigorously consider each datapoint of equal value, but judgment factors were utilized inweighting data from individual mine projects according to thepresence or absence of localized conditions that would result inunusually high or low values for costs or quantities.

International conference onenergy and the environment

Envitec 80, which will be held at theDusseldorf Fairgrounds (West Germany),February 11-15, 1980, is the world'slargest and most comprehensive en­vironmental technolog y exposition. Dur ­ing the fair, an international conferencewill be held on February II, 12 and 13,1980.

This meeting will bring together leadingauthorities from all over the world whowill present the latest developments in en­vironmental and energy conservationtechnology. It will cover a wide variety ofsubjects that have a direct impact onmany of the world's common problems .

The speakers will represent govern­ment, industry, research and lead ingacademic institutions from all over theworld. The subjects cover energy and en­vironmental policies, current state-of-the­art environmental processing technology,development of alternative energy sourcesand their impact on the environment, coalgasification, industrial pollution control(toxic gas, dust control, chemical wasteremoval and disposal), refuse disposaland recycling, refuse-fueled power plants,radioact ive waste disposal, new energy­saving heating methods (new types of heat

pumps, solar energy systems), alternatemethods of power for both commercialand private vehicles (including newautomobile engine design), air, water andnoise pollution control, and other sub­jects that have a direct bearing on today'senvironmental needs .

Thi s comprehensive conference dealswith all aspects of the environment asrelated to international, community andindustrial needs . It will provide new ap­proaches and immediate solutions tomany different individual problems. Theassembly of the world's leading author­ities on energy and the environment is ofimportance to anyone directly or indirect­ly involved with saving the quality of theenvironment. All presentations will besimultaneously translated into English aswell as other languages.

The Envitec 80 International Trade Fairwill attract over 30,000 visitors from over50 different countries. The visitors willrepresent a high-level international au­dience made up of industry execut ives,government (local and national) officials,and research and academic inst ituterepresentati ves who will com e · toDusseldorf to seek solutions to current

and long-range environmental and energyproblems. The fair will include over 400different exhibit s of equipment, processesand services covering every aspect of en­vironment protection and control techno­logy.

There will also be an EnvironmentInfo-Center during the full five days ofEnvitec 80, which will allow an exchangeof information among industry, govern­ment and science. The Environment Info­Center will offer academic institutes, in­dustry associations, government officialsand other authorities in the field an op­portunity to present the results of researchas well as new operational technology. Itwill include open discussions with an ex­change of experiences and viewpoints.

Exhibitors' seminars will also be heldeach day during Envitec 80. Theseseminars will allow the exhibiting com­panies to present and demonstrate newtechnology and procedures coveringspecial subjects. As small-scale forums,the seminars will cover specific subjectssuch as air pollution control, water pollu­tion control, noise abatement, solarenergy, radioactive waste disposal , etc .

Workshop on the forming ofaluminum sheet, plate and shaped products

A workshop on the form ing of alum inum,sheet, plate and shaped products will beheld March 18-19, 1980 at the LosAngeles Hilton, Los Angeles, California.

This new workshop will be staged bythe Society of Manufacturing Engineersand co-sponsored by the AluminumAssociation and the National Associationof Aluminum Distr ibutor s.

The emphasis of this two-day event willbe to increase the productivity ofaluminum users by providing practicalguidance on the selection, handling andforming of aluminum mill products. Theworkshop will be divided into four ses­sions:Session I. A technological base includingindustry nomenclature and terminology,

elM Bulletin, February 1980

alloys and tempers, material handling,finishing and segregation, and recoveryfor recycling.Session II. Selection and application oflubricants for the forming of aluminummill products will be detailed. Cutting ofaluminum will cover the classification ofcutting operations, blanking, tool design,force and clearance requirements, andequipment applications.Session III. Roll forming technology andsupport equipment, 'including general ap­plications, power specifications, tooldesign and equipment requirements, willbe covered. Bending and forming of ex­truded shapes and tube products will treatbend limits of particular alloys.Session IV. Press brake forming will in-

elude factors in choo sing and using pressbrakes to form alum inum, theircapabilities and limitations, and part, tooland die design . Drawing aluminum sheetwill cover stages of draw ing, charac­teristics and defects, blank development,redraw, complex drawing and secondaryoperations.

The fee for this two-day program is(U .S.)$195.00, covering all sessionmaterials, breaks and luncheons, and aspecial idea exchange reception plannedfor March 18, 1980.

For further information, contact DavidJohnson at the Society of ManufacturingEngineers, One SME Drive , Dearborn,Michigan 48128.

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