Not all mines are created equal, and what option a mining company goes with when pursuing a development depends on a myriad of factors.

Choosing which style of mine a miner will go with is one of the most important decisions they can make — and if they get it wrong, it could spell disaster for the company.

It’s why development planning in the form of pre-feasibility, definitive feasibility, and bankable feasibility studies can take years to complete.

READ: Your guide to feasibility studies

Not only are companies constantly evaluating as new exploration and infill drilling gives it more geotechnical information to work from — but mines take millions of dollars to get off the ground.

Any slight variation in placement or mining method runs the risk of losing millions of dollars of value.

So, what options do mining companies look at once they have an idea that they have something on their hands?

Underground mining

Underground mining is typically the most expensive form of mining, but is suitable for companies that have a deeper resource — but can’t afford massive open pits.

It involves digging a series of shafts to the resource, mining it, and then returning it to surface along the same shafts — whether that’s on tracks they’ve laid down or just wheeling it up to surface.

There are several types of underground mining methods depending on the geology miners are playing with, including longwall mining which is literally scraping the surface of a long surface.

Longwall mining in progress
Longwall mining in progress

Underground mining can often be the most dangerous form of mining, even though mine safety has come a long way from sending canaries into coal mines to see whether it was safe or not.

The main risk comes from being in an enclosed space underground, with the risk of cave-ins all too real.  

Underground mines are usually reserved for deeper and smaller resources — but depending on how the company plans they can be the most economic form of mining that particular resource.

These types of mines, managed poorly, can lead to subsidence damage (holes in the ground opening up) over the longer term.

But the good news is that the surface goes relatively intact, meaning an easier rehabilitation process once the mining operation is complete.

Surface mines

This is generally seen as the most favourable form of mine development, as it’s usually used for resources that are generally pretty close to the surface (and therefore cheaper to mine).

The most recognisable form of surface mining is the open pit, which is what a lot of miners aim for.

It is quite literally about digging a hole in the ground which, comparatively, doesn’t cost a lot of money.

Topsoil is removed, and put aside for filling in the hole once the mining operation is finished. Then, slowly, a put is dug and a sloping road is created for transporting the unprocessed minerals out of the pit.

Examples of an open-pit mine include the Kalgoorlie super-pit — although this is on the upper range of size.

The Kalgoorlie super-pit
The Kalgoorlie super-pit

Miners will often use explosives to clear out large sections of the pit at a time — with the ore then taken to surface and processed.

The leftover ore, referred to as talings, is then set aside in a tailings dam and covered by clay and topsoil.

Because it is quite literally a giant hole in the ground, mine rehabilitation can be a challenge — but a good operator will be able to rehabilitate the area with the topsoil collected during the initial digging.

In-situ mining

While open pit and underground mining are the most common forms of mining and the types ASX investors would be most familiar with, they’re not the only forms.

For example, in-situ mining involves the literal leeching of the target deposit in the ground and producing it much more like a hydraulic fracturing operation than a traditional mining operation.

It involves the drilling of dozens (or hundreds depending on the size of the deposit) of wells, to both inject acid into the deposit and draw the dissolved oxides to the surface.

Here’s a handy video:


The good news for operators is that in-situ mining can be several times cheaper [PDF] than other types of mining given the right conditions.

While one of the major advantages of in-situ mining is an easier rehabilitation process, environmental issues can occur as a result of literally injecting acid into the ground.

Production wells are completed with several barriers between them and groundwater sources, but there’s always the potential for the acid to leach into other layers.

Choosing which method to go with

Choosing which mining development to go with depends on a litany of factors including:

  • Access to the deposit
  • Surrounding environment
  • Deposit size and depth
  • Surrounding geology
  • Commodity prices
  • Equipment availability

While there are a variety of factors at play, there are general rules of thumb adhered to by miners.

Shallow and larger deposits are more often than not developed via an open-pit method.

Deeper deposits can be accessed via an underground operation.

There are only certain circumstances where you’d use in-situ mining, such as on uranium deposits.

Miners may also opt for a mixed development model — where an initial deposit would be developed using an open-pit method and then deeper later on.

When weighing up development options for a promising deposit, miners will go through the various options in consultation with geologists and mining consultants — with reams of paperwork and research taking place before a development option is reached.

Because committing to one form of mining and then changing your mind half-way through is a costly and fruitless exercise.