Mining and Minerals Engineering

CSM3384 - Mineral Economics & Feasibility Studies (2011)

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MODULE TITLEMineral Economics & Feasibility Studies CREDIT VALUE15
MODULE CODECSM3384 MODULE CONVENERMr Paul Wheeler (Coordinator)
DURATION: TERM 1 2 3
DURATION: WEEKS
Number of Students Taking Module (anticipated)
DESCRIPTION - summary of the module content
AIMS - intentions of the module
This module aims to help candidates to understand that the global minerals industry presents a unique investment environment, which needs to be mastered to ensure the successful development of a minerals venture. It prepares students for the month long Feasibility Study Exercise, module CSM3332, conducted after the second semester examination period. Key methods (traditional, statistical and geostatistical) of resource estimation used in the minerals industry are introduced, applied and evaluated. Geological and engineering inputs to, and constraints on, resource estimation are highlighted, together with a review of the conversion of mineral resources to ore reserves.
INTENDED LEARNING OUTCOMES (ILOs) (see assessment section below for how ILOs will be assessed)
SYLLABUS PLAN - summary of the structure and academic content of the module
Taxation: Mineral taxation and taxation of company profits. Different types of mineral taxation, resource rent taxation, royalty systems and profit based systems. Valuation reports and investment planning, the main points seen in a mine valuation report. Economics fundamentals: The development of supply and demand curves. The effects of supply and demand in perfect markets and the real world. Use of supply and demand curves to explain price movements. Price controls and subsidies and how they affect markets. The growth of demand for mineral commodities and projections for the future. Production and consumption patterns of some important mineral commodities. Mineral markets: metals, industrial minerals and fuel minerals. Sales contracts, smelter contracts and "best sell" analysis. Methods of reconciling differences between mine, mill and smelter results. Cash and futures trading and traded options. How the futures and options markets can be used to protect companies from unfavourable price movements. Resource estimation Introduction, data collection/manipulation, traditional estimation techniques. Variography in resource estimation. Local estimation techniques, block modelling and IDW. Geostatistical estimation (variography and kriging) Resource classification, conversion of resources to reserves Mine Feasibility Studies: The main factors that control mineral investment - capital intensity, long pre-production periods, high risks, infrastructure, environmental constraints and non-renewable resources. The types of feasibility studies used – Order of Magnitude, Preliminary, Definitive and Detailed. What each is used for, its usual contents, and the level of accuracy of estimates compared to the engineering work actually completed. Role of Cash flow Modelling & Valuation. Detailed coverage of the main engineering components of such an analysis. Revenue: – tonnage, grade and recovery calculations and the factors that effect mineral commodity prices. Calculation of net smelter return Cost Estimation: Capital costs - the methods available for estimating both fixed and working capital costs, depending on the type of study being carried out. Operating cost estimation methods. Cost indices, and a description of the Systems Approach to mineral cost estimating, as used by O'Hara. Optimisation and Risk Assessment: Production rate optimisation methods for mineral ventures. General coverage of risk analysis and how it is used in mineral project evaluation. The main factors considered and the techniques used in sensitivity analyses as carried out on feasibility study results.
LEARNING AND TEACHING
LEARNING ACTIVITIES AND TEACHING METHODS (given in hours of study time)
Scheduled Learning & Teaching Activities Guided Independent Study Placement / Study Abroad
DETAILS OF LEARNING ACTIVITIES AND TEACHING METHODS
ASSESSMENT
FORMATIVE ASSESSMENT - for feedback and development purposes; does not count towards module grade
SUMMATIVE ASSESSMENT (% of credit)
Coursework 50 Written Exams 50 Practical Exams
DETAILS OF SUMMATIVE ASSESSMENT
DETAILS OF RE-ASSESSMENT (where required by referral or deferral)
RE-ASSESSMENT NOTES
RESOURCES
INDICATIVE LEARNING RESOURCES - The following list is offered as an indication of the type & level of
information that you are expected to consult. Further guidance will be provided by the Module Convener

Reading list for this module:

There are currently no reading list entries found for this module.

CREDIT VALUE 15 ECTS VALUE 7.5
PRE-REQUISITE MODULES CSM3303
CO-REQUISITE MODULES
NQF LEVEL (FHEQ) 3 (NQF Level 6) AVAILABLE AS DISTANCE LEARNING No
ORIGIN DATE Thursday 15 December 2011 LAST REVISION DATE Thursday 15 December 2011
KEY WORDS SEARCH None Defined