Abstract
Classic engineering economics provides the mining engineer with a fundamental approach to choosing between capital spending alternatives. This approach has been heavily used over the years and is an accepted technique for most investment decisions. There is a shortcoming that I have run into over the 15 year period when I worked in business planning roles. The classic time value of money approaches such as Net Present Value, Return on Investment, and Internal Rate of Return provide good estimates, but the input assumptions may fall short of describing the real material differences required by these analysis techniques, if the cost benefit analysis is defined solely on the improvement of the item being replaced or improved, the true profitability of the decision may be overestimated. Productivity improvement based capital projects can yield more accurate forecasts when conducted in concert with a "bottleneck analysis".
Original language | English |
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Title of host publication | 2016 SME Annual Conference and Expo |
Subtitle of host publication | The Future for Mining in a Data-Driven World |
Pages | 803-806 |
Number of pages | 4 |
ISBN (Electronic) | 9781510825659 |
State | Published - 2016 |
Event | 2016 SME Annual Conference and Expo: The Future for Mining in a Data-Driven World - Phoenix, United States Duration: Feb 21 2016 → Feb 24 2016 |
Publication series
Name | 2016 SME Annual Conference and Expo: The Future for Mining in a Data-Driven World |
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Conference
Conference | 2016 SME Annual Conference and Expo: The Future for Mining in a Data-Driven World |
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Country/Territory | United States |
City | Phoenix |
Period | 2/21/16 → 2/24/16 |
Bibliographical note
Publisher Copyright:Copyright © 2016 by SME.
ASJC Scopus subject areas
- Geology
- Geochemistry and Petrology
- Geotechnical Engineering and Engineering Geology