Cost per Tonne Calculation in Opencast Mine (With Formula & Example) | Indian Minerology

Deepak Kumar Jogi January 30, 2026

Cost per Tonne Calculation in Opencast Mine

Cost per tonne calculation is one of the most important parameters in opencast mining. It helps mine management to evaluate profitability, control expenses, and improve operational efficiency.

What is Cost per Tonne in Mining?

Cost per tonne is the total cost incurred to produce one tonne of coal, ore, or overburden. It includes operating cost, maintenance cost, manpower cost, fuel cost, and overheads.

Why Cost per Tonne is Important?

Measures mine profitability
Helps in cost control
Used for tender & contract evaluation
Important for budgeting & planning

Major Cost Components in Opencast Mine

1. Operating Cost

Fuel cost
Lubricants
Power cost
Tyres

2. Maintenance Cost

Spare parts
Workshop cost
Breakdown repairs

3. Manpower Cost

Operators & helpers
Supervisors
Technical staff

4. Administrative & Overhead Cost

Office expenses
Safety & training
Royalty & statutory charges

Cost per Tonne Formula

Cost per Tonne = Total Operating Cost / Total Production (tonnes)

Example Calculation

Monthly Operating Cost = ₹3,00,00,000
Monthly Production = 5,00,000 tonnes

Cost per Tonne = 3,00,00,000 / 5,00,000 = ₹600 per tonne

Machine-wise Cost Contribution

Dump Truck: 35–40%
Hydraulic Shovel/Excavator: 25–30%
Drilling & Blasting: 10–15%
Others: 15–20%

Fuel Cost Impact on Cost per Tonne

Fuel cost alone can contribute 30–40% of total mining cost. Even a 5% reduction in fuel consumption can save crores annually.

Methods to Reduce Cost per Tonne

Proper shovel–dumper matching
Improving haul road condition
Reducing idle time
Preventive maintenance
Operator skill improvement
Use of electric mining machinery

Cost per Tonne for Different Mines (Indicative)

Coal Opencast Mine: ₹500 – ₹1200/tonne
Iron Ore Mine: ₹700 – ₹1500/tonne
Limestone Mine: ₹400 – ₹900/tonne

Frequently Asked Questions (FAQs)

Q1. What is a good cost per tonne in opencast mining?

Lower cost per tonne compared to industry average is considered good, but it depends on stripping ratio and mine conditions.

Q2. How can cost per tonne be reduced?

By improving productivity, reducing fuel consumption, and minimizing equipment downtime.

Conclusion

Cost per tonne is the most critical performance indicator of any mine. Regular monitoring and optimization are essential for sustainable and profitable mining operations.