Sum of the years digit method is used for
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Mine Economics
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Payback period is the time required
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A bank lends a mine owner Rs. 1,00,000 today to purchase hand-held drills. If a note of agreement is signed to pay the bank Rs. 1,76,234 at the end of 5 years, the rate of interest in percent compounded yearly on the loan becomes
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An O.C. mine requires 16 blocks of overburden of 3000 te each to mine 4 blocks of coal of 2000 te each. The mining cost of both overburden and coal is Rs. 50 per tonne. The cost of transportation of overburden to dump areas is Rs. 50 per tonne. Coal transportation cost to the selling point is Rs. 75 per tonne. The price of coal is Rs. 800 per tonne, If the royalty and tax to the state is Rs. 50 per tonne, the nominal profit in rupees is
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The cash flow table of a manganese mine for a particular year is shown below:
If the corporate tax is 50% of the profit before tax, operating cash inflow in lakhs of rupees is
| Item Amount | (Rs. in lakhs) |
| Revenue | 900 |
| Cost (other than depreciation) | 300 |
| Depreciation | 100 |
| Profit before tax | 500 |
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The net present value in Rs. of a 3 year annuity of Rs. 10,000 discounted at 10% is
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The total cost C (Iakh rupees) of a longwall face of length L in m is given by the equation C = 0.1L+ (1562.5/L) + 300. Length of the face in m for the minimum total cost is
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For a mine production t per year, the total cost of production is given by (at2 + b). The revenue from sale is given by ct. If a, b and c, are constants, the breakeven value of t is
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The uniform end of year payment, R, which can be realized for n years from a single present investment, P, at i rate of interest is
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A company producing bearing plates for rock bolts has the selling price Rs. 20/unit and the variable cost has Rs. 12/unit. If the total fixed cost is Rs. 5,60,000, then the profit earned for an output of 1,00,000 units of bearing plates is
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For an open pit operation the value of metal is Rs. 210/kg, and recoverable grade is 1.2%. Production cost per tonne of ore inclusive of mining and processing but excluding stripping is Rs. 2000. If the break even stripping ratio is 3.49 m3/te. then the stripping cost is (lte = 1000 kg)
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A mining company is considering the following project:
Cash Flows (Rs.) for five years
What will be the NPV for the project if the cost of capital is 10%.
Cash Flows (Rs.) for five years
| Year | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow (Rs.) | -50000 | +11300 | +12769 | 14428 | +16305 | +18421 |
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A company producing bearing plates for rock bolts has the selling price Rs. 20/unit and the variable cost has Rs. 12/unit, If the total fixed cost is Rs. 5,60,000, then for a target profit of Rs. 4,00,000, the total output units of bearing plates is
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The ABC copper company recently bought an ore-bearing parcel of land for Rs. 2,000,000. The recoverable reserves in the mine were estimated to be 5,00,000 tons. If 75,000 tons of ore were mined during the first year and 50,000 tons sold, what was the depletion allowance for one year?
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A company takes a loan of Rs. 25,000 at 8% interest for the extension of a mine. To repay the loan, an additional saving of Rs. 2500 per annum is necessary. The period taken for repayment is
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The following information is provided for an ore deposit:
Number of waste blocks = 10
Number of ore blocks = 5
Volume of each waste block, m3 = 600
Total cost of waste handling per m3 = Rs. 100
Tonnage of each ore block = 400
Total cost of ore handling per ton = Rs. 150
Sale price of ore per ton = Rs. 500
The net cash flow of mining the deposit in lakhs of rupees, is
Number of waste blocks = 10
Number of ore blocks = 5
Volume of each waste block, m3 = 600
Total cost of waste handling per m3 = Rs. 100
Tonnage of each ore block = 400
Total cost of ore handling per ton = Rs. 150
Sale price of ore per ton = Rs. 500
The net cash flow of mining the deposit in lakhs of rupees, is
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An investment at 10'% yearly interest rate, compounded quarterly, accumulates to a sum of Rs. 120,000 in 5 years. The present value of the sum in rupees is
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A mining industry has the following total cost and total revenue functions:
Total cost = TC = 50 + 100q - 6q2 + q3
Total revenue = TR = 64q
Where q is the output of mine in tonne/day
The profit will be maximized for what level of production?
Total cost = TC = 50 + 100q - 6q2 + q3
Total revenue = TR = 64q
Where q is the output of mine in tonne/day
The profit will be maximized for what level of production?
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Four alternative investment opportunities are available in a mining project each offering different revenues for the next two years as shown in the table. If the interest rate is 10% annually, which alternative provides the best investment opportunity based on the net present value?
| Case I | Case II | Case III | Case IV | |
| Initial Investment (Rs.) | 40,000 | 1,00,000 | 80,000 | 1,20,000 |
| Return in Year 2 | 30,000 | 75,000 | 65,000 | 80,000 |
| Return in Year 3 | 30,000 | 75,000 | 65,000 | 80,000 |
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The present value of a 4 year annuity of Rs. 10,000 discounted at 10% is
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