Skip to main content
Conference Proceedings

Mine Planning and Equipment Selection (MPES) 2010

Conference Proceedings

Mine Planning and Equipment Selection (MPES) 2010

PDF Add to cart

Economics of Mine Planning and Equipment Selection

This paper examines some of the fundamental economics of mining - in particular, for optimisation studies, for production rate determination and for reserve estimates. It includes introductory discussion on the principles as to how economics drives mining investment decision-making, applicable to the optimising of pit shapes and production, or truck fleets, or any other part of the mine. The main part of this paper looks at the decision to start-up a mine and why the optimum' production rate to start-up a mine is not the point of lowest cost according to traditional discounted cash flow (DCF) analysis. The optimum production rate is usually substantially less than this rate. The paper recognises the difference between typical mining investments and investments in other industries that do not have the unique characteristics of mining and the problem of uncertainty resolution. It examines the marginal revenue effects, the marginal cost of capital and the value of a real option to expand pending uncertainty resolution as determinants of optimum initial production rates. The final part of this paper looks at applying these principles to renewable and non-renewable resources. It examines mine life and reserve estimates from an economic perspective._x000D_
FORMAL CITATION:Runge, I C, 2010. Economics of mine planning and equipment selection, in Proceedings Mine Planning and Equipment Selection (MPES) 2010, pp 13-22 (The Australasian Institute of Mining and Metallurgy: Melbourne).
Return to parent product
  • Economics of Mine Planning and Equipment Selection
    PDF
    This product is exclusive to Digital library subscription
  • Economics of Mine Planning and Equipment Selection
    PDF
    Normal price $22.00
    Member price from $0.00
    Add to cart

    Fees above are GST inclusive

PD Hours
Approved activity
  • Published: 2010
  • PDF Size: 0.153 Mb.
  • Unique ID: P201011004

Our site uses cookies

We use these to improve your browser experience. By continuing to use the website you agree to the use of cookies.