The Contribution of Geomechanics and Engineering Geology to Mine Enterprise Value

Abstract

The objective of this thesis is to identify the value of geomechanics and engineering geology to mine enterprise value for hardrock underground mines. It was decided that the most effective way to highlight the value of geomechanics and engineering geology was by identifying an increase in expenditure that could be economically justified in the present to mitigate the cost of a future event, thus providing a means for showing the economic value of the work performed.

Cost models were generated for several events based on the direct cost, value of ore lost and decline in value of ore due to the event. A cost associated with fatalities was also included. Six rockburst events were developed into cost models from publicly available information. A further 13 were developed from confidential information provided by mining companies, bringing the total number of events analyzed to 19.

A probabilistic approach was then taken to identify the probability of a rockburst with a certain magnitude occurring and, if an event occurs, the probability it will cause damage. The former is based on the Gutenberg-Richter Frequency-Magnitude relationship while the latter was derived from Unusual Occurrence Reports provided by the Ontario Ministry of Labour. Three case studies were then developed to show how to use the average cost of a rockburst event in conjunction with the probability analysis to arrive at an increase in expenditure above baseline spending.

It was found that the total average cost of a rockburst based on the 19 events analyzed from 13 mines in 4 different countries for events occurring between 1984 and 2009 is $35.4 million (2010 CAD) with a range of $1.1 to $263.5 million (2010 CAD). Using the probabilistic method outlined above and cost models from the specific region involved, the increase in expenditure for the Ontario hard rock underground case study, Mine A and Mine B was found to be $12.1 million (2010 CAD), $5 million (2010 CAD) and $4.0 million (2010 CAD) respectively.