Capital investment appraisal for the integration of new technology into mining systems

New technologies have been widely recognized as the key to the achievement of competitiveness in the mining industry, enabling costs and environmental impact to be reduced while increasing safety, flexibility and productivity . Research has been undertaken with industry to develop management approach es for appraisal of the integration of new technology into mining systems. The traditional capital investment appraisal (CIA) methods currently used i n the mining industry are reviewed and their development and limitations ar e examined. Reference is made to how technologies affect mining operations- often bringing benefits in 'soft' or qualitative forms. A new CIA classific ation scheme is presented that aims to assist in the selection of the appro priate CIA method, according to the type of technology and the mining situa tion. A review of the theory underlying three particular CIA methods that a re considered to offer significant potential-activity-based costing, option s pricing and the Analytical Hierarchy Process-is accompanied by case studi es to illustrate their application to technology integration in mining oper ations. A concluding discussion of new technology integration emphasizes th e need for greater awareness of appraisal issues and methods.