LCV APES 2022-2023

Liceo Campoverde

Cookie Mining Lab

Objective
Acquire a mine and extract the mineral ore in a way that is profitable as well as socially and environmentally
acceptable.

Purpose
The purpose of this lab simulation is to give an introduction to the economics of mining and make possible an
understanding of the social and environmental obligations associated with the mining of mineral ores.

If a mining operation is to be profitable, the sold value of the mined ore must be greater than the sum of all
of the costs, including land purchases, compensation paid to local communities, operational expenses,
environmental restoration, and fines or penalties.

Overview
The mining of mineral resources is not just a simple matter of locating the desired ore, digging it up and marketing
it. Important economic, social and environmental considerations are incorporated into any mining venture, as well
as compliance with national regulations. The costs include purchasing property or land for mining purposes,
compensating local communities and seeking their cooperation, purchasing or hiring equipment, machinery and
labour, operating the mine, and restoring the land or possibly paying environmental fines.

In this lab simulation, you will purchase a cookie from the options on the market at the time (the mining property),
attempt to profitably extract chocolate chips (mineral ores) and do this in a way which is socially and
environmentally acceptable. Note that not all mines (ie chocolate chip cookies) have the same economic potential.
Deciding which mine to purchase is your first business decision.

Materials
● Starter money of $25 - this is your initial investment and is a loan from the bank which has to be repaid
● Graph paper and pencil - for calculating the area of your mining 'property' - the chocolate chip cookie
● 1 Chocolate chip cookie - this is your mining property, containing chocolate chips which provide the ore
you want to mine, and is chosen from the options available at the time, each having a different value
● Mining tools - flat or round toothpicks, or paper clips
● Stopwatch or phone timer
● Paper towels for cleaning up

Instructions
1. Create a mining corporation to run your mining operation. Decide the mining style of your corporation
and use that information to decide the outlay you will make, including selection of your 'property' (cookie), the
most appropriate investment in the local communities and the best tools for the mining operation. Record the name
of your mining corporation on the Cookie Mining Worksheet.

2. Visit the bank and collect your loan of $25.

3. Purchase your 'mining property' - one only of the following.

a. Schullo Lorena $7.00
b. Bauducco $6.00
c. Chokis $5.00
d. Chips Ahoy $4.50
e. Festival $4.00
f. Krispiz $3.50
(These ‘properties’ were valued according to Supermaxi price, weight of biscuits and cost, as of 15th April 2023.)
4. Determine the exact dimensions of your 'property' by placing it on the graph paper and use a
pencil to trace the exact outline of the cookie. Count each square falling inside the outline.
Count each partially filled square as a full square. Record this number on your Cookie
Mining Worksheet. These dimensions must be approved by a government inspector - John!

5. Rent your mining tools - up to 2 of any of the following:

a. Scoop $8.00
b. Heavy duty spike $6.00
c. Paper clip $5.00
d. Toothpick $4.00
Record your purchases on the Cookie Mining Worksheet.
Since you are renting your tools, any which are damaged at the end of the mining operation will have to
be replaced at double the rental price.

6. In return for being allowed to mine in the area, you have agreed an obligation to collaborate with the local
community. Choose one of the following:
a. $8.00 for building a school and a health clinic, after which you will pay no taxes from your mining
income to the local community.
b. $4.00 for employing a local workforce, after which you will pay a tax to the local community of
5% of your income from the sale of ore
c. $2.00 for propaganda and posters, after which you will pay a tax to the local community of 10% of
your income from the sale of ore
Record this expense on the Cookie Mining Worksheet.

7. Decide for how long you will mine your cookie. Think very carefully about this! Mining costs are $1.00
per minute (or fraction of a minute), including land restoration time. The sale of each chocolate chip
(ore), mined from the cookie, brings income of either $2.00 if it is still coated by gangue, or $3.00 if it is
clean. (Broken chocolate chips can be combined to make whole chips.)

8. Now start the watch and begin mining! You are not allowed to use hands or fingers at any stage of
the operation, including for land reclamation. Fines of $5.00 will be imposed for use of hands and
fingers.

9. When you have finished extracting chips from the cookie, you must restore the property by using your
mining tools only, to scrape all crumbs and waste back inside the drawn outline of the cookie. Restoration
time is included in the time which you work the mine (see #7 above).

10. Decide when you have mined as many chips as is profitable and you have restored the mine property as
far as you can, and stop the watch.

11. Record the number of minutes you were mining and restoring land, on the Cookie Mining Worksheet.
Fractions of a minute are counted as a full minute.

12. Total up the number of chocolate chips (and combined pieces) which you have mined and write the total
into the Cookie Mining Worksheet.

13. An EPA Inspector (John!) will now check the restoration of the property. Fines ranging from $1.00 (1
square of crumbs) up to $10.00 (10 squares equivalent of crumbs, or more) will be imposed for
discrepancies from the original shape and area of the property. Write the fines into the Cookie Mining
Worksheet.

14. Complete the Cookie Mining Worksheet, to determine whether you have made a profit or a loss from
your mining operation. Make sure that you include community tax payments, if required.
CRITICAL ‘BUSINESS’ DECISIONS BEFORE YOU START

Take your time to properly prepare your mining operation and plan your strategies. Read ALL
the instructions carefully before making decisions. You do not get any practice time; mistakes
will result in economic losses. Try to write down some rough calculations before you commit
yourself to operating choices.

CHOICE OF COOKIE: Which Cookie might realise the most chocolate chips, be the easiest to
mine and result in the least mess which needs restoration? below is the price and weight
breakdown when these cookies were purchased:

COMMUNITY COLLABORATION: What should be your investment in the local

communities? Weigh up the advantages and disadvantages of a one-off large investment or
having to pay taxes on your income.

TOOLS: What tools will allow you to efficiently mine as well as restore the mess?

TIME: How long should you mine your cookie? Don’t forget that restoration is also included in
the $1 a minute you spend mining the property. Don’t try to mine for too long - your returns
diminish and your mess increases, making it harder to restore the property and make a profit.
Before you start mining, have a good idea of the amount of ore (chocolate chips) which you need
to extract in order to make a profit. Decide whether you should spend time cleaning the ore and
removing the gangue, in order to sell at a higher price.

There are several difficult decisions to be successfully made here. The preparation and
calculations of any business operation most probably constitute the make-or-break stage.
Name: Date:

COOKIE MINING WORKSHEET

Name of Mining Corporation:

OPERATIONAL COSTS
MINING PROPERTY - 1 single purchase
Type Unit cost Cost
Schullo Lorena 7.00
Bauducco 6.00
Chokis 5.00
Chips Ahoy 4.50
Festival 4.00
Krispiz 3.50
Cookie cost: 1.

MINING TOOLS - < 2 tools

Type Quantity Unit cost Cost
Scoop (plastic spoon) 8.00
Heavy duty spike 6.00
Paper clip 5.00
Small spike (toothpick) 4.00
Total mining tools cost: 2.

COMMUNITY COLLABORATION - 1 only

Type Unit cost Cost
School & health clinic (No further payments to local communities) 8.00
Labour employment (5% of ore sales goes to local communities) 4.00
Propaganda/posters (10% of ore sales goes to local communities) 2.00
Community collaboration cost: 3.

MINING OPERATION
Mining & restoration time (minutes) Unit cost Cost
1.00/min 4.

TOTAL OPERATIONAL COSTS (1 + 2 + 3 + 4): 5.

INCOME
EXTRACTED ORE
Type Quantity Unit price Value
Clean Chocolate chips, free of gangue 3.00/chip
Chocolate chips still coated by gangue 2.00/chip
Total value of extracted ore: 6.

PROFITS/LOSSES
TOTAL VALUE OF MINING OPERATION (6 - 5): 7.
RESTORATION FINES & OTHER PENALTIES: 8.

COMMUNITY TAXES (0% or 5% or 10% of 6): 9.

REPLACEMENT OF DAMAGED TOOLS (2 X): 10.

CORPORATION PROFIT/LOSS (7 - 8 - 9 - 10): 11.

Lab report and analysis

Answer these questions:

1. Briefly summarise the choices you made - cookie, tools, community collaboration and time.
Were they the best choices? What choices would you make differently if you were to repeat
the mining operation? Why?

2. Why is it so critical to invest in the collaboration of local communities if a mining operation is to be

successful? What might be the results if this collaboration is ignored?

3. How successful was your restoration of the mined property? Apart from cleaning up and restoring the land
to its previous state, what other activities might a mining company undertake in order to ensure that its
operation does not leave a permanent scar on the environment and does not result in recurring hostility
amongst local residents or visitors? Consider animals, plants, soil, water, pollution, access roads and
erosion.

4. You began the operation with a $25 loan. Assuming that you must repay the loan, plus 15% interest, after
the operation, what now would be your profit or loss?

5. Research and find out what resources, ores and minerals are mined in Ecuador. Say where the mines are
located. (Do not include oil extraction in your answer.)

6. Before any mining operation is allowed, it is necessary to undertake an EIA. What is an EIA?

7. Write a summary and conclusion of your lab results.