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24-MMP-A4 Mine Valuation and Mineral Resource Estimation · May 2017

Question 17 of 18: Concentrate Transportation – Eastern Canada vs. Pacific Rim

Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)

Notes on this paper

EGBC National Exam — Mining and Mineral Processing Engineering, 09-MMP-A4 Mine Valuation and Mineral Resource Estimation, 2017-May. 3 hours duration; one handwritten 8.5×11 in reference sheet permitted (not an open-book exam); only approved Sharp or Casio calculators allowed. Question 1 is compulsory (40 marks, parts 1.1–1.6); candidates then select THREE of the five optional Questions 2–6 (20 marks each) to complete the paper.

Reference texts: Isaaks & Srivastava, An Introduction to Applied Geostatistics (variogram modelling, kriging estimators, volume–variance relations); Hustrulid, Kuchta & Martin, Open Pit Mine Planning and Design (mine valuation, NPV and cut-off grade methodology, mineable reserves); Gentry & O'Neil, Mine Investment Analysis (Canadian mining taxation, smelter/refining contract terms, net smelter return, transportation logistics); SME Mining Engineering Handbook, 3rd ed. (cost-estimating relationships, mineral exploration/evaluation stages, ore reserve classification); Evans, An Introduction to Ore Geology and Guilbert & Park, The Geology of Ore Deposits (ore deposit models); CIM Best Practice Guidelines and NI 43-101 (Canadian Securities Administrators).

Question 6.3: Concentrate Transportation – Eastern Canada vs. Pacific Rim (2 marks)

Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.

Mine siteCentral BCTruck to PortVancouver/Prince Rupertapprox $15-25/t (250-500 km)Ocean freightBulk carrier to Pacific Rim(Japan/China/Korea smelters)Truck to Rail sidingCN/CP unit trainapprox $60-90/t (2,500-4,000 km)Eastern Canada smelter(Rouyn-Noranda / Sudbury)
Fig. 6.3 – Two competing concentrate logistics chains from a central-BC mine: short truck haul to a Pacific port then ocean freight to Asian smelters (top), vs. a much longer truck-to-rail haul across the continent to eastern Canadian smelters (bottom).

From central BC, the PACIFIC route (truck 250–500 km to Vancouver or Prince Rupert, then bulk-carrier ocean freight to Japanese/Chinese/Korean custom smelters) totals roughly $35–55/tonne of concentrate, while the EASTERN CANADA route (truck to a rail siding, then a 2,500–4,000 km CN/CP unit-train haul to Rouyn-Noranda or Sudbury-area smelters) totals roughly $75–115/tonne – rail-plus-truck over such a long continental haul is substantially more expensive per tonne than a short truck leg feeding cheap bulk ocean freight. For a central-BC porphyry mine, the Pacific route is therefore the economically justified default choice: geographic proximity to a deep-water Pacific port makes the total logistics cost roughly half that of the transcontinental rail alternative, and Asian smelters (particularly in China and Japan) represent large, well-established custom-concentrate buyers actively competing for BC concentrate supply. The eastern route remains relevant mainly when a specific smelter contract, penalty-element handling (a smelter better equipped for a particular impurity profile), or supply-diversification/counterparty-risk consideration outweighs the pure freight-cost differential.