CAPEX builds the mine. OPEX keeps it running daily.
When it comes to the economics of mining, it is extremely difficult, if not impossible, to describe the industry without addressing two key concepts: capital expenditure (CAPEX) and operating expenditure (OPEX). These two terms form the basis of mining economics and provide an understanding of how mining projects are financed.
In the mining industry, CAPEX refers to expenditure that will be incurred when acquiring/building/materially improving assets used in production in the future, whereas OPEX refers to the cost involved in running the mining activities in the short term.
CAPEX will include expenditures like purchasing mobile equipment, developing the mine, building the plant, constructing the tailings area, building roads, etc., while OPEX will involve costs like fuel, power generation, consumables, labor, tires, contractor fees, spare parts, etc.
Does high CAPEX automation reduce OPEX enough to justify the cost? Share your ideas in comments!
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