Authors: Mandziak, T; Collyard, J; Subrahmanyan, B

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Mandziak, T, Collyard, J & Subrahmanyan, B 2023, 'The benefits and opportunities realized through an integrated and transparent closure cost model', in B Abbasi, J Parshley, A Fourie & M Tibbett (eds), Mine Closure 2023: Proceedings of the 16th International Conference on Mine Closure, Australian Centre for Geomechanics, Perth,

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Often, a closure strategy and cost estimate are developed to meet a specific purpose, such as regulatory submittal and bonding obligations or to support an Asset Retirement Obligation (ARO). This purpose-based approach may result in an incomplete closure cost to the project, risks to the successful operation and closure of the mine, and reduced accuracy in the resulting cost estimate. Simply stated, a closure plan and cost estimate may not result in a complete understanding of the closure risks (i.e., uncertainties or unknowns), or facilitate the process of identifying a successful closure approach and accurate cost estimate. By developing a comprehensive closure cost estimate model that can evolve from the conceptual planning through execution, major closure project risks can be clearly communicated and tracked; and plans can be developed to address and mitigate appropriate closure activities. This can be achieved through identifying a suitable work breakdown structure (WBS), developing appropriate activity codes, and using consistent coding of units and unit rates. This also includes developing an end-user interface that is fit for purpose and allows for the simple and transparent means to present and interpret the data. The closure cost model results can then be presented in a manner that is relatable to facilities, activities, quantities, and risk, allowing various stakeholders to identify impacts to the closure plan and costs and identify activities to reduce risk and costs, while realizing efficiencies as the closure project progresses from concept to execution. This paper presents how incorporating cost codes that represent key elements of the closure plan (i.e., material characterization, contingency, borrow sources, etc.) into a single, comprehensive closure cost estimate model can facilitate and provide additional insight on the cost assumptions and the progression of mine closure planning and costing over time.

Keywords: closure cost estimate, closure cost model, cost codes, risk, uncertainty

Association for the Advancement of Cost Engineering International (AACE International), 2021. ‘AACE International Recommended Practice No. 18R-97 COST ESTIMATE CLASSIFICATION SYSTEM – AS APPLIED IN ENGINEERING, PROCUREMENT, AND CONSTRUCTION FOR THE PROCESS INDUSTRIES’ TCM Framework: 7.3 – Cost Estimating and Budgeting.

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