Determining the profitability of a mining operation is crucial for investors, stakeholders, and management. It involves a complex calculation that considers the value of extracted resources against the costs incurred throughout the mining lifecycle. This calculator helps estimate the potential financial outcome of a mining project by factoring in key variables such as ore grade, tonnage, recovery rates, commodity prices, and various operational and capital expenditures.
Key Metrics Explained:
Average Ore Grade (%): This is the concentration of the valuable mineral within the orebody. A higher grade generally translates to more valuable output per tonne of material processed.
Tonnage Mined (tonnes): The total quantity of ore extracted from the ground over a specified period or the mine's lifespan.
Mineral Recovery Rate (%): The efficiency of the processing plant in extracting the valuable mineral from the ore. Not all minerals present in the ore can be recovered.
Metal Price (per tonne): The current or projected market price of the extracted commodity. This is a highly volatile factor.
Processing Cost (per tonne): The cost associated with crushing, grinding, and separating the valuable mineral from the waste rock.
Operating Cost (per tonne): Includes costs like labor, energy, maintenance, and administration directly related to mining and extraction operations.
Capital Expenditure (Total): The initial investment required for exploration, mine development, equipment purchase, and infrastructure.
Mine Lifespan (Years): The estimated duration for which the mine can operate economically based on the size of the orebody and production rates.
The Calculation Logic:
The core of the profitability calculation involves determining the total revenue and subtracting the total costs.
1. Total Recovered Mineral: Total Recovered Mineral = Tonnage Mined * (Ore Grade / 100) * (Recovery Rate / 100)
This gives the total quantity of the valuable mineral extracted.
2. Gross Revenue: Gross Revenue = Total Recovered Mineral * Metal Price
This is the total income generated from selling the extracted mineral.
3. Total Processing & Operating Costs: Total Variable Costs = Tonnage Mined * (Processing Cost + Operating Cost)
These costs vary with the amount of ore processed.
4. Total Costs: Total Costs = Total Variable Costs + Capital Expenditure
Note: For a simpler annual calculation, Capital Expenditure would be amortized over the mine lifespan. This calculator provides a simpler overall profitability view.
5. Net Profit: Net Profit = Gross Revenue - Total Costs
6. Profitability Per Tonne of Ore: Profitability Per Tonne = Net Profit / Tonnage Mined
This metric helps assess the efficiency of each tonne of ore extracted.
This calculator provides a simplified model. Real-world mining economics involve detailed feasibility studies, discounted cash flow analysis, risk assessments, and consideration of taxes, royalties, and environmental reclamation costs.
function calculateMiningProfitability() {
var oreGrade = parseFloat(document.getElementById("oreGrade").value);
var tonnageMined = parseFloat(document.getElementById("tonnageMined").value);
var recoveryRate = parseFloat(document.getElementById("recoveryRate").value);
var metalPrice = parseFloat(document.getElementById("metalPrice").value);
var processingCost = parseFloat(document.getElementById("processingCost").value);
var operatingCost = parseFloat(document.getElementById("operatingCost").value);
var capitalCost = parseFloat(document.getElementById("capitalCost").value);
var lifespan = parseFloat(document.getElementById("lifespan").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "; // Clear previous results
// Input validation
if (isNaN(oreGrade) || oreGrade <= 0 ||
isNaN(tonnageMined) || tonnageMined <= 0 ||
isNaN(recoveryRate) || recoveryRate 100 ||
isNaN(metalPrice) || metalPrice < 0 ||
isNaN(processingCost) || processingCost < 0 ||
isNaN(operatingCost) || operatingCost < 0 ||
isNaN(capitalCost) || capitalCost < 0 ||
isNaN(lifespan) || lifespan <= 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
// Calculations
var totalRecoveredMineral = tonnageMined * (oreGrade / 100) * (recoveryRate / 100);
var grossRevenue = totalRecoveredMineral * metalPrice;
var totalVariableCosts = tonnageMined * (processingCost + operatingCost);
var totalCosts = totalVariableCosts + capitalCost;
var netProfit = grossRevenue – totalCosts;
var profitPerTonne = netProfit / tonnageMined;
var annualProfit = netProfit / lifespan; // Simplified annual profit
// Display results
var formattedNetProfit = netProfit.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedGrossRevenue = grossRevenue.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedTotalCosts = totalCosts.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedProfitPerTonne = profitPerTonne.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedAnnualProfit = annualProfit.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML = `
Projected Financial Summary
Net Profit: $${formattedNetProfit} (Total over mine lifespan)Gross Revenue: $${formattedGrossRevenue}
Total Costs: $${formattedTotalCosts}
Profit Per Tonne of Ore: $${formattedProfitPerTonne}
Estimated Annual Profit: $${formattedAnnualProfit} (Net Profit / Lifespan)
`;
}