ECONOMIES OF SCALE IN MINING – ASSESSING UPPER BOUNDS WITH SIMULATION

Abstract

As part of the trend towards increasing levels of mechanisation and automation, mines are turning to the use of larger equipment in order to achieve economies of scale. Larger trucks, for example, result in fewer hauls and fewer drivers required to haul the same quantity of ore. resulting in lower production costs. This paper uses simulation to show that larger capacity trucks also have higher maintenance costs, primarily associated with lost production due to unscheduled downtime. Specific recommendations on how to estimate the scale and impact of these costs are included.