Developing a construction cost escalation index for the US mining and metals industry

Journal Article · Tue Jun 01 04:00:00 EDT 1982 · Cost Eng. (Morgantown, W.Va.); (United States)

OSTI ID:5938765

Gallagher, T C

Annual capital costs for new mines and metallurgical processing facilities exceed several hundred million dollars. Capital cost estimates are frequently prepared or updated for both grassroots facilities and expansion of existing facilities. These estimates may be order of magnitude, feasibility study estimates or budget appropriation estimates. As market conditions warrant, new updated capital and operating cost estimates are required as part of the evaluation of project economics. Substantial cost, time and effort are often expended in preparing the original estimate which may be updated in the future by using an appropriate cost escalation index. A detailed analysis of the actual cost components of constructed metallurgical facilities was conducted. It was concluded that the capital cost of a typical project in the mid 1960s approximated three equal dollar amounts for equipment, bulk materials, and labor (including labor indirects and engineering). The composition of published construction cost escalation indexes was examined and it was concluded that the published index components were substantially different from actual components of the metallurgical process facilities studied.

• Research Organization: AMAX Engineering and Management Services Co., Greenwich, CT
• OSTI ID: 5938765
• Journal Information: Cost Eng. (Morgantown, W.Va.); (United States), Journal Name: Cost Eng. (Morgantown, W.Va.); (United States) Vol. 24:3; ISSN CSTED
• Country of Publication: United States
• Language: English

Related Subjects

42 ENGINEERING
420200* -- Engineering-- Facilities
Equipment
& Techniques
CAPITALIZED COST
CONSTRUCTION
COST
COST ESTIMATION
ECONOMIC ANALYSIS
ECONOMICS
INDUSTRIAL PLANTS
INDUSTRY
METAL INDUSTRY
METALLURGY
MINES
UNDERGROUND FACILITIES