Northern Coalfields Limited, Singrauli

Optimization of Capital Costs And Carbon Foot Print In

Open Caste Mining

D.BAG
MBA Dept., NIT ROURKELA
dinabandhu.bag@gmail.com

Abstract —
Capital cost of an open cast mines is determined based on many irreversible geological factors e.g. topography, ore grade,
degree of mechanization, etc. Many equipment are procured by the mines during project initiation. However midway into the
life of the mines, half from the original list may remain untouched. Why are capital equipment’s needed in mining operations?
Mining industry is constantly in search of rapid capacity expansion, increased productivity, digital technology adoption and
reduced costs. Besides the economics the new dimension of development focuses on automation and cleaner mining system.
For faster rate of production, mechanization at high degree is imperative. Mine optimization deals with conventional tools of
production planning ignoring the drain on capital and related GHG implications.
Increase in idle times of machineries leads to increase in production cost. In order to reduce the idle time or waiting time
the number of machineries may be increased. Due to large number of machines greater capital investments are needed that
contributes to higher total GHG. The limitation is JIT (Just in Time) model of procurement of spares, does not exist in mining
towns.
Keywords—carbon foot print, trade off, operating costs, equipment’s, carbon gearing ratio

I. Introduction Scheaffer). In pure commercial projects, the capital

In the short term plan period for 6 months a higher
target rate of production will increase the number of
machines. Mining operations cannot mimic a perfectly
automated process industry. Capital planning is not
a reversible action. Since, mining operations are
non sequential and follow product lay out, capital
equipment’s can be shared across disjoint operations.
However, the degree of sharing is not 100%. Therefore,
higher the number of equipment, higher is the
total capital costs. Long-term production planning
for a horizon is generally 25-30 years, where as in
the medium-term is it is 1-5 years, The long term
production planning aims to maximize the net present
value of the total profits from the mining operations
against given pit slope design, such as mining slope,
grade blending, winning ratio, replacement of the
stock, etc. The medium-term mine plan in the range of
5-10 years aims to maintain enhance the operating life
of the fleet. The short range mine planning is for 1-6
months that aims to achieve zero down time of the fleet.
Commercial mining is aimed at maximizing expected
profits of the firm (Michail B. Kahle). However, mining
is also aimed to minimize carbon foot print (Fred J.
cost is critical to decide whether projects will proceed,
or be abandoned and hence the accuracy in their
determination is critical (Shafiee & Topal, 2012). The
lack of literature or publicly available data on capital
costs in many countries has been highlighted (Hall,
2013). Harper (2008) estimated the capital costs for
coal mines in Australia. Dipu (2011) conducted capital
costs determination for India. In many countries the
infrastructure of railway lines, roads and townships
are developed which escalates the total mining costs
(Rudenno, 2009). The possibility of reducing off-mine
infrastructure has been mentioned (Jourdan, 2008).
However specifically for open cast mines, the capital
costs attributed to pure mining is limited in Indian
setting.
The geological properties of the reserves such as
seam thickness, metalliferous veins or sedimentary
beds would create the bounds of pit design. However,
the parameters of that are taken into selecting size
of machines include purchase and operating costs,
replacement of tires, spares and routine maintenance,
workshop, etc. Equipments are chosen when they
provide maneuverability, flexibility in deployment

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International Conference on Opencast Mining Technology & Sustainability
and involve minimum labour hours to displace or
dissemble. At first, for a given production rate, number
of loaders are determined and the number of haulers
are obtained to match the dimensions of the loader.
The fleet mix deployment schedule is a simultaneous
consideration of the hourly production rate, hauling
time and distance, loader cycle time, etc. The capacity
rate of each of equipment are chosen subject to the
dimensions available with the OEM against the fact
that the ratio of operating cost / purchase cost would
vary across OEMs.
A. Objectives
The principal objectives include;
• to explore the trade- off between optimal capital
costs and optimal GHG emissions for open cast
mines.
• To arrive at the fleet mix and ownership mix (self
or lease) of scheduled equipment that minimizes
the total capital costs.
• To reduce the total GHGs emitted from face
operations and mining activities.
• To implement digitalized solutions of network
monitoring of mining sub-systems to reduce
their downtime.
II. Conclusions
Based on the study, the following conclusions are
drawn:
• the mines can avail of leasing service of heavy
machineries instead of spending OPEX &
CAPEX.
• The mines will incur lower rental service expense
of equipment rather than owning them.
• Carbon foot print is lower.
• The trade- off between GHG emissions and cost
of borrowing are explained
• There are no third party liability by the mines
because the equipment’s are non owned by the
mines.
There are few limitations of this study;
• This does not cover the sample data necessary
to conduct the analysis of field trials and
experimental response results.
• This does not cover a specific sponsoring
authority or mining company to bear the costs of
experiments.
• This intends to use secondary data available
in cross country studies which could mix the
empirical information compiled for metal and
coal mines together.
Therefore, future research must include extensive
collection of longitudinal test data from variety of
field conditions to demonstrate the robustness of
optimization results. Open cast Mining must attempt
to minimize the large burden of capital costs which
cannot be recovered from pricing of the production or
charging to its future generations of customers.
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