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Definition: Long-term financial planning for mine projects involving large investments.
Techniques:
NPV (Net Present Value): Best method, considers time value of money.
IRR (Internal Rate of Return): Discount rate at which NPV = 0.
Payback Period: Time to recover initial investment.
Profitability Index: Ratio of PV inflows / PV outflows.
Mining Relevance: Used for mine development, machinery purchase, processing plant installation.
Exam Point: NPV method is most reliable in mining projects.
Definition: ERP = Enterprise Resource Planning → integrated IT system for managing mining operations.
Modules in Mining ERP:
Production & Dispatch
Safety & Compliance
Finance & HR
Inventory & Procurement
Benefits: Real-time monitoring, cost control, DGMS compliance reporting.
Exam Point: ERP ensures integration of all departments for efficiency + safety.
Mine Manager is the “Occupier” under law.
Duties:
Ensure compliance with Mines Act, MMR 1961, CMR 2017, etc.
Accident reporting to DGMS.
Conduct inspections & maintain statutory registers.
Implement Safety Management Plan (SMP).
Provide PPE, training, welfare amenities.
Exam Point: Manager is legally responsible for safety of all persons in mine.
Mine Plans:
Must be accurate, up-to-date, and DGMS approved.
Includes surface plan, ventilation plan, geological plan, etc.
Important for safety (e.g., fire, inundation control).
Mine Returns:
Periodic reports submitted to DGMS/IBM.
Cover production, employment, accidents, explosives consumption.
Exam Point: Incorrect or false returns = punishable offence.
Definition: Structured checklist used to identify hazards and assess risks.
Formula: Risk = Likelihood × Consequence.
Risk Categories: Low, Medium, High, Extreme.
Use in Mines: Prioritizes hazards for corrective actions.
Exam Point: WRAC is a baseline risk assessment tool used before operations.
Definition: Systematic method to identify hazards for each job/task.
Steps:
Break job into steps.
Identify hazards at each step.
Define control measures.
Use in Mining: Especially for high-risk tasks (blasting, heavy machinery).
Exam Point: JSA is task-specific, while WRAC is workplace-wide.
NPV method is most reliable in capital budgeting.
IRR is the discount rate at which NPV = 0.
Payback period = time taken to recover investment.
Profitability Index = PV inflows ÷ PV outflows.
ERP integrates production, safety, finance, HR & inventory.
ERP ensures compliance reporting to DGMS.
Manager = legally responsible for safety under Mines Act.
Mine manager must ensure training, PPE & accident reporting.
Mine plans include surface, ventilation, geological, electrical, etc.
Mine returns cover production, employment & accidents.
False mine returns = punishable under law.
WRAC = Workplace Risk Assessment Checklist.
Risk = Likelihood × Consequence.
WRAC ranks hazards as Low, Medium, High, Extreme.
JSA = Job Safety Analysis, for specific tasks.
JSA step = Break job → Identify hazard → Control.
JSA mostly used for high-risk activities like blasting.
WRAC is baseline, JSA is task-specific.
DGMS enforces manager’s duties through inspections.
SMP (Safety Management Plan) must be implemented by manager.
Capital budgeting helps in machinery purchase decisions.
ERP reduces duplication of records & manual errors.
Accident reporting is a core legal duty of manager.
Mine plans must be updated and DGMS-approved.
Q1. Which method best considers the time value of money in mining projects?
A. Payback Period
B. Accounting Rate of Return
C. Net Present Value
D. Break-even Analysis
E. Cash Flow Ratio
✅ Answer: C
Explanation: NPV is most accurate as it considers cash flows & discounting.
Q2. A mine invests ₹50 lakhs, earning ₹10 lakhs annually for 10 years. Payback period = ?
A. 2 years
B. 5 years
C. 10 years
D. 7 years
E. 12 years
✅ Answer: B
Explanation: 50 ÷ 10 = 5 years.
Q3. Profitability Index > 1 indicates:
A. Project not viable
B. Project break-even
C. Project profitable
D. Project rejected
E. Data insufficient
✅ Answer: C
Explanation: PI > 1 → present value inflows exceed outflows.
Q4. ERP in mining primarily integrates:
A. Only production data
B. Finance, HR, safety, production & inventory
C. Training only
D. Government reporting only
E. IT networking only
✅ Answer: B
Explanation: ERP connects all major functions in one system.
Q5. Which is NOT a module of Mining ERP?
A. Dispatch & logistics
B. Geological exploration
C. Safety & compliance
D. Payroll management
E. Cooking canteen menus
✅ Answer: E
Explanation: ERP is for core operations, not unrelated facilities.
Q6. Who is legally responsible for mine safety?
A. Owner
B. DGMS Inspector
C. Mine Manager
D. Foreman
E. Mine Engineer
✅ Answer: C
Explanation: Manager is legally responsible under the Mines Act.
Q7. Which of the following is NOT a manager’s duty?
A. Accident reporting
B. Ensuring safety training
C. Submitting false mine returns
D. Implementing SMP
E. Providing PPE
✅ Answer: C
Explanation: False returns are punishable offences, not duties.
Q8. Ventilation plans must be updated at least:
A. Monthly
B. Quarterly
C. Annually
D. Bi-annually
E. 5-yearly
✅ Answer: C
Explanation: Ventilation plans must be updated yearly.
Q9. Mine returns generally report:
A. Production
B. Employment
C. Accidents
D. Explosives consumption
E. All of the above
✅ Answer: E
Explanation: Mine returns cover all key aspects of operations.
Q10. In WRAC, risk is assessed as:
A. Cost ÷ Time
B. Likelihood × Consequence
C. Profit ÷ Loss
D. Investment × Interest
E. Accident ÷ Hours worked
✅ Answer: B
Explanation: WRAC formula = Likelihood × Consequence.
Q11. A hazard with high likelihood but low consequence is:
A. Extreme risk
B. High risk
C. Medium risk
D. Low risk
E. Negligible
✅ Answer: C
Explanation: High probability + small consequence = medium risk.
Q12. The first step in Job Safety Analysis is:
A. Train the worker
B. Break job into steps
C. Assign supervisor
D. Record attendance
E. DGMS reporting
✅ Answer: B
Explanation: JSA starts with breaking job into small steps.
Q13. JSA is most useful for:
A. Office jobs
B. Routine paperwork
C. High-risk field tasks
D. Payroll systems
E. ERP operations
✅ Answer: C
Explanation: JSA is designed for hazardous tasks.
Q14. False mine returns are punishable under:
A. Mines Act
B. Companies Act
C. Factory Act
D. DGMS Manual
E. Electricity Act
✅ Answer: A
Explanation: Mines Act governs returns & punishments.
Q15. ERP helps mine managers mainly by:
A. Avoiding legal duties
B. Consolidating data for decisions
C. Reducing statutory registers
D. Skipping inspections
E. Avoiding safety plans
✅ Answer: B
Explanation: ERP improves decision-making by data integration.
Q16. IRR is defined as:
A. Rate where NPV = 0
B. Ratio of cost ÷ revenue
C. Rate of payback period
D. Average annual cash flow
E. Fixed cost ÷ variable cost
✅ Answer: A
Explanation: IRR is discount rate at which NPV becomes zero.
Q17. Who approves statutory mine plans?
A. Owner
B. DGMS/IBM authorities
C. Mine Engineer
D. Local Panchayat
E. Mining Union
✅ Answer: B
Explanation: DGMS/IBM ensure plans meet statutory compliance.
Q18. In WRAC, risk with low likelihood and extreme consequence is:
A. Low
B. Medium
C. High
D. Extreme
E. Not assessed
✅ Answer: C
Explanation: Rare but extreme events are high risk.
Q19. Which of the following pairs is correct?
A. WRAC – Job specific
B. JSA – Workplace wide
C. WRAC – Workplace wide, JSA – Job specific
D. Both same
E. None
✅ Answer: C
Explanation: WRAC is workplace-wide; JSA is task-specific.
Q20. Which is NOT a component of capital budgeting?
A. Fixed cost
B. Variable cost
C. Cash inflows
D. Geological reserves
E. Discount rate
✅ Answer: D
Explanation: Geological reserves are technical, not part of finance model.
👉 Use “C-E-M-P-W-J” for this chapter set:
C = Capital Budgeting
E = ERP
M = Manager’s Legal Responsibilities
P = Mine Plans & Returns
W = WRAC
J = JSA
👉 Formula hacks:
BEP = FC ÷ (SP–VC)
Risk = Likelihood × Consequence
IRR = Rate where NPV = 0
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