Reading mining KPIs: strip ratio and calorific value

A miner’s economics come down to two questions: how much rock it has to move to reach the ore, and how much the ore is worth once sold. Strip ratio answers the first. Calorific value (for coal) or grade (for metals) answers the second. Learn to read these two and most operating updates start to make sense.

Strip ratio: the cost of getting at the ore

Open-pit mines sit under waste rock, called overburden. The strip ratio is how much of that waste must be removed to expose one unit of saleable material. A higher ratio means more diesel, more truck hours, and more cost per ton produced.

Watch the trend, not just the level. Two mines can both report a ratio of eight; the one whose ratio climbed from five over three years is heading into more expensive ground, while a flat ratio signals a stable cost base.

Calorific value: what the coal is worth

Calorific value (CV) is the energy released when coal is burned, quoted in kilocalories per kilogram. Higher CV coal commands a higher price because a power station needs less of it for the same output. CV is reported on a basis that must be stated to be meaningful:

• GAR (gross as received): includes the moisture the coal carries when shipped. The basis most often used in contracts.
• GAD / ADB (air-dried): measured after partial drying, so the number reads higher than GAR for the same coal.
• NAR (net as received): strips out the energy lost vaporising moisture, so it reads lower than GAR.

Comparing a GAR figure to an air-dried one is the classic mistake. Always check the basis before concluding one miner’s coal is better than another’s.

Putting them together

A low strip ratio with high calorific value is the ideal: cheap to mine, valuable to sell. A high strip ratio with low CV is the squeeze, and it is where rising benchmark prices matter most, because the producer needs a strong market just to stay profitable. Read the two KPIs as a pair, then set them against the price the company actually realises.