Mine Planning Project

xxxxx

AGH University of science and Technology

Faculty of Mining and Geoengineering

Management and production engineering

Cracow 2015

Individual input data no.: 2

No.	Name	Unit	Value
1	Length of coalfield along strike, Ls	[m]	4000
2	Horizon depth, H	[m]	600
3	Horizon interval, h	[m]	150
4	Single longwall saleable daily production, Sld	[Mg/d]	6000
5	Overall produktivity, Po	[Mg/emp/a]	900

Contents:

1. Introduction

2. Mine model layout

3. Reserves estimation

4. Mine construction schedule

5. Mine produkction schedule

6. CAPEX estimation

7. OPEX estimation

8. Evaluation of mine planning project efficiency

9. Sensitivity analysis

10. Summary – basic technical and economical parameters

Ad I

Indtroduction

Introductory information and data:

Enterprise: underground hard coal mine

Method of mining: longwall caving

Dip angle deposit, α [degrees]: 5

Number of seams: 3 (enumerated: I, II, III)

Thickness of seam I: 3 [m]

Thickness of seam II: 3 [m]

Thickness of seam III: 4 [m]

Methane emission: 11 [m³/Mg]

Water inflow: 3 [m³/min]

Number of longwalls, n: 2

Number of working days, N_d [d/a]: 250

Annual saleable production from longwalls, S_e [MMg/a]:

S_e = 10 ^-6nS_ldN_d

n = 2

S_ld = 6000 [Mg/d]

N_d = 250

S_e = 10 ^-6 ∙ 2 ∙ 6000 ∙ 250 = 3 [MMg/a]

Annual saleable production from development workings, S_d [MMg/a]:

S_d = 0,1S_e

S_d = 0,1 ∙ S_e = 0,1 ∙ 3 = 0,3 [MMg/a]

Annual saleable production of the mine, S [MMg/a]:

S = S_e + S_d

S = 3 + 0,3 = 3,3 [MMg/a]

Overall manpower, N [man]:

$$N = \ \frac{10^{6}S}{P_{o}}$$

$$N = \ \frac{10^{6} \bullet 3,3}{900} = 3666,67\ \approx 3667\ \lbrack man\rbrack$$

Underground manpower, N_u [man]:

N_u = 0,8N

N = 0,8 ∙ 3667 = 2933,6 ≈ 2934 [man]

Surface manpower, N_s [man]:

N_s = 0,2N

N_s = 0,2 ∙ 3667 = 733,4 ≈ 734 [man]

Yield coefficient, u:

u = 0,8

Daily run-of-mine production, W_d [ThMg/d]:

$$\ W_{d} = \frac{1000S}{uN_{d}}$$

$$W_{d} = \frac{100 \bullet 3,3}{0,8 \bullet 250} = 16,5\ \lbrack\frac{\text{ThMg}}{d}\rbrack$$

Underground productivity, P_u [Mg/man/d]:

$$P_{u} = \frac{1000W_{d}}{N_{u}}$$

$$P_{u} = \frac{1000 \bullet 16,5}{2934} = 5,62\ \lbrack\frac{\frac{\text{Mg}}{\text{man}}}{d}\rbrack$$

Ad II

Mine model layout

1. Main shaft

2. Pit bottom of main shaft

3. Main transportation crosscut

4. Main transportation drift

5. Inclined drift

6. Main ventilation drift

7. Ventilation blind pit

8. Main ventitalion crosscut

9. Pit bottom of air shaft

10. Air shaft

Main shaft depth, D_ms [m]:

D_ms = H + 20

D_ms = 600 + 20 = 620 [m]

Air shaft depth, D_as [m]:

D_as = H – h + 10

D_as = 600 – 150 + 10 = 460 [m]

Ad III

Reserves estimation

Seam number	Area [m^2]	Thickness [m^2]	Volume [Mm^3]	Density [Mg/m^3]	Proved reserves [MMg]	Coefficient Æžav	Saleable reserves [MMg]
I	6884240	3	20,653	1,3	26,849	0,6	16,109
II	5966320	3	17,899	1,3	23,269	0,6	13,961
III	5048440	4	20,194	1,3	26,252	0,6	15,751
Total	17899000	10	58,745		76,369		45,821

Area – calculated for every seam by multiplication of coal field length along strike by coal seam length along dip.

Average coefficient of reserves recovery, Æž_av; let Æž_av=0,6

Index of useful capacity of deposit, z_u [Mg/m²]:

$z_{u} = \frac{1,3\Sigma m_{i}}{\text{cosα}}\eta_{\text{av}}$= $\frac{1,3 \bullet (3 + 3 + 4)}{cos5} \bullet 0,6 = 7,83\ \lbrack\frac{\text{Mg}}{m^{2}}\rbrack$

where:

m_i- i-th seam thickness [m],

α – dip angle [degrees]

Ad IV

Mine construction schedule

Name	Unit	Depth/Length	Driving through	Rate of advance [m/mth]	Time [mth]	Years
Preparatory workings before main shaftsinking					6
Main shaft sinking (1)	[m]	620	stone	60	10,4
Main shafr pit bottom inlet			stone		3
Driving the main transportation crosscut (3)	[m]	50	stone	50	1
Crossing (3/4L)	[m]		stone/coal		0,25
Driving the main transportation drift (4L)	[m]	1000	coal	150	6,7
Crossing (4L/5L)	[m]		coal		0,25
Driving the inclined drift I (5L)	[m]	1720	coal	120	14,35
Crossing (5L/6L)	[m]		coal		0,25
Preparatory workings before air shaft sinking					4
Air shaft sinking (10)	[m]	460	stone	60	7,6
Air shaft pit bottom inlet			stone		2
Driving the main ventilation crosscut (8)	[m]	50	stone	50	1
Crossing (8/6L)	[m]		stone/coal		0,25
Driving the main ventilation drift (6L)	[m]	1000	coal	150	6,7
Driving the main panel entry for longwall I	[m]	1000	coal	200	5
Driving the tail panel entry for longwall I	[m]	1000	coal	200	5
Driving the set-up entry for longwall I	[m]	300	coal	100	3
Longwall I face equipment installation					3
Start up of longwall I extraction						→
Driving the main transportation drift (4R)	[m]	1000	coal	150	6,7
Crossing (4R/5R)	[m]		coal		0,25
Driving the inclined drift II (5R)	[m]	1720	coal	120	14,35
Driving the main ventilation drift (6R)	[m]	1000	coal	150	6,7
Crossing (5R/6R)	[m]		coal		0,25
Driving the main panel entry longwall II	[m]	1000	coal	200	5
Driving the tail panel entry for longwall II	[m]	1000	coal	200	5
Driving the set-up entry for longwall II	[m]	300		100	3
Longwall II face equipment installation					3
Start up of longwall II extraction						→

Ad V

Mine production schedule

Seam number	Saleable reserves [MMg]	Annual saleable production [MMg/year]	Production period [years]	Year	Year
I	16,109	3,3	5,4
II	13,961	3,3	4,3
III	15,751	3,3	4,8

Ad VI

CAPEX estimation

1. Undegrund part

1. Expenditure on sinking, I_u1 [MPLN]

No	Specification	Drive through	Size	Unit cost [PLN/unit]	Total [MPLN]
			unit	amount
1	Main shaft sinking (1)	stone	[m]	620	340
2	Driving the main shaft pit bottom inlet	stone		1
3	Air shaft sinking (10)	stone	[m]	460	250
4	Driving the air shaft pit bottom inlet	stone		1
Total	327,8

1. Expenditure on driving main development openings, I_u2 [MPLN]

No	Specification	Drive through	Size	Unit cost [ThPLN/unit]	Total [MPLN]
			unit	amount
1	Driving the main cross transportation (3)	stone	[m]	50	25
2	Crossing (3/4L)	stone/coal	[m]
3	Driving the main transportation drift (4L)	coal	[m]	1000	15
4	Crossing (4L/5L)	coal	[m]
5	Driving the inclined drift I (5L)	coal	[m]	1720	12
6	Crossing (8/6L)	coal	[m]
7	Driving the main cross ventilation opening (8)	coal	[m]	50	25
8	Crossing (8/6L)	stone/coal	[m]
9	Driving the main ventilation drift (6L)	coal	[m]	1000	15
10	Driving the main longwall I panel entry	coal	[m]	1000	10
11	Driving the tail longwall I panel entry	coal	[m]	1000	10
12	Driving the set-up entry for longwall I	coal	[m]	300	15
13	Driving the main transportation drift (4R)	coal	[m]	1000	15
14	Crossing (4R/5R)	coal	[m]
15	Driving the inclined drift II (5R)	coal	[m]	1720	12
16	Driving the main ventilation drift (6R)	coal	[m]	1000	15
17	Crossing (5R/6R)	coal	[m]
18	Driving the main longwall II panel entry	coal	[m]	1000	10
19	Driving the tail longwall II panel entry	coal	[m]	1000	10
20	Driving the set-up entry for longwall II	coal	[m]	300	15
Total	153,08

1. Expenditure on driving pump room and other chambers at pit bottoms, I_u3 [MPLN]

$$I_{u3} = aW_{d} + b + c\sqrt{Q_{w}} + dQ_{w}$$

where:

Wd – daily run-of-mine production [ThMg/d]

Qw – natural water inflow in the mine [m³/min

For the gassy mine without water problems: a = 4,73; b = 7,7; c = 2,1; d = 2,7

$$I_{u3} = 4,73 \bullet 16,5 + 7,7 + 2,1 \bullet \sqrt{3} + 2,7 \bullet 3 = 97,48\lbrack MPLN\rbrack$$

1. Expenditure on underground equipment (in gassy mine), Iu4 [MPLN]

$$I_{u4} = \left( \frac{40,5}{z_{u3}} + 16,2 \right)W_{d}$$

where:

Zu3- index of useful capacity of deposit [Mg/m²]

$$I_{u4} = \left( \frac{40,5}{7,83} + 16,2 \right) \bullet 16,5 = 352,64\ \lbrack MPLN\rbrack$$

1. Expenditure on mechanization and automation (for gassy mine), Iu5 [MPLN]

I_u5 = 6, 9W_d + 31, 5

Wd – daily run-of-mine production [ThMg/d]

I_u5 = 6, 9 • 16, 5 + 31, 5 = 145, 35 [MPLN]

Total expenditure on underground workings:

$$I_{u} = \sum_{i = 1}^{i = 5}I_{\text{ui}}$$

I_u = 327, 8 + 153, 08 + 97, 48 + 352, 64 + 145, 35 =  1076, 35 [MPLN]

1. Surface part

1. Expenditures on surface installations (e.g. winding installations, shafy head gear setting, construction of winding machine, processing plant, housing and other pit top buildings, etc.), Is₁ [MPLN]

I_s1 = 54 MPLN

1. Expenditure for surface coal processing and handling installations, Is₂ [MPLN]

I_s2 = 0, 45W_d(v_jbK_jb + C_mK_jm + M_mK_js)

I_s2 = 0, 45 • 16, 5(140•0,15+3,4•8,4+6•2,4) = 474, 90 [MPLN]

where:

W_d – daily run-of-mine production [ ThMg/d]

v_jb – processing/ coal handling capacity of plant [m³/Mg/h]

K_jb – unit cost per m³ plant capacity [PLN/(m³/Mg/d)]

C_m – capacity of the coal handling machinery [Mg/Mg/h]

K_jm – unit cost of installation of processing machinery [PLN/(Mg/Mg/h)]

M_m – installed power of the processing plant [kW/Mg/h]

K_js – unit cost of the installed power [MPLN/(kW/Mg/h)]

Let: v_jb = 140; K_jb = 0,15; C_m = 3,4; K_jm = 8,4; M_m = 6; K_js = 2,4

1. Expenditure for preparation of mine stockyard and its fencing, Is3 [MPLN]

I_s3 = aL_b + br + cn_z + dF + e + 5, 25

where:

L_b – length of railway truck in mine stockyard area [km],

r – number of railway crossings in mine stockyard area,

n_z – number of loading track for coal

F – surface area of the mine stockyard [ha]

Let: L_b = 0,45; r = 20; n_z =11; F = 12; a = 0,45; b = 0,1; c = 0,4; d = 0,45; e = 0,45

I_s3 = 0, 45 • 0, 45 + 0, 1 • 20 + 0, 4 • 11 + 0, 45 • 12 + 0, 45 + 5, 25 = 17, 7 [MPLN]

1. Expenditure for installation of hydraulic backfilling, I_s4 [MPLN]

I_s4 = 0

1. Expenditure of the main ventilation infrastructure, I_s5 [MPLN]

I_s5 = (b_p+0,0065q_m)W_d + 10, 2S_w + 1, 5S_x + 13, 5n_m

where:

b_p – coefficient, bp=0,09  •  q_s=0,09  •  11=0,99

q_s – volume of methane emission per Mg of coal extracted [m³/Mg]

q_m – yield of gas from methane emission points [m³/Mg]

S_w – number of exhaust ventilation shafts

S_x – number of intake ventilation shafts

n_m – number of methane emission points = number of exhaust shafts

Let: q_s = 11; q_m = 6,6; S_w = 1; S_x = 1; n_m = 1

I_s5 = (0,09•11+0,0065•66) • 16, 5 + 10, 2 • 1 + 1, 5 • 1 + 13, 5 • 1 = 42, 24 [MPLN]

1. Expenditure on the installation of electric energy supply infrastructure, Is6 [MPLN]

I_s6 = 12,2 [MPLN]

1. Expenditure on the compressed air supply system, I_s7 [MPLN]

I_s7 = 1, 47W_d + 2, 25n_s1

where:

n_s1 – number of compressed air stations = number of winding shafts = 1

I_s7 = 1, 47 • 16, 5 + 2, 25 • 1 = 26, 5 [MPLN]

1. Expenditure for hot water supply system, I_s8 [MPLN]

$$I_{s8} = \left( \frac{a}{P_{u}} + b \right)W_{d} + c$$

where:

W_d – daily run-of-mine production [ ThMg/d]

P_u – underground productivity [Mg/emp/d]

a, b, c – coefficients depending upon the supply model; a = 2,5 ; b = 0,7 ; c = 8

$$I_{s8} = \left( \frac{a}{P_{u}} + b \right)W_{d} + c$$

$$I_{s8} = \left( \frac{2,5}{5,62} + 0,13 \right) \bullet 16,5 + 8 = 26,88\ \lbrack MPLN\rbrack$$

1. Expenditure on the construction of administrative buildings and installation of telecommunication network, I_s9 [MPLN]

$$I_{s9} = \left( \frac{1,83}{P_{u}} + 0,13 \right)W_{d} + 3,8$$

$$I_{s9} = \left( \frac{1,83}{5,62} + 0,13 \right) \bullet 16,5 + 3,8 = 11,32\ \lbrack MPLN\rbrack$$

where:

W_d – daily run-of-mine production [ ThMg/d]

P_u – underground productivity [Mg/emp/d]

1. Expenditure on the supply centers, workshops and storage yards and narrow gauge track layout fot mine, I_s10 [MPLN]

I_s10 = 2, 4W_d + 2, 63

where:

W_d – daily run-of-mine production [ ThMg/d]

I_s10 = 2, 4 • 16, 5 + 2, 63 = 42, 23 [MPLN]

1. Expenditure on the mine premises preparation, land work, area protection and fencing, I_s11 [MPLN]

I_s11 = 16, 5 [MPLN]

1. Cost budgeting for mine development construction, I_s12 [MPLN]

I_s12 = 0, 4I_u2

where:

I_u2 – expenditure on main development openings [MPLN]

I_s12 = 0, 4 • 153, 08 = 61, 23 [MPLN]

1. Reserve fund for unezpected expediture, I_s13 [MPLN]

$$I_{s13} = 0,1(I_{u} + \sum_{i = 1}^{i = 12}{I_{\text{si}})}$$

where:

I_u – total expenditure for underground mine development [MPLN] = 1076,03 [MPLN]

I_s13 = 0, 1(1076,03+(54+474,9+17,7+0+42,24+12,2+26,5+26,88+11,32+42,23+16,5+61,23)) = 0, 1(1076,03+785,7) = 186, 17 [MPLN]

1. Total expenditure on surface workings, I_s [MPLN]

$$I_{s} = \sum_{i = 1}^{i = 13}I_{\text{si}}$$

I_s = 785, 7 + 186, 17 = 971, 87 [MPLN]

1. Total CAPEX – total expenditure (underground and surface), I [MPLN]

I = I_u + I_s

I = 1076, 03 + 971, 87 = 2047, 9 [MPLN]

1. Calculation of annual amortization, A_an [MPLN/a]

$$A_{\text{an}} = \frac{I}{t_{\text{av}}}$$

where:

t_av – average period of influence of the mine assets, t_av = 18 years

$$A_{\text{an}} = \frac{2047,9}{18} = 113,77\ \lbrack\frac{\text{MPLN}}{a}\rbrack$$

1. Calculation of unit amortization, a [PLN/Mg]

$$a = \frac{A_{\text{an}}}{S}$$

where:

S – annual saleable production of the mine [MMg/a] = 3,3 [MMg/a]

$$a = \frac{113,77}{3,3} = 34,47\ \lbrack\frac{\text{MPLN}}{a}\rbrack$$

Ad VII

OPEX estimation

Annual operating cost specification

Id	Cost specification	Fixed [MPLN/a]	Variable [MPLN/a]	Total [MPLN/a]	Unit cost [PLN/Mg]
1	Amortization	113,77	Â	113,77	34,48
2	Materials	25,70	70,95	96,65	29,29
3	Energy	37,40	23,76	61,16	18,53
4	Equipment lease and rental	10,80	Â	10,80	3,27
5	Drilling and mining serveces	7,10	47,85	54,95	16,65
6	Methane drainage services	3,00	20,13	23,13	7,01
7	Mining damage services	12,00	Â	12,00	3,64
8	Other mining services	5,00	8,91	13,91	4,22
9	Repair services	25,00	13,20	38,20	11,58
10	Transport services	3,80	11,55	15,35	4,65
11	Other services	10,00	2,97	12,97	3,93
12	Labor costs	440,04	Â	440,04	133,35
13	Welfare securities	89,77	Â	89,77	27,20
14	Union benefits	34,32	Â	34,32	10,40
15	Real property tax	7,65	Â	7,65	2,32
16	Royalties	Â	0,07	0,07	0,02
17	Environmental charge	Â	0,05	0,05	0,02
18	PFRON charge	3,10	Â	3,10	0,94
19	Other taxes and charges	0,42	Â	0,42	0,13
20	Insurances	4,60	Â	4,60	1,39
21	Total production cost	833,47	199,44	1032,91	313,00
22	Cost of sales	Â	Â	206,58	62,60
23	Total operating cost	Â	Â	1239,49	375,60
24	Cost minus amortization	Â	Â	1125,72	341,13

Year	0	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19
Discount coefficient, at	1,00	0,91	0,83	0,75	0,68	0,62	0,56	0,51	0,47	0,42	0,39	0,35	0,32	0,29	0,26	0,24	0,22	0,20	0,18	0,16
Annual sales, St [PLN/year]					1,01	1,65	2,12	3,30	3,30	3,30	3,30	3,30	3,30	3,30	3,30	3,30	3,30	3,30	3,30	3,30
Average coal price, Pt [PLN/Mg]					450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00	450,00
Pevenues, Rt [MPLN/year]					454,59	742,50	954,64	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00	1485,00
Annual cost, Ct [MPLN/year]					1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72	1125,72
Investments, It [MPLN/year]	97,52	417,94	292,56	390,08	585,11	390,08	292,56	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00
Inventories, Bt [MPLN/year]					65,00	0,00	65,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	-130,00
Capital expenditures, Nt=It+Bt [MPLN/year]	97,52	417,94	292,56	390,08	650,11	390,08	357,56	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	-130,00
Rt-Ct	0,00	0,00	0,00	0,00	-671,13	-383,22	-171,08	359,28	359,28	359,28	359,28	359,28	359,28	359,28	359,28	359,28	359,28	359,28	359,28	359,28
at(Rt-Ct)	0,00	0,00	0,00	0,00	-458,39	-237,95	-96,57	184,37	167,60	152,37	138,52	125,92	114,48	104,07	94,61	86,01	78,19	71,08	64,62	58,74
atNt	97,52	379,94	241,78	293,07	444,04	242,21	201,83	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	-21,26
at(Rt-Ct-Nt)	-97,52	-379,94	-241,78	-293,07	-902,43	-480,16	-298,40	184,37	167,60	152,37	138,52	125,92	114,48	104,07	94,61	86,01	78,19	71,08	64,62	80,00

Ad VIII

Evaluation of mine planning project efficiency.

NPV = -1231,48

Ad IX

Sensitivity analyses for criteria NPV

%	Average coal price	NPV	% NPV
-0,1	405	-1 957,95	-58,99
-0,05	427,5	-1 594,72	-29,50
0	450	-1231,48	0,00
0,05	472,5	-868,24	29,50
0,1	495	-505,01	58,99

%	CAPEX	NPV	% NPV
-0,1	1 843,11	-1 049,55	14,77
-0,05	1 945,51	-1 140,52	7,39
0	2 047,90	-1231,48	0,00
0,05	2 150,30	-1 322,45	-7,39
0,1	2 252,69	-1 413,41	-14,77

%	Annual cost	NPV	% NPV
-0,1	1013,152262	-569,77	53,73
-0,05	1069,438499	-900,63	26,87
0	1125,724736	-1231,48	0,00
0,05	1182,010973	-1562,33	-26,87
0,1	1238,29721	-1893,19	-53,73

Ad X

Summary

1. Reseves:

Proved reserves: 76,369 [MMg]

Saleable reserves: 45,821 [MMg]

1. Number of seams: 3

2. Number of shafts: 2

3. Horizon depth: 600 [m]

4. Horizon interval: 150 [m]

5. Number of longwall: 2

6. Annual saleable production: 3,3 [MMg/a]

7. Overall manpower: 3667 [man]

8. Underground manpower: 2934 [man]

9. Overall productivity: 900 [Mg/emp/a]

10. Underground productivity: 5,62 [Mg/man/d]

11. Daily run-of-mine production, W_d: 16,5 [ThMg/d]

12. CAPEX: 2047,9 [MPLN]

13. OPEX – Total: 1125,72 [MPLN/a]

14. NPV: -1231,48

15. Conclusions derived from sensitivity analysis:

Changes in coal price don't affect the NPV, it always has a negative value. Therefore the investment is unprofitable.