Pre-Feasibility Study Cost Estimation Resources

©2002 Dr. Bradley C. Paul

Pre-Feasibility Study

Order of Magnitude Estimates Determined which things would be considered

Pre-Feasibility Study Determines whether there is enough promise to justify the effort required to move forward

Feasibility Study (generally 10-30% +/-) Next Moves to Project Approval (5-10%)

Pre-Feasibility Study

Pre-Feasibility Study– Requires that you have a concept for what going to

build– Break project down into areas and tasks

Outby Haulage Ventilation Mine Workings

Costs of Components Done Separately– Need to include everything

Methods of Getting Pre-Feasibility Cost Data Clear List of What is Included to make sure

all components are included Begin to Find Manuals Available

– EPRI Coal Mine Cost Model (about 1981)– Bureau of Mines Cost Estimating System

(1984)– SERPA Cost Program (current)– Western Mine Cost Service

Typical Cost Manual Approaches

Factored Cost Estimates– Use Curves that are a function of some over-all

characteristic Example US Bureau of Mines Cost Estimating System

Itemized Cost Estimates– Specify cubic yards of concrete– Apply a cost per cubic yard– Used by EPRI and Serpa

Strengths and Weaknesses

Factored Cost Estimation Approach– Requires a lesser degree of engineering detail be

worked out to run all costs linked to a specific generally known parameter

– Lets get closer to answer with less work Itemized Cost Estimates

– Structure is same as Feasibility Estimate allows more transparent transition to Feasibility study

estimates

General Comments on Major Cost Estimation Resources EPRI - Coal Mine Cost Model

– Most cost model resources are for hard rock and industrial minerals - this one is coal

– Model covers coal mining costs but is weak in ancillary facilities and some capital costs

Example - No capital cost capability for shaft or slope

– Model linked to a computer program that has not been updated

1981 software in the 21rst century looses a lot

More EPRI Comments

1980 and 1981 cost base– needs significant inflation indexing

will see later that knowing how much to index with what is important

doesn’t show which indices to use on what

Productivity Sensitive– crews and advances done with simulations current in 1980– coal mine productivity has increased about 250%

are some productivity indices from BLS but not a common updating procedure

SERPA

A Hardrock Package A comprehensive mine cost package that has

been maintained to fairly current status with costs

– is private so seeing exactly what is in the package is not really possible

– fairly current still means the driving routines run in DOS cryptic key sequences and IO problems suspect that costs are updated but engineering assumptions in code

may not be

SERPA

Has a lot of defaults built in Has relatively simple categories of mine needs May almost be able to run at at the fairly precise

order of magnitude estimate stage– most manuals really can’t help you till get to

prefeasibility– Ability to add details and replace defaults gives system

power that extends up into pre-feasibility weaknesses in showing details of output probably make use in

feasibility stage really questionable

Western Mine Cost Service

Collection of cost models and typical item prices– comes as articles over time

makes comprehensive approach at any one time questionable may have to inflation index different parts of mine cost

separately very vulnerable to holes in needed costing

Hardrock manual that has some coal mining equipment items in it– can use on coal but comprehensive approach problem

Western Mine Cost Service

Place where manual shines– identify a critical cost area and you want to get down to

itemizing equipment or features and need costs great alternative to fishing for vendors that will give you prices

before your really shopping for equipment

– event is likely to occur as Pre-feasibility study moves into true feasibility study

– Manual caters all the way from Order of Magnitude to Feasibility but is comprehensive nowhere

US Bureau of Mines Cost Estimating System Prob the most comprehensive high precision pre-

feasibility manual ever written– No holes - covers everything– Too much detail and work to function in Order of

Magnitude Estimation– Factored cost estimate approach is not compatible with

itemized detail needed in critical areas of Feasibility Study

– Manual is clearly hardrock not good for quarry’s either

Status of BM CES

Mid 90s Congress killed Bureau of Mines– manual has been without caretaker– lots spin off people went to Western Mine Cost

and Serpa came from BofM Had beautiful spreadsheet program that ran

manuals rapidly was designed for Lotus 123 not updated to latest spreadsheets and some macros

don’t work

Status of BM CES cont

Had automatic cost indexing but that’s not been maintained

fortunately same index structure was picked up by Western Mine Cost which has been maintained

getting recent indexing into spreadsheet model is an on your own

– can do it manually as you will see