Natural Resources Research, Vol. 18, No.

1, March 2009 ( 2009)

DOI: 10.1007/s11053-009-9088-y

A Test and Re-Estimation of Taylors Empirical

CapacityReserve Relationship
Keith R. Long1,2
Received 21 April 2008; accepted 14 January 2009
Published online: 30 January 2009

In 1977, Taylor proposed a constant elasticity model relating capacity choice in mines to
reserves. A test of this model using a very large (n = 1,195) dataset confirms its validity but
obtains significantly different estimated values for the model coefficients. Capacity is
somewhat inelastic with respect to reserves, with an elasticity of 0.65 estimated for open-pit
plus block-cave underground mines and 0.56 for all other underground mines. These new
estimates should be useful for capacity determinations as scoping studies and as a starting
point for feasibility studies. The results are robust over a wide range of deposit types, deposit
sizes, and time, consistent with physical constraints on mine capacity that are largely independent of technology.
KEY WORDS: Mine capacity, mine planning, feasibility studies, scoping studies, Taylors rule,
Hotellings rule.

0.77 among his models using a sample of 15 mines.

Long and Singer (2001) tested a sample of 45 openpit copper mines with a result not significantly different, at a 5% level, from Taylors three-quarter
power hypothesis.
The U.S. Geological Survey is developing
up-dated mining and mineral processing cost models
according to the general pattern of Camm (1991).
These cost models use Taylors Rule to estimate
mine operating rate from a given reserve estimate. It
was thought prudent, some 20 years hence, to
re-estimate Taylors Rule using a much larger sample covering the full range of mining methods used
in modern mining. Taylor (1986) noted several reasons why certain underground mines might have a
capacity proportional to significantly less than threequarters power of reserve tonnage. These reasons
have to do with capacity constraints imposed by
limited access and the need to keep a large proportion of reserves in place during operations to
maintain roof support. Thus, an examination of the
capacityreserve tonnage relationship for underground mines is likewise long overdue.

INTRODUCTION
Taylor (1977, 1986) introduced an empirical
relationship between mine capacity and reserves,
informally known as Taylors Rule, as an aid to
determining installed capacity in mine planning.
Based on his experience in mine design, Taylor
suggested that installed mine capacity is roughly
proportional to the three-quarters power of estimated tonnage of reserves. He later confirmed
this with a sample of nearly 30 mining projects.
McSpadden and Schaap (1984) obtained the same
result with a sample of 45 open-pit copper mines.
Lasserre (1985), in an econometric study of some
North American metal mines, likewise found that
mine capacity increases proportionately less than
reserves. Lasserres (1985) estimated elasticities for
capacity with respect to reserves varied from 0.58 to
1

U.S. Geological Survey, 520 N Park Ave, Ste 355, Tucson AZ

85719, USA.
2
To whom correspondence should be addressed; e-mail: klong@
usgs.gov

57
1520-7439/09/0300-0057/0 2009 International Association for Mathematical Geology

Long

58
DATA
Data on reserves, capacity, mining method, and
related information were obtained from a proprietary database, the Mining Operations Report,
developed by Geomineinfo of Tucson, Arizona. The
database contains comprehensive technical and historical information on more than 800 operating or
recently operating mines, principally in Americas
and Australia. A total of 539 mines were used in this
study, of which 342 are open-pit and 197 are
underground mines. The distribution of these mines
according to primary commodity is shown in
Table 1. Most of the mines (59%) are gold mines,
followed by copper (23%) and zinc-lead (12%).
Many of the mines in the database have
undertaken at least one significant expansion in
capacity during the life of the mine. On the
assumption that any expansion in capacity must
correspond to an expansion in reserves, individual
data points for this study were defined as a capacity
and its corresponding reserve for a newly opened
mine or an expansion thereof. The total number of
data points used in this study, over 1,200, thus
exceeds the number of mines from which data were
obtained. Generally, the reserve figure used was the
latest reported prior to completion of new capacity
or an expansion. In a very few cases, the appropriate
reserve estimate was reported well before or sometime after new capacity was installed.
A few open-pit gold and copper mines treated
higher and lower-grade ores, or oxide and sulfide
ores, by different methods in different facilities and
reported separate reserves for each ore type. These
mines, totaling 29, were treated as two mines in
one, thus increasing the number of open-pit
mines used from 342 to 375. Table 2 shows the
distribution of the total number of mines used in this
study by mining method and number of capacity
expansions.
These methods of handling the data may be
illustrated by the Sleeper gold mine in the Awakening Mining District, Humboldt County, Nevada,
USA. The mine was opened in 1986 as an open-pit,
heap-leach operation with an initial processing
capacity of 1,800 metric tons per day. The heapleach operation was subsequently expanded three
times to an ultimate capacity of 14,900 metric tons
per day. A vat-leach mill was installed in 1987 to
treat higher-grade oxide ores with an initial capacity
of 900 metric tons per day. The mill was subsequently expanded five times, reaching 2,500 metric

Table 1. Number of Mines Used in This Study Listed According

to Mining Method and Primary Commodity
Primary Commodity
Copper
Gold
Molybdenum
Nickel
Niobium
Platinum group elements
Silver
Tin
Zinc and lead
Total

Open Pit

Underground

Total

94
226
5
1
0
1
7
0
8
342

31
93
3
3
1
2
9
1
54
197

125
319
8
4
1
3
16
1
62
539

Four of the underground mines are block-caving operations

which, as explained in the text, were included in the open pitmodel.

Table 2. Number of Mines Used in this Study Undergoing One or

More Expansions in Capacity to Date
Expansions Number
None
1
2
3
4
5
6
7
8
9
10

Open Pit

Underground

Total

157
93
47
31
14
12
9
4
2
3
3

83
41
27
17
12
3
3
3
2
2
0

240
134
74
48
26
15
12
7
4
5
3

tons per day in 1993. From this single mine, 10 data

points can be obtained, six for the mill and four for
the heap-leach operations, assuming no missing or
problematic data.

MODEL ESTIMATION
Taylors original model (Taylor, 1986, Eq. 3)
Tonnes per day 0:014
Expected tonnes)0:75
can be re-written as
C bT a

where C is capacity in metric tons per day, T is

reserve tonnage in metric tons, and a and b are
coefficients to be estimated. Note that the point
elasticity of this function is a, thus the elasticity of
capacity (proportionate change in capacity with
respect to a given change in reserves) does not vary

Re-Estimation of Taylors Rule

59
Table 3. Model Estimation Results

Model

Observations

R2

Coefcient

Open pit + block cave

796

0.870

Underground

400

0.821

with the magnitude of reserves. Known as constant

elasticity of scale, this is a fairly restrictive assumption about the technology of mining.
For estimation the model, Eq. 1 was transformed by taking natural logarithms of each side of
the equation to:
ln C ln b a ln T

a
b
a
b

Estimate

0.649
2.093
0.563
1.214

Lower

Upper

0.631
2.392
0.538
1.603

0.666
1.794
0.589
0.824

Table 4. Tests of Significance of Model Results

Model
Open pit +
block cave
Underground

Observations

F
Coefcient Standard
t
Ratio
Error
Ratio

796

5334

400

1824

so that ordinary least-squares methods for estimating the coefficients a and b could be used. The large
size of the database led to a prolonged effort in
outlier detection and exploratory analysis. Outliers
were investigated and found to comprise a handful
of data errors, some reporting problems, and a few
mines with unique circumstances. An example of the
latter was the Morenci copper mine in Arizona, an
open-pit mine-for-leach operation where about 93%
of the material mined in 2006 was treated by
leaching of run-of-mine or crushed ore. The large
capacity of this mine, wholly out of proportion with
its reserves, is thought to reflect the unique mining
and processing method used and a conservative
approach to reserve estimation. Most importantly, it
was found that underground mines, with the exception of block-cave mines, form a distinct group
which was estimated separately from open-pit plus
block-cave mines. Estimation results are shown in
Table 3.
All of the coefficients are highly significant
(Table 4) and residuals are normally distributed with
no apparent inhomogeneity of variance. Note that
the coefficient of greatest interest, a, in each model, is
significantly less than a = 0.75 value originally estimated by Taylor (1977). As expected, the value of a
for the underground model is significantly less than
that for the open-pit plus block-cave model. These
coefficients are <1, hence the capacityreserve relationship is relatively inelastic, or in other words,
there are decreasing returns to capacity with
increasing reserves. The good fit of the equation
suggests that the restrictive technological assumptions of the model, constant elasticity of scale, are not

95% Condence Interval

a
b
a
b

0.009
0.152
0.013
0.198

73.03
13.75
42.71
6.12

at great deviance from reality. These models are

valid for estimation over the range of the data for the
independent variable, reserve tonnage, which was
from 82,000 to 2,584,000,000 metric tons of reserves.

MODEL EVALUATION
The models are subject to criticism in at least
two ways: (1) a possible lack of homogeneity due to
the mixture of many types of mineral deposits, and
(2) the assumption of constant elasticity. The two
objections are not unrelated. The data include mines
developed from 1908 to 2007, thus there might be
technological changes over time that result in technology-dependent values for the model coefficients.
Unique geologic characteristics of certain deposit
types may require unique technological solutions
that could also affect the value of the estimated
model coefficients. If these considerations are significant, subdividing the data by deposit type and
other criteria might result in better models.
The data for the open-pit plus block-cave and
underground models were first divided between
newly developed mines and expansions of mines.
The object was to test for significant differences in
the estimated parameter a between the open-pit plus
block-cave and underground mine models and
four new models derived by separating new and
expanded mines. No significant differences at the
5% level were found (Table 5). The full models are
applicable to new as well as expanded mines.

Long

60
Table 5. Test of Ho : a^ am Against the Alternative Ho : a^ 6 am ,
where ^
a is the Estimate of the Parameter a for a Subset of New or
Expanded Mines and am is the Estimate of the Parameter a for the
Full Models; am Equals 0.649 for the Open-Pit Plus Block-Cave
and 0.563 for Underground Models
Model
Open pit + block cavenew mines
Open pit + block cave expansions
Undergroundnew mines
Undergroundexpansions

Observations

t Ratio

338
459
157
243

0.624
0.641
0.556
0.551

1.71
0.71
0.36
0.72

For a t\ j1:96j, we accept the null hypothesis at the 5% level.

Table 6. Test of Ho : a^ am Against the Alternative Ho : ^a 6 am ,
where ^
a is the Estimate of the Parameter a for a Subset of Mines
Working a Particular Deposit Type and am is the Estimate of the
Parameter a for the Full Models; am Equals 0.649 for the Open-Pit
Plus Block-Cave and 0.563 for Underground Models
Model
Open pit + block caveporphyry
Open pit + block caveepithermal
Open pit + block cavelow-sulfide
Auquartz
Undergroundvolcanogenic
massive sulfide
Undergroundlow-sulfide
Auquartz
Undergroundepithermal

Observations

t Ratio

291
331
83

0.668
0.636
0.656

1.13
0.65
0.23

87

0.564

0.03

132

0.506

1.97

31

0.601

0.89

For a t\ j1:96j, we accept the null hypothesis at the 5% level.

To test for differences between mineral deposit

types, data for some of the better represented mineral deposit types were extracted and tested independently. From the open-pit plus block-cave
model, three new models were derived: (1) porphyry
deposits, including porphyry copper, porphyry
molybdenum, and porphyry gold deposits; (2) epithermal gold deposits, including the related hot
spring gold, gold telluride, distal-disseminated gold,
and detachment-fault-related gold deposits; and
(3) low-sulfide goldquartz veins. From the underground model, three additional models were
derived: (1) volcanogenic massive sulfide deposits;
(2) low-sulfide goldquartz veins; and (3) epithermal
gold deposits. Deposits were classified according the
system of deposit models used by the U.S. Geological Survey (Cox and Singer, 1986). Table 6 gives the
results of testing the estimated parameter a for the
six new models against that estimated for the two
original models. A significant difference, at the 5%
level, was found only for the underground lowsulfide goldquartz vein model. These are narrow
veins that pinch-and-swell, which may limit capacity

Table 7. Test of Ho : a^ am Against the Alternative Ho : ^a 6 am ,

where ^a is the Estimate of the Parameter a for a Particular
Quartile of the Full Model and am is the Estimate of the
Parameter a for the Full Models; am Equals 0.649 for the Open-Pit
Plus Block-Cave and 0.563 for Underground Models
Model
Open pit + block cavefirst quartile
Open pit + block cavesecond quartile
Open pit + block cavethird quartile
Open pit + block cavefourth quartile
Undergroundfirst quartile
Undergroundsecond quartile
Undergroundthird quartile
Undergroundfourth quartile

t Ratio

0.547
0.793
0.551
0.677
0.484
0.476
0.304
0.571

2.19
1.68
1.06
0.70
1.30
0.70
1.94
0.14

For a t\ j1:96j, we accept the null hypothesis at the 5% level.

Table 8. Test of Ho : a^ am Against the Alternative Ho : ^a 6 am ,

where ^a is the Estimate of the Parameter a for a Particular Time
Period Within the Full Model and am is the Estimate of the
Parameter a for the Full Models; am Equals 0.649 for the Open-Pit
Plus Block-Cave and 0.563 for Underground Models
Model
Open pit + block cave19001969
Open pit + block cave19701979
Open pit + block cave19801989
Open pit + block cave19901999
Open pit + block cave20002007
Underground19001969
Underground19701979
Underground19801989
Underground19901999
Underground20002007

Observations

t Ratio

51
63
198
241
59
51
45
87
81
28

0.583
0.640
0.658
0.612
0.637
0.584
0.565
0.530
0.536
0.518

1.91
0.35
0.48
2.02
0.33
0.80
0.06
1.00
0.86
1.00

For a t\ j1:96j, we accept the null hypothesis at the 5% level.

relative to other deposit types, possibly explaining

the significantly lower estimate for a of 0.506.
The assumption of constant elasticity was tested
by dividing the data into quartiles based on the
independent variable, reserves. Eight new models
were generated in this fashion, representing the
quartiles for the open-pit plus block-cave and
underground models. A significant difference at the
5% level was only found for the lowest quartile
(smallest reserves) of the open-pit plus block-cave
model (t = 2.19; Table 7). Changes in the parameter
a over time were evaluated by dividing the data into
five time intervals, 19001969, 19701979, 1980
1989, 19901999, and 20002007. Ten models were
generated by this subdivision of the open-pit plus
block-cave and underground models, none of which
generated a significantly different value for a except
the period 19901999 for the open-pit plus blockcave model (t = 2.02; Table 8). Taken together, this

Re-Estimation of Taylors Rule

61

is fairly good evidence for the robustness of the

open-pit plus block-cave and underground models,
despite the assumption of constant elasticity and
mixture of deposit types.

Table 9. Extended Model Estimation Results

Model

Observations R2 Coefcient Estimate

Epithermal
AuX1, X2, X3

162

0.824

ALTERNATIVE MODELS

Epithermal
AuX1, X2

162

0.815

Equation 1 can be extended to several variables

as follows:

Epithermal
AuX1
Porphyry
CuX1, X2, X3

162

0.777

53

0.849

Porphyry
CuX1, X2

53

0.848

Porphyry
CuX1
Carlin
AuX1, X2, X3

53

0.795

79

0.726

Carlin AuX1, X2

79

0.723

Carlin AuX1

80

0.679

Cb

N
X

Xnan

n1

where Xn is an explanatory variable, such as reserves

or grade. Taking the natural logarithm of both sides
of Eq. 3 yields
ln C ln b

N
X

an ln Xn

n1

which can be estimated by ordinary least-squares

methods. Lasserre (1985) found that, aside from
reserve tonnage, reserve grade, cost of capital, and
cost of labor, were significant determinants of the
demand for capital for a mine. In terms of capacity,
if two deposits with the same reserve tonnage were
of a different grade, a higher capacity may be justified for the lower-grade deposit to obtain an annual
metal output comparable to that of the higher-grade
deposit. Everything else held equal, higher capital
costs might result in a lower capacity than otherwise
would be chosen. Higher labor costs should, as
Lasserre (1985) observed, increase demand for
labor-saving capital, indirectly increasing capital
costs. Given that relative labor and capital costs
affect the composition of capital, and not capacity,
an extended model composed of reserve tonnage,
grade, and a capital cost index was tested.
The data show multiple populations in terms of
grade. Gold deposits are of very low grade, conventionally measured in grams per metric ton (parts
per million), whereas base metal grades are measured in percent (parts per hundred). Hence, the
extended model was tested according to deposit type
to ensure homogeneity in grade. The mines in the
data date from 1908, well before the start of any
capital cost index known to the author. To test the
extended model, the U.S. Bureau of Labor Statistics
Index 112, for construction machinery and equipment, was used as a proxy for capital costs because it
is available for the period 1965 to the present,

a1
a2
a3
b
a1
a2
b
a1
b
a1
a2
a3
b
a1
a2
b
a1
b
a1
a2
a3
b
a1
a2
b
a1
b

0.544
0.342
0.725
3.651
0.563
0.352
0.484
0.649
2.021
0.572
0.560
0.070
1.248
0.586
0.576
1.204
0.650
2.046
0.565
0.315
0.207
1.545
0.578
0.345
0.755
0.573
0.983

t
18.593
5.736
2.841
3.014
19.302
5.776
0.998
23.589
4.543
11.486
3.960
0.541
1.549
13.615
4.181
1.513
14.214
2.337
12.497
2.971
0.838
1.312
13.612
3.463
1.073
12.853
1.343

All models are of open-pit mines in the United States. The

extended model includes the explanatory variables X1, reserve
tonnage, X2, reserve grade, and X3, a capital cost index (Bureau of
Labor Statistics Index 112).

covering most of the mines in the data. To avoid

issues of differing capital costs between countries,
only US mines were used.
Three extended models were tested (Table 9),
all open-pit mines, corresponding to three deposit
types, carbonate-hosted gold (Carlin-type), epithermal gold, and porphyry copper. All three models
show an improvement in R2 of about 0.040.05 by
adding grade to reserve tonnage as an explanatory
variable (Table 9). The capital cost index had
explanatory power only in the case of epithermal
deposits, adding 0.009 to R2. Clearly, reserve tonnage is the most significant explanatory variable.
Capital costs play little or no role in determining
capacity in these models. Whether it is worth adding
grade is a practical matter. For the original purpose
of Taylors Rule, a rough capacity estimate to serve
as a starting point for a feasibility study, the original
open-pit plus block-cave and underground models
should be sufficient. At the U.S. Geological Survey,
we will likely use deposit-type specific models that

62
incorporate at least grade to simulate the cost distribution of known and undiscovered deposits.

DISCUSSION
There have been many attempts to derive
optimal mine capacity by various methods, including
modifications to the Hotelling (1931) model of
extraction from a finite resource (Cairns, 2001), net
present value criteria (Smith, 1997), and marginal
analysis (Sabour, 2002). None of the models obtains
results consistent with actual practice as empirically
observed in studies such as this one. All of the
proposed methods tend to specify optimal output
rates far in excess of observed capacity choices. This
is not surprising in that none of these methods
impose restrictions based on technology, which
suggest that there could be diseconomies to scale if
too large a capacity is selected.
The history of the mines examined for this study
show that, for sufficiently large deposits, reserves are
not fully delineated prior to commencement of
production, and that these mines often undergo
several phases of capacity expansion as reserves are
expanded over time. This phenomenon is consistent
with the hypothesis of technological and capital cost
constraints that limit actual capacity to levels much
lower than otherwise optimal. For a very large
deposit, fully exploring that deposit and developing
a mine to match, prior to realizing any revenue, is
probably too costly. Capacity expansions may also
be justified by an increase in metal prices or a
decline in costs such that lower-grade ores are added
to reserves. Cost-saving technical innovation is a
significant long-run factor in adding to reserves
(Long, in press). Capacity may also be expanded to
maintain a given metal output if grade is declining.
This study does not isolate the relative contributions
of these various factors, but does establish that
reserve additions and capacity expansion are common features of metal mining.
This study does show that Taylors empirical
relationship holds across time, deposit type, and
deposit size, with little or no significant variation in
the estimated coefficients. This remarkable fact
requires explanation. Taylor (1986) opined that
physical limitations on working a deposit are at
work. In the case of an open-pit mine, access can
only be from one direction, from the surface down,
and the amount of ore extracted from a pit is limited
by geometry of the ore body and other factors that

Long
affect pit design, such as rock strength. These factors
work together to require significant mining of rock
not of ore grade in order to access the ore. In the
case of an underground mine, with the significant
exception of block-cave mines, a large portion of the
ore reserve must be left in place during the main
phase of mining for roof support, and if ever
recovered, is removed only in the last stages of
mining. The depth and geometry of the ore put
limits on the number of working faces that can be
maintained at a time as well.
There may be a myriad of geotechnical factors
at work here, which bear further study. Comparison
with a better understood deposit typepetroleumis useful to understand this phenomenon.
Adelman (1993) and Cairns and Davis (2001) have
demonstrated that petroleum reservoir pressure
places practical limits on extraction rate or capacity.
Pressure declines as production advances, hence
individual well production declines over time,
regardless of any economic factors. Thus reservoir
pressure, a physical rather than an economic variable, is the limiting factor on production. A Taylors
rule for initial oil well capacity would have to
account for reservoir pressure as well as initial
reserves. We can infer from the results of this study
that physical factors governing access to ore limit
capacity for metal mines as well.
As Cairns and Davis (2001) show in the case of
petroleum, these physical limitations are the
scarce factor, not the size of the resource being
extracted. Hotelling (1931) proposed that the equilibrium price of an exhaustible resource, net of
marginal extraction costs, would rise at the rate of
interest. Such a phenomenon has not been empirically observed nor does it figure into the conscious
decision making of mine planners. Hotellings model
has a number of restrictive assumptions that, when
relaxed, often result in models that better fit with
observed reality. As Cairns and Davis (2001) show, a
physical constraint on production capacity substitutes a different kind of scarcity, reservoir pressure,
that completely changes the dynamics of pricing
mineral resources. Consistent with Adelman (1993),
Cairns and Davis (2001) show that the value of
petroleum reserves is only about half that predicted
by Hotellings model. This study shows that metal
mine capacity will increase proportionately less than
reserves, due to physical limitations on mine
capacity. Under Hotellings model, capacity would
ultimately be governed by the interest rate, there
being no physical limitations at play. Thus, we would

Re-Estimation of Taylors Rule

expect the value of metal reserves to be less than
that predicted by Hotellings model as well.
The original data collection for this study did not
consider measures of physical limitations to mining.
For the future, such data will be collected and the
overall database extended to include unrepresented
and under-represented deposit types, particularly
nonmetallic deposits. Aside from developing useful
predictive tools, these efforts should shed more light
on the physical limitations to mining capacity.

CONCLUSIONS
Taylors Rule relating capacity to estimated
reserves has been re-estimated using a large sample
of mines representing many countries with freemarket economies and several mineral commodities.
The empirical data were found to divide into two
groups, open-pit plus block-cave mines versus all
other underground mines, which were estimated
separately. Taylors three-quarter percent rule was
found to be too large in each instance, the proportional coefficient being 0.65 for open-pit plus blockcave mines and 0.56 for all other underground
mines. The good fit of the data to the model, and
several tests of alternative models, supports the
model assumption of constant elasticity of scale,
over the range of the data.
These new estimates, based on a large dataset
including underground mines, should be more reliable and have wider applicability than previous
estimates. For feasibility studies, the appropriate
model can be used to estimate an initial capacity
from which an iterative search for an optimal
capacity may begin. For scoping studies and other
rough calculations of probable mining costs, the
appropriate model can be used outright to estimate
capacity. The 95% confidence intervals estimated
give a useful range in capacity based on past and
current mining practice.
The constancy of the coefficient a over a range
of commodities, deposit types, deposit sizes, and
time, are consistent with Taylors intuition that
physical factors limit mine capacity. Put simply,

63
mine capacity can only grow about half to two-thirds
of the rate of increase in reserves, which is significantly less than what mine planners, using net
present value calculations, would likely choose. This
observed limitation on capacity renders Hotellings
rule irrelevant for mineral resources, just as it does
for petroleum. A better understanding of these
physical limitations to mine capacity will help
explain observed capacity choices, mineral pricing,
and the valuation of mineral deposits and mines.

REFERENCES
Adelman, M. A., 1993, The economics of petroleum supply;
Papers by M.A. Adelman, 19621993: MIT Press, Cambridge,
Massachusetts.
Cairns, R. D., 2001, Capacity choice and the theory of the mine:
Environ. Resour. Econ., v. 18, p. 129148. doi:10.1023/
A:1011114400536.
Cairns, R. D., and Davis, G. A., 2001, Adelmans Rule and the
petroleum firm: Energy J., v. 22, no. 3, p. 3154.
Camm, T. W., 1991, Simplified cost models for prefeasibility
mineral evaluations: U.S. Bureau of Mines Information
Circular 9298, 35 p.
Cox, D. P., and Singer, D. A., 1986, Mineral deposit models: U.S.
Geological Survey Bulletin 1693, 379 p.
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Errata for Long, Keith R., 2009, A test and re-estimation of Taylors empirical capacity-reserve
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Table 3. Model estimation results.

Model

R2

Observations

Open Pit + Block Cave

Underground

796

Coefficient

0.870

400

0.821

Estimate

95% Confidence
Interval
Lower

Upper

0.649

0.631

0.666

0.123

0.092

0.166

0.563

0.538

0.589

0.297

0.201

0.439

Table 4. Tests of significance of model results.

Model

Observations

F
Ratio

Coefficient

Standard
error

t
ratio

Open Pit + Block Cave

796

5334

0.009

73.03

ln b

0.152

-13.75

0.013

42.71

ln b

0.198

-6.12

Underground

400

1824

Table 9. Extended model estimation results. All models are of open-pit mines in the United
States. The extended model includes the explanatory variables X 1 , reserve tonnage, X 2 , reserve
grade, and X 3 , a capital cost index (Bureau of Labor Statistics Index 112).
Model
Epithermal Au X1, X2, X3

Observations

R2

Coefficient

Estimate

162

0.824

a1

0.544

18.593

a2

-0.342

-5.736

a3

0.725

2.841

ln b

-3.651

-3.014

Epithermal Au X1, X2

Epithermal Au X1
Porphyry Cu X1, X2, X3

Porphyry Cu X1, X2

Porphyry Cu X1
Carlin Au X1, X2, X3

Carlin Au X1, X2

Carlin Au X1

162

0.815

162

0.777

53

0.849

53

0.848

53

0.795

79

0.726

79

0.723

80

0.679

Equation 3 should read:

N

C b X nan
n 1

a1

0.563

19.302

a2

-0.352

-5.776

ln b

-0.484

-0.998

a1

0.649

23.589

ln b

-2.021

-4.543

a1

0.572

11.486

a2

-0.560

-3.960

a3

0.070

0.541

ln b

-1.248

-1.549

a1

0.586

13.615

a2

-0.576

-4.181

ln b

-1.204

-1.513

a1

0.650

14.214

ln b

-2.046

-2.337

a1

0.565

12.497

a2

-0.315

-2.971

a3

0.207

0.838

ln b

-1.545

-1.312

a1

0.578

13.612

a2

-0.345

-3.463

ln b

-0.755

-1.073

a1

0.573

12.853

ln b

-0.983

-1.343