This paper presents a practical model to calculate the optimal
replacement time (ORT) of drilling rigs used in underground
mining. As a case study, cost data for drilling rig were collected
over four years from a Swedish mine. The cost data include
acquisition, operating, maintenance and downtime costs when
using a redundant rig. A discount rate is used to determine the
value of these costs over time. The study develops an optimisation
model to identify the ORT of a mining drilling rig which
represents a key performance indicator. It uses an artificial
neural network (ANN) technique to identify the effect of the
various cost factors on the ORT. The absolute ORT in the case
study is 87 months, and there is an optimal replacement range
within which the company can replace the rig. The results also
show that the redundant rig cost has the largest impact on the
ORT followed by acquisition, maintenance and operating costs.
Regression analysis shows a linear relationship between the cost
factors and the ORT of the drilling rig.