The Mining Rate Risk

Economies of scale operate well in the mining industry: a big mine will produce significantly more output per unit of input than will a small mine. But not all orebodies can support a big mine.

The mining engineer has to match each orebody with an appropriate mining rate. Not uncommonly, he or she is forced to come to the conclusion that mining can only realistically happen at some fraction of the maximum rate because of| the awkward shape of the deposit.

In the case of an ore deposit that is oriented somewhat vertically, there is a good rule-of-thumb that can be used for selecting mining rates: the daily tonnage rate should be that of about 15% of the number of tonnes indicated or developed per vertical meter of depth. If, for example, the exploration program has proved up 7,200 tons (6,500 tonnes) of ore per vertical meter to some reasonable depth, a daily rate of 1,100 tons (1,000 tonnes) could be justified.

The width of an orebody will have a direct bearing on production rates as well. Ore in wide orebodies can be mined and handled much less expensively per tonne than can ore in narrow occurrences.

Rate of production is also related to the ore's availability for extraction, due to the fact that most mining methods require that the miner leave behind some ore in pillars to support the structure of the mine. It may take some time before this ore becomes available for stoping, and some of it might altogether have to be left behind.

The Risk of Dilution
In some mines, the physical characteristics of the wallrock may force a company to mine a very large amount of unwanted, rock which is barren along with the ore. This waste rock must afterwards be transported to surface with the ore; so as is natural, such dilution of the ore is costly for the mining company. In some cases, dilution can reach as high as 20% of what is mined, making the mine far less profitable than it could have been if the mining engineer would have been able to devise a method of mining only the mineralized rock.