Mine Design and Costs, and Their Impact on Exploration Targets
Jean-michel Rendu, Scott Santti, Phil Hansen, Dan White, 2005. "Mine Design and Costs, and Their Impact on Exploration Targets", Wealth Creation in the Minerals Industry: Integrating Science, Business, and Education, Michael D. Doggett, John R. Parry
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Over the last 20 years, utilization of mineral resources has improved dramatically following changes in mine technology and operating practices, resulting in lower costs and increased productivity. Improved deposit modeling methods, better understanding of geotechnical constraints, optimized mine designs, automated production scheduling, new methods of ore control, progress in the design of blasting, loading, and haulage equipment, and changes in operating practices—all contributed to better utilization of manpower and equipment and significantly lowered production costs. Safety and environmental concerns are an integral part of mine design, construction, operation, and closure. But to reap the benefits of these changes, early understanding of the geologic, geochemical, mineralogical, metallurgical, geotechnical, and hydrological properties of mineralized deposits and surrounding areas is increasingly critical.
Assumptions concerning what makes a viable exploration target must always be challenged. Cutoff grades can be lowered. Large, low-grade deposits, including halos around old mines, are viable exploration targets, and small underground deposits still remain economical to mine. Deeper deposits can be considered. Difficult geotechnical environments can be mined safely. Greater care must be taken in the early definition of the type, quality, and quantity of geologic information, which must be collected before a decision is made to open a new mine. Ore control practices are critical to the success of most operations and require ongoing contributions from mine geologists. Successful closure is dependent on attention being given to geologic input throughout the life of the project. Open communications between geologists, mining engineers, metallurgists, environmental engineers, and operators are more important than ever.
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Global political and economic developments shape both the demand for minerals and primary metals and their supply. Overall, demand has moved broadly in step with economic activity over the past 30 years. Notwithstanding the collapse of the Soviet Union and Eastern Bloc countries, demand grew more rapidly in the second half of the period than the first. The performance of individual products within this general trend largely reflects the specific nature of their main end uses. The geographic center of demand has shifted away from the mature industrial economies of North America, Western Europe, and Japan toward the newly industrializing countries of the Pacific Rim, China, and India. Mine production rose with demand, but not always in precise step. New capacity was required not just to meet demand, even where that was static, but also to offset the continuing effects of ore depletion. There were also changes in the location of production in response to geopolitical forces, the depletion of ore reserves, and the changing economics of extraction and processing. The number of mines contracted, especially during the 1990s, and the scale of mining operations was increased in order to achieve the requisite cost savings. Prices fluctuated in response to changing balances between supply and demand, trending downward from the early 1970s until the early 2000s. Most products witnessed at least one sharp price spike during the period, usually with continuing repercussions. Prices picked up from 2003, but generally not back to their earlier peak in real terms. Profitability varied according to the products concerned. In many years the average rates of return on capital employed have been insufficient to cover the risks involved.