Journal of the Southern African Institute of Mining and Metallurgy
On-line version ISSN 2411-9717
Print version ISSN 0038-223X
MOHUTSIWA, M. and MUSINGWINI, C.. Parametric estimation of capital costs for establishing a coal mine: South Africa case study. J. S. Afr. Inst. Min. Metall. [online]. 2015, vol.115, n.8, pp.789-797. ISSN 2411-9717. http://dx.doi.org/10.17159/2411-9717/2015/V115N8A17.
Capital cost estimates are important in decisions on whether a project will be approved, mothballed, or abandoned. In South Africa, junior coal miners do not have extensive databases of historical projects from which to estimate capital costs. The purpose of this paper is to establish formulae that can be used for estimating capital costs of developing coal mines in a coal-producing country, using South Africa as a case study. The costs are estimated to an error of magnitude level of -30% to +50%, which is suitable for a concept study level, using a parametric estimation technique. The study uses data from completed coal mining projects from selected coal-producing countries. Three formulae are developed and presented for estimating capital costs of underground bord and pillar, surface shovel and truck, and dragline operations.
Keywords : coal mining; capital costs; parametric cost estimation.