Totally Mobile Conveyors Offer New Flexibility In Surface Mine Operations ? Economics

In recent years, there have been many articles and papers written on the use of specially designed belt conveyor systems in mining operations, either economic studies or actual experience. These papers generally conclude that the use of these systems can reduce overall costs from 10% to 40% over conventional methods using general purpose equipment (truck/shovel, scrapers, etc.). However, they also generally conclude that conveyor systems are inflexible and capital intensive. With the increasing cost of mobile equipment, the capital cost conclusion is losing steam, particularly when the costs of maintenance shops, road and ramp construction and other related start-up costs are thrown in. Attention here will be focused on answers to flexibility related questions, but first, a look at costs in general. Basic production economics tell us that when we have a small job to do, it is cost effective to use simple, low cost, general purpose tools which will have a minimum impact on total cost. It also tells us that when we have a large project, we can employ methods using special, relatively expensive production tools. Figure 1 illustrates what occurs on projects, of different sizes, with various quantities of production. With small quantities of work, the cost per unit of work starts out much lower using general purpose equipment, rather than using special purpose methods and equipment. However, at a relatively low quantity of work, the cost hits a lower limit and, regardless of how great the quantity of work, the unit cost can never go any lower.