Mine Costs and Control

SHELDON P. WIMPFEN The measure of the success of any mining operation is the size of the difference between sales realization and cost of product, including operating, sales, administra¬tive, capital and others. Evaluation of a mining project necessitates projecting costs and sales realization as accurately as possible. Possible variations in specific cost elements and sales prices must be considered. To accomplish this, project studies should include giving effect to possible fluctuations to determine the break¬even points with varying costs and prices. Development of cost data is never an easy task. Mining is characterized by a great variety of conditions which result in still more variables. Achieving realistic figures as of any specific time involves consideration of changes, which may be frequent, in labor-contract terms and equipment used, variations in working condi¬tions and mining practices, and changes in mineralization and metallurgy. The purchasing power of the dollar, which has been declining persistently, also affects the situation at any given time. The only thing that can be said of costs, with certainty, is that they will change. With this in mind, the "guideline" data in this section are offered for the use of the mining engineer. It was provided for the most part by representative companies, whose contributions are gratefully acknowledged. In reviewing the tabu¬lations and other material it is of course necessary to remember that the data presented are valid only for the time periods specified, and will change with changing economic conditions in any other. 31.1-CAPITAL COST OF PLANTS Plant capital costs are set forth in Tables 31-6 and 31-7 by year of construction. To estimate capital cost of plants built in future years, various cost bases and indexes are utilized. Design and Construction Manpower: Monthly Salary Ranges, January, 1970 Project manager $1,400-82,600 Project engineer1,000- 1,500 Project design engineer1,050- 1,800 Senior engineer1,000- 1,700 Senior design engineer1,100- 1,700 Senior engineering designer1,000- 1,300 Layout draftsman750- 1,000 Detail draftsman650- 1,000 Material engineer900- 1,400 Construction-project manager1,500- 2,500 Project engineer1,500- 2,500 Construction superintendent 1,500- 2,500 A rule of thumb in design work is one man-month per drawing. The number will vary for each specific plant. For a recently constructed 30,000-tpd (tons per day) copper concentrator, 1,800 drawings were made. Design should provide for the addition of milling units when these may become justified in relation to investment markets and life of the deposit.