Many aspects influence the financial productivity of any mine. Obviously the pre
ID: 801797 • Letter: M
Question
Many aspects influence the financial productivity of any mine. Obviously the presence of the desired material is key, but both geological and nongeological elements influence the overall success of the mine. Some important factors, in addition to the strategy of the company and their management, include:
Resource Quality: Ease with which the ore can be mined, the type of mineral resource, the size of the ore deposit, ore grade (concentration of desired material within the rock)
Input Costs: Labor, energy, and water use; infrastructure and services; other materials used in the mining process
Macroeconomic Factors: Metal prices, ability to obtain credit and interest rates, exchange rates
Other Factors: Governmental permitting rules, financial resources, social and political factors
Together these factors determine whether a site is worth mining and/or whether a mine will stay open and, if so, for how long. They will also influence the extensiveness of the mine (how much land is mined), the amount of waste products created, the number of jobs maintained, and more. A mining company has some control over only some of these factors.
The grade of an ore is the concentration of the desired material within the rock. There is more metal (a higher concentration) in higher grade metal ores. Ore grades are often given in percentages or in units of ppm.
The cut-off grade of an ore is essentially the lowest grade of an ore that is worth mining. If the ore grade is less than the cut-off grade, then a mining company will not make money mining that ore. According to Fellows (2010), the cut-off grade of an ore is one of the main factors in determining the economics of the mine.
It might seem as if the cut-off grade of an ore is determined permanently at the time of exploration and mine opening, but actually the cut-off grade changes throughout the lifetime of the mine (and thus, changes the estimates of the amount of ore in a reserve). For example, if cut-off grade drops, the mine is now able to profitably extract metal from an ore with a lower ore grade (a lower concentration of metal in the ore).
and explain why. The first one (a) is an example:
Increased market price of the metal? Rise or Fall
Explain:
If the mine can receive more money for each ounce that they produce, then the extra costs of processing more lower concentration ore are worthwhile. Therefore an increased market price could lead to a lower cut-off ore grade.
1)With new beneficiation technologies indicate if the cut-off grade would likely rise or fall and explain why in 1-2 sentences.
2)With better (more equitable) labor agreements (for example increase wages, health care, insurance, etc..) indicate if the cut-off grade would likely rise or fall and explain why in 1-2 sentences.
3)With rising energy costs indicate if the cut-off grade would likely rise or falland explain why in 1-2 sentences.
4)With more stringent environmental regulations indicate if the cut-off grade would likely rise or fall and explain why in 1-2 sentences.
Explanation / Answer
Answer 1: As cut off grade is the important factor in deciding the cost of metal in mine. By new beneficiation technologies we can get the best value at minimum cut off grade and make profit.Therefore, with these new technologies the cut off grade would be fall.
Answer 2: The profit of mine is calculated after the factors such as wages of labour, health agreements etc, Therefore, the cut off grade would be rise if these factors increases.
Answer 3: Energy is another important factor in mining profit, by increasing the energy cost, the cut off grade would also be rise. Because, more energy rate will decrease the profit.
Answer 4 : Environmental regulations is also the keen aspect nowadays, due to the environmental health mining should be done in a more concise way. Therefore, increase in regulations would increase or rise in cut off grade.
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