A Simulation Model Of Storage Requirements For Open-Pit Coal Mines

When planning for the required amount of storage capacity at a proposed open-pit coal mine or determining when additional storage capacity should be added to an existing operation, the decision must be based on a breakeven- analysis relating the discounted cost of capital for storage capacity to the marginal costs incurred for additional crew call-outs on weekends and demurrage charges. The model developed in this paper uses simulation techniques applied to two coal mines in the Powder-River Basin to determine how much storage capacity is needed and when it is needed. The paper also generalizes the simulation model so that it can be applied to any type of open-pit mining operation. Two important results of the model are (1) all of the mines in the Powder River Basin have excessive amounts of storage capacity, and (2) management is provided with estimates of the total number of hours that crews will have to work on the weekends as annual tonnage increases, and the levels of demurrage costs incurred.