Understanding the drivers of economic viability of a mineral extraction project is of fundamental importance. Especially for bulk commodities external factors can have as much of an influence on mine economics as internal factors. Therefore, mineral economics in bulk commodities need to focus on the entire supply and demand system.
Understanding the drivers in determining the economic viability of a mineral extraction project, be it a mega mine or a quarry, is fundamentally important to operators, investors, legislators and others. Especially for bulk commodities, such as coal or aggregates, external factors can have as much of an influence on mine economics as internal factors. Therefore, mineral economics in bulk commodities need to focus on the entire supply and demand system and not only on the mine level.
The course explains the factors and relationships in markets and mining that determine mineral economics in bulk commodities. Using coal markets and mining as an example, the learning can easily be applied to other bulk commodities.
The course discusses the roles of types of markets, mechanism of trade and logistic. Methodologies of estimating and applying long term supply and demand forecasts are explained, as well as cost curves and application of the principle of “last mine needed” to derive long term market prices.
Using these parameters, mine economics are explained by applying estimated costs and revenues in a simple discounted cash flow model. Quantification of market and operational risks are demonstrated and discussed by modifying input parameters and observing the effect of the modifications on the model.
1) General characteristics of bulk commodities
2) Understanding on-mine cost factors2.1) Geological cost factors2.2) Mining cost factors2.3) Metallurgy / Processing cost factors2.4) Non-technical cost factors2.5) Concept of "free on mine" cost
3) Transportation costs factors3.1) Modes of transport: road, rail, sea3.2) capacity restrictions3.3) Concept of "as delivered" cost
4) Markets4.1) Market location & size4.2) Entry restrictions4.3) Cost to access / participate4.4) Estimating supply & demand
5) Prices5.1) Where and how are prices set?5.2) Cost curves5.3) Understanding the "last mine needed" principle
6) Discounted Cash Flow6.1) The long term production plan6.2) Capex and opex6.3) Cost of capital, depreciation, taxation6.3) Determining unit costs6.4) Your position on the cost curve
7) Improving your position7.1) Understanding fixed & variable costs7.2) Internal & external cost factors: what can you control?7.3) Reducing unit costs7.4) Calculating sensitivities
Objectives and outcomes
Practising geologists and mining engineers in mineral resources production, consultancies and public institutions.
Non-technical managers and analysts that need to have a basic understanding of mineral economics.
Students in geology, mining and mineral resource management without exposure to the topic at their institution of learning.
The course will be held by Mr Götz Bartkowiak, M.Sc. (Geology), who has more than 25 years of international experience in the resource industry. After completing his M.Sc. in Geology at the University of Aachen, he started his career in 1996 as an exploration geologist for Anglovaal Minerals Limited in South Africa. He then moved on, in 1999, to the position of head of the geological department of Total Coal South Africa, where he oversaw exploration activities as well as the geological supervision of the producing mines. In 2007 he moved to France to first take up the position of project mining engineer and later senior technical advisor / strategist at the coal mining section of the Total Group. In 2013 he returned to Total Coal South Africa to take on the position of Head of Strategy and Business Development, being responsible among others for Geology, Mine Planning, Project Development, New Business & Strategy. In 2015 he returned to his native Germany to start a new career as an independent Management- and Technical Advisor to the resource industry, under the tradename greenvalleycoal.com. In 2019 he became the authorised partner of Carlson Mining Software for Germany and neighbouring countries, a role he fills in parallel and complementary to his consulting capacity. Throughout his career, Mr Bartkowiak has been actively involved in the technical assessment and economic evaluation of mining projects, ranging from exploring grass-roots projects to evaluating producing mines. He has worked and carried out assessments on numerous exploration and mining projects, mostly in coal, in a broad variety of countries, including South Africa, Indonesia, Australia, Colombia, China, the USA, and others. Since moving to Germany, he was able to add experiences in other bulk commodities, such as Limestone, to his portfolio of projects.
Mr Bartkowiak is a registered Professional with SACNASP, member of the Association of Practising Geoscientists in Germany (“Berufsverband Deutscher Geologen, BDG”) and member of the Geological Society of South Africa. From 2009 to 2013 he was a member of the board of the World Coal Association.
945 € per person.
Classes will be given in english. Classes in german available on request.
On-line course dates: 14.02.2022 - 18.02.2022