Effect Of Rate Of Mining On Ton Cost And Total Value Of Mine

IN CONSIDERING the question of mining methods the possible rate of production deserves much more attention than it often receives. Hoover's theorem that, in order to show the greatest profit, an orebody should be worked out in the shortest practicable time, should be better known. The author recently' obtained detailed statements of costs from iron-mine superintendents of the Lake Superior district. In discussing these, the effect of rate of mining on cost of production was considered and detailed estimates were made. The methods by which these estimates were made and the way in which they were presented are here described to illustrate the importance of this factor in mining operations. The saving due to lower costs is not the only factor that should be considered. The greater profit per ton is of much importance but of equal importance are the greater profit per ton that will be made on a greater number of tons per year, and the fact that the total profit will be received in a shorter; period. This last makes a great difference in the present value of a property, by shortening the period of discount on future profits. Another item of importance to those operating a number of mines is that the tonnage needed to supply the market can be obtained most profitably by operating the smallest number of mines that will supply the amount required when each is worked to maximum capacity. In the Lake Superior iron district there are many grades of ore, and the requirements for each are known. If the demand for a certain grade can be supplied from mines now operating, the development and mining of a new orebody of the same grade must result in lower rates of production and lower profits to all mines producing this grade. If a company is mining the same grade of ore from three mines when it can supply its needs by operating only two, by operating only two it can obtain the greatest profit. Royalty rates, lease terms, and other considerations modify this general statement, but if all three properties