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Blasting Economics

©Dr. B. C. Paul 2009


Note – The example contained in these slides was prepared by the author for use in the
courses he instructs. It represents ideas and concepts believed by the author to be
commonly understood by those well studied in the subject. Cost figures were taken
from a variety of published and unpublished discussion sources, though contributions
from Western Mine Cost Service and the U.S. Bureau of Mines are specifically
recognized.
We Will Utilize A Standard Blast
Design Cost Calculation
Spreadsheet
• The Spreadsheet will consider
– The Ownership Cost of Your Drills
– The Operating Cost of Your Drills
– The Labor Cost for Drill Operations
– The Ownership Cost of Explosives Trucks
– The Explosives Supplies Cost
– The Explosives Labor Cost
– Management and Engineering Support Cost
– Penalty Costs
• Wear and Tear
• Secondary Breakage
• Pit evacuations for Blasting
Why A Spreadsheet?

• Cost Estimating Calculations are generally


simple math
• Just a tedious matter of estimating each
thing and adding up totals
– Spreadsheet avoids calculation errors and
differences in assumptions
The Basic Input

Pick your drill type

Use the table to enter your drill penetration


Rate.
Get Other Parameters from your
Have a Blast Spreadsheet
Plug Into Sheet
First Task Is To Get Ownership Cost
of Drill

• Approach
– Figure out how much time it will take to drill
the holes each year
– Figure out how many drills you need and how
many hours they will work
– Figure out how long the drill will last
– Now you have Capital Cost for drills and the
life of the drills you can get an annual cost to
own the drills
Our Spreadsheet

Here is the bottom line cost per year


$294,606
Deciding How Much Drill Time
• Number of feet drilled
– Required tonnage * specific
drilling
• (specific drilling is ft of
drilling per ton)
• Number of Holes Drilled
– Number feet drilled / length of
a hole
• You know how long it takes to
set up to drill a hole (We had the time for each type of drill to set up
Over 1 hole)
• You know how long it takes to
drill a foot of hole (We know how many feet of hole the drill can go
An hour when it is drilling)
• Add the two and you have the
drilling time needed
Crunching Toward an Answer
• Drill crews don’t work 60 minutes an hour
• Drills are not in working order 100% of the time
• Drills are not assigned to work 100% of the time
they are available
• Use these factors to find out how many hours you
will have to plan for a drill to get what you really
need
• Compare that to hours one drill can be available
• Now you know how many drills you need
And Getting There
• Divide up the hours between the drills needed
• Divide the hours of drill life by the hours worked
per year to get the drill life
• A/P converts the capital cost of the drills into
equal payments (with interest) over the life of the
drill
– We how have the drill Capital Cost broken down on an
annual basis.
Finding Out How Many Hours and
Drills

With 8 months, 5 days a week and 10 hour shifts I have 1714 hours
Max available on one drill.
Other Ownership Costs
• Taxes and Insurance
– These are commonly approximated as a percentage of
the value of the equipment
– Most mining equipment tends to be 4 to 7% of value
depending on what it is.
– Problem is that the value varies with time as the asset
grows old and wears out
– Idea is to get the average value at the start of each tax
or insurance year
• Industry term is average annual investment.
Spreadsheet Gets Taxes as a Function of
Average Annual Investment

Now we have our first cost – What is the Annual Ownership


Cost of the drills we must have to meet production?

$294,606 per year


Drill Operations Cost

Energy Cost = Fuel Units/hr * #hours worked * Cost/Energy Unit


More Drill Operating Costs

Repair Cost = Cost/hr * # Hours Worked


The Stabilizer and Recorder Costs

Misc Parts Cost = Stabilizer+Recorder Cost/hr * # Hours


Bit and Steel Costs

Bit and Steel Cost = Cost Per Foot Drilled * # of feet of drilling
Total Up the Non-Labor Direct Drill
Operating Costs
Getting Drill Labor Cost

Drill crew is assumed to consist of a head driller and helper.

Drill Labor Cost = (Head Driller/hr + Helper/hr) * # hours for crew


What Is Burden?
• In this case its not the amount of rock to blast
• Employer pays
– Wage for hours worked
– Also pay
• Social Security Match
• Workmans Comp Insurance
• Unemployment Insurance
• Health Insurance
• Vacation and Sick Leave
• Other Benefits Company Pays
– Costs for employees that are not paid as a wage/hr are
called Burden
• Commonly estimated as a % of work payroll
Getting The Capital Cost of
Explosives Equipment

If you are bulk loading explosives you need an Explosives Truck


If using bagged explosive gels a heavy pick-up can be used
If doing electric blasting need sequential blasting machine.

Calculation method is the same as was used in getting capital cost


Of drills.
Next You Choose Your Initiation
System
• Electric – current passing through wire electric
circuits ignite timing elements in caps that set off
boosters that set off charge
– Quite
– Circuits can be tested from the initiation point
– Delay Elements are down the hole in caps or from
delayed pulses sent out to circuits from blasting
machine.
– Need to practice electrical design to make sure circuits
are balanced
– Risk – large wire loops convert Electro-Magnetic
waves into electricity which could set off some of the
caps
Detonating Cord
• Cord is filled with high explosive
• Shot is physically connected with cord and
initiation spreads by blast propagation through the
cord.
• Just tying the cord around a booster can set-off the
booster as the cord explodes – no caps needed
• Delays are usually fuse sections put into the lines
on the surface
Det Cord Dark Sides
• It is very noisy – if you burry it you could break a
connection
• Only way to check the system is to check every
connection
• Usually have to top prime because det cord will
burn powder around it as detonation wave goes
through powder
• Pretty much need a direct lighting strike hit to set
it off accidentally.
Non-El
• Uses caps in booster like electric
• Network is connected by hollow cord with explosive on
the edges
– Result is a lot less noise
– Won’t burn surrounding powder so you can bottom prime
– Also can use air pressure to check connections from one point
• Put delay fused in lines on the surface or down the holes.
• Lines don’t generate stray electric currents from EM pulses
Choosing on the Spreadsheet

Enter 1 for What Ever


System you use.

Indicate the
Number of
Booster per hole

Indicate the
Number of
Initiation points
Identify the number of surface or down hole delays used in your
Pattern (needed for non-el and det cord)
Spread Sheet Calculations

Boosters = #boosters/hole*# of holes*cost/booster

Caps = #initiation points/hole*#holes*cost/cap


(det cord systems have no caps)

Delays = #of delays/pattern*#of patterns*cost/delay


Final Explosives Cost Calculations
There is also a cost for connecting
Wires and cords.
Spreadsheet uses a % of total
Cost approach to estimate
Takes subtotal for powder,
Caps, boosters, delays and adds
A percentage for cord.

It totals up everything to get the annual explosives cost.


We Need Workers to Load the
Explosives and Hook-Up the Shot

We know the number of holes


The value of holes loaded per shift is from a number of published articles
A crew is expected to consist of a Blast Supervisor and two helpers

# Shifts needed = # of holes / holes per shift

Cost per Shift = (Sum of Labors cost/hour)*hours per shift

Labor Cost Per Year is = # Shifts needed * Cost per Shift


Engineering and Management Costs
Are Estimated as a Percentage of
Other Labor Costs
Spreadsheet Charges Penalties for
Impact on Other Operations

Secondary breakage on top of grizzly screen costs money. Take a cost/ton for
Secondary breakage * tons needing breakage. (The percentage of your tonnage
Needing secondary breakage comes from Havablast Spreadsheet).

Note – Even if 2ndary breakage is within acceptable limits it still does not happen
For free.
Excess Wear Penalty

When rocks are too big it puts extra wear on trucks, bed-liners, suspensions, loader
Teeth and hydraulics and other things. Spreadsheet uses D50 from the Havablast
Spreadsheet and a cost per inch for excess size to estimate. (Note that you could
Change values to tune a sheet like this to a specific operation).
Cost of Suspended Operations

When blasting is to be done, equipment is pulled back and workers not needed for
The blasting work are evacuated from the pit. Equipment not in service still has
An ownership cost and workers still are paid. Even if the blast may be done in less
Than 10 minutes people slowing down before the blast and then getting “in the groove”
After takes time.

(Note – this spreadsheet does not charge a lost production penalty)


Spreadsheet Totals the Annual Costs
and Then Divides By the Annual
Tons

Result is the Cost Per Ton for Rock Blasting


(The name of the game for your assignment #5 is to have the lowest cost
And a design that still works)
Assignment #5 is now issued