Distribution of Operating Costs Along the Value Chain of an Open-Pit Copper Mine

Abstract

This study analyzes the distribution of operating costs along the value chain of an open-pit copper mine with a focus on key operational units or operations such as drilling, blasting, loading, hauling, stockpiling, blending, crushing, milling, and flotation. Using process costing analysis, key cost drivers were identified, and their individual contributions to total expenses were quantified. Results revealed that comminution processes dominate the operational cost structure, with milling accounting for 6.18 USD/ton, representing 59.1% of total operating costs, and crushing costing 1.15 USD/ton, that is, 11% of total operating expenditure. The study also highlighted several opportunities for cost reduction and enhanced mining sustainability through strategies such as energy consumption optimization, the use of alternative energy sources, and optimized blast design. Finally, valuable insights aimed at promoting sustainable resource utilization, improved cost efficiency, and data-driven decision-making in mining operations are offered to mine planners and operators. This is eventually expected to lay the foundation for benchmarking work on the establishment of a baseline and standards for similar mining operations.