Definition:It is the ratio of the volume or weight of overburden (OB) removed to the volume or weight of ore or coal extracted in a surface mine. SR=OB Removed (M³)/Ore or Coal Extracted (Tonnes) • A lower SR means more economical mining; a higher SR increases cost. 🔸Types of the SR: 1.Overall Stripping Ratio(OSR): It is the total quantity of OB removed divided by the total quantity of Ore/Coal mined during entire life of mine,Used for long-term planning. OSR=Total OB removed÷Total ore/coal mined during the mine’s life 2.Instantaneous or Bench SR (ISR or BSR): It is the ratio for a specific portion or bench of the mine,not the entire life,Used for short-term planning & assessing local variations in mine geometry. 3.Break-Even Stripping Ratio (BESR): It represents the max SR at which mining remains economically viable.Beyond this ratio,the cost of removing OB equals or exceeds the value of the ore (No Profit=No Loss). BESR=Value of Ore-Cost of Ore Mining/Cost of OB Removal 🔸Factors Affecting the SR: 1.Depth of Ore Body: Deeper deposits→ higher SR. 2.Thickness of Seam: Thicker seams→lower SR. 3.Dip of Seam: Steeper dips→higher SR. 4.Nature of OB: Hard/compact OB→increases SR cost. 5.Ore Body Shape & Continuity: Irregular or faulted ore→higher SR. 6.Mining Method & Equipment: Efficient,high-capacity machines→lower SR. 7.Haulage Distance: Longer haul→increases SR cost. 8. Market Price of Ore/Coal: Higher price allows higher SR to remain economic. 9.Cost of OB Removal: Higher removal cost→lower acceptable SR. 10.Groundwater & Drainage: Poor drainage→more OB handling→higher SR. 11.Mine Planning & Scheduling: Proper planning reduces SR;early stages often have higher SR. 🔸Need for Determining SR: Determining the SR is essential because it helps in: 1.Economic Feasibility: To know if mining is profitable or not. 2.Mine Planning & Design:Helps determine the Ultimate Pit Limit (UPL),pit depth & layout,selecting the most suitable mining method and equipment capacity. 3.Production Scheduling: Guides annual stripping and ore production targets.Helps maintain a balance between OB removal and ore extraction. 4.Cost Estimation and Budgeting: SR provides the basis for estimating OB handling costs,unit cost of production and preparing project budgets. 5.Environmental and Safety Compliance: Determines the volume of waste to be handled,dumbed & backfilled.Affects slope design,reclamation planning & stability analysis. 6.Decision on Cut-off Grade and Pit Limit: Helps establish the BESR & Final boundaries of the pit (i.e.UPL). 7. Equipment & Resource Planning: Used to select suitable machine & manpower requirements based on waste-to-ore ratio. •1.5:1 – Manual quarrying •2:1 – Semi-mechanized quarrying •3 to 4:1 – Bucket Wheel excavator •4 to 5:1 – Shovel-Dumper combination •8 to 10:1 – Dragline method The SR is a key economic indicator that determines the feasibility, profitability, mine design, pit depth & life of a mining project.

En los estudios económicos de un proyecto minero, las reservas juegan un rol crítico en la valorización del mismo. En el gráfico, se muestra cómo una variación del 1% en las reservas minerales (por tonelaje o ley) puede modificar el NPV en aproximadamente $6.2 millones de dólares. Esta relación proporcional evidencia la alta sensibilidad del NPV frente a las reservas. En este ejemplo se tiene un NPV base de 288 millones de USD. Una disminución del 30% en las reservas podría reducir el NPV a 105, mientras que un aumento del 30% lo elevaría hasta 474 millones. 📊 Fuente: Mining Project Value Optimization

A Practical Reflection on Hidden Costs, Precision Engineering, and Operational Survival This week, I revisited a robust technical report on operational costs in mining. The document, published by the respected SRK Consulting, is a valuable compendium: it details costs by activity, separates fixed and variable expenses, and discusses methodologies such as Activity-Based Costing (ABC), among other essential practices for reducing expenses and maximizing value. However, one thing caught my attention: there was no mention of the cost of error — the kind that doesn’t appear directly on spreadsheets, but is paid for through rework, metallurgical losses, poorly executed blasts, geotechnical instability, or even irreversible social and environmental impacts. I couldn’t help but recall 2019, when I was in Chile for a summer internship, visiting a low-grade iron ore operation. In that challenging context, margins were so tight that attention to every detail made a difference, and all quality and uncertainty control systems (QA/QC) were tuned to the highest level. I witnessed precision engineering being used as a tool for economic survival. In that setting, error simply wasn’t an option. At that moment, I realized a stark contrast with the mindset I’ve often seen in Brazil: the idea that "errors can be absorbed", a mentality historically supported by high ore grades and a more forgiving market environment. But that reality no longer exists. Today, mining operations in Brazil are subject to much stricter demands for precision, control, social responsibility, and sustainability. So, the big questions are: 👉 How much does an error really cost? 👉 What is the impact of uncertainty on our decisions? 👉 Why is there still resistance to modeling uncertainty as a strategic cost? As my professor Joao Felipe Costa wisely says: “Error exists, and our role is to quantify the space of uncertainty.” And he’s absolutely right. There are now statistical models, geotechnical systems, sensors, simulations, and algorithms that allow us to measure operational risks and uncertainties with remarkable precision. And every percentage point of ignored uncertainty is, in practice, a hidden cost that undermines the competitiveness and sustainability of any operation. In a sector under pressure from narrow margins and high responsibility, increasing environmental pressure, stricter social demands, and a diversity of political and economic conditions, incorporating the cost of error into decision-making models is no longer a luxury: it’s a technical and ethical urgency. Ignoring the cost of uncertainty is no longer acceptable. It’s time to turn this “invisible Cost” into a strategic indicator. Claiming certainty without knowing the degree of uncertainty doesn’t eliminate the error. The error exists — and must be accounted for. Precision Engineering Is Impact Engineering We are called to act with excellence and responsibility. We must look beyond the visible CAPEX and OPEX, and include the variables that truly define long-term viability: error, uncertainty, trust in data, and a commitment to social and environmental impact. That is the kind of engineering I believe in. That is the future I want to help build. If you believe in this too, let’s talk. 📩 Leave a comment or send me a message. 💬 Let’s turn data into decisions — together.

Opening a new mine or expanding an existing operation can be a challenging and daunting task. Aside from assessing and evaluating social-environmental concerns and designing the mining and material movement approach, the first question often asked is, "how much will it cost us to mine?" This may need to be determined even before you decide that there is a potential project. Mine cost estimation may be done at many levels. At first it may be a simple “back of the envelope” estimation using similar operations to benchmark against. Later it may be decided to use an existing mine that the company owns and factor and compare costs against them. In the final stages a detailed bottom-up estimation based on first principles may be completed. This paper will investigate common methodologies of estimating operating costs for mines and present examples from actual operations and why those methods were selected. It will highlight why some methods are superior to others. Finally, we will explore the potential pit falls in cost estimation that often occur and the opportunities that may exist to lower mine costs.

Since founding Objectivity I’ve discovered that resource drill planning is mostly being done with the assumption that more drilling will lead to more resource classification/definition. More drilling isn't always better in mining. Here is why. Like many things in mining this is not quite correct and the current process leaves a lot of value on the table. Budget is often set before a full technical assessment (as these tend to evolve during budgeting), there are no clear KPIs, boards/management tend to reduce budgets (because drilling is often the first casualty of cost control) and there are a limited number of options reviewed when making plans. Someone presents a plan with X number of holes, and often the only question asked is “can you add a hole here and there?” or “what can you do with half the budget?”. Resource development drilling and exploration drilling have very different value drivers. The former benefits from a QP/CP defined sampling criteria that will guide the resource drilling plan’s layout. Unfortunately spacing is a great criteria for a time when holes were planned in 2D on mylar. But what if I told you that in most cases, you could achieve the same expected resource conversion with 30% fewer drill holes, while meeting QP/CP sampling requirements? You'd probably say: "That's not possible." When we analyze resource conversion efficiency, we see a curve that looks like this: as you add more drill holes, the percentage of volume potentially converted increases, but not linearly. Drilling from 10,000 to 13,000 meters can improve resource conversion by 24%, but then adding another 3,000 meters yields only an additional 7% (data courtesy Adventus Zinc @Curipumba). The curve always flattens dramatically after a certain point, reducing incremental value. This is the investment curve that highlights a critical point of diminishing returns that most drilling programs blow right past. This is sensitivity analysis for your resource drilling - sensitivity analysis is always expected at the feasibility study stage yet seldom used for an activity that is on every mining/late stage exploration project’s critical path. Would you make better decisions with multiple plans objectively assessed against key criteria, or with just a single plan? The answer seems obvious, yet most companies stick to the single-plan approach citing, “no time”, “no people”, “shifting criteria”. Still skeptical? Good, skepticism is healthy. But why not put us to the test? We are confident that we can change how you think about resource drilling and the value that it produces. Increasing conversion efficiency, while respecting QP/CP requirements, will make our industry more financially efficient. Show us your data and we'll show you a range of solutions to help make objective based investment decisions. Begin optimizing your investment here: https://docs.google.com/forms/d/e/1FAIpQLSe8JdRWRB5MK9gnzJbk3FQZu17dFmWyUkre8S2yXo_k0l2HIw/viewform

This file is a step-by-step guide that explains how mining works, from the very beginning until the final product is ready. It starts with mine development, where the mine is built and prepared. Then it goes through each stage like drilling, blasting, loading, hauling, ventilation, crushing, mineral separation, and waste management. For every step, the file explains: * What kind of work is done * What machines and systems are used * What safety measures are needed * What the costs are (fixed and variable) It’s written in simple words, so it’s easy to understand for students, new engineers, or anyone interested in the mining industry. It also shows how important planning, safety, and cost control are in mining operations. This guide can be useful for: -Mining and geology students -People working in mines or planning to work in this field -Anyone curious about how raw materials are taken from the earth and turned into useful products

Hoy quiero hablar de un concepto fundamental que impacta directamente en la planificación, costes y ejecución de nuestros proyectos: los Volúmenes Aparentes. Sabemos que 1 m³ de material in situ (en su estado natural) rara vez ocupa el mismo volumen una vez excavado, transportado o compactado. ¡Comprender estas variaciones es crucial! Tomando como base 1.0 el volumen del material in situ: 1️⃣ EXCAVACIÓN / VOLADURA: Tierras: Al excavar, el suelo se suelta y sufre un esponjamiento. Su volumen aumenta, pasando de 1.0 a aproximadamente 1.20 - 1.30. Roca (Canteras): Tras la voladura, la fragmentación es mayor. El volumen puede incrementarse significativamente, ¡llegando a 2.0 respecto al banco original! 2️⃣ CARGA Y TRANSPORTE: El material mantiene o incluso ajusta ligeramente su volumen esponjado. Tierras cargadas/transportadas: Se mantienen en el rango de 1.20 - 1.30. Roca volada cargada/transportada: El volumen puede ser de 1.25 - 1.50 (ya algo asentada respecto al momento justo post-voladura). 3️⃣ PROCESOS FINALES: RELLENOS Y COMPACTACIÓN (Tierras): Vertida (Rellenos sin compactar): Al descargar, el material se asienta un poco, situándose en 1.10 - 1.20. Pisada/Pre-compactada: Un primer paso de compactación lo lleva a 1.0 - 1.10. Compactada: Con la maquinaria adecuada, buscamos reducir vacíos y aumentar la densidad. El volumen final puede ser 0.95 - 1.0, ¡incluso ligeramente inferior al original si la compactación es muy eficiente! CHANCADO/TRITURACIÓN (Rocas): Chancado Primario: La roca procesada aún presenta un volumen superior al original en banco, alrededor de 1.30 - 1.40. Trituración (Fina): El producto final triturado sigue teniendo un volumen aparente mayor al in-situ, típicamente 1.20 - 1.30. ¿Por qué es vital este conocimiento? 📊 Cálculo de volúmenes: Para saber cuántos viajes de camión se necesitan. 💰 Estimación de costes: Afecta directamente los costes de excavación, transporte y disposición. 🛠️ Selección de maquinaria: El volumen real a manejar influye en la capacidad de los equipos. 📈 Planificación de obra: Optimiza los espacios de acopio y la secuencia de trabajos. Conocer y aplicar correctamente los factores de esponjamiento y compactación es un pilar para el éxito y la rentabilidad de nuestros proyectos.

This presentation covers various factors impacting development cost estimation, including the impact of assumptions on unit rates and strategies for cost reduction using innovative technologies. Source: https://www.srk.com/en/publications/development-cost-for-miners-understanding-managing-mine-costs

🔍 La inversión minera sigue siendo la base de la economía peruana, alcanzando en diciembre de 2024 una cifra superior a los US$ 769 millones. A nivel de titulares mineros, los que registraron mayor monto de inversión ejecutado al cierre del 2024 fueron: 🏆 1. Compañía Minera Antamina S.A. 📌 Inversión: US$ 689 millones (13.9% del total) 📌 Clave del éxito: Fuerte inversión en la Unidad Económica Administrativa “Yanacancha 1” y su Planta de Beneficio “Huincush”. 🥈 2. Minera Las Bambas S.A. 📌 Inversión: US$ 385 millones (7.8% del total) 🥉 3. Sociedad Minera Cerro Verde S.A.A. 📌 Inversión: US$ 355 millones (7.2% del total) 🏅 4. Anglo American Quellaveco S.A. 📌 Inversión: US$ 346 millones (7.0% del total) 💡 Dato clave: Estas cuatro empresas en conjunto concentraron el 35.8% de la inversión minera ejecutada a nivel nacional. En este listado, exploramos a las 5 principales empresas según cada rubro de inversión. Conoce su impacto en la industria. 📌 Fuente: Boletín Estadístico Minero – Diciembre 2024 (Ministerio de Energía y Minas

Everyone in mining knows the importance of NPV, IRR, and most critically—cashflow. - Almost to a painful degree. But there’s something that’s been sitting in my head for a while, and once I point it out, I think it will seem obvious. A recent post that linked grades to permitting delays got me thinking again about the time bias embedded in how we model cashflows. We all know that NPV and IRR rely on discounting future cashflows—and for good reason. The further out a dollar is, the less valuable it is today. It’s a fundamental principle in mining project evaluation. But here’s the problem: this approach bends reality in ways we don’t always acknowledge. 🔹 Long-term distortion—Anything beyond 30-50 years is effectively erased in value because of discounting. Yet, for the majors, a 50-year mine life is a massive advantage. The model says it’s nearly worthless. Operators know otherwise. 🔹 Short-term distortion—The magic of cashflow modeling is that it rewards slight shifts in timing. Delay capital deployment a little, assume cashflows start rolling in faster, push sustaining capital back a few years—suddenly, the numbers look fantastic. But in reality, there are limits on how well we can control these things. Payment terms don’t always line up. Ramp-ups rarely go exactly as planned. And once a project is in motion, those early assumptions can make or break it. We saw a clear example of it with a few companies in 2024. Namely Ascot Resources and the Premier Mine. This was an experienced team, a solid project that was tripped up because of not meeting early cashflow need. Not because the mine wasn’t viable, but because cashflows it needed did not come in on time. That brings up the real question: 1) How do we ensure long-term optionality isn’t ignored just because it doesn’t show up in NPV? 2) How do we stay reasonable and conservative in short-term cashflow assumptions? 3) How do we account for delays—because they’re real and likely—so that a three or six-month slip doesn’t determine whether a mine should have been built in the first place? ▪️Because if a small delay can break a project, was the decision to build it ever sound? The focus shouldn’t just be on making numbers work in the short term—it should be on long-term stability beyond the initial payback.

Depreciation, a visual guide: Depreciation is key in accounting. It shows how a fixed asset's value drops over time. This drop is due to wear, tear, and obsolescence. It's crucial for businesses with assets like machinery, buildings, vehicles, and equipment. In the cash flow statement, depreciation appears in the operating activities section. It's added back to net income as a non-cash expense. This step reduces taxable income without affecting actual cash flow. Businesses depreciate assets like machinery, buildings, vehicles, and computers. These items have limited useful lives. Depreciation spreads their cost over these periods. Several ratios help measure depreciation and its impact: 1. 𝗗𝗲𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝗦𝗮𝗹𝗲𝘀 𝗥𝗮𝘁𝗶𝗼: Measures the proportion of sales used to cover depreciation. 2. 𝗗𝗲𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝗙𝗶𝘅𝗲𝗱 𝗔𝘀𝘀𝗲𝘁𝘀 𝗥𝗮𝘁𝗶𝗼: Assesses the extent of depreciation relative to total fixed assets. 3. 𝗗𝗲𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗜𝗻𝗰𝗼𝗺𝗲 𝗥𝗮𝘁𝗶𝗼: Evaluates the impact of depreciation on operating profitability. 4. 𝗔𝗰𝗰𝘂𝗺𝘂𝗹𝗮𝘁𝗲𝗱 𝗗𝗲𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝗧𝗼𝘁𝗮𝗹 𝗔𝘀𝘀𝗲𝘁𝘀 𝗥𝗮𝘁𝗶𝗼: Indicates the proportion of asset value depreciated over time. Depreciation greatly affects investments. It lowers a company's profits, increases its taxes, and reduces asset values. Knowing how a company handles depreciation reveals its financial and operational health. https://einvestingforbeginners.kit.com/99e2f936ff

Sustaining capital is essential for maintaining and enhancing production levels in mining operations over the life of the project. Unlike routine operating costs (labor, consumables, maintenance, and third-party services), sustaining capital is specifically focused on the necessary investments required to extend the useful life of mining assets and ensure continuous operations. Why Sustaining Capital is Important in Mining Projects: 1. Maintaining Production: Sustaining capital is vital to maintaining operations at the planned level, ensuring that key assets (mining fleet, equipment, processing facilities) are maintained or replaced as required. 2. Long-Term Viability: It supports the extended life of the mine, ensuring continued resource extraction through investments in mine development, infrastructure, and safety systems. 3. Risk Mitigation: By allocating funds for unexpected equipment failures, infrastructure upgrades, and environmental management, sustaining capital helps mitigate operational risks. 4. Economic Stability: Accurate sustaining capital estimates contribute to financial planning, ensuring that cash flow is managed efficiently throughout the mine's life cycle. Key Technical Parameters in Sustaining Capital: Mine Development: Includes open-pit pre-stripping, underground haulage drifts, and ventilation raises to prepare and maintain access to reserves. Push-Back Waste Stripping: Extending mine life by removing waste material to access ore. Equipment Rebuilds: Costs related to overhauling mining fleets and plant equipment to extend their operational life. Equipment Replacement or Expansion: Replacement of obsolete equipment and expansion of mining fleets based on the Life-of-Mine (LOM) plan Process Facility Replacements: Ensuring the continuous functionality of processing plants through replacement or upgrades. Expansion of TSF: Ensuring adequate capacity for increasing tailings production as the mine progresses Progressive Rehabilitation & Ongoing Closure Costs: Long-term planning for environmental reclamation and mine closure, ensuring sustainable environmental practices. Infrastructure Facility Replacements: Replacing critical infrastructure (e.g., power, water, transportation) to support ongoing mining operations. Additional Land Purchases: Acquiring land for future expansion or to support reserves Dewatering and Pumping: Managing water resources effectively to avoid operational disruptions. Contingency: Allocating funds for unexpected costs or emergencies that may arise during the life of the mine Sustaining capital ensures that a mining operation remains viable and efficient over its entire life cycle, ultimately contributing to the financial success of the project. Note: The numerical values used in the table and graph are for illustrative purposes only.

Following the discussion about the Dozer Push Method some time aago in my previous post, in this moment, i'll try to give a general overview of the cost and benefits of this method. and next post i'll explain about the planning and implementation to mine scheduling. The cost-benefit analysis of Dozer Push Method in mining operations primarily arises from reduced dependency on trucks and excavators, leading to lower operating costs. Below is an overview of the cost and benefit considerations: => Cost Savings 1. Reduced Fuel Consumption: • Bulldozers consume significantly less fuel than a fleet of trucks and excavators. • Example: A standard dozer may use 15-20 liters/hour of fuel, whereas a large mining truck can consume 50-100 liters/hour. 2. Lower Maintenance Costs: • Trucks and haul roads require frequent maintenance, increasing costs. • Bulldozers operate in a smaller, more contained area, leading to reduced wear and tear. 3. Reduced Equipment Requirements: • Fewer trucks and excavators are needed, saving on capital and operating expenses. • A single dozer can replace multiple trucks for short-distance material movement (typically up to 200 meters). 4. Smaller Workforce: • Fewer operators are required as the method relies more on dozers than complex truck-excavator systems. 5. Less Road Construction and Maintenance: • The method eliminates or minimizes haul road construction, which can be costly, particularly in rugged terrains. => Benefits 1. Operational Efficiency: • For short distances, dozers can move material more quickly and effectively than trucks, reducing cycle times. 2. Flexibility: • Bulldozers can operate in areas where trucks may not be feasible, such as steep slopes or tight spaces. 3. Environmental Benefits: • Reduced fuel consumption translates to lower greenhouse gas emissions and a smaller carbon footprint. 4. Improved Safety: • Fewer vehicles on site reduce the risk of collisions and accidents, enhancing overall safety. => Potential Costs 1. High Initial Capital for Dozers: • Purchasing or leasing large bulldozers can require significant upfront investment. • However, the long-term savings often outweigh this cost. 2. Limited Efficiency Over Long Distances: • Dozer push is cost-effective only for short distances (typically less than 200 meters). For longer distances, trucks and conveyors are more economical. 3. Steeper Learning Curve: • Operations may require retraining of personnel to maximize the efficiency of dozer push operations. => Conclusion The Dozer Push Method offers significant cost savings in the right conditions (short distances, suitable slopes) and is particularly effective in shallow mining operations. However, a detailed feasibility study should evaluate specific project conditions to determine the exact cost-benefit ratio.

As long as the drilling and blasting are executed correctly, the mining operations will be carried out safely as planned. 😍

When it comes to mining, the focus is often on the big picture—how much ore is being produced, or what the market prices are. But have you ever thought about the real costs behind every mining operation? The truth is, it’s not just about the minerals you’re extracting, but how much it costs to get them out of the ground and keep everything running smoothly. Here’s the big question: What’s the most important cost factor that keeps a mine sustainable in the long run? Is it maintaining equipment and infrastructure to avoid breakdowns? Or is it investing in environmental responsibility to ensure future operations aren’t threatened by regulations and fines? Maybe it's about reducing transportation costs or optimizing energy use to keep the mine efficient. It’s a complex puzzle, but it’s one worth solving. Every cost decision you make can impact not just the immediate bottom line, but the long-term viability of the entire operation. Let’s break it down together and get the conversation going. What do you think is the most critical piece of this puzzle?