Replacement time of mining drilling rigs

Abstract

This paper presents a practical model to calculate the optimal replacement time (ORT) of drilling rigs used in underground mining. As a case study, cost data for drilling rig were collected over four years from a Swedish mine. The cost data include acquisition, operating, maintenance and downtime costs when using a redundant rig. A discount rate is used to determine the value of these costs over time. The study develops an optimisation model to identify the ORT of a mining drilling rig which represents a key performance indicator. It uses an artificial neural network (ANN) technique to identify the effect of the various cost factors on the ORT. The absolute ORT in the case study is 87 months, and there is an optimal replacement range within which the company can replace the rig. The results also show that the redundant rig cost has the largest impact on the ORT followed by acquisition, maintenance and operating costs. Regression analysis shows a linear relationship between the cost factors and the ORT of the drilling rig.