DECISION SUPPORT SYSTEM FOR
REHABILITATION BOND OF MINING AREA
DEDE IDA SUHENDRA
GRADUATE SCHOOL
STATEMENT
I, Mr. Dede Ida Suhendra, herewith declare the thesis title:
‘Decision Support System for Rehabilitation Bond of Mining Area’
Contains correct results come in from my own work and it has not been published
ever before. All data sources and information have used factual and clear methods
in this research has been examined for its factualness.
Bogor, April 2007
ABSTRACT
DEDE IDA SUHENDRA (2007). Decision Support System for Rehabilitation Bond of Mining Area. Under the supervision of HARTISARI H. and HASRUL L. AZAHARI.
Mining is an effort to remove in situ minerals resources, which is in exploitation stage that employ surface mining method is critical, yet mostly close to huge spatial opening, therefore suitable planning and operation is required to synchronize both of economical and environmental interests. Due to the prudent principle of the Government on a mining company, by regardless its principal and scale, the company is obliged to insure any spatial opening during their operation period by allocating appropriate fund in a certain Bank, as Reclamation Bond. Determining the Reclamation Bond needs both skill and expertise, otherwise it would consume time, even perfunctorily. Dealing with the necessity of Reclamation Bond assessment tool, this study attempted to develop a decision support system (DSS) approach to support fast and objective problem solution for evading disputability.
The objective of this project is to develop a Mining Rehabilitation Bond System, which can provide the additional tool for the Government as Decision Support System to evaluate any company planning concerning cost estimation either suitable or not to be agreed with, determining adequate amount direct cost and indirect cost and emphasizing mine stakeholder awareness of any decision support related to cost of mining reclamation activity
The Mining Rehabilitation Bond System is designed to support decision making, in order to minimize DSS implementation, data base manipulation through Visual Basic programming language. Beside direct cost analysis and indirect cost analysis, there is also manual analysis to perform additional data for structure demolition calculation and earth moving activities. The main focus of this system design is to estimate the amount of escalation per year that have to meet mining company’s reclamation cost planning.
Based on the result, the combination of DSS Tool and reclamation formula can produce application system for rehabilitation bond. This calculation system is used to evaluate Reclamation Bond for 5 (five) years and annual reclamation cost based on direct and indirect cost of reclamation activity. This application tries to attempt evaluating system of mining company’s reclamation data. The application system has several weaknesses such as haul distance and grade consideration that should be measured manually, need socialization to mining company association and never published yet.
The Mining Rehabilitation Bond System still needs to be tested for knowing its performance including its database system through several data from company (KK, KP and PKP2B) and the calculation of haul distance and grade of equipment needs digital input using spatial approach or digital map digitizer.
DECISION SUPPORT SYSTEM FOR
REHABILITATION BOND OF MINING AREA
DEDE IDA SUHENDRA
A Thesis submitted for the degree of Master of Science of Bogor Agricultural University
GRADUATE SCHOOL
Research Title : Decision Support System for Rehabilitation Bond of Mining Area
Student Name : Dede Ida Suhendra
Student ID : G051030071
Study Program : Master of Science in Information Technology for Natural Resources Management
Approved by,
Advisory Board
Dr. Ir. Hartrisari Hardjomidjojo, DEA Dr. Ing. Hasrul L. Azahari, M.Met.E Supervisor Co-Supervisor
Endorsed by,
Program Coordinator Dean of Graduate School
Dr. Ir. Tania June, M.Sc Prof. Dr. Ir. Khairil A. Notodiputro, MS
CURRICULUM VITAE
Dede Ida Suhendra was born in Bandung, West Java,
Indonesia at December 26, 1957. He received his
undergraduate diploma from Bandung Institute of
Technology (ITB), Faculty of Industrial Technology -
Mining Technique Department majoring Exploration in
1983. He worked for oil and geothermal consultant project as geophysicist in PT
Alico during 1984 to 1986, and has been working for Department of Energy and
Mineral Resources since 1987.
In the year of 2003, Dede Ida Suhendra pursued his post graduate at MIT (Master
of Science in Information Technology) for Natural Resources Management from
Bogor Agricultural University and received his master degree in 2007
respectively. His thesis title was on “Decision Support System for Rehabilitation
ACKNOWLEDGEMENT
First of all I would like to grateful thanks to ALLAH SWT who The Most
Merciful and Gracious for blazing me, and allowing me to complete my post graduate
study. Furthermore, I realize the completion of this research would not have been
possible if not through the kind assistance and technical support of several individual
and organization.
I am thankful to Dr. Tania June, the Program Coordinator for her support and
for allowing me to use the MIT facilities during my study. I would like to express my
special appreciation to the following for their invaluable contributions at all stages
towards and finishing this thesis, Dr. Hartrisari Hardjomidjojo, my primary supervisor
who offered me not only excellent and patience guidance but also useful ideas; and
Dr. Ing. Hasrul L. Azahari, the co-supervisor for his constructive discussion and
suggestion. I would like to specially thank to my external examiner supervisor,
Dr Gatot Haryo Pramono who spent his time in seminar, gave general assistance and
suggestions. I also wish to thank all members of the staff of the MIT, including
Mr Bambang, Ms Uma and Ms Devy for their help in numerous ways.
I thank the Directorate General of Mineral, Coal and Geothermal, particularly
Ir. Soemarno Witoro S, Msi for allowing me to follow this study and to use technical
data from various mining companies.
Thanks also to my course mates MIT-2003 Generation, especially appreciation
is given to Ir. Andes Jayarsa, MSc and Ir. Iksal Yanuarsyah, MSc for the friendliness,
giving me encouragement and supporting throughout this period.
Finally, my special gratitude is also extended to my lovely mother, my wife
Lilis Mulyatie, my son Ilyasa Haqqani, and my daughters Nursyifaa Rabbani and the
LIST OF CONTENTS
Page
STATEMENT ... i
ACKNOWLEDGEMENT ... ii
CURRICULUM VITAE ... iii
ABSTRACT ... iv
List of Contents ... vi
List of Figures ... viii
List of Tables ... ix
List of Appendixes ... x
I. INTRODUCTION ... 1
1.1. Background ... 1
1.1.1. Mining Management ... 2
1.1.1.1. Mining Enterprises ... 2
1.1.1.2. Government Functionality ... 3
1.1.1.3. Company Responsibilities ... 4
1.1.2. Mining Method ... 5
1.1.2.1. Surface Mining ... 5
1.1.2.2. Underground Mining ... 7
1.1.2.3. Mining Supporting Facility ... 8
1.1.3. Land Management ... 8
1.1.4. Mining Reclamation Bond ... 10
1.2. Problem Identification ... 11
1.3. Objectives ... 12
II. LITERATURE REVIEW ... 13
2.1. Reclamation Bond Provision ... 13
2.1.1. Direct Cost Component ... 14
2.1.1.1. Mine Facilities Removal ... 14
2.1.1.2. Material handling plan ... 15
2.1.1.3. Re-Vegetation ... 21
2.1.1.4. Other Direct Reclamation Cost ... 21
2.1.2. Indirect Cost Component ... 22
2.1.2.1. Mob-Demob of Heavy Equipments ... 22
2.1.2.2. Reclamation Planning ... 22
2.1.2.3. Administration Cost and Contractor Profit ... 24
2.1.2.4. Management Cost ... 25
2.1.3. Determining the Total Performance Bond Amount ... 26
2.2. Decision Support System ... 26
2.2.1. Data Management ... 28
2.2.2. Model Management ... 28
2.2.3. Knowledge Management ... 28
III. METHODOLOGY ... 29
3.1. Time and Location Selection ... 29
3.2. Material and Tool ... 30
3.2.1. Hardware and Software Required ... 30
3.2.2. Data Requirement ... 30
3.3. Method ... 32
3.3.1. General Concept ... 32
3.3.2. Legal Aspect ... 33
3.3.3. Decision Support System (DSS) Analysis ... 33
3.3.3.1. Conceptual Process ... 33
3.3.3.2. User Need Analysis ... 34
3.3.3.3. DSS Construction ... 35
IV. RESULT AND DISCUSSION ... 37
4.1. System Analysis ... 37
4.1.1. Database Design ... 37
4.1.1.1. Process Modeling ... 37
4.1.1.2. Conceptual Model ... 38
4.1.1.3. Logical Model ... 40
4.1.1.4. Physical Model ... 41
4.1.2. User Interface Design ... 42
4.2. System Implementation ... 43
4.2.1. DSS Tool Application ... 43
4.2.2. DSS Tool Analysis ... 52
V. CONCLUSION AND RECOMMENDATION ... 58
5.1. Conclusion ... 58
5.2. Recommendation ... 59
REFERENCES ... 60
LIST OF FIGURES
Page
Figure 1.1 Land management principle of back filling of a coal surface mining method (Adopted from Skelly and Loy, 1975) ...
6
Figure 1.2 The underground mining method profile of an ore mining (Adopted from Microsoft ® Encarta 2005) ...
7
Figure 1.3 The Lay Out of a mining facility to support mining operation (Adopted from http://www.nrcan.gc.ca/mms/mining/) ...
8
Figure 1.4 The land management mechanism of a back filling surface mining method (Adopted from Skelly and Loy, 1975) ...
9
Figure 2.1 The relationship of reclamation planning cost and Direct Cost
23
Figure 2.2 The relationship of overhead and contractor profit
and Direct Cost ... 24
Figure 2.3 The relationship of reclamation management cost
and Direct Cost ... 25
Figure 2.4 The conceptual model of a DSS, showing four main software components facilitated by other parts of the system (Adapted from Turban, 2003) ...
27
Figure 3.1 The Mining Company PT Newmont Nusa Tenggara
Location Map ... 29
Figure 3.2 The general concept flowchart Rehabilitation mechanism ... 32
Figure 3.3 Conceptual of Input-Output Process in Reclamation Bond Determination ... 34 Figure 3.4 Diagram of User Needs Analysis 35
Figure 3.5 Flowchart of DSS Construction ... 35
Figure 4.1 Rehabilitation Bond Context Diagram ... 37
Figure 4.2 Rehabilitation Bond DFD Level 1 ... 38
Figure 4.3 Rehabilitation Bond ERD ... 39
Figure 4.4 Rehabilitation Bond ‘user login’ application ... 44
Figure 4.5 Rehabilitation Bond ‘main form’ application ... 44
Figure 4.6 Rehabilitation Bond ‘main form’ application ... 45
Figure 4.7 Mine facilities removal cost form ... 46
Figure 4.8 Material Handling Plan form ... 46
Figure 4.9 Additional Equipment Activity form ... 47
Figure 4.10 Revegetation Cost form ... 47
Figure 4.11 Indirect Cost form ... 48
Figure 4.12 Total Reclamation Cost form ... 49
Figure 4.13 Material Handling Recapitulation form ... 49
Figure 4.14 Reclamation Bond Calculation form ... 50
Figure 4.15 Financial Compulsory form ... 50
Figure 4.16 Equipment and Labour Cost form ... 51
Figure 4.17 Cost component form ... 52
DECISION SUPPORT SYSTEM FOR
REHABILITATION BOND OF MINING AREA
DEDE IDA SUHENDRA
GRADUATE SCHOOL
STATEMENT
I, Mr. Dede Ida Suhendra, herewith declare the thesis title:
‘Decision Support System for Rehabilitation Bond of Mining Area’
Contains correct results come in from my own work and it has not been published
ever before. All data sources and information have used factual and clear methods
in this research has been examined for its factualness.
Bogor, April 2007
ABSTRACT
DEDE IDA SUHENDRA (2007). Decision Support System for Rehabilitation Bond of Mining Area. Under the supervision of HARTISARI H. and HASRUL L. AZAHARI.
Mining is an effort to remove in situ minerals resources, which is in exploitation stage that employ surface mining method is critical, yet mostly close to huge spatial opening, therefore suitable planning and operation is required to synchronize both of economical and environmental interests. Due to the prudent principle of the Government on a mining company, by regardless its principal and scale, the company is obliged to insure any spatial opening during their operation period by allocating appropriate fund in a certain Bank, as Reclamation Bond. Determining the Reclamation Bond needs both skill and expertise, otherwise it would consume time, even perfunctorily. Dealing with the necessity of Reclamation Bond assessment tool, this study attempted to develop a decision support system (DSS) approach to support fast and objective problem solution for evading disputability.
The objective of this project is to develop a Mining Rehabilitation Bond System, which can provide the additional tool for the Government as Decision Support System to evaluate any company planning concerning cost estimation either suitable or not to be agreed with, determining adequate amount direct cost and indirect cost and emphasizing mine stakeholder awareness of any decision support related to cost of mining reclamation activity
The Mining Rehabilitation Bond System is designed to support decision making, in order to minimize DSS implementation, data base manipulation through Visual Basic programming language. Beside direct cost analysis and indirect cost analysis, there is also manual analysis to perform additional data for structure demolition calculation and earth moving activities. The main focus of this system design is to estimate the amount of escalation per year that have to meet mining company’s reclamation cost planning.
Based on the result, the combination of DSS Tool and reclamation formula can produce application system for rehabilitation bond. This calculation system is used to evaluate Reclamation Bond for 5 (five) years and annual reclamation cost based on direct and indirect cost of reclamation activity. This application tries to attempt evaluating system of mining company’s reclamation data. The application system has several weaknesses such as haul distance and grade consideration that should be measured manually, need socialization to mining company association and never published yet.
The Mining Rehabilitation Bond System still needs to be tested for knowing its performance including its database system through several data from company (KK, KP and PKP2B) and the calculation of haul distance and grade of equipment needs digital input using spatial approach or digital map digitizer.
DECISION SUPPORT SYSTEM FOR
REHABILITATION BOND OF MINING AREA
DEDE IDA SUHENDRA
A Thesis submitted for the degree of Master of Science of Bogor Agricultural University
GRADUATE SCHOOL
Research Title : Decision Support System for Rehabilitation Bond of Mining Area
Student Name : Dede Ida Suhendra
Student ID : G051030071
Study Program : Master of Science in Information Technology for Natural Resources Management
Approved by,
Advisory Board
Dr. Ir. Hartrisari Hardjomidjojo, DEA Dr. Ing. Hasrul L. Azahari, M.Met.E Supervisor Co-Supervisor
Endorsed by,
Program Coordinator Dean of Graduate School
Dr. Ir. Tania June, M.Sc Prof. Dr. Ir. Khairil A. Notodiputro, MS
CURRICULUM VITAE
Dede Ida Suhendra was born in Bandung, West Java,
Indonesia at December 26, 1957. He received his
undergraduate diploma from Bandung Institute of
Technology (ITB), Faculty of Industrial Technology -
Mining Technique Department majoring Exploration in
1983. He worked for oil and geothermal consultant project as geophysicist in PT
Alico during 1984 to 1986, and has been working for Department of Energy and
Mineral Resources since 1987.
In the year of 2003, Dede Ida Suhendra pursued his post graduate at MIT (Master
of Science in Information Technology) for Natural Resources Management from
Bogor Agricultural University and received his master degree in 2007
respectively. His thesis title was on “Decision Support System for Rehabilitation
ACKNOWLEDGEMENT
First of all I would like to grateful thanks to ALLAH SWT who The Most
Merciful and Gracious for blazing me, and allowing me to complete my post graduate
study. Furthermore, I realize the completion of this research would not have been
possible if not through the kind assistance and technical support of several individual
and organization.
I am thankful to Dr. Tania June, the Program Coordinator for her support and
for allowing me to use the MIT facilities during my study. I would like to express my
special appreciation to the following for their invaluable contributions at all stages
towards and finishing this thesis, Dr. Hartrisari Hardjomidjojo, my primary supervisor
who offered me not only excellent and patience guidance but also useful ideas; and
Dr. Ing. Hasrul L. Azahari, the co-supervisor for his constructive discussion and
suggestion. I would like to specially thank to my external examiner supervisor,
Dr Gatot Haryo Pramono who spent his time in seminar, gave general assistance and
suggestions. I also wish to thank all members of the staff of the MIT, including
Mr Bambang, Ms Uma and Ms Devy for their help in numerous ways.
I thank the Directorate General of Mineral, Coal and Geothermal, particularly
Ir. Soemarno Witoro S, Msi for allowing me to follow this study and to use technical
data from various mining companies.
Thanks also to my course mates MIT-2003 Generation, especially appreciation
is given to Ir. Andes Jayarsa, MSc and Ir. Iksal Yanuarsyah, MSc for the friendliness,
giving me encouragement and supporting throughout this period.
Finally, my special gratitude is also extended to my lovely mother, my wife
Lilis Mulyatie, my son Ilyasa Haqqani, and my daughters Nursyifaa Rabbani and the
LIST OF CONTENTS
Page
STATEMENT ... i
ACKNOWLEDGEMENT ... ii
CURRICULUM VITAE ... iii
ABSTRACT ... iv
List of Contents ... vi
List of Figures ... viii
List of Tables ... ix
List of Appendixes ... x
I. INTRODUCTION ... 1
1.1. Background ... 1
1.1.1. Mining Management ... 2
1.1.1.1. Mining Enterprises ... 2
1.1.1.2. Government Functionality ... 3
1.1.1.3. Company Responsibilities ... 4
1.1.2. Mining Method ... 5
1.1.2.1. Surface Mining ... 5
1.1.2.2. Underground Mining ... 7
1.1.2.3. Mining Supporting Facility ... 8
1.1.3. Land Management ... 8
1.1.4. Mining Reclamation Bond ... 10
1.2. Problem Identification ... 11
1.3. Objectives ... 12
II. LITERATURE REVIEW ... 13
2.1. Reclamation Bond Provision ... 13
2.1.1. Direct Cost Component ... 14
2.1.1.1. Mine Facilities Removal ... 14
2.1.1.2. Material handling plan ... 15
2.1.1.3. Re-Vegetation ... 21
2.1.1.4. Other Direct Reclamation Cost ... 21
2.1.2. Indirect Cost Component ... 22
2.1.2.1. Mob-Demob of Heavy Equipments ... 22
2.1.2.2. Reclamation Planning ... 22
2.1.2.3. Administration Cost and Contractor Profit ... 24
2.1.2.4. Management Cost ... 25
2.1.3. Determining the Total Performance Bond Amount ... 26
2.2. Decision Support System ... 26
2.2.1. Data Management ... 28
2.2.2. Model Management ... 28
2.2.3. Knowledge Management ... 28
III. METHODOLOGY ... 29
3.1. Time and Location Selection ... 29
3.2. Material and Tool ... 30
3.2.1. Hardware and Software Required ... 30
3.2.2. Data Requirement ... 30
3.3. Method ... 32
3.3.1. General Concept ... 32
3.3.2. Legal Aspect ... 33
3.3.3. Decision Support System (DSS) Analysis ... 33
3.3.3.1. Conceptual Process ... 33
3.3.3.2. User Need Analysis ... 34
3.3.3.3. DSS Construction ... 35
IV. RESULT AND DISCUSSION ... 37
4.1. System Analysis ... 37
4.1.1. Database Design ... 37
4.1.1.1. Process Modeling ... 37
4.1.1.2. Conceptual Model ... 38
4.1.1.3. Logical Model ... 40
4.1.1.4. Physical Model ... 41
4.1.2. User Interface Design ... 42
4.2. System Implementation ... 43
4.2.1. DSS Tool Application ... 43
4.2.2. DSS Tool Analysis ... 52
V. CONCLUSION AND RECOMMENDATION ... 58
5.1. Conclusion ... 58
5.2. Recommendation ... 59
REFERENCES ... 60
LIST OF FIGURES
Page
Figure 1.1 Land management principle of back filling of a coal surface mining method (Adopted from Skelly and Loy, 1975) ...
6
Figure 1.2 The underground mining method profile of an ore mining (Adopted from Microsoft ® Encarta 2005) ...
7
Figure 1.3 The Lay Out of a mining facility to support mining operation (Adopted from http://www.nrcan.gc.ca/mms/mining/) ...
8
Figure 1.4 The land management mechanism of a back filling surface mining method (Adopted from Skelly and Loy, 1975) ...
9
Figure 2.1 The relationship of reclamation planning cost and Direct Cost
23
Figure 2.2 The relationship of overhead and contractor profit
and Direct Cost ... 24
Figure 2.3 The relationship of reclamation management cost
and Direct Cost ... 25
Figure 2.4 The conceptual model of a DSS, showing four main software components facilitated by other parts of the system (Adapted from Turban, 2003) ...
27
Figure 3.1 The Mining Company PT Newmont Nusa Tenggara
Location Map ... 29
Figure 3.2 The general concept flowchart Rehabilitation mechanism ... 32
Figure 3.3 Conceptual of Input-Output Process in Reclamation Bond Determination ... 34 Figure 3.4 Diagram of User Needs Analysis 35
Figure 3.5 Flowchart of DSS Construction ... 35
Figure 4.1 Rehabilitation Bond Context Diagram ... 37
Figure 4.2 Rehabilitation Bond DFD Level 1 ... 38
Figure 4.3 Rehabilitation Bond ERD ... 39
Figure 4.4 Rehabilitation Bond ‘user login’ application ... 44
Figure 4.5 Rehabilitation Bond ‘main form’ application ... 44
Figure 4.6 Rehabilitation Bond ‘main form’ application ... 45
Figure 4.7 Mine facilities removal cost form ... 46
Figure 4.8 Material Handling Plan form ... 46
Figure 4.9 Additional Equipment Activity form ... 47
Figure 4.10 Revegetation Cost form ... 47
Figure 4.11 Indirect Cost form ... 48
Figure 4.12 Total Reclamation Cost form ... 49
Figure 4.13 Material Handling Recapitulation form ... 49
Figure 4.14 Reclamation Bond Calculation form ... 50
Figure 4.15 Financial Compulsory form ... 50
Figure 4.16 Equipment and Labour Cost form ... 51
Figure 4.17 Cost component form ... 52
LIST OF TABLES
Page
Table 2.1 The commonly material used and the removal cost 14 Table 2.2 Relevant building and specific construction in a mining
operation (Means, 2000 ... 14
Table 2.3 Initial and final swells of selected material ... 16
Table 2.4 Heavy Duty / Construction Equipments Rental Prices (APKASI, October 2005) ... 20
Table 2.5 The Average of Heavy Equipment’s Lubricant and Fuel Consumptions ... 21
Table 4.1 Rehabilitation Bond logical data model ... 40
Table 4.2 Rehabilitation Bond physical design ... 41
Table 4.3 List of PT.NNT’s mine facilities removal cost ... 53
Table 4.4 List of PT.NNT’s Reclamation Bond ... 56
LIST OF APPENDIXES
Page
I. INTRODUCTION
1.1. Background
The mandate of Act Number 11 Year 1967 concerning The Basic
Provisions of Mining, on article (1) asserted that:” All minerals found within the
Indonesian mining jurisdiction in the form of natural deposits as blessing of God
Almighty are national wealth of the Indonesian people and shall, therefore, be
controlled and utilized by the State for the maximum welfare of the people”.
Mining is an effort to remove in situ minerals resources, which is
processed and refined into more valuable matters to become raw material for
downstream industries. The operation could be conducted by surface and/or
under-ground mining methods depend on natural deposit character by through
several stages of mining operation. The stages consist of general survey,
exploration, exploitation, processing and refining, transportation and sales; which
can be operated either by a Government Agency, a state own company, a
cooperative, a private body, or by way of people mining, through technically,
economically and environmentally feasibility studies with respect to prevailing
regulation. This activity is very potential to change the surrounding of
environmental working area significantly, either positive or negative impacts.
Positively, it could play a role as an agent of economical development. Contrary,
it could be also as the source of environment deterioration, whether physical,
chemical, biological, or social-economically if it is not managed appropriately.
Improving the positive impact and to maintain the environment, a mining
company is compulsory to conduct environmental management and
environmental monitoring during the operation.
The mining operation, especially in exploitation stage that employ surface
mining method is critical, yet mostly close to huge spatial opening, therefore
suitable planning and operation is required to synchronize both of economical and
environmental interests. Surface method has several subsequent steps, which are
land clearing, topsoil removal, overburden/waste rock removal, minerals deposits
excavation, and back filling. Those successive processes are driven eventually in
previously usage or change to another more benefit one. Some diverting usages
mined out area are used as water reservoir, tourism, fish cultivation, and sport
facility. Otherwise, if there is not any benefit of mined out area, except
deterioration for the environment, no mining activity might be much better.
1.1.1. Mining Management
In principle, since 1999 in line with regional autonomy policy, almost all
of mining management has decentralized, except for the existing contract in
respect of Foreign Capital Investment, which is still under Central Government
authority until the licenses is finished.
1.1.1.1. Mining Enterprises
All investors are able to invest in mining sector, regardless nationality and
company scale; could be in term of multinational company, State Own Company,
private company, cooperation, or local community based. Due to this scheme,
which refers to the prevailing regulation, mining enterprises and the type of
license are classified as follow.
• Mining Authorization holders (Kuasa Pertambangan/KP) managed by National Agency, State Own Company, national company, and
cooperation
• Contract of Work for mineral mining (Kontrak Karya/KK) and Work Agreement for Coal Mining Enterprises (Perjanjian Karya Pengusahaan
Pertambangan Batubara/PKP2B), managed by multinational companies in
term of Foreign Capital Investment Company (PMA) as contractor
• People based Mining, managed by local community on certain Area for People Mining, where determined by Local Government
The mining license is given in respect to mining activities stages
successively in a definite period of time which each can be extended if necessary.
The following are the stages with each duration permit.
• exploration, mainly for 3 years period and can be extended twice for 1 year each
• exploitation, processing and refining, transportation and sales, for maximum 30 years period and can be extended twice for 10 years each
This condition is omitted for the company in term of PMA, the license is
given once as a package.
1.1.1.2. Government Functionality;
Actually, the Government functionality based on the prevailing policy is
as follows:
a. Central Government
- Proposing, determining, and updating national mineral management
policies, guideline, standardization, norms, criteria, and procedures;
- Socialization and technical guidance for environment, safety, added
value and community development aspects, whether for local
government, community and company;
- Supervising and evaluating local government official performances in
conducting mining services both deskwork and fieldwork,
- Managing overlying license area between provinces and exceeding 12
miles of offshore area.
- Monitoring and evaluating contractors performance in conducting their
becoming obligations comprises; environmental, safety, added value,
community development, taxes and financial aspects, both deskwork
and fieldwork,
b. Local Government
- Managing coal and minerals resources under their authorities’ area.
- Monitoring and evaluating company performance in conducting their
becoming obligations comprises; environmental, safety, added value,
community development, taxes and financial aspects, both deskwork
and fieldwork,
- Socialization and technical guidance of each aspects whether to local
- Supervising the provincial and regional official in conducting mining
services related to Regional Autonomy.
1.1.1.3. Company Responsibilities
a. Implementing Good Mining Practices
Good Mining Practices is conducted by implementing appropriate
method and compliance of any related prevailing regulations to create
accountable mining,
- Applying an effective and efficient mining method
- Environmental eligibility, based on Environmental Impact Assessment
(EIM) to keep the environment components as ambient condition and
to meet environmental policies.
- Added Value eligibility, concerning the company effort to improve
their yield and condition such as conservation, quality, human aspect,
community development and multiplying effect.
- Safety and health occupancy of the employee, to avoid mining
accident.
- Standardization of any aspect of mining activities, whether operational
procedure, equipment appropriateness, and official or operator
competency; by referring to the national or international standards.
- Economics eligibility to meet any finance and taxes obligations
b. Fulfilling Taxes and Other Financial Obligation - Deadrent in respect of the mining area
- Royalties in respect of the company’s production
- Corporate Income Tax in respect of income received or accrued by the
contractor
- Personal Income Tax
- Income Tax under Article 23 and Article 26 of Income Tax Law Year
1994
- Value Added Tax and Sales Tax of Luxury Goods
- Stamp Duty on Documents
- Import Duty on goods imported into Indonesia
• The area of the mining area; and
• The utilization of land and building in the area where the contractor constructs facilities for its mining operations.
- Levies, taxes, charges and duties imposed by Regional Governments in
Indonesia, which have been approved by the Central Government.
- General administrative fees and charges for facilities or services
rendered and particular rights granted by the Government to the extent
that such fees and charges have been approved by the Central
Government
- Duties on the transfer of ownership for motor vehicles and ships or sea
transportation.
- Capital goods and materials, imported by private Contractor Company
within the context of the Agreement, are exempted from import Duty,
Import Levies and Duty of Ownership Transfer according to the
prevailing legislative rules.
- Allocating appropriate amount of fund in certain Bank, which have
been approved by the Government as Mining Reclamation Bond, since
it’s commencing up to decommissioning.
1.1.2. Mining Method
In principle, mining is classified into two main categories namely surface
mining and underground mining. Implementations of these methods rely on the
occurrences of mineral deposit, which are characteristics, kind of mineral, deposit
type, position, spreading, and host-rock/ over-burden.
1.1.2.1. Surface Mining
Surface mining is excavation of mineral deposit at or near the surface,
where the whole work is open to the atmosphere. The name is also designated by
a modifying word or phrases depending on the mineral deposit types such as the
following.
a. Open-pit/open-cut/open-cast/open-mine is open surface for removing
South-East Sulawesi Province, Bintan alluminium mine at Kepulauan Riau
Province, Eastberg cupper mine at Papua Province.
b. Quarry is excavation for economic-minerals/industrial-minerals; for
example Tulungagung marble mine at East Java Province, Padalarang
limestone mine at West Java Province, Karimun granite mine at
Kepulauan Riau Province.
c. Strip mine is excavation for flat or slightly oblique of coal bed/seam/layer;
for example Ombilin coal mine at West Sumatera, Tanjungenim coal mine
at South Sumatera, Sangata coal mine at East Kalimantan,
d. Alluvial/placer mine is excavation for alluvium deposit of sand, gravel, or
talus from which some valuable mineral is extracted; for example Logas
gold mine at Riau Propince, Cilacap iron mine at Central Java Province,
Martapura diamond mine at South Kalimantan Province.
e. Hydraulic mine, a placer mine worked by means of a stream of water
directed against a bank of sand, gravel, or talus; soft rock similarly
worked; for example almost all of ore tin mine on the islands of
Bangka-Belitung Province.
1.1.2.2. Underground Mining
Underground mining is also known as a “deep” mine; it’s usually located
several hundred meters beneath the earth’s surface by means of the certain
opening hole to connect to the surface. The opening hole could be employed
either for main entrance, main haulage, or supporting facility way, those provide
work for material and labor transportation, ventilation, drainage.
a. Shafts, a vertical or incline opening hole.
b. Tunnel, a horizontal or gentle inclining hole through in both sides of
foothill.
c. Drift a horizontal or slight inclining hole at or parallel to adjacent strike of
the mineral/coal deposit. Strike is the longest part of the deposit.
d. Adit, a horizontal or gentle inclining hole through the foothill in one side,
it’s a dead end tunnel.
The broken mineral or coal as product material is removed mechanically
and transferred by shuttle car or conveyor to the surface.
1.1.2.3. Mining Supporting Facility
Both of surface and underground mining methods operation are supported
by several interrelation facilities, such as; processing plant, official buildings,
warehouse, workshop, stock pile, settling pond, tailing pond, polishing pond,
dumping area, roads, emplacements, erosion controls, dock, jetty, conveyor,
railway-tract, water channel, bridges, electricity transmission, dormitory, fencing
[image:30.595.138.487.267.499.2]and other related various ones.
Figure 1.3 The Lay Out of a mining facility to support mining operation (Adopted from http://www.nrcan.gc.ca/mms/mining/)
1.1.3. Land Management
Based on the character where the whole excavation is opened, surface
mining is more extensive on spatial opening than underground mining, and tends
to evoke morphological change. The surface mining is critical, therefore suitable
planning and operation to synchronize both of environmental and economical
interests on land usage in exploitation is required. Exploitation is one of mining
operation stages, which mostly related to spatial opening, since the purpose of
Surface mining method exploitation stage occupies several subsequent
steps as follows:
a. Land clearing, it’s an attempt to eliminate working area of vegetation
coverage.
b. Topsoil removal, to strip an upper part of earth layer called humus, then be
loaded, hauled and stocked on certain area or be spread directly to a
reclamation area, as a growth medium to accelerate re-vegetation.
c. Overburden/waste rock removal is to strip or to dig the covered rock layer
or host rock of valuable minerals, then be loaded and hauled to be dumped
either on permanently or provisional dumping areas, or even be dumped
directly to a mined out area as reclamation filling material.
d. Minerals deposit excavation, then be loaded and hauled to processing plant
stockpile, becoming feed for processing and or refining/purification
process. The mineral deposit, which at least one of its metal content could
be extracted economically, is also called ore.
e. Back filling, it’s the reclamation process, especially conducted in coal
mining by returning the over burden or the waste rock, whether derive
from the dumping area or directly from the active area to the void mined
[image:31.595.120.503.499.702.2]area, then being re-contoured, covered by humus, and re-vegetation.
1.1.4. Mining Reclamation Bond
Due to the prudent principle of the Government on a mining company, by
regardless its principal and scale, the company is obliged to insure any spatial
opening during their operation period by allocating appropriate fund in a certain
Bank, as Reclamation Bond. Every mining company is compulsory to reclaim
their mined area during operation and it will have had to finish before
decommissioning. The reclamation should be agreed by Local Regional
Government, whether it is fit with existing General Planning of Regional
Land-use (RUTRD) or diverting to another more benefit one. The bond should be an
adequate amount; therefore on default condition, it would be sufficient for any
third party to do so. This is determined based on the Government regulation,
which has been stipulated by Directorate General of Geological and Mineral
Resources Decree (DGMR) - Department of Energy and Mineral Resources
(DEMR) No. 336.K/271/DDJP/1996 concerning Reclamation Bond.
The Reclamation Bond mechanism is proposed by the company to be
consulted with the government in order to achieve an agreement. The Reclamation
Bond that has been agreed then being saved by the company in a certain Bank on
behalf of Head of Regional Government, prior DGMR representing Minister of
DEMR. The company could withdraw the bond when any requirements are
satisfied, otherwise as default condition the Government will conduct an action to
determine a third party to do so. The amount of bond is based on annual company
planning pertain mined area reclamation for every five years period, which consist
of direct and indirect cost. These costs are allocated for appropriate mined and
disturbed area management, mobilizing material sources, procurement vegetation
types, engineering method and equipment. Concerning spatial management
related to engineering method and equipment, the fund determination relies on
equipments and employment cost, which has unique characteristics such as
bulldozer, loader, dump truck, excavator, grader, etc. These could be considered
as effective and efficient whether single or combination operational. Determining
the Reclamation Bond needs both skill and expertise, otherwise it would consume
Due to Regional Autonomy policy, since year 1999, the actual mineral
resource management is belonging to the regional authority. However, in
transition period, these would raise some technical problem, particularly in
expertise-required aspects in determining the Reclamation Bond. The Central
Government realizes that there is a need to provide a supporting tool to accelerate
knowledge transformation and to improve the capability of Regional Government
human resources. This tool whether in term of a guideline or an application
program insists to be developed for synchronizing the mining management
policies between Central and Regional Governments.
Dealing with the necessity of Reclamation Bond assessment tool, this
study attempted to develop a decision supporting system (DSS) approach to
support fast and objective problem solution for evading disputability, namely
Mining Rehabilitation Bond System (MR BoS). This is an interactive, flexible,
and adaptable computerized based information system, which re-useable and be
replicable tool by using model and knowledge for solving comparable projects
and replicated for concerned users. The components of Mining Rehabilitation
Bond System, whether variable, parameter and criterion are input into the system,
to be processed within available formula eventually resulted an adequate amount
of fund and rendering interrelated maps. In principle this yield will have been a
main consideration reference for the Reclamation Bond decision maker.
1.2. Problem Identification
Reclamation Bond is crucial policy in mining industry, which needs
prudential and peer principal of both company and government as this decisive to
drive the post mining environment condition. It has to be proposed and allocated
by a company before conducting any production activity, after through evaluation
by the government. Mining is an investment, which limited by time and
production frameworks. Therefore if this were constraint, either would delay to
inflict financial loss of company operations or be determined perfunctorily, which
would be flaw mining environmental image.
In this case both skill and expertise of government officials are required,
management planning, and cost estimation. The mining principle is also involved
in form of land management, which mostly employs mechanical earth moving as
well. Environmental management planning is a part of Environmental Impact
Assessment, which performs the steps of mined out area management fit with post
mining area usage. The cost estimation is based on any economical calculation in
conducting both land and environmental managements technically in effective and
efficient manners.
Regional Autonomy provision requires appropriate official capacity
building, related to their authority and responsibility. Consuming time and costly
are common obstacles of Regional Government in improving their official
capacity. Based on this reason, some of them might release a contradictive
Reclamation Bond provision according to their perception eventually to increase
regional income. Therefore, it is necessary to develop an integrated and
user-friendly tool to determine Reclamation Bond.
1.3. Objectives
The main objective of this project is to develop a Mining Rehabilitation
Bond System, with specific purposes are:
1). To provide the additional tool for the Government as Decision Support
System to evaluate any company planning concerning cost estimation in accordance with spatial management and material removal through any
equipment employment, ether suitable or not to be agreed with.
2). Determining adequate amount of fund, which has to be saved by a mining
company in certain Bank as Reclamation Bond, which classified into;
- Direct cost; mine facilities removal, land structuring, re-vegetation,
erosion control, acid mine drainage mitigation; and
- Indirect cost; mobilization and demobilization of heavy equipments,
establish reclamation planning, administration and contractor
II. LITERATURE REVIEW
Rehabilitation bonds and bank guarantees are broadly accepted as
instruments available to governments to ensure completion of rehabilitation of
mined areas. Bond and guarantees are seen to provide a financial incentive for the
proper completion of rehabilitation work and to ensure that the cost of
rehabilitation will be met by the miner rather than through public funding (McGill
and Fox, 1998).
Several terms are commonly used to express this bond and guarantees
including rehabilitation guarantee, rehabilitation bond, reclamation bond,
performance bond etc. In this case, the differences between rehabilitation bond
and reclamation bond merely by the author to distinguish between the name of
application and the Government Provisions which has legal aspect. The Mining
Rehabilitation Bond System is designed to support decision making of
Reclamation Bond.
2.1. Reclamation Bond Provision
According to Director General of Geological and Mineral Resources
Decree number: 336.K/271/DDJP/1996 concerning Reclamation Bond, asserted;
“Reclamation Bond is a definite fund, which is provided by a mining company as
a guarantee in conducting reclamation on mined area”, though “reclamation is an
effort to restructure and improve condition upon a disturb land that is impacted by
mining operation to fit either with previous or divert land use to be more useful
one”, and “the adequate amount of bond is based on annual company planning
pertain mined area reclamation for every five years period, with the premise
would be conducted by the third party”.
Realization of Reclamation Bond is based on the “Guideline of
Established Annual Planning of Environmental Management regarding
Determining of Reclamation Bond (DEMR, 1996)”. The components of
Reclamation Bond could be classified into two main components those comprise
of direct and indirect costs regarding establishment of company annual
2.1.1. Direct Cost Component
The cost is prepared to cover mine facilities removal, material handling,
re-vegetation, and supporting efforts for post mining condition; erosion control,
acid mine drainage mitigation.
2.1.1.1. Mine Facilities Removal
This cost is proposed for removing or demolishing and disposal of any
supporting facilities of mining operation, if not any exception for post mining
usage of a certain items. There is not any specific calculation method could be
implemented to whole mine facilities removal, since that almost developed by
civil work. The structure demolition, disposal cost and equipments are decisive
driven by their physical characteristics such as material types, foundation, and
dimension.
Table 2.1 The commonly material used and the removal cost (Means, 2000)
Material Structure Based Type Cost ($) Units
Bricks 5 m3
Concrete 6 m3
Metal 5 m3
Iron Pipe / Water Channel 2.50 m3
Belt Conveyor 38.00 Ft
Wood / Electricity Pole 250 Ft
Wires 3.00 Ft
Shaped Concrete / Foundation 2.67 Ft
Table 2.2 Relevant building and specific construction in a mining operation (Means, 2000)
Building Based Types Specific Based Types
Offices Foundations
Warehouse Belt Conveyor
Workshop Railway
Fuel Tank Water Channel
Primary Processing Bridges
Secondary Processing Electricity Transmission
Stacker Poles
According to Means (2000), the structure demolition and disposal cost is
based on the material type in certain units as shown on Table 2.1, and the
common building and other specific types that relevant to be built in a mining
operation. The common material used and the removal cost is shown in Table 2.2.
2.1.1.2. Material Handling Plan
Land structuring or earthmoving consists of several operations, i.e. back
filled of mined area, re-contouring, top soil spreading, erosion and surface water
controls.
a. Earthmoving
The material-handling plan is determined by estimation of material
volume to be done, haulage distance, road grade, and employed equipment
types.
1) Waste rock volume estimation
Determination of material amount that must be handled
(earthmoving volumes calculation) uses standards engineering methods.
Volume calculation can be obtained by comparing the pre-reclamation and
post-reclamation topography of the site. A series of pre-reclamation and
post-reclamation cross sections can be used to calculate volumes by the
average-end-area method as follow:
i=n
V =
∑
{[(
A(i)+A(i+1))
/2]
*Li +…..+[(
A(n-1)+A(n))
/2]
*L(n-1)}
...1)i=1
V : Volume
Ai : Area of cross Ai section.
Li : Length between the section of area A (i) - A (i+1).
n : Number of section
Material volume is defined according to its state in the earth
moving process. There are three volume measurements, which are bank of
cubic meters (BCM), loose cubic meters (LCM), and compacted cubic
meters (CCM), which driven by a swell factor. Swell is the volume
increasing resulting from a change of bank state to loose state. Some
divided by the bank density. The following equation is used to determine
the swell factor.
SF = [100 / (LD / BD)] – 100 ……….……….. 2)
SF : Swell Factor
LD : Loose Density
BD : Bank Density
Table 2.3 Initial and final swells of selected material
Material Types Initial Swell (%) Final Swell (%)
Mixed waste rock
Siltstone
Sandstone
25-45
35-45
60-70
10-25
10-25
25-45
2) Haulage distance estimation
Haulage distance estimation is based on the reclamation and
operation plans of the permit application. This includes haul-roads and
routes designation for each area where backfilling, grading, topsoil
replacement, or other earth moving activities occurred, identify the
approximate centroid of each source material and its destination, and
determine the centroid-to-centroid distance. Centroid is a surface
expression of the center of mass.
3) Grade estimation
Haul road grade and its surface roughness conditions greatly
impact equipment productivity and may confine the type of equipment to
be employed. Most equipment productivity and guideline express these
limitations in term of the total resistance of the haul, which is the sum of
the rolling resistance and grade resistance.
TR = RR + GR ……….. 3)
4) Equipment selection
The following are the principle process in selecting appropriate
equipments.
• Determines types of equipment such as bulldozer, scraper,
excavator, dump truck, loader, grader or dragline.
• Determines model and capacity of equipments based on the
reclamation plan information; concerning land management,
material handling, and manual of equipments.
5) Land management
The land management in order to meet the reclamation plan has to
select the appropriate equipment that is efficient and effective. Typical
earthmoving activities together with equipment needed are described
bellow.
• Spoil ridge reduction: to move tops of the spoil ridges into the valley between the ridges, the operations normally rely upon
bulldozers.
• Final pit/highwall elimination; to fill the last pit with material, which its sources obtained from such following area.
- Adjacent spoil ridges or the area above the highwall, these usually by
using bulldozer.
- Overburden stockpile; normally uses scrappers or combination of
loaders and trucks to move material to the pit. When trucks and loaders
are used, bulldozers spread the material in the pit area. If the pit is going
to be reconfigured for retention as a permanent impoundment,
bulldozers are normally used to reduce the highwall and spoil slopes into
acceptable grades.
• Final grading; to re-contour backfilled area, excess spoil disposal structures and other disturbed areas, to facilitate proper drainage
and the approved post mining land use and to prepare disturbed
areas for topsoil redistribution These usually use scrapers,
bulldozers and motor graders. In some cases, especially for sites
may be required to reduce compaction in the root zone and provide
a slightly rough surface to enhance topsoil adhesion.
• Topsoil redistribution: this considers soil horizon placement, soil
depth, compaction, and drainage systems. The choice of equipment
depends on grade, the haulage distance between stockpiles and
placement areas, and the volume of material to be moved. These
normally involving the use of scrapers, front-end loaders, trucks,
bulldozers, and/or graders.
• Removal of diversions and siltation structures: to grade out
diversions and excavated siltation structures, generally bulldozers
is adequate to be used. In some cases, a hydraulic backhoe
excavator or small dragline is required to dredge accumulated
sediment.
• Covering of coal mine waste or other acid-toxic forming materials exposed: when the reclamation and operation plans require the
application of cover material prior to revegetation, the similar
equipment considerations as the topsoil redistribution activities
discussed above apply to the transport and distribution of this
material, i.e. include the covering of coarse coal mine refuse, slurry
impoundments and coal stockpile pads.
b. Productivity and Equipment Cost Calculations
The development of the materials handling plan requires a
determination of equipment productivity and earthmoving costs. Generally,
the productivity of certain equipment is expressed in cubic meter per hour.
Several factors relates to equipment productivity are capacity, cycle time, site
conditions, and material characteristics. Actually, reclamation activities do not
operate at 100% efficiency, it relies on complex factors such as operator skill,
repairing and adjustments, and personnel and job layout delays. Human factor
either addressed individual factor as part of the operator factor or combined in
factors. The total hours of an equipment usage determined by applying
productivity rates to the amount of material removed.
The following are several formulas related to the capacity estimation
for dozing, excavating, loading, and hauling of certain equipment to be
adjusted with the selected equipment specification.
1) Estimation of Bulldozer production capacities
q * 60 * b
Q = ………..……. 4)
(D/F) + (D/R) + Z
Q : Production capacity (m³/hour) q : Blade capacity (m³)
b : Blade factor
D : Dozing distance (m)
F : Forward speed (m/mnt)
R : Reverse speed (m/mnt)
Z : Transmission (mnt)
2) Estimation of Excavator production capacities
q * 3600 * e
Q = ………...……. 5)
Ct
Q : Production capacity (m³/hour) q : Bucket capacity (m³)
e : Correction factor
Ct : Cycle time (sec)
3) Estimation of Dump Truck production capacities
q * 60 * d
Q = …………...…… 6)
(n*Ct) + (D/V1) + (D/V2) + T1 +T2
Q : Production capacity (m³/hour) q : Haulage capacity (m³/hour)
d : Correction factor
4) Estimation of Wheel Loader production capacities
q * 60 * w
Q = ………...……. 7)
(D/F) + (D/R) + Z
Q : Production capacity (m³/hour) q : Bucket capacity (m³)
w : Correction factor D : Loading distance (m)
F : Forward speed (m/mnt)
R : Reverse speed (m/mnt)
Z : Transmission (mnt)
Table 2.4 Heavy Duty / Construction Equipments Rental Prices (APKASI, October 2005)
Prices / Unit ($ US)
No. Types Capacity Per Month /
210 Hours Per Hours
1 Bulldozer 160 HP 6430 32
2 Bulldozer 200 HP 8064 40
3 Bulldozer 320 HP 12860 64
4 Bulldozer 425 HP 17161 86
5 Wheel Loader 1.5 m3 3871 19
6 Wheel Loader 2.5 m3 4516 23
7 Wheel Loader 3.0 m3 4710 24
8 Wheel Loader 4.0 m3 9419 47
9 Track Loader 2.3 m3 4301 21
10 Track Loader 2.8 m3 5161 26
11 Motor Grader 135 HP 5054 25
12 Motor Grader 150 HP 5591 28
13 Hyd Excavator 0.5 m3 3527 18
14 Hyd Excavator 0.9 m3 4516 23
15 Hyd Excavator 1.5 m3 6279 31
16 Hyd Excavator 2 m3 8344 42
17 Hyd Breaker 3000 9763 49
18 Back Hoe Loader 0.3 – 1 m3 3720 19
19 Dump Truck 20 Ton 3048 17
20 Dump Truck 12 Ton 2903 14
21 Dump Truck 8 Ton 1935 10
The required cost for material handling is based on the equipment
productivity and number of equipments used, whether individual or/and
combinations. While to determine the hourly cost of equipment during
Reference Guide for Construction Equipment, for the number of shifts, oil and
fuel costs, etc.
Table 2.5 The Average of Heavy Equipment’s Lubricant and Fuel Consumptions
Consumption (Unit/hr)
No. Oil Type Unit
Excavator Bulldozer
Prices/ Unit ($ US)
1 Fuel Ltr 0.14 22.5 0.7
2 Engine Oil Ltr 0.108 0.1 2.5
3 Final Drive Oil Ltr 0.007 0.04 2.5
4 Hydraulic Oil Ltr 0.075 0.11 2.5
5 Swing Machine Oil Ltr 0.007 - 2.5
6 Transmission Oil Ltr - 0.15 2.5
7 Grease Kg 0.07 0.02 3.0
2.1.1.3. Re-vegetation
The initial re-vegetation process generally consists of seedbed preparation,
including application of soil amendment to improve soil quality, seeding,
planting, maintenance, and monitoring. The reclamation plan will specify the soil
condition and specific plantation, which has been agreed. Generally the cost of
each revegetation activities is determined per hectare.
2.1.1.4. Other Direct Reclamation Cost
Other direct reclamation cost depends on the site conditions and applicable
requirements of the reclamation and operation plans, other necessary reclamation
activities may include:
• Pumping and treating impounded waters
• Replacing wetlands
• Sealing underground mine entries and openings
• Plugging auger holes
• Sealing monitoring wells and other drilled holes.
• Constructing rock drains.
• Maintaining roads during reclamation including grading, surfacing, ditches and culverts.
• Maintaining ponds.
• Evaluating and rehabilitating structures to be retained as part of the post-mining land use (ponds, roads, diversions, etc).
There is no established method of estimating costs for most of these
activities; therefore a case-by-case basis calculation by using professional
judgment is needed.
2.1.2. Indirect Cost Component
This cost is non-technical fund, which proposed to support the realization
of reclamation planning.
2.1.2.1. Mobilization and Demobilization of Heavy Equipments
Mobilization and Demobilization (mob-demob) of heavy equipments is an
allowance for the cost of moving equipment, to and from the reclamation site. The
cost will be varied depend on such condition:
• the type and number of equipment,
• the haul distance to the site,
• the needing for special equipment;
• the presence of non standard features or condition,
• the remote location
• a necessity of separate mob-demob at a later one.
Generally the cost is range up to 10% of the total direct costs in
accordance with its constraint that should be recognized, and normally is
determined 2.5% of direct cost.
2.1.2.2. Reclamation Planning
The cost of reclamation planning is addressed to engineering redesign cost,
in the event of bond forfeiture; due to the plans in the permit application may be
not reflect site conditions at the time of bond. Necessary activities may include:
• Preparing maps and plans to show the extent of required reclamation.
• Analyzing topsoil and overburden stockpiles to determine whether special handling is necessary.
• Evaluating structures to assess the difficulty of demolition and removal.
• Evaluating impoundments and roads to determine any special reclamation needs (such as the presence of toxic materials), the feasibility of leaving those structures in place, and the reclamation needed to ensure stability and facilitate the post mining landuse.
• Assessing the condition of area reclaimed by the permitee to determine whether additional work is needed to complete the reclamation plan.
[image:45.595.132.481.161.492.2]• Preparing contract documents.
Figure 2.1 The relationship of reclamation planning cost and Direct Cost
Based on the manual chart of “Englemen’s Heavy Construction Cost File”
(on Handbook for Calculation of Reclamation Bond Amounts - OSM US
Department of the Interior, 2000), the cost of reclamation plan generally allocate
in between 2.5%-6.0% of direct cost, whilst DEMR has been determined in
between 2%-10% as shown on Figure 2.1. The following formula is derived from
this chart.
Y = exp(13.8155105579643-1.15129254649702X) ; or
(LN(Y))=13.8155105579643-1.15129254649702X ... 8)
Y : Direct Cost
2.1.2.3. Administration Cost and Contractor Profit
The reclamation plan is designed likely to be conducted by a third party,
thus overhead and profit for the contractor as reclamation doer have to be included
in bond amount. This allowance is needed to anticipate when an uncertainty event
or in default condition occurred.
Based on the manual chart of “Englemen’s Heavy Construction Cost File”
(on Annual Plan of Environmental Management for Reclamation Bond, DEMR),
the overhead and profit costs related to the direct cost is in between 3%-14% as
classified follow:
• for Y
≤
21000, then X=14, and• for Y
≥
100000000, then X=3, else• for 21000
<
Y<
100000000, then X is determined by the following equation;
Y= exp(20.7232658369464-0.767528364331349X), or
(LN(Y))=20.7232658369464-0.767528364331349X ……...………..9)
Y : Direct cost (US$ million) X : Overhead and profit (%)
[image:46.595.135.497.310.729.2]2.1.2.4. Management Cost
Reclamation management cost is addressed to hire an independence
project management firm related to inspect and supervise the reclamation
contractor work performance. Some activities may include as additional work,
such as dam inspection.
Based on the manually chart of “Englemen’s Heavy Construction Cost
File” (on Annual Plan of Environmental Management for Reclamation Bond,
DEMR), the fee is in between 2%-7% related to the direct cost is configured in
equations and shown on chart below.
• for Y
≤
10000, then X = 7, and• for Y
≥
100000000, then X = 2, else• for 10000
<
Y<
100000000, then X is determined by the following equation;Y = exp(22.1048168927428 - 1.84206807439524X), or
(LN(y)) = 22.1048168927428 - 1.84206807439524X …………………10)
Y : Direct cost (US$ million)
X : Reclamation management cost (%)
[image:47.595.139.479.444.719.2]
2.1.3. Determining the Total Performance Bond Amount
Reclamation cost is total amount of direct and indirect cost components,
whilst the Reclamation Bond is determined for its five years period. Therefore
actual reclamation cost as the first annum bond must be in detail, and the
calculation of each component can be expressed in a certain price per units. In the
absence of major changes to the reclamation and operation plans, accordingly
without redoing the both calculation, the cost of remaining fourth years can be
estimated by considering a predicted annually escalation price or inflations.
Rc = DC + IC .……….…11)
RC : Reclamation Cost
DC : Direct Cost IC : Indirect Cost
i= 5
Rb =
∑
[(
1+E(i))
*Dc(i) + IC(i)]
...12)i=1
Rb : Reclamation Bond
Ei : Escalation year i Dc(i) : Direct Cost year i IC(i) : Indirect Cost year i
2.2. Decision Support System
Decision theory is an essential branch of operations and resource
management and its methodology has been developed at the intersection between
applied mathematics and computer engineering. In the past, decision processes
were considered to be simple rational mathematical optimizations, based on linear
programming and graphical techniques. However, this oversimplification resulted
in system representations which were far from real conditions and consequently of
limited practical application. Since the end of 1950s, the Nobel prize-winner H.
Simmon introduced the need to human capacity to process it. Simmon suggested
the formulation of realistic goals that reflect satisfactory solution instead of
optimal ones, and proposed adapting the decision procedure to human heuristic
behavior, by introducing the concept of three interactive and iterative phases:
intelligence, design, and choice phases. Together with the introduction of
construction of integrated Decision Support Systems (Hernandez and Carnelli,
1996).
Decision making can be a complicated process, because decision makers
are faced with an ever-increasing number of alternatives, the relationships
between the variables involved are complex, and frequent changes are occurring.
Decision often must be made under time pressure, and several decisions may be
interrelated (Turban, 2003).
Turban (2003) stated that Decision Support System (DSS) is a computer
based information system that combines models and data to provide support for
decision makers in solving non-structured and semi-structured or interdependent
problems with extensive user involvement. DSS consist of the following four
main components; Data Management, User Interface, Model Management, and
[image:49.595.119.511.365.703.2]Knowledge Management subsystems.
2.2.1. Data Management
The data management includes a specially constructed database or set of
files that contain relevant data for the decision situation and is managed by a
database management system (DBMS). Data can also be obtained directly from
the corporate data warehouse, from regular databases, or from other sources.
2.2.2. Model Management
Model management includes software with financial, statistical,
management science, or other quantitative models. These provide the systems
analytical capabilities and an appropriate software management program to
manage the models. Some of the models are preprogrammed, while others are
built by the DSS builder or end user.
2.2.3. Knowledge Management
The knowledge management subsystem can support any of the other
subsystems or act as an independent component, providing knowledge for the
solution of the specific problem. This subsystem is available in only some DSSs.
2.2.4. User Interface
The user interface subsystem enables the user to communicate with and
III. METHODOLOGY
This section describes the materials and the methods used in designing,
creating and implementing Mining Rehabilitation Bond System of a mining area.
3.1. Time and Location Selection
The research has been conducted from April 2005 to January 2006 at
