- Ore grade: The grade is crucial in determining whether a deposit can be mined profitably. Higher-grade deposits generally require less ore to be mined and processed to produce the same amount of metal, which can lead to lower costs per unit of metal produced (admin, 2023).
- Mining and Processing costs: Cost estimation in the mining industry involves the process of forecasting the expenses associated with various stages of a mining project. It is from exploration and development to production and closure. This stage is crucial for determining the feasibility and potential profitability of a mining project. A key component of cost estimation in the mining industry is Exploration cost as they form the foundation for decisions regarding further development of a mining project. Accurate assessments during the exploration phase can greatly influence the economic viability and success of the overall mining endeavour (AllMinings, 2024).
- Market Prices: Ultimately, the market price is determined by the balance between demand and supply. A higher demand for a commodity may be caused by the fast industrial development of large countries such as China and India, and a lower demand may be caused by the discovery of cheaper and/or better substitutes for an application. For mineral commodities, cumulative supply at a certain price is fixed by the amount of the mineral that can be produced profitably at that price. A rising price permits the extraction of a lower grade mineral and higher external costs, if these are included in the price. The higher the price that consumers are willing to pay for a mineral, the greater its possible cumulative extraction (Henckens et al., 2016).
- Metallurgical testing: In fact, metallurgical testing is one of the most important components of successfully transforming an exploration-stage project into a profitable mine. Positive metallurgical testing results tell the market not only whether an operation will be feasible, but also if it will be profitable. The higher the recoveries (the percentage of a metal extracted from the ore during processing), the higher the profit margin and the quicker investors will see returns. Metallurgical testing can de-risk projects in other ways, such as by helping mine engineers determine the best flow sheet design, which can have a huge impact on capital and operating costs as well a project’s environmental footprint.(Pdf, n.d.).
- Mining method selection: This is a process of selecting an extraction method for a defined deposit because the nature of an orebody is unique, it would not be a realistic approach to just adopt a specific mining method without catering for the needs of the specific orebody, and the economic potential of a project can be affected by this decision. It is of paramount importance that a suitable mining method is selected to maximise profit, recovery of the deposit and provision of a safe working area for the employees (Baloyi & Meyer, 2020).
What key factors would you evaluate before deciding to mine?”
References:
https://southernsilverexploration.com/site/assets/files/3982/why_is_metallurgy_test_work_important.pdf
admin. (2023, September 15). Understanding “Grade” in Mineral Exploration. Macro Commodity. https://macrocommodity.com/understanding-grade-in-mineral-exploration
AllMinings. (2024, December 16). Comprehensive Guide to Mining Industry Cost Estimation: Key Components and Insights. AllMinings. https://allminings.com/cost-estimation/
Baloyi, V. D., & Meyer, L. D. (2020). The development of a mining method selection model through a detailed assessment of multi-criteria decision methods. Results in Engineering, 8, 100172. https://doi.org/10.1016/j.rineng.2020.100172
Henckens, M. L. C. M., van Ierland, E. C., Driessen, P. P. J., & Worrell, E. (2016). Mineral resources: Geological scarcity, market price trends, and future generations. Resources Policy, 49, 102–111. https://doi.org/10.1016/j.resourpol.2016.04.012
Why_is_metallurgy_test_work_important.pdf. (n.d.). Retrieved March 27, 2025, from https://southernsilverexploration.com/site/assets/files/3982/why_is_metallurgy_test_work_important.pdf
