A New Cost Model for Estimation of Open Pit Copper Mine Capital Expenditure

Authors

Department of Mining and Metallurgical Engineering, Amirkabir University of Technology, Tehran, Iran

Abstract

One of the most important issues in all stages of mining study is capital cost estimation. Determination of capital expenditure is a challenging issue for mine designers. In recent decade, quite a few number of studies have focused on proposing estimation models to predict mining capital cost. However, these efforts have not achieved to a predictor model with reliable range of error. Both of overestimation and underestimation of capital expenditure are causing huge problems. The former leads to estimating the value of projects less than the real value, and the latter causes to fail or postpone the project. In this paper, in order to achieve a reliable cost model, the technical and economic data of 15 open pit porphyry copper mines have been collected. The proposed cost model is developed based on stepwise multi variate regression . The R square of the presented model was 97.53% and indicated a proper fit on the data set. In addition, the mean absolute error  with respect to the average capital cost of data set used in the modelling procedure was obtained ±8%. The results showed that this model is capable of estimating open pit porphyry copper mine capital expenditure in an acceptable range of error.
One of the most important issues in all stages of mining study is capital cost estimation. Determination of capital expenditure is a challenging issue for mine designers. In recent decade, quite a few number of studies have focused on proposing estimation models to predict mining capital cost. However, these efforts have not achieved to a predictor model with reliable range of error. Both of overestimation and underestimation of capital expenditure are causing huge problems. The former leads to estimating the value of projects less than the real value, and the latter causes to fail or postpone the project. In this paper, in order to achieve a reliable cost model, the technical and economic data of 15 open pit porphyry copper mines have been collected. The proposed cost model is developed based on stepwise multi variate regression . The R square of the presented model was 97.53% and indicated a proper fit on the data set. In addition, the mean absolute error  with respect to the average capital cost of data set used in the modelling procedure was obtained ±8%. The results showed that this model is capable of estimating open pit porphyry copper mine capital expenditure in an acceptable range of error.

Keywords