Mineral deposits come in all sizes and shapes, and in grades from extremely rich to barely significant. So just because you find a mineral deposit doesn't mean you are destined to become a mining magnate. In this topic, we will consider the factors that determine the economic viability of a mineral deposit.

There are many factors, which, in combination, determine whether or not exploitation of the mineral deposit iseconomically viable. These are the size of the deposit, that is, the total extractable tonnes; the grade of the deposit, the extent to which the ore is mixed with gangue, or worthless minerals; the unit cost of winning the ore from the ground; the unit costs of separating the ore from the waste rock and the gangue; the unit costs of extracting the commodity from the ore, generally known as smelting; the cost of getting the ore commodity from the mine to the market; and the present worth of the commodity in the global market. These will now be given further consideration.

The total extractable tonnes of ore determines the gross worth of the deposit. 1All things being equal, larger deposits have greater potential for generating greater returns. The economic viability of an ore deposit is strongly influenced by the grade of the ore. It is generally not possible to liberate an ore deposit without firstly removing some quantity of worthless rock, and without some gangue being mixed with the ore. Usually, in mining, it is not possible to separate the ore from the gangue, and this has to be done later, in an industrial process. Associated costs include the cost of breaking, moving, and storing the ore in waste rock, which are costs of equipment, fuel, and labour, and the costs of concentrating the ore by

separating it from the gangue. These are costs of infrastructure establishment, running costs, and waste disposal. Even after the ore is concentrated, the commodity of interest is seldom obtained directly. It usually has to be extracted from the concentrated ore in a process generally known as smelting. This can be more or less costly and difficult depending on the nature of the mineral.

Costs arise from the costs of building a refining plant at the mine, or taking the concentrated ore to an existing plant, operational costs, which may be energy intensive, and costs of pollution mitigation and waste disposal.

In the primary consideration, the value of the commodity over the life of the mine must exceed the cost of purchasing equipment, building infrastructure, breaking and moving earth, concentrating and refining ore, and transporting products by an amount representing a good return on investment for the anticipated market value of the commodity. Mining is undertaken to be a profitable exercise.

In a secondary consideration, it is necessary for the mining 02:51operation to remain profitable for most, if not all, phases of its design life, and not just profitable from an overall consideration. This is a challenge because most of the cost of moving worthless ground, buying equipment, and building infrastructure is incurred very early in the life of the mine. And this is the time when the returns from the mine product are very low.

In planning a mine, it must be possible to incur these initial establishment costs at a rate that is offset by acceptable financial returns. In some cases, this can be achieved by staging mine development to occur gradually over an extended period as mining progresses. In other cases, it may be possible to target a super -rich, or high grade, part of the ore body so that we maximize returns in the early stage of the mine to offset the costs of establishment. The economic viability of mineral deposits changes with time. It is influenced by the market value of the commodity related to supply, the cost of energy, and technological innovation. Deposits that are not economically viable today may become economically viable in the future. This is one reason why it's so difficult to estimate the global reserves of a given mineral resource. As minerals become scarce and commodity prices increase, more and more marginal mineral deposits become economically viable. Some more economic considerations specific to surface and underground mining will be considered further in modules three and four.