IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v17y2024i14p3379-d1432144.html
   My bibliography  Save this article

Exploitation of Mineral Resources in Conditions of Volatile Energy Prices: Technical and Economic Analysis of Low-Quality Deposits

Author

Listed:
  • Zbigniew Krysa

    (Department of Mining, Faculty of Geoengineering, Mining and Geology, Wroclaw University of Science and Technology, 50-370 Wroclaw, Poland)

  • Przemysław Bodziony

    (Department of Mining Engineering and Work Safety, Faculty of Civil Engineering and Resource Management, AGH University of Kraków, 30-059 Krakow, Poland)

  • Michał Patyk

    (Department of Mining Engineering and Work Safety, Faculty of Civil Engineering and Resource Management, AGH University of Kraków, 30-059 Krakow, Poland)

Abstract

In mining projects and production operations, energy carrier costs (fuel, electricity) constitute the primary component of variable costs. This study outlines a methodology for projecting operating costs in a surface mine or quarry in order to find the optimal configuration of mining equipment to extract low-grade secondary deposits, taking into account volatile energy prices. For illustration, the operating costs of five variants of mining equipment deployed to mine low-grade products were analysed, with the price of energy and fuels being the key cost component and the main risk factor. There were differences between the initial investment outlays and operating costs involved in all analysed variants, whilst the starting point for estimating the technical and economic parameters involved in the respective solutions was the predefined configuration of the mining equipment. Further, the decision to commence or discontinue mining operations could be supported by the simulation procedure based on the economic model. The results provided valuable insights into the cost-effectiveness of low-grade deposit extraction scenarios, depending on the projected unit costs of fuels and energy.

Suggested Citation

  • Zbigniew Krysa & Przemysław Bodziony & Michał Patyk, 2024. "Exploitation of Mineral Resources in Conditions of Volatile Energy Prices: Technical and Economic Analysis of Low-Quality Deposits," Energies, MDPI, vol. 17(14), pages 1-19, July.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:14:p:3379-:d:1432144
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/17/14/3379/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/17/14/3379/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Botín, José A. & Vergara, Marcelo A., 2015. "A cost management model for economic sustainability and continuos improvement of mining operations," Resources Policy, Elsevier, vol. 46(P2), pages 212-218.
    2. Fernandes, Mário Correia & Dias, José Carlos & Nunes, João Pedro Vidal, 2021. "Modeling energy prices under energy transition: A novel stochastic-copula approach," Economic Modelling, Elsevier, vol. 105(C).
    3. Sheo Shankar Rai & Vemavarapu M. S. R. Murthy & Nalamasa Sukesh & Akkiraju Sairam Teja & Simit Raval, 2021. "Operational efficiency of equipment system drives environmental and economic performance of surface coal mining—A sustainable development approach," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 25-44, January.
    4. Mustofa Usman & Luvita Loves & Edwin Russel & Muslim Ansori & Warsono Warsono & Widiarti Widiarti & Wamiliana Wamiliana, 2022. "Analysis of Some Energy and Economics Variables by Using VECMX Model in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 91-102, March.
    5. Stenis, Jan & Hogland, William, 2011. "Optimization of mining by application of the equality principle," Resources Policy, Elsevier, vol. 36(3), pages 285-292, September.
    6. Guo, Hongquan & Nguyen, Hoang & Vu, Diep-Anh & Bui, Xuan-Nam, 2021. "Forecasting mining capital cost for open-pit mining projects based on artificial neural network approach," Resources Policy, Elsevier, vol. 74(C).
    7. Dehghani, Hesam & Ataee-pour, Majid, 2012. "Determination of the effect of operating cost uncertainty on mining project evaluation," Resources Policy, Elsevier, vol. 37(1), pages 109-117.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michał Patyk & Przemysław Bodziony, 2024. "Empirical Analysis of Mining Costs Amid Energy Price Volatility for Secondary Deposits in Quarrying," Energies, MDPI, vol. 17(3), pages 1-19, February.
    2. Yıldız, Taşkın Deniz, 2022. "Supervisor fund expectation for the guarantee of salaries in the presence of the effect of permanent supervisor salaries on mining operating costs in Turkey," Resources Policy, Elsevier, vol. 77(C).
    3. Yıldız, Taşkın Deniz, 2023. "Changes in the salaries of mining engineers as they obtain managerial and OHS specialist positions in Turkey: By what criteria can salaries be increased?," Resources Policy, Elsevier, vol. 84(C).
    4. Haibing Liu & Serhat Yüksel & Hasan Dinçer, 2020. "Analyzing the Criteria of Efficient Carbon Capture and Separation Technologies for Sustainable Clean Energy Usage," Energies, MDPI, vol. 13(10), pages 1-12, May.
    5. Yıldız, Taşkın Deniz, 2022. "Considering the recent increase in license fees in Turkey, how can the negative effect of the fees on the mining operating costs be reduced?," Resources Policy, Elsevier, vol. 77(C).
    6. Burlakovs, Juris & Kriipsalu, Mait & Klavins, Maris & Bhatnagar, Amit & Vincevica-Gaile, Zane & Stenis, Jan & Jani, Yahya & Mykhaylenko, Valeriy & Denafas, Gintaras & Turkadze, Tsitsino & Hogland, Mar, 2017. "Paradigms on landfill mining: From dump site scavenging to ecosystem services revitalization," Resources, Conservation & Recycling, Elsevier, vol. 123(C), pages 73-84.
    7. Jang, Hyuna & Kim, Jong-Min & Noh, Hohsuk, 2022. "Vine copula Granger causality in mean," Economic Modelling, Elsevier, vol. 109(C).
    8. Odai Y. Dweekat & Sarah S. Lam & Lindsay McGrath, 2023. "An Integrated System of Braden Scale and Random Forest Using Real-Time Diagnoses to Predict When Hospital-Acquired Pressure Injuries (Bedsores) Occur," IJERPH, MDPI, vol. 20(6), pages 1-18, March.
    9. Kamel, Ahmed & Elwageeh, Mohamed & Bonduà, Stefano & Elkarmoty, Mohamed, 2023. "Evaluation of mining projects subjected to economic uncertainties using the Monte Carlo simulation and the binomial tree method: Case study in a phosphate mine in Egypt," Resources Policy, Elsevier, vol. 80(C).
    10. Hosseini, Shahab & Mousavi, Amin & Monjezi, Masoud & Khandelwal, Manoj, 2022. "Mine-to-crusher policy: Planning of mine blasting patterns for environmentally friendly and optimum fragmentation using Monte Carlo simulation-based multi-objective grey wolf optimization approach," Resources Policy, Elsevier, vol. 79(C).
    11. Rahimi, Esmaeil & Ghasemzadeh, Hasan, 2015. "A new algorithm to determine optimum cut-off grades considering technical, economical, environmental and social aspects," Resources Policy, Elsevier, vol. 46(P1), pages 51-63.
    12. Lv, J. & Li, Y.P. & Huang, G.H. & Ding, Y.K. & Li, X. & Li, Y., 2022. "Planning energy economy and eco-environment nexus system under uncertainty: A copula-based stochastic multi-level programming method," Applied Energy, Elsevier, vol. 312(C).
    13. Guo, Hongquan & Nguyen, Hoang & Vu, Diep-Anh & Bui, Xuan-Nam, 2021. "Forecasting mining capital cost for open-pit mining projects based on artificial neural network approach," Resources Policy, Elsevier, vol. 74(C).
    14. Díaz, Juan D. & Hansen, Erwin & Cabrera, Gabriel, 2020. "A random walk through the trees: Forecasting copper prices using decision learning methods," Resources Policy, Elsevier, vol. 69(C).
    15. Akhmad Akhmad & Ambo Asse & Nursalam Nursalam & Ibrahim Ibrahim & Bunyamin Bunyamin & Ansaar Ansaar & Sahajuddin Sahajuddin, 2023. "The Impact of the Increase of Oil Fuel Price and Government Subsidy on Indonesia’s Economic Performance," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 547-557, November.
    16. Dehghani, Hesam & Bogdanovic, Dejan, 2018. "Copper price estimation using bat algorithm," Resources Policy, Elsevier, vol. 55(C), pages 55-61.
    17. Song, Feng & Cui, Jian & Yu, Yihua, 2022. "Dynamic volatility spillover effects between wind and solar power generations: Implications for hedging strategies and a sustainable power sector," Economic Modelling, Elsevier, vol. 116(C).
    18. Dua’a B. Telfah & Aiman Q. Jaradat & Rabah Ismail, 2024. "Examining the Long-Run and Short-Run Relationship between Water Demand and Socio-Economic Explanatory Variables: Evidence from Amman," Sustainability, MDPI, vol. 16(6), pages 1-23, March.
    19. Jiao Liu & Shuang Li & Weijun Bao & Kun Xu, 2022. "Could the Management System of Safety Partnership Change Miners’ Unsafe Behavior?," Sustainability, MDPI, vol. 14(20), pages 1-14, October.
    20. Camacho, Maximo & Caro, Angela & Peña, Daniel, 2023. "What drives industrial energy prices?," Economic Modelling, Elsevier, vol. 120(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:17:y:2024:i:14:p:3379-:d:1432144. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.