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Statistical methods of estimating mining costs

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Abstract

Until it was defunded in 1995, the U.S. Bureau of Mines maintained a Cost Estimating System (CES) for prefeasibility-type economic evaluations of mineral deposits and estimating costs at producing and non-producing mines. This system had a significant role in mineral resource assessments to estimate costs of developing and operating known mineral deposits and predicted undiscovered deposits. For legal reasons, the U.S. Geological Survey cannot update and maintain CES. Instead, statistical tools are under development to estimate mining costs from basic properties of mineral deposits such as tonnage, grade, mineralogy, depth, strip ratio, distance from infrastructure, rock strength, and work index. The first step was to reestimate "Taylor's Rule" which relates operating rate to available ore tonnage. The second step was to estimate statistical models of capital and operating costs for open pit porphyry copper mines with flotation concentrators. For a sample of 27 proposed porphyry copper projects, capital costs can be estimated from three variables: mineral processing rate, strip ratio, and distance from nearest railroad before mine construction began. Of all the variables tested, operating costs were found to be significantly correlated only with strip ratio.

Suggested Citation

Long, K.R., 2011, Statistical methods of estimating mining costs, in SME Annual Meeting and Exhibit and CMA 113th National Western Mining Conference 2011, Denver, CO, 28 February 2011 through 2 March 2011, p. 147-151.

Publication type Conference Paper
Publication Subtype Conference Paper
Title Statistical methods of estimating mining costs
ISBN 9781617829727
Year Published 2011
Language English
Larger Work Title SME Annual Meeting and Exhibit and CMA 113th National Western Mining Conference 2011
First page 147
Last page 151
Conference Title SME Annual Meeting and Exhibit and CMA 113th National Western Mining Conference 2011
Conference Location Denver, CO
Conference Date 28 February 2011 through 2 March 2011
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