Questions
6–8 questions in major PSU papers
Difficulty
Medium-Hard
Importance
High yield for HPCL/NTPC/ONGC
Overview
Mine Planning and Economics integrates geological data with financial modeling to determine the viability of mineral extraction. It is a critical component for PSU exams as it assesses an engineer's ability to balance technical operational efficiency with long-term cost profitability.
Reserve Estimation Methods
Reserve estimation involves calculating the quantity and grade of mineral deposits to predict project lifespan and feasibility. Aspirants must distinguish between classical geometric methods and modern geostatistical approaches.
- Area of Influence method
- Triangular method (TIN)
- Cross-sectional method (Prismoidal rule)
- Kriging (Best Linear Unbiased Estimator)
- Reserve = Volume * Bulk Density
Mine Scheduling & Sequencing
Scheduling defines the order of extraction to maximize Net Present Value (NPV) while adhering to geological and logistical constraints. Understanding the sequence of mining faces is essential for production consistency.
- NPV maximization is the primary goal
- Stripping Ratio (SR) limits sequence
- Push-back design principles
- Cut-off grade optimization
- Blending requirements influence scheduling
Capital & Operating Costs
This sub-topic focuses on the financial evaluation of mining projects, differentiating between initial investment (CAPEX) and recurring daily expenses (OPEX). Proficiency in these metrics is vital for solving economic feasibility questions.
- CAPEX: Equipment purchase, site preparation, infrastructure
- OPEX: Labor, fuel, maintenance, consumables
- Payback Period = Initial Investment / Annual Cash Flow
- Internal Rate of Return (IRR) calculation
- Break-even point analysis
Systems Engineering: CPM & PERT
Project management tools like CPM and PERT are used to manage mining construction and operational workflows. Focus on identifying critical paths that dictate the overall timeline of a mining project.
- CPM is deterministic; PERT is probabilistic
- Expected Time = (Optimistic + 4*Most Likely + Pessimistic) / 6
- Slack = Latest Start - Earliest Start
- Critical Path: The longest duration path in the network
- Crashing: Reducing activity time by increasing cost
Formula Sheet
Expected Time (Te) = (to + 4tm + tp) / 6
Stripping Ratio = Volume of Waste / Quantity of Ore
NPV = Sum[CF / (1+r)^n] - Initial Investment
Variance (σ²) = [(tp - to) / 6]²
Exam Tip
Always prioritize calculating the Critical Path and Slack before attempting project duration questions, as these are high-frequency 'low hanging fruit' in technical sections.
Common Mistakes
- Confusing the standard deviation formula in PERT calculations.
- Neglecting the time value of money when evaluating mining project feasibility.
- Incorrectly calculating stripping ratio when unit dimensions are mixed.
More Revision Notes
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