Product Review

Economic skill is an essential partner to technical skill in every step of the mining process. An economic “mindset” begins before the first drill hole. This new book will help you effectively direct mining operations through the use of innovative economic strategies.

The text covers what is meant by a cost-effective mining scheme, the economics of information, and the procedures for rational evaluation of uncertain projects. It defines “ore” from an economic perspective and covers the influence of scheduling on ore reserves.

Discounted cash flow techniques, the most widely used evaluation technique for investment decision making, is covered in detail. The assumption of the use of spreadsheets is unique to this book. The application of DCF techniques in an operating mine environment is given expanded coverage and examples are drawn from real-life studies.

The differences between economic decision-making—a forward-looking task—and the reporting of results via accounting methods—a backward-looking activity—are reviewed. Capital and decision-making procedures associated with capital investments in a risk environment are given extensive coverage. Case studies for capital investment in an operating mine are included. Comprehensive examples investigate “value” from a risk-reduction perspective and from an “expected return on investment” perspective.

This book offers solutions to the problem that many mining projects fail to achieve expectations because of their inability to adapt to change. A new technique is explained that allows calculation of capital that is “at risk” from capital that is not at risk. This promises significant advances in the way that investments are made and capital is valued in the industry.