Cost Comparison of Underground and Surface Mining Options for Potential Western Mesabi Range Iron Ore Resources

Abstract

This summary report compares capital and operating costs associated with hypothetical underground and surface mining operations located on Minnesota’s Western Mesabi Iron Range. Spreadsheet cost models developed by the author are used for generating the comparative cost data.* The models are based in part on underground and surface mine cost information provided in InfoMine USA, Inc. Mining Cost Service. Model output is intended to provide only an approximation of capital and operating costs associated with both underground and surface mining, and should be viewed accordingly. “Ore” is considered to be restricted to sub-members Lower Cherty 4 and Lower Cherty 3 (LC-4 and LC-3). Note that the stripping ratio increases from about 4:1 to 6:1 approximately one mile to the south of the Biwabik Iron Formation’s southern subcrop extent. Currently, the stripping ratio at active Minnesota iron ore (taconite) surface mining operations is at about 1:1. Based on the Biwabik Iron Formation’s overall dip of 5-10° to the south in the area of interest, for every mile that mining progresses down-dip, the depth to ore increases by about 700 feet. Therefore, the ore zone (LC-4 and LC-3) of any mine developed more than one mile to the south of historic iron ore mining activity will be more than 1,000 feet below ground surface.