You’re a mining engineer. What tools do you need to estimate costs effectively?

1 Historical data

One of the simplest and most reliable tools for cost estimation is historical data. This means using the actual costs of similar projects that have been completed or are ongoing in the same or comparable regions, geologies, and markets. Historical data can provide you with realistic benchmarks and trends for various cost components, such as capital expenditures, operating expenses, labor, equipment, materials, energy, taxes, royalties, and environmental compliance. However, you should also account for inflation, exchange rates, and other factors that may affect the current and future costs of your project.

2 Software applications

Another tool that can help you estimate costs effectively is software applications. These are programs that can perform complex calculations, simulations, and analyses based on various inputs and assumptions. Software applications can help you model different scenarios, optimize design parameters, compare alternatives, and generate reports and graphs. Some examples of software applications that are widely used by mining engineers are MineCost, HME Benchmark, Deswik, and NPV Scheduler. However, you should also be aware of the limitations, uncertainties, and biases that may affect the accuracy and reliability of software applications.

3 Professional standards

A third tool that can help you estimate costs effectively is professional standards. These are guidelines and frameworks that can help you organize, present, and communicate your cost estimates in a consistent and transparent manner. Professional standards can help you define the scope, level of detail, accuracy range, and confidence level of your cost estimates, as well as the sources, methods, and assumptions that you used. Some examples of professional standards that are widely used by mining engineers are the AACE International Recommended Practices, the Australian Institute of Mining and Metallurgy Cost Estimation Handbook, and the Canadian Institute of Mining, Metallurgy and Petroleum Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines.

4 Expert opinions

A fourth tool that can help you estimate costs effectively is expert opinions. These are the views and judgments of experienced and qualified professionals who have relevant knowledge and expertise in your field. Expert opinions can help you validate, refine, and improve your cost estimates, as well as identify and mitigate potential risks and uncertainties. You can obtain expert opinions from various sources, such as consultants, contractors, suppliers, peers, mentors, and industry associations. However, you should also be careful to avoid over-reliance, conflicts of interest, and groupthink that may affect the quality and credibility of expert opinions.

5 Continuous learning

A fifth tool that can help you estimate costs effectively is continuous learning. This means updating and enhancing your skills, knowledge, and competencies in cost estimation through formal and informal education and training. Continuous learning can help you keep up with the latest developments, trends, and innovations in your field, as well as learn from best practices, case studies, and lessons learned from other projects and professionals. You can pursue continuous learning through various means, such as courses, workshops, webinars, podcasts, books, journals, blogs, and forums.

Estimating costs effectively is a vital skill for mining engineers, as it can affect the success and viability of your projects. By using these tools, you can improve your performance and confidence in this challenging and rewarding task.