Exploitation of Mineral Resources in Conditions of Volatile Energy Prices: Technical and Economic Analysis of Low-Quality Deposits

Abstract

In mining projects and production operations, energy carrier costs (fuel, electricity) constitute the primary component of variable costs. This study outlines a methodology for projecting operating costs in a surface mine or quarry in order to find the optimal configuration of mining equipment to extract low-grade secondary deposits, taking into account volatile energy prices. For illustration, the operating costs of five variants of mining equipment deployed to mine low-grade products were analysed, with the price of energy and fuels being the key cost component and the main risk factor. There were differences between the initial investment outlays and operating costs involved in all analysed variants, whilst the starting point for estimating the technical and economic parameters involved in the respective solutions was the predefined configuration of the mining equipment. Further, the decision to commence or discontinue mining operations could be supported by the simulation procedure based on the economic model. The results provided valuable insights into the cost-effectiveness of low-grade deposit extraction scenarios, depending on the projected unit costs of fuels and energy.