ADDIS ABABA SCIENCE AND TECHNOLOGY

UNIVERSITY
COLLEGE OF NATURAL AND SOCIAL SCIENCE
DEPARTMENT OF MINING ENGINEERING
INTRODUCTION TO MINING ENGINEERING
GROUP MEMBERS ID NO
1) Beniyam Abebe ETS 0198/13
2) Samuel Enchalew ETS 1133/13
3) Temesgen Silabat ETS 1215/13
4) Yonas Alemayehu ETS 1349/13
5) Yohannes Messele ETS 1342/13

Submitted to: Instructor Angesom G. (M.Tech)

Submission date: Dec 27, 2022
Table of Contents
Introduction.....................................................................................................1

Feasibility study in mining...............................................................................2

Types of feasibility study used in mining.........................................................3

Order of magnitude......................................................................................3

Preliminary feasibility...................................................................................4

Detailed feasibility........................................................................................6

Conclusion....................................................................................................... 7

Reference........................................................................................................ 8
 Introduction

Feasibility studies are required throughout the pre-production stage of

every mining project to justify continued investment in the subsequent
phase.
Usually a concept study or scoping study is followed by one or more
pre-feasibility studies that reflect the increasing level of technical and
economic knowledge gained at the various earlier stages.
These culminate in a final feasibility study that demonstrates the
economic feasibility of the project with sufficient certainty to allow a
decision to develop a mine.
The results of a pre-feasibility study may be the first hard project
information that is seen by corporate decision makers. In such cases, the
pre-feasibility study is the real decision point, with the subsequent
feasibility study being seen by management as a necessary step along
the path that has already been committed.

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 Feasibility study in mining
 A mining feasibility study is an evaluation of a proposed mining project to
determine whether the mineral resource can be mined economically.
 A Feasibility Study is usually based on the most attractive option for the
project as determined by relevant studies which normally include: orebody
size and quality, geotechnical, mining, mineral processing, mine waste
disposal, environmental and social options.
 The aim of the study is to remove all significant uncertainties and to present
the relevant information with supporting material in a concise and
accessible way.
 The Feasibility Study has a number of key objectives:

 to demonstrate with reasonable confidence that the project can be

constructed and operated in a technically sound and economically
viable manner;
 to provide a basis for detailed design and construction; and
 to enable the raising of finance for the project from banks or other
sources.
A Feasibility Study would normally require studies of the following topics:
a) An Ore Reserve Statement (a statement of the ore reserves and
resources, calculated).
b) A report on the proposed mining method including geotechnical
considerations including a schedule of the mining equipment and
supplies (fuel, explosives, cement, aggregate etc.) required for the
operation.
c) A hydrogeological report assessing groundwater issues in the area of
the proposed mine and the impact that the mine may have on these
resources and other users of the resource.
d) A report on the proposed method of processing the mined ore
including a schedule of the plant and supplies (reagents etc.).

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 e) A mining schedule for the life of the mine – more detailed for the first
two years of production.
f) A report on tailings and other mine waste disposal proposals.
g) Rights required – planning, mining and environmental permits
h) Land access issues.
i) Construction considerations.
j) Infrastructure required – including transport, power, accommodation.

Types of feasibility study used in mining

There are three types of feasibility study used in mining which includes:
order of magnitude, preliminary feasibility and detailed feasibility.

Order of magnitude
 Order of magnitude feasibility studies (sometimes referred to as
"scoping studies") are an initial financial appraisal of an inferred
mineral resource.
 Depending on the size of the project, an order of magnitude study may
be carried out by a single individual.

 It will involve a preliminary mine plan, and is the basis for determining
whether to proceed with an exploration program, and more detailed
engineering work.
 Order-of-magnitude studies are developed by copying plans and
factoring known costs from existing projects completed elsewhere and
are accurate to within 40–50%.

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Preliminary feasibility
 Preliminary feasibility studies or "pre-feasibility studies" are more
detailed than order of magnitude studies.
 A preliminary feasibility study is used in due diligence work,
determining whether to proceed with a detailed feasibility study and
as a "reality check" to determine areas within the project that require
more attention.
 Preliminary feasibility studies are done by factoring known unit
costs and by estimating gross dimensions or quantities once
conceptual or preliminary engineering and mine design has been
completed.
 Preliminary feasibility studies are completed by a small group of multi-
disciplined technical individuals and have an accuracy within 20-30%.
 The pre-feasibility study usually considers a range of mining and
processing alternatives and varying production rates, with the options
narrowed down to one or two in each area. At this stage it is possible
to detail the additional work including further definition drilling,
sterilization drilling, metallurgical test work, pilot plant work and other
site investigations that will be needed to support a feasibility study.
 The results of the pre-feasibility study are used to justify expenditure
on gathering this additional information and the considerable
expenditure needed to carry out the final feasibility study on a
substantial project

Scoping study may be carried out very early in the exploration phase, as a
basis for acquiring exploration areas or making a commitment for
exploration funding. At this stage the investment risk may be relatively small
but it is obviously undesirable to expend further funds on something that
has no chance of being economic.

Major risk

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  Is that a viable mining project is relinquished due to an inadequate
assessment. As there is a very low probability of an exploration project
proceeding to become a mine it is evident that this risk is quite a
serious one at the scoping study stage. For this reason it is essential
that experienced people are involved in the scoping study. Estimation
accuracy may be 30 to 35%.
 It is acceptable for scoping studies to be based on very limited
information or speculative assumptions in the absence of hard data.
The study is directed at the potential of the property rather than a
conservative view based on limited information

There are three common reasons for carrying out pre-feasibility studies as
follows:

 As a basis for committing to a major exploration programme following

a successful preliminary programme. For example, where ore reserves
cannot be proven by surface drilling, underground development may
be required for exploration at an early stage of the project.
 To attract a buyer to the project or to attract a joint venture partner or
as a basis for a major underwriting to raise the required risk capital. A
pre-feasibility study may also be prepared in full or in part by potential
purchasers as part of the due diligence process
 for these reasons the pre-feasibility study must be prepared with great
care by experienced people, and its conclusions heavily qualified
wherever necessary. Assumptions should be realistic rather than
optimistic because it is very difficult to bring management and markets
back to reality in the event that the final feasibility study is significantly
less favourable.

The main features of the pre-feasibility study are:

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  Mine design based on a resource model.
 Best alternative selected from a range of alternatives
 Preliminary studies completed on geotechnical, environmental and
infrastructe requirement
 Cost estimated based on comparative prices
 Usually results in an ore reserve estimate

Detailed feasibility
 Detailed feasibility studies are the most detailed and will determine
definitively whether to proceed with the project. A detailed feasibility
study will be the basis for capital appropriation, and will provide the
budget figures for the project.
 Detailed feasibility studies require a significant amount of formal
engineering work, are accurate to within 10-15% and can cost between
½-1½% of the total estimated project cost.
The aim of the study is to remove all significant uncertainities and to present
therelative information with backup material in a concise and accessible
way.
The final feasibility study has 3 objectives:
 To provide a basis for detailed design and construction
 To demonstrate within a reasonable confidence that the project can be
constructed and operated in a technically sound and economically
viable manner.
 To enable the raising of finance for the project from banks or other
sources.

Conclusion

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Feasibility studies are required for the evaluation of a property, which
leads to a high degree of confidence in the decision process.
One additional aspect of project evaluation that must be considered
prior to making the final decision to proceed with the project is
product marketing and the subsequent revenues received. The
projected revenue or return of the mining venture is the ultimate
criteria for determining the feasibility of any mining venture. If the
return isn’t high enough, then an extensive study is not justified.
In addition to the financial evaluation, a risk assessment should be
carried out on the major parameters, including metal price, working
costs, capital costs and recoveries. The first level at which revenue
becomes critical is the exploration phase. If the rate of return isn’t
sufficient at that point, there is no point in continuing on with the
project.
This concludes or reviews the work expected to be completed for the
various types of feasibility studies i.e a scoping, prefeasibility or full
feasibility study. However, we should note that what has been
presented is only a guideline and would vary depending on the actual
details of the project and the amount of work done to date.

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 Reference

 MCCARTHY, P.L. Objectives of feasibility studies. Internal paper for

Australian Mining Consultants
 www.amcconsultants.com
 https://en.wikipedia.org/