Economic Considerations In Determining Ore Reserves

The concept of "profit" is implicit in the definition of an ore reserve. It is suggested that the flexible concept "economic" is more appropriate. This allows different economic considerations to be taken to account when determining what is ore at the feasibility study stage; during actual mining production; before mine closure; and from the viewpoint of the national economy. Economic factors which are highly variable, and largely beyond a mining enterprise's control, affect the economic exploitation of a mineral resource. Major economic factors include: metal prices; operating costs; the cost of original and replacement capital equipment; the cost of capital; taxation and royalties; inflation; exchange rates and the state of the world economy. The paper suggests why a careful quantification of the average value, trend, and variation from the trend of major economic factors should be made and how this will lead to a better definition of ore reserves. The paper also discusses the necessity of reappraising economic factors during the life of a mine in order to maximise the economic surplus and to minimise the wastage of natural, economic and human resources employed in mining.