Drilling cost per meter refers to the amount of money a mining company spends to drill a hole in the ground for the purpose of extracting minerals or other resources. The cost per meter is calculated by dividing the total cost of the drilling program by the total number of meters drilled.
This includes all costs associated with the drilling operation, such as labor, equipment, consumables, fuel, and maintenance. Here's a breakdown of each component:
- Rig costs: These costs include the rental or purchase cost of the drilling rig and any associated equipment. If you rent the rig, use the daily rental cost. If you purchase the rig, amortize the purchase price over the useful life of the rig to obtain a daily cost.
- Labor costs: This includes the salaries or wages of drilling personnel, such as drillers, tool pushers, and other support staff. This should be calculated as a daily cost based on the number of personnel and their daily wage.
- Fuel costs: This includes the cost of fuel used to power the drilling rig and any associated equipment. Calculate the daily fuel consumption by considering the fuel efficiency of the equipment and the hours of operation per day.
- Material costs: This includes the cost of consumables such as drilling mud, drill bits, casing, and cement. Estimate the daily material consumption and multiply it by the unit cost of each material.
- Other costs: These are any additional expenses associated with drilling, such as permits, waste disposal, environmental fees, or transportation costs. Estimate the daily costs for these items.
- Meters drilled: This is the total number of meters drilled during the project. Divide the sum of all the daily costs by the total meters drilled to get the drilling cost per meter.
Companies may also factor in other variables, such as the depth and location of the drill site, the type of drilling method used, and the complexity of the geology. The cost per meter is an important metric for mining companies as it helps them to determine the feasibility and profitability of their operations.
The process of calculating drilling cost per meter involves the following steps:
- Mining managers need to first determine all costs associated with the drilling operation. This includes labor costs, equipment rental costs, supplies and consumables costs, fuel costs, maintenance costs, and any other costs associated with the drilling operation.
- The total number of meters drilled must be carefully recorded, which can be obtained from the drilling logs.
- The next step is, to sum up, the total costs. Add up all the costs associated with the drilling operations to determine the total cost.
- As the name suggests, the total cost of operations must now be divided by the total number of meters drilled.
- Some companies may adjust the drilling cost per meter for factors such as the complexity of the geology, the depth and location of the drill site, and the type of drilling method used. So, once you're done factoring these in, you're good to go!
The steps might sound simple, but in practicality, they're very difficult to achieve with the utmost precision. It is important to ensure that all costs are recorded accurately and in a consistent manner so that the drilling cost per meter can be calculated without any mistakes. But this doesn't mean it's impossible, and with emerging software and technology, this process is getting easier day by day. But for mining companies still relying on manual methods, this continues to be a laborious process, resulting in decreased avenues for profits. The transition to software that calculates drilling cost per meter in real-time using data collected from your mine site has now become extremely simple. There is a range of tools available for collecting the required data conveniently:
- Drilling Logs: Detailed records kept by the drilling contractor or the mining company that tracks the progress of the drilling operation and the meters drilled.
- Cost tracking Software: Software programs specifically designed to track and manage costs in drilling operations, including labor costs, equipment costs, supplies costs, and other expenses.
- Accounting Software: General accounting software that can be used to record and track all financial transactions and invoices, including costs associated with the drilling operation.
- Spreadsheets: Simple spreadsheet programs like Microsoft Excel can be used to record and track drilling costs and meters drilled.
- Mobile devices: Mobile devices like smartphones or tablets can be used by drilling crews to record drilling data in real time, which can then be transmitted to the office for detailed analysis.
It is important to use accurate and reliable tools to collect and record the data needed to calculate the drilling cost per meter, as this will ensure that the cost per meter is calculated accurately and consistently. What if you could access all of the aforementioned tools in one place, on an integrated platform? Grid frees up the time and effort in managing five different tools and transferring data from one software to the other. This way, all you have to do is have one master application that handles all of your needs, and you can devote as much time as possible to your mining operations.
How would Grid automate the calculation of drilling cost per meter?
To automate the calculation of drilling cost per meter, Grid provides you with industry tested workflows that gather the required input data from multiple users, process it using the formula, and presents the results. Here's a step-by-step guide for building such software:
- Defined input parameters: Identify the key input parameters required for the calculation, such as rig costs, labor costs, fuel costs, material costs, other costs, and meters drilled.
- Accessible user interface (UI): Develop a user-friendly interface that allows users to input the required parameters. This interface can be a standalone application, a web-based form, or part of a more comprehensive mining software suite.
- Data validation: Implement data validation checks to ensure the input values provided by the user are valid and within reasonable ranges. This step helps minimize errors and improve the accuracy of the calculations.
- Inbuilt formula: Write the code or create a script that processes the input data using the drilling cost per meter formula. This involves adding up all the cost components and dividing the sum by the total meters drilled.
- Adjustments and Customizations: Allow users to customize the formula, if necessary, to account for company-specific factors or regional variations in cost structures. This flexibility will make the software more useful for different mining companies with unique requirements.
- Reports and Analytics: Present the calculated drilling cost per meter to the user in a clear and concise format. You can display the result on the screen, export it to a spreadsheet or database, or integrate it into other mining software applications for further analysis.
- Data storage and retrieval: Implement a system for storing and retrieving historical data, allowing users to track changes in drilling costs over time and analyze trends.
- User documentation and support: Provide clear documentation and support resources to help users understand how to use the software effectively and troubleshoot any issues they may encounter.
By following these steps, you can create a software solution that automates the calculation of drilling cost per meter, making it easier for mining companies to quickly and accurately estimate their drilling expenses.
If you'd like to speak with an expert to know more about how to set up an automated Drilling Cost per Meter application to turn your drill operations agile, don't hesitate to reach out!