CH 9 - Underground Coal and Soft Rock Mining

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CHAPTER 9
Underground Coal and
Soft Rock Mining
CHAPTER CONTENTS
Project definition 168

Resource and mine planning 168
Mining method and productivity 169
Operating costs 173
Cost report outline 174
Major cost centres 174
Capital costs 183
Project creation 183
Establishing an underground mine 184
Run-of-mine production 185
Ongoing or sustaining capital 190
Exploration 190
Closure costs 190
References 191
Further reading 191
CONTRIBUTORS
First edition text by: D H Fawcett and P Murray
Revised and updated by:
Dave Thomas MAusIMM, Principal Consultant, IMC Mining Group Pty Ltd
Steve Thornton, Principal Mining Consultant, Mine Advice Pty Ltd
Mark Elliot, Managing Director, Ellton Group
Underground Coal and Soft Rock Mining
The mining of coal and other soft materials (ie potash, mining method(s) and mine layout(s) that fit the
soda ash and salt) by underground methods is typified resource characteristics and developing a mine plan
by the need to use a low-cost mining process in order to using these method(s) and layout(s) to meet the
be economically viable. This is because of the relatively production targets set for the project.
low sales price of the final products compared to most
other underground mining products (ie heavy metals). Resource and mine planning
In today’s economic climate of rapidly increasing costs Mine planning begins once the geological team has
of labour, power and raw materials, the need for low- created a geological model of the deposit. There
cost mining methods has driven inexorable increases in are several computer-based modelling systems that
the production volumes required from soft rock mines, generate specific grids, which can either be used by
and consequently the need for higher productivity the mining engineer within the system or exported to
from equipment and operators. In addition, the capital a 2D/3D drawing package. At this stage the deposit
required to develop and sustain this higher production is referred to as a resource and the meanings of
capacity has markedly increased. This dynamic ‘Measured’, ‘Indicated’ and ‘Inferred’ Resources as
determines the feasibility of new mines and requires detailed by the Joint Ore Reserves Committee standard
existing, higher cost mines to be either redeveloped (JORC, 2004) apply.
or closed. While the basic mining techniques for bulk Once the resource is defined, the mine planner goes
underground soft rock production have not changed through an iterative process to determine how much of
substantially over the last few years, the health and that resource is recoverable given political, geological
safety requirements, nameplate production capacity and marketing constraints. These constraints include
and level of technology embedded in the mining surface subsidence exclusion zones, seam thickness,
equipment continues to increase. rock type in the roof and floor, seam gradients and
In almost every project, operating costs are more faulting, depth of cover and product type and yield.
At this point a risk assessment of major hazards
important to the project’s viability than capital costs.
should be undertaken. Once the constraints are
While initial capital costs are usually substantial and
identified, the planning engineer considers mining
can create difficulties in obtaining project financing,
layouts and methods (or mine plans) that suit the
they can be recovered through future operating
constrained resource. The engineer estimates the
profits over time and/or be written off by the investor.
resource recovery, costs and economics of the chosen
Conversely, recurring operating losses are rarely
mine plans. As a guide, resource recoveries for various
tolerated as they prevent the initial capital investment mining methods are:
to be recouped. Nonetheless, accurate estimation
•• longwalls – typically recover 95 per cent of the
of both capital and operating costs is essential to
resource within a given mining block
determining a project’s feasibility. If initial capital
•• bord and pillar systems with secondary (pillar)
costs are substantially underestimated then the future
extraction – recover 60 - 85 per cent of the resource
operating margin, even though accurately estimated,
within a given mining block
may still be insufficient to sustain the project.
•• bord and pillar development systems – recover
The process for estimating a project’s operating and 20 - 35 per cent of the resource within a mining block.
capital costs follows three basic steps:
When developing the mine plan, the planning
1. define the project (mining method, mine layout and
engineer will have in mind that the highest
production capacity) productivity and/or most efficient mining method
2. estimate the operating costs should be adopted because of the high capital cost of
3. estimate the capital costs. bringing a coalmining project to the production stage.
These steps are considered in turn in this chapter. Where possible, this should include the lowest possible
operating costs of working the mine in a compliant
PROJECT DEFINITION manner.
Defining the project entails understanding the Once developed, the mine plan is overlain on the
resource characteristics, determining applicable geological model and the geological model is re-run
168 Cost Estimation Handbook

CHAPTER 9 – UNDERGROUND COAL AND SOFT ROCK MINING
no examples of bulk production from this method.

TABLE 9.1 Hydraulic mining has a small representation; however,
Soft rock mining processes and their applications. it has potential as steeper seams are mined. Table 9.1
Mining process Application shows the various soft rock mining processes currently
in use.
Coal Soft rock
Shotfiring Bord and pillar
 The bord and pillar method involves systematically
Roadway development N/A
forming rows of square or rectangular pillars of
Bulk production N/A N/A coal, which are subsequently either left in situ or
Hydraulic mining partially or fully extracted. The method uses CMs and
shuttle cars (SCs) to mine the roadways (bords) and
Bulk production  N/A
specialised bolting machines to install ground support.
Continuous miners Alternatively, as in most cases in Australia, the CM also
In-place – mine and support   provides the roofbolting platform. Figure 9.1 illustrates
a bord and pillar mining system.
Place-changing – cut-and-flit  
CMs have a number of configurations.
Secondary extraction  N/A • Multi-pass-miners (place-changers) do not have
Longwall bolting equipment fitted and are generally narrower
than the roadway being formed. They will cut
Short (<150 m face length)  N/A
unsupported ‘plunges’, often requiring two passes
Standard (150 - 250 m face length)   to cut to full roadway width. After the unsupported
Extended (>250 m face length)  N/A plunges have been cut, the CM is moved (or flitted)
to the next heading and a bolting machine is flitted
Note: N/A = not applicable. It does not mean that the method cannot be in to install the required ground support.
used; rather, there are no current examples. • Miner-bolters (for general roadway development
with the emphasis on mining production) are
to determine the recoverable resource. The recoverable generally equipped with two roofbolters and are
resource is then converted into a reserve, and again the fairly manoeuvrable. Thus they can be relocated
meanings of Proved and Probable Reserves within the easily within the bord and pillar configuration.
context of the (JORC, 2004) standard apply.
• Bolter-miners (for development of longwall gateroads
Mining method and productivity with the emphasis on ground support installation)
There are two main processes, or mining methods, may have the ability to simultaneously cut coal
normally used to extract coal and soft rock during and install roofbolts. These machines are generally
underground mining. These are bord and pillar using equipped with four roofbolters and two rib-bolters.
continuous miners (CMs) and longwall extraction. They are not as manoeuvrable as a miner-bolter, and
The use of drill-and-blast, or shotfiring, in bord and thus require a longer time for relocation between
pillar mining has declined and there are currently headings.
FIG 9.1 - Illustration of bord and pillar mining system (courtesy of Weir International Inc).
Cost Estimation Handbook 169

Bolter-miners and miner-bolters are referred to as •• most pillar extraction sections – mobile roof
‘in-place’ systems because the machine does not move supports provide temporary roof support while
away from the advancing face as it phases from coal the pillar coal is being extracted; the use of hand set
cutting to installing ground support. These machines breaker line supports (wooden posts or props) is
typically have cutting heads that allow the full width rare in developed countries
(5.0 - 5.5 m) of the heading (or roadway) to be extracted •• place-changing sections – a mobile roofbolter is
with a single pass, although miner–bolters may be generally used to install ground support.
equipped with narrower heads for greater manoeuvr-
ability. Miner–bolters can be reconfigured as extraction Longwall
machines but this is not a simple process. Thus, for cost In longwall mining, rectangular blocks of coal (120 m
estimation purposes they should be considered to have to 400 m wide and usually >1000 m long) are formed
a static configuration. by bord and pillar development methods (gateroads).
Place change (or cut-and-flit) machines can only cut The formed coal block is then completely extracted
coal and must be moved out of the advancing face by a separate, specialised mining system (Figure 9.2).
area before ground support can be installed. They also Except in Europe, all longwalls are of the retreating
operate as pillar extraction machines where this method type, where the entire block is developed to its furthest
is used. Place-change machines have narrower cutting extremity from the main headings and portal (inbye
heads (±3.6 m), which makes them more manoeuvrable, end), before the longwall is inserted and retreats back
but they require two passes to cut a typical 5.5 to to the end of the block nearest the main headings and
6 m wide roadway. Place change machines generally portal (outbye end). At any point in the mine, inbye is
advance a roadway 10 to 12 m before moving to the the direction along a roadway towards the face, thus
next roadway. This is unsupported during cutting and going away from the surface entry and outbye is the
is called the ‘plunge’ depth. direction along a roadway away from the face, thus
The set-up for two continuous miners operating in one going towards the surface entry.
production block (or panel) is known as a supersection
or superpanel.
With every continuous miner one of the following
mineral transport systems are used in some form:
•• Shuttle cars that require trailing cables (favoured in
Australia and South Africa), which can carry up to
25 t of material and operate up to 200 m from the
panel conveyor boot end.
•• Battery or diesel-powered haulers (common in the
USA), which can carry up to 18 t of material. These
haulers can follow multiple haulage routes and
operate over a greater distance than shuttle cars
but at the cost of needing more units to maintain FIG 9.2 - Illustration of retreat longwall mining system.
productivity at the greater distances, as well as
requiring additional ventilation in the case of the The three configurations of longwall systems are:
diesel-powered haulers. 1. short longwall (block up to 150 m wide)
•• Continuous haulage units (common in the USA and 2. standard longwall (block 150 - 250 m wide)
South Africa, rare in Australia), which can transport 3. extended longwall (block greater than 250 m wide).
at 600 to 1000 t/h. These units operate up to 110 m The standard longwall is the most common. Short
from the panel conveyor boot end. longwalls find use where surface subsidence needs
•• Civil type dump trucks (soft rock mines), which can to be minimised. This is possible because the narrow
carry up to 40 t of material. width of full extraction creates a subcritical caving
Additional equipment used for various panels and environment, where the pillars and roof beam prevent
sections in bord and pillar mining includes: full caving from occurring. Extended longwalls require
•• most panels – there is a feeder breaker to accept larger resource domains that are reasonably free of
material from the batch hauler or shuttle cars, size it seam-dislocating faults and uncuttable intrusions.
and meter it onto the panel conveyor However, they are becoming more common as they
•• in-place development panels – auxiliary fans require the least amount of development and therefore
connected to ventilation ducting ventilate the potentially offer the lowest mining cost and highest
working face and stubs; in place-changing panels, production rates.
auxiliary fans and ducting may or may not be used All longwall mining systems have a similar set-up:

•• A double-ended ranging drum shearer, which cuts 65 per cent to 75 per cent of its capability because of
the coal in 0.5 - 1-m-thick ‘slices’ as it travels up and interactions between the two sets of equipment. As
down the face atop the armoured face conveyor a system, the two CMs will achieve 30 - 50 per cent
(AFC). greater advance rates than a single CM section.
•• Hydraulically powered roof supports (generally •• Place-change CMs in multiple heading develop-
two leg shield type supports, 1.5 - 2 m wide), which ments should do four to six 10 m deep cuts per ten-
advance behind the shearer by pulling on the AFC. hour shift (ie 40 - 60 m advance per shift).
•• An AFC, which accepts the cut coal from the shearer •• A place-change CM on pure pillar extraction with
and transports it by chain conveyor to the intake shuttle cars can average around 850 t per ten-hour
air gateroad (maingate). The AFC has electrically shift, and around 1200 t per ten-hour shift with a
powered conveyor drives at each end except in the continuous haulage system.
case of the short longwall, which does not have a •• Longwalls of all configurations retreat about 90 m to
tail-end drive. The AFC is advanced by pushing off 120 m per week.
the roof supports.
All bord and pillar operations will be negatively
•• The beamed stage loader (BSL), which connects the affected by the need to advance or retreat the panel belt
AFC to the maingate conveyor by an in-line crusher conveyor and services (power, water and compressed
and specialised boot end. air). As a rule-of-thumb, panel services advance and
•• Electrical power transformer, hydraulic fluid pumps retraction for bord and pillar operations will take one
and dust suppression water booster pumps set-up to two shifts per 100 m. Thus, average productivities
approximately 200 m outbye from the face. These will be five to ten per cent less than the rates above.
feed the face through service lines mounted on a The indicative annual production capacity of the
monorail suspended from the roof of the maingate above systems is shown in Table 9.2. Real figures can
belt road. vary substantially from those in Table 9.2 according to
•• The maingate conveyor, which terminates in the mining configuration, mining height, ground support
special boot end of the BSL. The maingate conveyor requirements, working arrangements and equipment
also incorporates a loop take-up at the drive head age. Extraction is expressed in tonnes per annum
end, which gathers and stores approximately 400 m as this is the industry standard used when quoting
of conveyor belting as the longwall face retreats. production figures.
Once this loop take-up is full, the belt is cut short
and the excess conveyor removed to be used on the
Labour requirements
next longwall panel. Once a production schedule has been developed, then
Longwalls have a nameplate capacity expressed the labour required to achieve this schedule in terms
in tonnes per hour (t/h), which is the short-duration of production crews, outbye support and mine staffing
peak cutting and conveying capability of the system. needs to be determined.
Modern longwalls generally have a nameplate capacity Production crews
of 3000 to 4500 t/h. The operational average capacity is
Each mining system has a different labour requirement
generally 30 to 50 per cent of this value.
for the production crews, as indicated in Table 9.3.
Equipment productivity Outbye maintenance and support
Productivity estimations can be as simple as rule-of- Outbye the production faces, a number of maintenance
thumb figures or analysed from first principles using and support functions are required to be undertaken to
criteria such as shift time, utilisation, availability,
keep the mine in production. These functions include:
uptime, downtime, cutting cycle times and flit times.
•• conveyor maintenance
Rule-of-thumb figures for a 2.5 m seam thickness or
mining height requiring four roofbolts per 1.2 m of •• diesel equipment maintenance
roadway (in development) are given below: •• electrical equipment maintenance
•• A bolter–miner should be able to achieve 15 m of •• mine inspections (roadways and conveyors)
roadway advance per ten-hour shift in longwall •• roadway maintenance
gateroad development. It will be affected by more •• secondary support installation
downtime when it is moved between headings due •• section set-up and conveyor installation
to its restricted manoeuvrability.
•• stonedusting
•• A miner–bolter should be able to achieve 20 m of
•• supplies delivery
roadway advance per ten-hour shift, but is more
likely to be affected by a poor roof that requires •• ventilation construction
significant roof support installations. •• water and gas control.
•• In a supersection or superpanel, the miner–bolter In general terms, outbye functions that occur on a
(or bolter–miner) will generally achieve only daily basis (inspections, conveyor and diesel equipment

TABLE 9.2
Typical annual production rates for various underground coal mining methods at a mining height of 2.5 m in Australia.
Production rate (m/a) Production rate (kt/a)

CM (dev bolter–miner) gate roads/mains 9000 180
CM (dev miner–bolter) gate roads/mains 12 000 240
CM (dev place-changing) gate roads/mains 24 000 480
CM (pillar extraction with shuttle cars) 450 - 510
CM (pillar extraction with continuous haulage) 600 - 720
Short longwall (<100 m wide) 1500 - 3000
Normal longwall (250 m wide) 2000 - 4500
Extended longwall (400 m wide) Up to 8000
Notes: CM = continuous miner; dev = development.
TABLE 9.3
Typical labour complement for various underground coal mining production units.
Team leader Production Trades Total

Normal unit (single CM) 1 5 2 8
Supersection (two CMs) 1 9 2 12
Place-changing section (with 2 × shuttle cars) 1 6 2 9
Continuous haulage unit (single CM) 1 8 3 12
Normal longwall unit (approximately 250 m long) 1 4 2 7
Note: CM = continuous miner.
maintenance and supplied delivery) are usually under- •• commercial (including accounting, purchasing,
taken by permanent employees of the mine while those stores and payroll)
that occur less frequently are performed by specialist •• human resources
contractors. •• safety and training
•• technical services (including geology, geotechnical
Mine staff engineering, mine planning and surveying).
It can be assumed that each mine site will require the In terms of the spread of labour in a mine, Table 9.4
following mine management and front line supervision provides an example from a stand-alone bord and
as a minimum: pillar mine operating a six-days-per-week, three-roster
•• a general site manager system with two supersections on development and
•• a mine manager two pillar extraction panels. The example illustrates the
•• five departmental managers – engineering, product- types and levels of labour employed and their functions
ion, safety and training, technical and commercial within the mine.
(accounting, purchasing, stores and payroll) For comparison, Table 9.5 provides an example of
•• a senior supervisor (or undermanager) per shift the total labour complement for a longwall operation
operating the same six-days-per-week roster with one
•• a supervisor for each production area and each normal section on main development, one supersection
maintenance group on gateroad development and a standard longwall.
•• two administration assistant personnel. The attraction of a high-volume longwall coupled
Depending on corporate structure, additional with low labour requirements is obvious and is
administration and technical services personnel may the main reason why almost all new underground
be directly attributed to a specific mine. Generally, coalmines propose to use longwall technology if it is at
if a company has more than one mine, then some all possible. This is particularly important if the mine
administrative personnel may be shared among those is situated remotely from populated areas and labour
mines and apportioned accordingly. Administrative needs mean that people must be transported to and
and technical functions in this group would include: from and housed on-site.

TABLE 9.4
Example of total mine labour complement for a bord and pillar operation with four units.
By type By location
Number (%) of total Number (%) of total
Staff and administration 19 9 Staff and administration 19 9
Supervisors 20 9 Production area 114 53
Production 109 51 Maintenance 30 14
Electricians 26 12 Outbye support 51 24
Fitters 30 14
Contractors (yearly equivalent) 10 5
Totals 214 214
TABLE 9.5
Example of total mine labour complement for a longwall operation with two development units.
By type By location
Number (%) of total Number (%) of total
Staff and administration 25 12 Staff and administration 25 12
Supervisors 22 11 Production area 75 37
Production 75 37 Maintenance 29 15
Electricians 31 15 Outbye support 72 36
Fitters 33 17
Contractors (yearly equivalent) 15 8
Total 201 201
Mine output port access and shiploading, royalties and levies and
marketing. These costs ultimately create the free-on-
Mine output is invariably derived from a combination
board (FOB) cost. These downstream costs are not
of production systems. Typical combinations are:
assessed in this chapter as they are fairly site-specific
•• a standard longwall plus two to three standard and difficult to estimate from first principles.
development sections using bolter–miners to create
Operating costs include fixed and variable costs. The
longwall gateroads and advance the main roadways
primary fixed costs are labour and operating overheads
•• a supersection using bolter–miners to create multi-
such as power supply demand charges, water licenses,
heading bord and pillar panels and a pillar extraction
ventilation fans, diesel fuel, safety equipment and
section with an extraction continuous miner
tools, insurance, taxes, building maintenance and office
•• two place-change sections, one on bord and pillar running costs. Fixed costs also include certain equip-
panel development and the other on pillar extract- ment preventative maintenance consumables such as
ion. greases and oils, and outbye mine maintenance such
Some mines may use several of the available as road maintenance and reapplication of stonedust.
combinations to best extract the reserves. The effective These costs do not appreciably change for a given
output is a combination of the above factors as well as production roster, installed production capacity or
the available system haulage capacity. installed infrastructure. The remaining operating
costs are variable costs, which are based on the mine
OPERATING COSTS production. For example, to advance a roadway costs
This section deals with the estimation of operating costs $x/m in terms of consumables (roofbolts, stonedust,
from the production area to the product stockpile and etc). To operate a continuous miner costs $y/t in terms
places those costs within the context of a high-level cost of repair and maintenance parts and power and water
model. Beyond the point of despatch from the mine usage, etc. To operate a longwall costs $z/t in terms of
site there are several usually fixed downstream costs, repair and maintenance parts, power and water usage,
including rail or truck loading, rail or truck transport, secondary support consumables, etc.

It is important to remember that money must be TABLE 9.6

accrued for the costs of major rebuilds. All operational Example of a high-level cost report for a mining operation.
equipment will require rebuilds. In addition, the
capital cost of the equipment, although capitalised, Production cost to portal (a)
must effectively be paid for from profits after normal Underground labour and labour hire $/ROM t
production costs.
Equipment repairs, maintenance and hire $/ROM t
It is therefore logical to build-up a cost model that
identifies fixed and variable costs from each product- Ground support $/ROM t
ion source. This includes the cost of support of Mining consumables including ventilation and outbye $/ROM t
production in terms of conveyor maintenance, grading Grouped costs – utilities, fuels, sundry items, etc $/ROM t
of road-ways and installation of ventilation structures,
and the costs of site management and site maintenance. Direct cost to ROM stockpile (a) $/ROM t
While not strictly the province of this chapter, the Production overheads (b)
effect of yield, which is the effect of loss in converting Management and administration $/ROM t
a run-of-mine (ROM) material to a saleable material, is
Occupational health and safety and training,
outlined as it can make a profound difference to the $/prod t
technical services
cash margin (ie the difference between selling price
and production cost). Insurances, licences, taxes, etc $/prod t
Site maintenance $/ROM t
Cost report outline
Cost of production overheads (b) $/ROM t
Table 9.6 illustrates what a simple cost report looks
like. For the site manager it reveals how much it costs to Cost of despatched ROM production (c) = (a) + (b) $/ROM t
produce the raw material. For the processing manager, ROM haulage and processing (d)
it reveals the cost of generating a final product and the
Haulage from ROM stockpile to processing plant $/ROM t
effect of processing yield, whether it is organic (ie the
inherent yield) or plant efficiency (ie avoidable losses Processing costs $/ROM t
of product). Finally, for the organisation as a whole Total cost ROM stockpile to product stockpile (d) $/ROM t
the report reveals the cost of providing management
Washing yield (%)
support and corporate services. To a degree, these costs
are manageable by the organisation. Total cost of product (e) = ((c) + (d))/yield $/prod t
The ‘high-level’ cost report is built up from a large
number of individual cost centres that are combined Note: ROM = run-of-mine.
into three main areas:
(FWA, undated). Effectively, this package provides
1. production costs that can be directly attributed to a for the minimum hourly rates, overtime rates and
production unit leave provisions (which are important if labour hire is
2. grouped, or shared, production costs that are used as a fill-in) that every mine worker in Australia is
difficult to apportion to a particular production unit entitled to. In addition to the minimum remuneration
3. indirect production costs (overheads) that are package, most operations also provide bonus structures
allocated to the entire site. and other incentives to attract and retain employees. In
This is illustrated in the flow chart in Figure 9.3. addition to the basic agreement, Fair Work Australia
provides employment agreements for specific, but not
Major cost centres all, mine sites (FWA, undated). More details regarding
Major cost centres include those for labour, ground specific awards are generally available on union and
mine site web sites.
support, equipment maintenance, ventilation, stone-
dusting, gas drainage, group costs, longwall specific To calculate the full cost of an employee, on-costs such
costs and production overheads. Each is considered in as superannuation, payroll tax and insurances must be
this section. added to the direct wage rate. For evaluation purposes,
rates are best compiled into an annualised figure. An
Labour example for a typical New South Wales mine based on
January 2011 Australian dollars is given in Table 9.7.
This major cost centre includes hourly and salaried
labour, and labour hire. It is important to ensure additional workforce
numbers are added to the base requirement to provide
Hourly wages coverage for annual leave and absenteeism (generally
The minimum remuneration package for production five to ten per cent).
and tradespeople employed in the coal mining industry As a comparison, the average annual labour cost
in Australia can be obtained from Fair Work Australia for wages personnel in Queensland is approximately

FIG 9.3 - Illustration of the three main cost centres of a mining operation.
TABLE 9.7 Salary wages

Example of full labour cost calculation for a wage employee.
In terms of salaried personnel, the annual labour cost
Direct wages Weeks per Hours of varies considerably from top to bottom and fractionally
annum pay from mine to mine. For initial estimation purposes, the
following factors can be used as a guide:
Ordinary time/week (35 h) 52 1820
•• administration personnel (clerks) = wages employee
Rostered overtime/week (double rate)
52 1040 × 0.75
(10 h)
•• safety and training staff and junior engineers
Average other overtime/week = wages employee × 1
48 384
(double rate) (4 h)
•• supervisors and senior engineers = wages employee
Total hours per annum 3244 × 1.25
Annual direct wage cost at A$27.00/h $87 588 •• senior supervisors = wages employee × 1.5
Bonus •• departmental managers = wages employee × 1.75
Bonus ($/week) 52 $425 •• senior managers = wages employees × 2 - 3.
Using the above information and a typical complement
Annual cost of bonus $22 100
of salaried personnel at a mine site, an average annual
On-costs (% of wages) labour cost in January 2011 Australian dollars for a
Superannuation (%) 9.0 salaried employee is around A$190 000 to 200 000.
Payroll tax (%) 5.8 Labour hire
Workers compensation insurance (%) 4.5 Workers sourced from a labour hire company tend
Long service leave levy (%) 2.7 to be on casual rates so that there is an inflated base
hourly rate and an administration charge (on-costs
Annual on-cost $24 131 and profit for the hire company). As a rule-of-thumb,
Total annual employee cost $133 819 hired labour will cost approximately 45 per cent more
than permanent labour on an hourly basis. However,
A$180 000 per person, primarily because of the cost for periodic or short-term labour requirements, there
of inducements (housing allowance, etc) required is a saving for the organisation in terms of on-costs,
to attract and retain employees at the more remote training costs, accrual of employee entitlements and
operations. severance costs.

Ground support •• Is there a need for rib support, and if so, what is the
density and required accessories as in roof support?
Ground support is more important in coalmines than
•• What is the life of bolting consumables (ie drill
in the (usually) more stable ground conditions of other
steels, drill bits and mixing dollies)?
soft rock environments. Ground support can be either
passive, such as steel arches and timber, or active, For costing purposes, the process is to determine the
such as roofbolting. The various categories of ground cost per metre of ground support in the various areas
support are: of the mine. This can be done using known cost of
components (obtainable from suppliers) and simple
•• primary ground support – erected as the roadway
spreadsheets. Multiply these unit rates by the average
advances or shortly afterwards
quantities required per metre for the various areas in
•• remedial ground support – erected some distance the mine plan.
behind the working face either in the production Typical costs for primary ground support consum-
panel itself or generally within the mine ables in July 2011 Australian dollars are provided in
•• secondary ground support – specialised support Table 9.8. Using these unit costs, Table 9.9 provides an
installed for a particular reason, such as reinforce- example of a matrix for estimating primary support
ment of a longwall tailgate with standing supports costs per metre. To obtain an average unit cost per
or cablebolts, polyurethane resin injection and long metre of drivage, the costs are determined over a
tendons for wide longwall installation roads. typical pillar length so as to incorporate the additional
Primary ground support support that is normally required in intersections. Note
that there is also a small allowance for wastage in the
Building up the cost model for primary ground support
primary ground support unit cost estimates.
requires the following thought process:
•• To obtain a cost per metre, consider a full row of Remedial ground support
pillars in main headings or a full longwall chain pillar. Remedial ground support costs are difficult to estimate
•• Consider the roof support density (ie how many from first principles, as the quantity and type of
roofbolts in a row), the distance between rows and support installed will depend on specific ground
what types of roof support accessories (eg mesh condition requirements. As remedial ground support
modules, butterfly plates, etc) are being used. Also, is not part of everyday mine operations, contractors
are there different support requirements for different are usually engaged to install the support, and mines
parts of the pillar, such as the cut-through versus the normally budget for a number of campaigns per
roadways, or is there a need to install long tendons annum, depending on the mine size and experience
or cables as part of the normal support regime? with ground support requirements.
TABLE 9.8
Typical costs of ground support consumables (July 2011 A$).
Item 1.2 m long rib 1.5 m long 1.8 m long 2.1 m long 4 m long flexi
bolting roofbolting roofbolting roofbolting bolting
1. Bolt w/nut 8.69 each 9.88 each 11.18 each 12.47 each 58.31 each
2. Chemical anchor 2.73 each 3.42 each 4.04 each 4.50 each 6.83 each
3. Roof mesh 4.8 m × 1.5 m 64.19 each 64.19 each 64.19 each
4. Star washer 2.02 each 2.02 each 2.02 each 2.02 each 2.02 each
5. Dragonfly plate 2.36 each 3.25 each 3.25 each 3.25 each 3.62 each
6. Pizza plate 8.23 each 8.23 each 8.23 each
7. Rib mesh 1.2 m × 1.7 m 27.70 each
8. Drill rod cost 87.41 each 94.28 each 101.17 each 108.06 each 216.12 each
9. Drill rod life (no of holes) 100 95 90 80 60
10. Drill bit cost 9.60 each 9.60 each 9.60 each 9.60 each 9.60 each
11. Drill bit life (no of holes) 30 25 25 20 10
12. Spanner 58.00 each 58.00 each 58.00 each 58.00 each 58.00 each
13. Spanner life (no of bolts) 500 500 500 500 500
Roof or rib bolt complete
17.11 each 28.29 each 30.34 each 32.42 each 75.46 each
(1 + 2 + 4 + 5 + 8/9 + 10/11 + 12/13)

TABLE 9.9
Example of calculation of primary ground support costs.
Panel type Main roads B and P panel roads LW gate roads
Configuration 5 entries, 5 entries, 2 entries,
75 m × 30 m centres 50 m × 25 m centres 100 m × 35 m centres
Drivage per pillar (m) 475 330 230
Support row spacing (m) 1.25 1.25 1.00
Rib support
1.2 m bolts per row (number) 4 4 4
Rib mesh per row (number) 2 2 2
Entries with rib support (%) 40 20 100
Total $ per row 49.54 24.77 123.84
Total $/m – rib support 39.63 19.81 123.84
Roof support
Roof mesh per row (number) 1 1 1
Total $ per row 152.65 144.44 209.31
Total $/m – roof support 122.12 115.55 209.31
Additional support in intersections
Intersections per pillar (number) 5 5 2
4 m flexi bolts per intersection (number) 4 4 6
Intersections with FB (%) 60 40 100
Extra roofbolts for corners (number) 15 15 10
Pizza plates (number) 5 5 5
Total $/pillar 2769.80 2314.10 1471.53
Total $/m – intersections $5.83 $7.01 $6.40
Grand total $/m (including 2% wastage) $170.93 $145.23 $346.34
Note: FB = feeder breaker.
As a rule-of-thumb, a yearly remedial ground support As in estimating for primary ground support, a
campaign of $100 000 can be budgeted for every 1.0 km first-principles approach using the cost of the various
of main headings that are open and operational. support components and a ‘density’ matrix is the
Secondary ground support preferable method. An example of such a calculation is
provided in Table 9.10.
Support functions in this category are:
•• systematic reinforcement of return airways (because Repair and maintenance
they deteriorate faster than intake airways)
Repair and maintenance of equipment falls into the
•• systematic reinforcement of longwall maingates following main categories:
with active support (usually cables or trusses)
•• replacement of worn or failed major component
•• systematic reinforcement of longwall tailgates either
by passive standing support (tin cans or timber parts such as gearboxes, clutches and motors, which
or fibrecrete cribs) or by active support (cables or generally occurs on the mine site
trusses) •• mechanical and electrical consumables such as
•• engineered support systems for longwall installation picks and holders, hydraulic hoses, electric cables
roads, which can contain longer roofbolts, cables, and conveyor idlers
tendons and polyurethane resin injection. •• routine and preventative maintenance

TABLE 9.10
Example of calculation of secondary support costs for a longwall.
Secondary support – longwall No Unit cost (A$) Spacing $/m of retreat
Cablebolts (8 m long in MG and TG) 4 98.13 2m 196.26
MG secondary rib bolts (walkway) 3 13.44 2m 20.16
MG secondary rib mesh (walkway) 1 roll 628.00 28 m 22.43
Link ‘n’ lock cribs (TG only) 1 1850 3.0 m 616.67
Drilling rods (1 per 100 rib bolts) 1 87.41 3 bolts/2.0 m 1.31
Drilling bits (1 per 30 rib bolts) 1 9.60 3 bolts/2.0 m 0.48
Drilling rods (1 per 40 cablebolts) 1 432.24 4 bolts/2.0 m 21.61
Drilling bits (1 per 5 cablebolts) 1 9.60 4 bolts/2.0 m 4.80
Total cost per m of retreat (July 2011 A$) 883.72
Notes: MG = maingate; TG = tailgate.
•• minor overhauls and fabrication work that occurs they could be considerably more. After a full machine
on an as-needs basis between major overhauls overhaul, the major components are considered ‘as-
•• major overhauls that occur either on the basis of new’ and the cycle resumes; however, it is generally
time or volume; these costs are either expensed from a slightly higher base.
(treated as an operating cost) or capitalised and are The mine may keep some of the critical components as
not dealt with in this section. part of store stock but more frequently these compon-
ents are part of an original equipment manufacturer
Major component replacement (OEM) spares service.
Major component parts such as gearboxes, clutches
and motors are replaced when an in-service failure Mechanical and electrical consumables
occurs. Major parts are also replaced on a time or Costs for mechanical and electrical consumables
tonnage-based proactive maintenance program prior include replacement of minor wear items (miner picks
to failure, during a dedicated maintenance shift, to and holders, chain conveyor flights), failed hoses and
reduce unplanned production delays. Indicative costs fittings, damaged trailing cables and worn conveyor
per mined tonne ($/ROM t) for major items of plant are belting and idlers. These costs are usually apportioned
usually available from the manufacturers. Indicative on a cost-per-tonne basis, with typical January 2011
costs in January 2011 A$ are indicated in Table 9.11. Australian dollar costs shown in Table 9.12.
TABLE 9.12
TABLE 9.11
Indicative costs per mined tonne of consumables.
Indicative costs per mined tonne of major plant items.
Consumable Cost (A$/t)
Major plant item Cost
(January 2011 A$/ROM t) CM/shearer picks 0.20
Longwall system 2.25 Hoses and cables 0.25
Continuous haulage 2.10 Chain conveyor flights 0.25
Continuous miner with bolters 2.00 Section belt conveyors 0.20 per km length
Continuous miner without bolters 1.60 Note: CM = continuous miner.
Shuttle cars 0.75
Routine and preventative maintenance
Mobile roofbolter 0.50
In addition to major repairs, production equipment
Diesel equipment 0.50 requires routine and preventative maintenance. This
Feeder breaker 0.30 includes replacement of consumed oils and lubricants
including engine and hydraulic oils, filters and longwall
Mobile roof support 0.25 support hydraulic fluid. These costs are generally
unrelated to production tonnes and thus are usually
These are the averaged costs over the operational apportioned on a fixed cost-per-time basis. Typical
cycle of the equipment. In the new condition, major apportioned costs for budget purposes are:
component parts costs should be considerably less. As •• continuous miner section – $10 000/month
the equipment operates and nears an overhaul point •• longwall section – $50 000/month.

Outbye diesel support equipment also requires cost of ventilation structures installed by contractors
routine preventative maintenance, which is usually (labour, equipment and materials) can vary depending
based on engine operating hours. Typical frequencies on the construction type and size of the mine openings.
are 250, 500 and 1000 hours. Due to the range of As a first estimation, the following January 2011
equipment in service, precise costs are difficult to Australian dollar costs can be assumed:
quantify; however, for budget purposes, $1200 per •• high pressure overcasts and undercasts – $70 000
month per equipment item such as a load-haul-dump each
(LHD) unit or a personnel transport unit can be •• low pressure overcasts and undercasts – $50 000
assumed. each
Minor overhauls and electrical codes •• high pressure (50 psi) final seals for a panel – $50 000
Underground mining is a harsh environment where to $80 000 each
equipment can be subjected to unplanned events •• low pressure (20 psi) seals for a longwall gateroad
such as accelerated wear from mining harder than or bord and pillar panel – $25 000 - $40 000 each
expected material, physical damage from impact •• ventilation stoppings (5 psi) – $5000 each ($6000
with other equipment or involvement in minor roof with mandoor)
falls, as well as the cumulative effects of emergency •• regulators and coffin seals – $20 000 - $30 000 each
repairs. Additionally, legislation requires equipment •• vehicle doors – $15 000 each ($30 000 for double
to undergo periodic inspections to ensure compliance doors).
with relevant regulations and codes. Any major Rigid ducting of 680 - 900 mm diameter connected
overhauls and repair work that involves structural to an auxiliary exhausting fan is used to ventilate the
fabrication and extensive re-hosing and/or rewiring production face. Including joining gaskets and hangers,
will usually require the equipment to be sent off-site. rigid ducting costs approximately $400 to $600 per 2 m
The recommended estimated costing for this length for round ducting and $700 to $900 per 2 m
unplanned work is ten to 15 per cent of the cost of a length for oval ducting. Ancillaries such as bends and
major overhaul, which can be apportioned at the transition pieces cost approximately $500 to $650 each.
midpoint of a major overhaul cycle. For example if it When estimating quantities assume that:
costs A$1.2 M to overhaul a continuous miner every one •• ducting along roadways will normally be round
million tonnes, then allow $120 000 between purchase •• ducting across intersections will normally be oval
and the first overhaul, $180 000 between the first and •• ducting will be carried in both roadways in twin
second overhauls and $240 000 between the second heading longwall development
overhaul and the machine being scrapped. •• ventilation systems on each side of the panel are
not uncommon in bord and pillar mining where the
Ventilation seam section is <2.5 m in thickness as this minimises
Ventilation covers: duct damage due to impact from vehicles
•• installation of ventilation stoppings in development •• in low seam heights, brattice sheeting may be used
sections for face ventilation control instead of ducting
•• maingate seals in longwalls •• some ducting will always be damaged beyond
•• provision and maintenance of ventilation ducting in repair so allow, say, 1 m of new duct per 250 m of
the development faces roadway drivage.
•• sealing off worked-out panels Ancillary items that also need to be brought into the
•• tube bundle and other monitoring infrastructure general estimating equation are brattice sheeting (used
for temporary ventilation stoppings), which costs $550
•• ventilation structures such as overcasts, undercasts
for a 50 m roll and will be entirely consumed during
and main road stoppings.
approximately 350 m of development. Polyvinyl
Generally, initial life-of-mine ventilation structures chloride pogo sticks are used for securing temporary
(pit bottom overcasts, etc), ventilation fans (main and brattice and other things. Pogo sticks cost $50 each and
auxiliary), initial ducting and auxiliary fan replace- could be used at the rate of two to three per 350 m of
ment are capitalised. All other ventilation structures development.
and apparatus are normally expensed. Seals and
stoppings can be expensed over the volume of ROM Stonedusting
material obtained from a particular area of production Stonedusting is required in underground coalmining
they control (ie tonnes or metres per cut-through or but isn’t an issue in other soft rock environments.
production panel) and ventilation ducting is simply There are two categories of stonedusting: the initial
expensed as a consumable. stonedusting at the working face and remedial
Increasingly, as the construction of ventilation stonedusting that keeps the mine in compliance
structures is a periodic rather than daily function, with respect to maintaining the 80 per cent level of
specialist contractors are used for this function. The incombustible material in its roadway dust.

Initial stonedusting can be applied either by hand •• supply of recovery mesh, installation of mesh and
(now rare), venturi (common) or LHD attachment roof support along the face during the bolt-up
(normal). Remedial stonedusting is invariably done by process
machine or venturi. •• hire of a package of diesel equipment for approx-
If stonedust is applied by hand, 20 kg bags are imately four to five weeks
normally used. For LHD attachments, 1 t bulk bags are •• additional labour to assist in the move, usually
used, or the mine may construct a silo on the surface contractors
to store the bulk stonedust and feed it to the mine
•• road building and maintenance.
via a borehole. The application rate is approximately
2 kg/ m2. The cost in January 2011 Australian dollars of the
above for a typical face (250 m to 300 m wide) relocation
Current (January 2011 A$) costs for stonedust are:
of five weeks is around A$5 M.
•• 20 kg bag – $7.50
•• 1 tonne bag – $300 Remediation
•• bulk – $200 t. Remediation programs are required where an event has
At an application rate of 2 kg m2, the cost for stonedust occurred on the longwall face that requires intervention
application in a typical 3.5 m × 5.2 m roadway is around to allow the face to advance. Typical programs include
A$10/m. filling cavities above the longwall roof supports,
reinforcing the roof in front of the longwall and dealing
Group costs with strata failure at the face ends.
This category includes costs for electrical power, Deliberate inclusion of these costs in the detailed
diesel fuel, road maintenance, remedial stonedusting, feasibility stage is recommended because these events
pumping and personal protective equipment (PPE), do happen. A remediation event may cost $500 000
which are shared by all sections of the mine. (excluding lost production) and this should be spread
The costs for electricity and diesel can generally be over the production that can be obtained from a
worked from first principles as follows. length of the longwall panel retreat. The length of
panel retreat is somewhat subjective and fairly site-
•• Electricity – installed power of the operating
specific (dependent on local ground conditions) but
equipment times the anticipated operating hours
an allowance of 1500 - 2000 m of retreat per event is
per annum times the anticipated power (load) factor
common.
(usually around 80 per cent) times the appropriate
tariff (high, medium and low). The power utility Gas drainage
company may or may not also have a fixed charge
Gas drainage is an important cost consideration in
for supplying a certain level of peak demand.
most coalmines.
•• Fuel – hourly consumption of each type of vehicle
times the normal run hours per annum for each type Predrainage
of vehicle times the number of vehicles times the As underground coalmining moves deeper, predrain-
cost of fuel per consumption unit. age of seam gas is often required to allow development
Human considerations such as PPE, remedial and longwall operations to proceed without risk
stonedusting and road maintenance can be included of catastrophic events (outbursts) or undue delays.
and costed using the following rules-of-thumb: Depending on the circumstances, initial drainage may
•• employee clothing and PPE – $3500 per annum per be undertaken from the surface through directionally
employee drilled surface to in-seam (SIS) holes or from in-seam
•• road maintenance – $10 000 per annum per kilometre holes drilled horizontally from underground, which
of travel road are vented to the surface through riser holes, or rarely,
directly into the mine’s exhaust air. With the use of
•• remedial stonedusting – $25 000 per annum per
coal seam methane for power generation and the
kilometre of main entries.
introduction of a price on carbon emissions, the gases
Specific longwall costs are generally captured and used for power generation
Longwall mining incurs a range of costs that bord and or flared and vented. Generally the requirement is to
reduce the levels of seam gas to below those that could
pillar systems are not exposed to. These costs are related
cause gas trips or outburst conditions.
to the recovery and relocation of mining equipment and
the possibility of remedial ground support programs The level of seam gas predrainage required is very
due to poor geological and geotechnical conditions. much site-specific, so a generic cost estimation method
is impossible. However, as a general rule, once the
Face relocations drainage pattern is determined (ie hole spacing and
Face relocations require a number of expensive drilling metres required per metre of gateroad) an all-
programs: up contracted cost in January 2011 Australian dollars of

$150/m drilled can be used for underground in-seam power generation. Goaf gas is seldom captured and
gas drainage drilling. For SIS operations, the vertical commercially sold as it contains high concentrations of
well will cost around $20 000/m of depth and the SIS other gases.
holes will cost around $200/m drilled. To these costs Goaf drainage holes are usually 300 mm in diameter
must be added the costs of capture (suction plant and and cased to prevent collapse as the ground caves. A
piping) and disposal of the drained gas. typical cost for a 200 m-deep hole is around $100 000.
Goaf drainage To this cost must be added the costs of capture and
In longwall operations, gas will be released during coal disposal of the drained gas.
cutting and may also build-up in the goaf behind the
longwall face from coal left from the seam being mined
Contract development
(in thick seam operations) or from adjacent seams. Often Often during initial mine development, or when a new
this gas concentration cannot be sufficiently diluted by area of a mine is being opened up, the additional in-
the face ventilation air alone, and drainage of the goaf seam development metres required are beyond the
gases through vertical holes drilled from the surface capability of the steady-state production crews. As
will be used to minimise the gas reporting to the face. this additional development is usually short lived (one
Typically, a goaf drainage hole will be required every to two years), the mine will engage a contractor to
50 - 200 m of longwall retreat depending on the level undertake the development rather than hire and then
of gas emissions. These holes are usually placed on make redundant the additional personnel required.
suction through a centrally located plant and pipe This usually goes for the additional equipment as well,
range and the gas is either flared or used in on-site although the mine may have spare equipment to use.
TABLE 9.13
Example of daily mine water requirements estimation.
Location Flow input Maximum Normal peak Process Daily flow Daily flow
flow (L/min) flow (L/min) utilisation (%) (L/min) (ML)
Shearer water 570 570 0.65 370.50 0.53
Shield dust suppression (if used) 346 346 0.49 169.54 0.24
TG and MG cooling system 172 172 0.8 137.60 0.20
Crusher and BSL cooling 40 40 0.8 32.00 0.05
MG dust suppression 30 30 0.8 24.00 0.03
Longwall
Dust extractor 60 60 0.8 48.00 0.07
Water coupling operation MG 210 13 0.007 0.09 0.0001
Water coupling operation TG 210 13 0.007 0.09 0.0001
3 × conveyor transfers (dust control) 45 45 0.8 36.00 0.0518
Subtotal 1683 1289 – 817.82 1.18
Cutting and bolting 200 140 0.33 46.20 0.07
Dev 1 Belt/feeder dust suppression 15 15 0.4 6.00 0.01
Subtotal 215 155 – 52.20 0.08
Subtotal 215 155 – 52.20 0.08
Subtotal 215 155 – 52.20 0.08
6 × conveyor transfers 90 90 0.8 11.66 0.10
Trunk belts Subtotal 90 90 – 11.66 0.10
Total daily flow – 986.09 1.51
Notes: BSL = beam staged loader; Dev = development; MG = maingate; TG = tailgate; – = not applicable.

There are a number of experienced development cent depending on the final quality requirements. It is
contractors in Australia, and all generally have their usually the case that as quality requirements decrease,
own equipment. Contract development is usually or have a wider acceptance range, recoveries increase.
charged on a per-metre mined basis, with additional Similarly, if quality requirements increase with a
charges for mobilisation and demobilisation of the narrow acceptance range then recoveries will decrease.
operations as well as travel and accommodation for the These are dependent on the inherent qualities of the
crews. The mine generally supplies the ground support deposit.
materials, conveyors and services reticulation. Typical In underground mining, the concept of diluting the
costs in January 2011 Australian dollars excluding inherent quality of the deposit must be considered.
ground support, services and conveyance of the Dilution is the addition of waste material from the roof
material from the mining section to the pit top are:
and floor that occurs as part of the mining process and
•• mobilisation and demobilisation – $6 M which generally lowers the quality of the mined mater-
•• pit bottom areas (reduced productivity) – $4500 m ial. In thick deposits of soft rock such as salt and potash
•• normal main entries and gateroads – $3500 m. this is rarely a problem as the mine can operate within
a quality boundary rather than a physical boundary.
Production overheads However, in a coalmine the coal seam is usually
This area includes costs like water supply, office defined by a non-coal roof and floor and it is inevitable
running costs, office and bath house cleaning and that some floor and some roof material (out-of-seam
maintenance, site security, business insurance, land dilution) will find its way into the ROM material. Out-
taxes, consultants, occupational health and safety of-seam dilution happens where:
(OH&S) compliance and technical services. •• the separation between coal seam and roof and
Estimating production overhead costs can generally floor is not perfect and the excavation equipment
be broken down into three areas: removes some roof and floor while mining the coal
1. General overheads – a rule-of-thumb to use is seam so as to keep a level roof and floor
$1.25 M per annum per Mt of annual production. •• the coal seam is marginally too thin for the mining
2. Insurance – a rule-of-thumb for new operations is to equipment and roof and floor are cut to provide a
use is $1/t/a of production. Insurance depends on an suitable (minimum) working height
operation’s claims history. •• roof and floor material become detached and are
3. Water supply – this is site-specific and depends on caught up in the mining process
whether local groundwater is available or water must •• the floor material is weak or the roof material is
be purchased from a third party. There is no general friable and they are deliberately removed to achieve
rule-of-thumb for such costs and the estimator will a stable working horizon.
need to make specific inquiries. However, annual
It can be assumed that most coal mined will require
water requirements can be estimated using first
a wet process to generate a clean saleable product
principles as shown by the example in Table 9.13.
from the ROM material. Simple maths determines that
These quantities do not include any water use by the 100 per cent of the cost of obtaining a product has to
coal handling and preparation plant (CHPP), which be carried by a lesser amount of product material. For
can be considerable if significant washing is required. example, if it costs $40 to mine and process a tonne of
ROM coal and there is a product yield of 80 per cent
Effect of yield then the cost of product coal is $40/80 per cent = $50 per
Most coal and soft rock requires some form of tonne. This figure is carried through the remainder
processing to take it from the as-mined (or ROM) of the cost sheet. Naturally, as the amount of dilution
condition to the final product (or saleable) condition. increases, the effective yield of clean product from ROM
During this process there generally will be some loss material decreases as the dilution material becomes
of material. further waste in the washing process.
In a dry process, the material is sized and screened Figure 9.4 shows this effect. To the left is a theoretical
so that material that is too hard, too big or too small is material mined from a 2.5 m thick seam that has a
rejected. Recoveries can therefore be up to 99 per cent of 100 per cent yield and costs $40 to mine and process.
the input ROM material. If the ROM material contains The crossover is a normal situation where the coal is
an unsaleable component, as most coal seams do in mined without dilution, has a clean coal yield of 85 per
the form of bands of rock and poor-quality coal, a wet cent and a clean coal cost of $47.
process is used. Coal washing processes, by their very As the graph moves to the right, increasing amounts
nature, produce a coarse reject and slurry containing of out-of-seam dilution are included in the ROM
ultra-fine material that has both unrecoverable product material so at far right with 250 mm of dilution (2.75 m
and reject in the mix. Recovery of clean product from working height), yield has dropped below 75 per cent
the coal seam can range from <50 per cent to >90 per and the cost of product has increased to $54. In itself

components. The ability of suppliers to provide an

infinite number of options and variations has declined
over the years to a point where the operator generally
selects from what is currently available and does some
limited customisation to suit the particular operation.
Care is required when estimating equipment capital
costs due to long lead times and cost escalation.
Project creation
Four major areas where capital will be spent prior to
the project being handed over to the operational staff
are:
1. project development
FIG 9.4 - Effect of dilution in coal mining.
2. project approval
3. project planning
this is not a problem if the correct yield was built into
the original project justification. However, if the actual 4. project delivery.
yield is lower than the projected yield there are two
Project development and approval
problems. The first is financial because the cash margin
will be lower. The second is a potentially lower volume This is the progressive process where ideas, possibil-
of product as the processing system has to process ities and opportunities start as a bare skeleton and
more ROM material to generate the equivalent amount finish as a project that is worth further evaluation. It is
of product. ultimately something that is capable of withstanding
scrutiny in the public arena and has a very high
CAPITAL COSTS probability of gaining project approval from the
Capital expenditure on a project commences well before regulatory author-ities.
physical work, continues through the establishment Project development will normally comprise:
and operational phases and often includes mine • confirmation that a workable deposit exists
closure. It is an expenditure that can be depreciated • contemplation of a basic design(s), production
over time. method(s) and level(s) of output
The main capital expenditure ‘headlines’ are: • consideration of the environmental and social
• upfront capital required to create the project aspects
• initial or prime capital required to establish the mine • creation of a high-level WBS
• initial or prime capital required to bring ROM • capital estimation to budget level.
production to projected levels
These steps can be considered as a prefeasibility
• ongoing or sustaining capital required to maintain study and a decision will be made at the completion
production levels of the study as to whether the project progresses.
• mine closure and site rehabilitation. Following on from this, the granularity of the capital
For a mining project, therefore, the capital cost estimate decreases and successive evaluations occur at
estimation should be for the life of the project or at progressively finer levels of detail until the owners of
least for a period of ten years after the mine has reached the project decide to obtain a type of approval from the
steady-state production. regulators commonly known as ‘development consent’
In estimating the likely capital expenditure of a project, and the project meets all the internal financial hurdles.
there is the concept of granularity. This means that in the
initial stages the expenditure estimate is relatively coarse Project planning and delivery
or high level. This high-level expenditure estimate is Project planning takes the project to a point where it
usually based on the project work breakdown structure can be executed and delivered. Inevitably this requires:
(WBS) and the major items are individually costed on • detailed engineering so that site-specific facilities
budget quotes that can be actual cost plus or minus 20 can be costed
per cent with allowances for minor items. As the project • expansion of the WBS into at least three levels for
moves forward, the WBS structure is expanded and detailed capital estimation:
used to subdivide the major cost areas, which allows a
1. primary level – prime areas
progressively finer level of cost estimation down to, say,
plus or minus five per cent. 2. secondary level – subarea of the project
Development of the Capex model is a ground-up 3. third level – systems or work packages.
process that simply requires an understanding of the Figure 9.5 shows the WBS.

•• prework and portals (typically replacement or

reinforcement of near-surface material)
•• excavation and muck removal
•• excavation lining and ground control
•• preparation of the travelling surface
•• demobilisation.
The cost of mine access work is difficult to estimate
from first principles because of the number of variables,
which include grade of excavation, cross-sectional
area, ground support density and length of opening.
However, as a rule-of-thumb, the following all-
inclusive costs in January 2011 Australian dollars for
typical 5.5 m diameter shafts and drifts of 4.5 m × 5.5 m
can be used for initial estimation:
FIG 9.5 - Example of work breakdown structure expanded
•• vertical shafts <200 m deep – $40 000 - $45 000/m
to three levels.
•• vertical shafts >200 m deep – $35 000 - $40 000/m
It is generally considered that a project has been •• declines/drifts <1000 m long – $30 000 - $35 000/m
delivered when the scope of work has been completed •• declines/drifts >1000 m long – $28 000 - $30 000/m
and the operational team is in place. There are several •• 2 × main fan installation including electrics – $6 M
ways of delivering a project, ranging from a totally in- to $8 M
house solution to an engineering, procurement and •• 3 × main fan installation including electrics – $8 M
construction management (EPCM) contract. to $10 M.
The cost of an EPCM contract can be as high as 30 per
cent of the total project cost, although using experienced Adits
EPCM providers may reduce the risk. In this category are mine entries from:
•• a small excavation where the deposit crops out
Establishing an underground mine
•• the final highwall of an open cut excavation
Capital to establish an underground mine includes
costs for access facilities such as adits, declines, drifts •• a civil excavation or box cut that exposes the deposit.
and shafts, and ventilation facilities, which include fans The roadways from these entries are at seam grade.
and possibly shafts.
Declines and drifts
Access points Declines are typically constructed at a grade of one-in-
The access points are collectively known as entries six or more, are too steep for free-steer vehicles (FSVs)
or portals. In shaft mines there are likely to be two and are usually classified as ‘unwalkable’. This means
shafts. One is for mineral transport, personnel and some form of haulage via hoist is needed for personnel
materials and intake air and the other is for personnel and materials. They may be used as a second egress
and materials and return air. Drift and adit mines provided there are acceptable stairs or a travel system.
usually have three separate entries: two are for mineral An inability to use FSVs is a severe impediment to
transport, personnel and materials transport and intake personnel and materials haulage due to the amount
air, the other is for the ventilation fan and return air. of traffic within the mine. Declines of up to one-in-
four grade, however, can be used for conveyors and
Ultimately the number of entries and their cross- ventilation and will be significantly shorter than a drift
sections are a function of how much air needs to be to the same depth.
moved around the mine and the tolerable air velocity in
Drifts are constructed at a grade of one-in-seven
each roadway. This is determined in the mine planning
or less, which allows FSVs to operate and the entry
process. However, in some states two separate means to be classified as ‘walkable’. This is an important
of egress in fresh air from the mine must be provided. consideration when there is a need to provide multiple
As a mine becomes more extensive, it is not unusual exits from the mine.
for the ventilation fan to be moved to an inbye location Construction of drifts and declines of one in five
and the original shaft converted into an additional or less can be achieved with roadheaders. At steeper
intake airway. grades, drill-and-blast methods must be used.
Access facilities Shafts
The main components to consider for capital estimation Shafts obviously provide the shortest distance between
of access facilities are: the surface and the deposit. Shafts have disadvantages
•• contractor mobilisation for mined material haulage because:

•• there is no ability to install a continuous minerals Longwall systems

haulage system A longwall system is usually purchased as either a
•• the installed batch winding system is usually the single scope of work from a major supplier or a turnkey
constraint on production levels supply from an organisation that sources sections of
•• shaft-based haulage systems have higher costs than the system from different manufacturers. Supply may
drifts (conveyors) for maintenance and compliance. or may not include the maingate conveying system.
For ventilation and additional access points for The cost of a longwall system depends on several
personnel and materials, shafts can be superior to long factors including the length of the face, the design life
inclines or drifts. and load-bearing capacity of the roof supports, and
Methods of shaft sinking include conventional (ie the nameplate production capacity. All of these factors
shotfiring), raise boring (which requires access to the are obviously site-specific, and the estimator should
base of the shaft), blind bore (large diameter boring identify these variables then seek to obtain budget
from the surface) and the horadiam method (a raise quotes from the longwall system suppliers (eg Joy
Mining, Caterpillar or Nepean Longwall). As a guide,
bore that is enlarged by shotfiring methods).
the January 2011 A$ cost of a 300 m wide longwall
Ventilation systems system of 4000 t/h cutting capacity and typical 1000 t
capacity roof supports is around $130 M, excluding the
Underground soft rock mines are invariably ventilated
panel conveyor and installation.
by mechanical means due to the high volumes and
pressures involved. A typical mine will require Conveying systems
200 - 300 m3/s of airflow at pressures of 2 - 3 kPa. Lower
volumes at lower pressure will be required initially but Conveyor systems currently range from 1050 mm to
higher volumes and pressures will be needed as the 2100 mm belt width with belt speeds of 2.5 m/s to
mine size expands. Both axial flow and centrifugal fans 5 m/s, which provide capacities of 500 to 6000 t/h. The
installed power of a conveyor can range from a single
are commonly used. They are selected according to
75 kW drive for short development belts to a multiple
duty. Both types of fans cost roughly the same. Two fans
drive system with each drive consisting of 750 to
are usually purchased initially, with one in operation
1000 kW of installed power. The attendant power
and the other to provide standby capacity in case of
supplies and control systems for the larger conveyors
failure of the other. As ventilation duties increase, a
are significant pieces of underground infrastructure.
third fan may be required so that two can operate at
Conveyor systems now form the second-ranking
one time. An exhausting system is almost invariably
expense group behind production equipment.
used as it is generally easier to control the airflow in
this configuration. However, very gassy mines may use When selecting a conveyor system for a large-scale
a blowing system to reduce gas make by maintaining a project it is prudent to undertake a flow and mass
positive pressure on the coal seam. analysis to determine what the system capacities will
look like. Material flow from production units is never
Run-of-mine production continuous. Rather, there are peaks and troughs and
the mine engineers will therefore initially be forced
Capital to establish production facilities for a soft
to design a system that can accommodate peak loads.
rock mine includes costs for production equipment,
As the mine develops, surge points (ie underground
conveyors, support vehicles, heavy-duty equipment,
bunkers or bins) may be created such that peak loads
underground services, monitoring and data collection
can be evened out and allow lower capacity conveyance
and safety compliance.
to be used outbye the surge point. This allows slower
Production equipment belt speeds and reduces wear and tear and operating
costs of these outbye conveyors.
Production equipment usually comprises the machine-
ry required to initially mine and transport the mineral The basic steps in designing a conveyor are:
to the conveyors. The boundary of a production unit •• work out the peak loading requirements and the
is usually where its individual costs can no longer duration of the peak loading
be determined, such as a transfer point from the face •• decide what combination of width and speed is
haulage system onto the panel conveyor. A mine will appropriate, which means narrower high speed
have both roadway development sections and bulk versus wider lower speed
production sections. •• rationalise the length of the installation versus the
lift (uphill, level or downhill) so that the number
Continuous miner systems and power requirements of the drive(s) can be
Table 9.14 shows the major items of plant in the various calculated and rationalised
configurations of a continuous miner production unit •• decide the type and strength of conveyor belting
along with their initial purchase costs. required.

TABLE 9.14
Typical capital costs of continuous miner systems – July 2010 A$.
Unit cost Normal Super Place- DCB Secondary
($000) section section changing (dev) panel dev extraction (SC)
Continuous miners
Miner–bolter 5500 1 2
Bolter–miner 6250 1
Place-changer 5000 1
Extraction 4750 1
Mining equipment
Shuttle car 1250 2 3 3 1 2
Continuous haulage 15 000
Breakerline support 1175 3
Mobile roofbolter 1250 1
Feeder breaker 1275 1 1 1 1 1
Auxiliary fan 300 1 2 1
Electrical equipment
Isolator and HT cable 225 1 1 1 1 1
Substation and DCB 750 1 1 1 1 1
Machine cables 400 1 1 2 1 1
Diesel equipment
12-person transporter 300 2 3 2 2 2
10 t LHD and attachments 875 1 1 1 1 1
Total cost ($ M) 12.43 19.78 14.53 11.93 14.90
Notes: CM = continuous miner; DCB = distribution control board; HT = high-tension; LHD = load-haul-dump; SC = shuttle car.
The following discussion and Figures 9.6 to 9.10 steps 2. Determine the best length and capacity requirements
through the initial process of conveyor selection and for a particular conveyor so as to obtain a base
capital costing: installed power requirement.
1. Determine the best width and speed for the peak At this stage the type of belting to be used is
loading capacity. significant. The three main types are steel cord, ply
When considering the conveyor speed, valid inputs and solid woven, all of which have different tensile
are the wear characteristics of the type of conveyor
belting chosen, and its manufacturing availability
and compatibility with other belting at the mine.
FIG 9.6 - (Coal) capacity versus belt width. FIG 9.7 - Installed power versus capacity and length.

At this stage there is likely to be some iteration so

that an appropriate level of power can be deter-
mined for the installation. Considerations are likely
to include compatibility of drives within the mine
site, belt starting characteristics and capacity of
available power supplies. Again, modifications to
length may be required to accommodate a chosen
belt type.
4. Determine the cost of the initial system.
Once the total power requirements are known,
then the initial system, which is a conveyor
approximately 100 m long, can be broken up into
the following components:
FIG 9.8 - Additional installed power at additional lift (m) • design of the system
versus capacity. • supply of:
• delivery end, conveyor drive, loop take-up,
return end and cleaning systems
• power, switch gear and control systems
• initial run of structure
• chutes and transfer point arrangements
• installation of the system inclusive of initial run
of structure.
As installed power increases, as expected so does
the cost of the initial system. This is because the
higher powered systems require progressively
higher quality and capacity foundations and
higher strength fabrications. Figure 9.9 shows this
relationship.
5. Determine the cost of conveyor extensions.
Conveyor extensions are the remaining conveyor
structure, conveyor belting and control systems
needed to complete the entire system. The install-
ation of the entire system can be completed either
FIG 9.9 - Initial system cost versus installed power. as a lump sum item (if the entire conveyor is
being installed) or as progressive expenditure (if
the conveyor is being extended as roadways are
developed). This is important when the cash flow
of capital projects is being scheduled. Figure 9.10
shows typical conveyor extension costs.
Worked example
A mine requires a 2000 m long, 3000 t/h conveyor to
handle peak capacity from its longwall. Using the
above tables and graphs, an initial capital cost estimate
is determined as follows:
• Mine elects to run a 1600 mm-wide conveyor at 4 m/s
• Conveyor is 2 km long; therefore the basic power
requirement is 500 kW
• Conveyor lift is 50 m so there is an additional power
FIG 9.10 - Belt, structure and incidentals cost versus capacity. requirement for an additional 40 m lift of 350 kW,
making a total installed power of 850 kW
capabilities. The belt tensile strength is the main • Cost of the 850 kW initial system is $2.35 M
factor in determining the amount of power that can • Cost of 1900 m of conveyor extensions is 1900 m at
be used and therefore the conveyor length and lift. $1050 m = $2 M
3. Determine the additional power requirement for • Total cost of the entire conveyor system is therefore
extra lift. $4.35 M.

Diesel support vehicles TABLE 9.15

Typical complement and pricing of load-haul-dumps (LHDs)
In addition to the diesel equipment purchased as part of
and support equipment for a longwall mine (excluding
the production section, additional diesel mobile equip- production panels).
ment is required for outbye support tasks including:
•• maintenance and emergency response Item No July 2010
•• distribution of materials and consumables to unit cost (A$000)
production areas Load-haul-dumps (10 t) 2 875
•• substitution of vehicles during routine on- and off- LHDs (13 - 15 t) 3 1000
site servicing
LHDs (50 t) 1 1450
•• project work such as conveyor installations and
roadway maintenance. Personnel transport 4-8 300
Maintenance and emergency response vehicles Maintenance vehicle 2 350
Mine maintenance crews will generally use a standard Ambulance 1 335
personnel transport vehicle (manufactured by Industrea Supply trailers 9 20
or Valley Longwall International) that has been fitted out
with a tray back complete with tool boxes, lubrication Pipe trailers 2 200
dispensers and a jib crane. These can be configured for Ballast trailer (17 t) 1 410
two- or four-person seating in the cab. Alternatively,
QDS work platforms 2 18
special maintenance pods that attach to an LHD unit
may be used. Cable boats 4 7
Every underground mine is required to have an Supply/material cassettes 12 6
ambulance for transport of injured personnel in an
Cassette carrier 1 15
emergency. Again, these are usually standard personnel
transporters fitted out for the purpose. Duck bill 2 13
The cost of the above vehicles is generally $35 000 - QDS jib crane (slewing) 1 22
$50 000 more than the standard 12 person transport Stoneduster (pod duster) 1 52
vehicle. A typical mine will have two maintenance
vehicles and a dedicated ambulance. Stonedust carry pods 3 12
Auger 1 17
Supply and construction vehicles
The movement of supplies, conveyor and service QDS tyre handlers 1 14
components and construction materials is generally QDS quick dusters 1 46
accomplished with an LHD equipped with various QDS roofbolter 2 243
attachments. The LHDs will have capacities of 10 t and
13 - 15 t. Specialised ‘pods’ are available that quickly Cable reeler 2 42
attach to and detach from the LHD instead of the Belt reeler 2 40
standard bucket or forks. A typical complement of
Winch (30 t) 1 156
support LHDs and pods for a longwall mine of two
development units, along with indicative pricing, is Powertram 1 1090
shown in Table 9.15. Fuel pod 2 68
Specific heavy-duty equipment Electrical power, compressed air and water reticulation
Operators in general no longer purchase specialised The supply (reticulation) of electrical power, com-
equipment such as mine graders or the specific heavy- pressed air and fresh water for equipment operation
duty equipment required to recover, relocate and and fire-fighting is required to each production section
install longwall equipment. Contractors either relocate and throughout the other travelable areas of the mine.
the longwall face or the operator leases a package of In general, a compressed air pipe, freshwater pipe,
equipment from an equipment supplier. This allows the dewatering pipe and high-voltage (HV) electrical cable
operator to transfer some capital costs to operational will be run along every metre of travel road in a mine.
costs but more importantly allows proper utilisation, Depending on the power requirements of the conveyors
maintenance and replacement of specialised equipment and section equipment, two to three (or more) HV
that has little use otherwise. cables may be required. In addition, the pit bottom area
will house an electrical substation and switchboard to
Underground services distribute the main electrical supply to the various HV
Underground services include electricity, compressed cables. Typical costs in July 2010 Australian dollars for
air and freshwater reticulation and wastewater removal. this equipment are:

•• pit bottom switchboard (four circuits) – $500 000 Monitoring and data collection
•• 11 kV HV cabling with connector plugs (300 mm2) Environmental monitoring is a legal requirement for
– $250/m mines. Data collection is an important component of
•• 150 mm-diameter (nominal) freshwater and fire- such monitoring.
fighting supply line with couplings and fittings –
$100/m Monitoring and sampling
•• 150 mm-diameter (nominal) compressed air supply Legislation and mine protocols require environmental
line with couplings and fittings – $50/m. conditions to be monitored for issues including mine
gases, smoke and airflow. Some air monitoring is done
Wastewater removal real-time, where sensors transmit data to computer-
Wastewater from the mining process (dust suppress- based systems. Some monitoring is best done by
ion, roof drilling, equipment cooling, etc) as well sampling with a tube bundle. Many conveyor and
as groundwater that enters the workings from the pump installations incorporate temperature and
surrounding strata needs to be collected and pumped vibration monitoring. An allowance of $1 M - $1.5 M
to the surface. Depending on the attitude of the for these systems is appropriate.
workings to the dip of the strata (downdip or updip), In addition to the static or hard-wired systems, in the
water will either collect at the working face or drain coal industry most mining supervisors carry portable
outbye to other low-lying areas. monitors. The capital cost of providing items like
In development and outbye operations, the localised monitors, charging racks and calibration equipment
water collection point (working face or outbye swilley) needs to be identified in the Capex model. Individual
is usually drained by small pumps powered by gas testing units can cost up to $4000, and an allowance
compressed air, which then feed larger electrically of $100 000 for necessary units, chargers and accessories
powered section, or pod, pumps for pumping out of the is common.
section. Pod pumps typically have capacities of 15 L/s
to 20 L/s at up to 150 m of head, and are so named as Data collection
they come complete with a 2000 - 4000 L tank. Typical Mines need to collect real-time data. Systems are
water make in a development section is 2.5 - 5 L/s so that currently available to monitor conveyor status and
the pod pumps work only sporadically. Because of the loads, the status of CMs (whether they are cutting
relatively low pressures involved, section dewatering or not) and the complete health of the longwall
lines are usually 100 mm diameter polyethylene pipe. (including fluid pressures and support performance).
In longwall operations, substantially more wastewater The equipment manufacturer will supply the data
is generally encountered. A typical longwall mine collection and interface but the mine will be required to
will make on average around 25 - 40 L/s, with short- supply the data highway. An allowance of $500 000 for
term surges of up to 100 L/s during initial caving in a initial data collection systems is common.
panel. This level of water make needs to be carefully
considered in the mine planning process, with longwall Safety equipment and compliance
panels oriented to retreat updip where possible to The capital cost of safety equipment (July 2011 A$),
avoid collection or large amounts of water at the outlined below, should not be underestimated:
face. Regardless of orientation, it is general practice •• Personal self-rescuers – filter self-rescuers allowable
to allow the wastewater to drain under gravity to in New South Wales cost $500 each, while self-
specially excavated sumps, from which large electric contained self-rescuers (SCSRs) oxygen units
pumps remove the water to the surface, either through required in Queensland cost $1000 each. An allow-
a borehole or through pipes and staging within the ance of one self-rescuer per employee plus 25 per
mine. Depending on the pressure head involved, large cent for visitors and contractors should be made.
dewatering pumps can require up to 500 kW of installed •• Underground caches – each cache may contain
power and generally use 150 - 200 mm diameter steel enough SCSRs for an entire panel or shift, depending
discharge pipes. on location. An allowance of enough SCSRs for
Typical costs in July 2010 Australian dollars for mine twice the largest shift should be made.
dewatering equipment are : •• Secondary rescue systems such as compressed
•• diaphragm pumps including 50 m of suction hose air breathing apparatus (CABA) – these units
and strainer – $8000 cost between $3000 and $4000, and enough units
•• section pod pumps including transformer and should be allowed for nominally 20 persons. Some
starter and 1500 m of discharge line – $300 000 operations may substitute these units for SCSRs in
•• main pumps (100 L/s) including transformer and a cache. Oxygen refilling stations on the surface
starter (not including piping or borehole costs) – ($60 000) and periodically underground ($110 000)
$1 M. are also required.

•• Refuge chambers – special self-contained, air-tight approximately 30 per cent of a new machine. Addition-
emergency refuge chambers strategically located ally, other upgrade work will usually increase the cost
underground are common in the USA and are to around 35 per cent. A typical longwall overhaul will
becoming more common in Australia. Portable cost around $3 M including replacement of the AFC
units capable of accommodating up to 20 people chain.
cost around $100 000, and one unit per production
section might be allowed for. Periodic replacements
•• Lights and caplamps – depending on whether Periodic replacements occur when major items of plant
caplamps with personal emergency device (PED) and equipment either can no longer be overhauled
communications facilities and personnel avoidance to an ‘as-new’ condition in terms of reliability and
devices (PADs) are used, the price of caplamps productive capacity or have become obsolete in terms
may very between $800 and $1800 each. Allow of technology or compliance.
an additional $500 per caplamp for the charging Giving a schedule for replacements is difficult because
stations and lamproom set-up. there is a range of variables; however, as an indication:
•• Personal gas monitors – these are required by •• continuous miner – maximum 4 Mt with three
statutory and maintenance personnel in order to overhauls, ie ten to 15 years
work safely underground. Typically allow one •• diesel man transporters – seven to eight years
personal monitoring device per ten people working
•• LHDs – eight to ten years
underground. These devices in 2011 prices vary
between $250 and $1200 each, depending on the •• longwall AFC – 20 Mt
number of gases monitored and other monitoring •• longwall shearers and BSL – 16 Mt
capabilities. •• longwall supports – 30 000 to 60 000 advance cycles
depending on design life
Ongoing or sustaining capital
•• shuttle cars and feeder breakers – 15 to 20 years.
Once the mine is constructed, sustaining capital is
needed. In addition to periodic major overhauls and Mine infrastructure extensions
replacement of mining equipment, underground mines As mines expand there is a need for:
that extract a seam of material inexorably progress away
•• conveyor extensions, which generally include all
from the mine entries and this requires extensions to other service conduits such as power, process water,
services. Over time it is not unusual for the production compressed air, wastewater and communications
faces to be several kilometres from the main portals.
•• additional complete conveyor systems
Major overhauls •• additional diesel vehicles (because of increasing
travel times)
Major overhauls are often capitalised because the
expenditure can be included in the depreciation •• additional infrastructure including ventilation
schedule. Major overhauls are required when: capacity and pumps.
•• the equipment has been in use for a certain number The cost to be allowed for these items is identical
of hours – typically this category applies to mobile to the initial purchase costs as discussed in previous
equipment sections of this chapter.
•• a certain amount of mineral has been cut or Exploration
transported – typically this applies to production
A mine is likely to commence operation with only part
equipment (CMs, shuttle cars, feeder breakers,
of its reserve being drilled to a pattern, allowing the
longwall equipment) due to wear and tear on
estimation of Proved Reserves (JORC, 2004). Additional
structural components
drilling will often occur as the mine develops to improve
•• the equipment needs to be stripped and inspected
reserve classification. Infill drilling will be done to
for statutory reasons – this particularly applies to
improve local knowledge. Vertical drill holes may miss
production equipment.
geological anomalies. To counter this, underground
Typical intervals between overhauls for various items drilling in the horizontal plane is undertaken and this
of equipment are: is especially common in longwall mines.
•• CMs and shuttle cars – 1 Mt
•• feeder breakers – 1.5 Mt Closure costs
•• longwall shearer, BSL crusher and AFC drives – Closure costs may or may not be capitalised. They often
usually every panel depending on the panel tonnage are capitalised because closed mines have no revenue
(>3 Mt), but a maximum of 8 Mt. stream and it may be several years before the property
The cost of a major overhaul for development has been sufficiently rehabilitated to allow reuse or
equipment can vary considerably but is usually sale.

Typically closure costs comprise: FURTHER READING

•• removal of buildings and infrastructure Australian Coal Industry’s Research Program and
•• disconnection of services University of Wollongong, undated. Underground coal
•• remedial earthworks and revegetation. [online]. Available from: <http://www.undergroundcoal.
com.au/> [Accessed: 5 September 2012].
Energy Publishing Pty Ltd, undated. Glossary of
REFERENCES
underground coal mining terms [online]. Available from:
Fair Work Australia, undated. Available from <http://www. <http://www.coalportal.com/help.aspx> [Accessed: 5
fwa.gov.au> [Accessed: 5 September 2012]. September 2012].
JORC, 2004. Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC
Code) [online]. Available from: <http://www.jorc.org>.
(The Joint Ore Reserves Committee of The Australasian
Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia).

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Project definition 168

First edition text by: D H Fawcett and P Murray

Revised and updated by:

168 Cost Estimation Handbook

no examples of bulk production from this method.

Cost Estimation Handbook 169

170 Cost Estimation Handbook

Cost Estimation Handbook 171

Production rate (m/a) Production rate (kt/a)

Notes: CM = continuous miner; dev = development.

Team leader Production Trades Total

Note: CM = continuous miner.

172 Cost Estimation Handbook

Cost Estimation Handbook 173

It is important to remember that money must be TABLE 9.6

174 Cost Estimation Handbook

TABLE 9.7 Salary wages

Cost Estimation Handbook 175

176 Cost Estimation Handbook

Note: FB = feeder breaker.

Cost Estimation Handbook 177

178 Cost Estimation Handbook

Cost Estimation Handbook 179

180 Cost Estimation Handbook

Cost Estimation Handbook 181

182 Cost Estimation Handbook

components. The ability of suppliers to provide an

Cost Estimation Handbook 183

•• prework and portals (typically replacement or

184 Cost Estimation Handbook

•• there is no ability to install a continuous minerals Longwall systems

Cost Estimation Handbook 185

186 Cost Estimation Handbook

At this stage there is likely to be some iteration so

Cost Estimation Handbook 187

Diesel support vehicles TABLE 9.15

188 Cost Estimation Handbook

Cost Estimation Handbook 189

190 Cost Estimation Handbook

Typically closure costs comprise: FURTHER READING

Cost Estimation Handbook 191

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