Simple Cost Charts
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Simple rules of thumb are useful in helping to discriminate between economic and uneconomic ore deposits prior to investing in expensive exploration and test work normally required for a proper feasibility study. The most successful rule of thumb, pioneered by Alan O'Hara, relates mining costs to mining rates using data from operating mines based on the exponential regression equation Y=aX^b where X is the independent variable upon which the cost relationship is based - in this case the production rate - and a and b are constants estimated by the regression of X on Y. Y is the unit cost.

This approach gives order of magnitude accuracies of +/- 30% to 50%, typical of preliminary estimates sufficient for budgetary authorization and discrimination between competing ore targets. The usefulness of such estimates is greatly enhanced by timely updates of the input data which can shift quite rapidly because of exchange rate fluctuations and jumps in fuel costs.

Using data from well over 300 mining operations as modelled by minecost, rule of thumb or filter curves have been estimated for the major mining regions in North America, Latin America, Australia and Western Europe for the year 2003. Insufficient data is available for Africa.

The curves and accompanying statistical data for each major region are embedded in downloadable Excel spreadsheets. The curves show each data point in the regression and are drawn to show the area within one standard deviation above and below the regession line.

You can see an example at Simple Cost Curves and registered subscribers can download a free sample set of curves from this page.

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