Course DescriptionA mining operation requires a business to incur substantial up-front costs for exploration and development activities and probably additional costs as part of the mines eventual closure and site rehabilitation. In Accounting for Mining we describe how to account for the costs incurred at each phase of a mines development with particular attention to the more complex topics of asset retirement obligations and environmental obligations. Several additional topics related to asset impairment business combinations and financial disclosures are also covered.Get A Quote
Course DescriptionA mining operation requires a business to incur substantial up-front costs for exploration and development activities and probably additional costs as part of the mines eventual closure and site rehabilitation. In Accounting for Mining we describe how to account for the costs incurred at each phase of a mines development with particular attention to the more complex topics of asset retirement obligations and environmental obligations. Several additional topics related to asset impairment business combinations and financial disclosures are also covered.
Jan 29 2016nbsp018332Cash Operating Costs include direct mining and milling costs stripping and mine development costs third party smelting and refining costs transport costs and by-product credits. Total Cash.
Describe which costs related to environmental contamination should be charged to expense as incurred and which should be deferred.
workforce costs supervision costs maintenance costs and general mine services costs. Fixed costs include overheads opportunity costs and social and environmental protection costs.
Mining Cost Service is the industry standard reference for Mining Cost Estimation. This system places cost estimating data at your fingertips with conveniently indexed information to make your cost estimates faster easier and more credible. Monthly updates assure that you are working with the most current cost data available.
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Mar 29 2016nbsp018332Co-Product accounting If the primary metal accounts for less than 80 of total revenues then all the metals are considered co-products. The cost attributed to the production of each metal is .
Cash costs Mine site operating costs include mining milling labor energy and consumables measured in cost per ton of material All-in sustaining costs Mine site costs corporate GampA sustaining capital to maintain the mine capitalized exploration to continue to explore for reserves and resources exclude interest or taxes
Mining Cost Service continues to be a useful reference on a wide range of topics for early stage mine planning through to fill the gaps on more detailed studies. Mining Cost Service provides an independent source for information on equipment quantities and cost for a significant number of mining methods and range of production rates.
Apr 22 2020nbsp018332If so the cost of the royalty should be capitalized into inventory so that it gets charged to expense when the inventory is sold. Asset Retirement Obligations. And the final unique accounting issue for a mine is the costs that arise towards the end of its useful life. There are two of them.
May 08 2020nbsp018332Mining requires extensive capital expenditures both for exploration and the initial establishment of mining operations. However once a mine is operational its operating costs
The situation changes when you actually start to develop the mine. At this point management has decided that commercially recoverable mineral reserves actually exist and so has decided to proceed with construction. There can be a lot of development costs such as building roads to get to the mine site and sinking shafts and removing something called overburden which is the rock or soil that lies on top of a mineral deposit. All of these costs are capitalized during the development stage.
That development stage ends when sustainable production begins. At that point you can start amortizing the costs that were capitalized during the development stage. The amortization method used is the units of production method which is not used all that much elsewhere. Under this approach you estimate the total output expected from the mine and then amortize the proportion of the total output actually mined.
So if the capitalized amount of development costs is 1 million and the mine has just produced 2 of the total amount of expected ore then you can charge 2 of that 1 million to expense in the current reporting period. If theres no production from the mine then theres no amortization.
The next phase in the life of a mine is the production phase which should last a fairly long time. The most unique accounting issue in this phase is inventory valuation because it isnt necessarily all that precise. For example a mine could engage in something called heap leaching. This means the company has laid out some sort of impermeable pad and dumped a massive amount of low-grade ore onto it.
Oct 21 2020nbsp018332Reason to smile. First Quantums Kansanshi mine in Zambia is expected to produce 220235kt of copper and 120130koz of gold in 2020. Image FQM The all-in sustaining cost
The other cost that can come up later in the life of a mine is environmental obligations. If therere any environmentally hazardous conditions at a mine site the mining company may be seriously liable under a bunch of federal laws. If so it may be responsible for things like feasibility studies cleanup costs legal fees and restoration costs. The accountant needs to accrue for an environmental obligation if it appears that the business bears some responsibility for a past event and its probable that the outcome will be unfavorable for the business.
Its not that easy to figure out the amount of this cost because the mining company might end up sharing responsibility for the obligation with other parties. For example a mining company buys a mine from another mine operator and then the Environmental Protection Agency declares the area a Superfund site. In this case both the current and former owners share responsibility for the cleanup.
In this case you need to estimate the likelihood that the other party will pay its fair share of the liability because if it doesnt then your company may be tagged with the full amount of the cleanup. Consequently the amount of the environmental cleanup obligation will vary not just based on the latest cost estimate but also on the ability of the other responsible parties to pay for their shares of the bill. This is a moving target for the accountant who can expect to issue revisions to this accrued liability on a very regular basis.
Cost Accounting Jobs. Cost accounting is a facet of management accounting that determines the actual cost associated with manufacturing a product or providing a service by looking at all expenses within the supply chain. It is done for the purpose of budget preparation and profitability analysis. The information derived from this process is .
Lubambe Copper Mine seeks to employ experienced and qualified individuals in the following position This position reports into the Cost Accountant. Core Purpose of The Role. Coordinating costs in the department as well as working on Finance Administrative work-related duties related to Finance for the company Key Performance AreasIndicators .
Apr 09 2018nbsp018332Bingham Canyon Mine Utah 2.2 Moz Copper Mine The majority of the remaining 11 Moz of U.S. silver production comes as a by-product of gold and copper mining predominantly in Nevada and Arizona.
DEPLETION CALCULATING AND JOURNALIZING Mining Works Co. acquired a copper mine at a cost of x00241200000 with no expected salvage value. The estimated number of units available for production from the mine is 3000000 tons.
The proposed cost model is applied through an example case study of the hypothetical copper mines. The results show that cost uncertainties likely have a critical impact on the profitability for .
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