A drilling contractor's per-meter rate is a selling number. The actual cost per meter is the management number: what it takes to produce each hole once rig time, bit and steel consumption, fuel, labor, and standby are all in the same calculation. On most projects those two figures start close and drift apart as the job runs.
The drift matters because it determines whether a contract is profitable, which projects to price more carefully at the next tender, and when a formation change or a high-standby week has crossed from a variance into a structural problem.
The equation that makes that visible is simple. Each term in it, measured from shift data rather than estimated from last year's average, produces a unit cost the contractor can read against their quoted rate at the end of any week.
The equation: Drilling cost per meter
CPM = (R x H + B) / MWhere:
CPM- cost per meter drilled ($/m)R- all-in rig hourly rate covering fuel, maintenance, depreciation, and operator ($/h)H- productive shift hours on-rock (h)B- bit and steel consumable cost for the shift ($)M- meters drilled in the shift (m)
Valid for: Applies to a single rig over a single shift on uniform ground; does not capture standby cost unless H includes non-productive hours, and does not separate fixed from variable cost components across a project.
Derived from: SME Mining Engineering Handbook, 3rd edition, 4.9.4 Drill and Blast, p. 283. The handbook presents a worked cost decomposition for drill-and-blast operations including explosive consumption, daily drilling requirements, drill use, and worker requirements; this expression consolidates that shift-level cost structure into a single per-meter formula.
Worked example
A 15.24-cm rotary blast-hole drill on a 12.2-m surface bench, using the parameters from SME Mining Engineering Handbook, 3rd edition, 4.9.4 Drill and Blast, p. 283: penetration rate 1.10 m/min, 8.56 productive drilling hours per shift, 565 m drilled per shift, and bit consumption of 2,500 m per bit. Assume an all-in rig rate of $350/h and a replacement bit cost of $800 each for this example. Rod steel wear is excluded as minor on this single-shift surface application.
| Step | Calculation | Result |
|---|---|---|
| Shift rig cost | $350/h x 8.56 h | $2,996 |
| Bits consumed this shift | 565 m / 2,500 m per bit | 0.226 bits |
| Bit cost for the shift | 0.226 x $800 per bit | $181 |
| Total shift cost | $2,996 + $181 | $3,177 |
| Cost per meter | $3,177 / 565 m | $5.62/m |
Answer: At these inputs, each meter of hole costs $5.62 to produce. The SME handbook's reference rate for contract drilling on a comparable 12.2-m bench in 2006 was $6.23/m (SME Mining Engineering Handbook, 3rd edition, 7.3.7 Description and Control of Blast Effects, p. 456). The $0.61/m gap is 10.8% above the bare production cost, which is where contractor overhead and margin typically live.
Drilling cost per foot
On a US job quoted in feet, it is the same equation with feet drilled in the denominator:
CPF = (R x H + B) / FF is the feet drilled in the shift; R, H and B are unchanged. One meter is 3.2808 ft, so a cost per meter divided by 3.2808 is the cost per foot. On the worked example above, 565 m is 1,853.7 ft, and $3,177 / 1,853.7 ft = $1.71 per foot, the same answer as $5.62/m / 3.2808.
What the Rig Hourly Rate Actually Covers
The rig rate is not a fuel price. It is the total cost of keeping that machine running per hour, whether it is on-rock, moving to a new collar, or waiting on a blast clearance. The SME handbook's cost structure for direct drilling expenses (SME Mining Engineering Handbook, 3rd edition, 7.3.7 Description and Control of Blast Effects, p. 456) lists the components: amortization or lease of the drill rig, fuel, operator labor, lubrication, maintenance, and consumables including drill steels and bits.
Contractors typically quote a single rate that bundles these components, calculated on an assumed utilization of 8 to 10 productive hours per shift. When utilization drops because of a weather hold, a blast exclusion zone, or a collar-to-collar move that runs long, the same hourly cost is spread over fewer meters. The quoted rate stays fixed. The real cost per meter rises.
The room-and-pillar direct operating cost data in the SME handbook (SME Mining Engineering Handbook, 3rd edition, 13.1 References, p. 1337) breaks the cost structure down by activity in 2008 dollars: drill and blast labor at $0.47 per metric ton, diesel fuel at $1.60 per metric ton, and drill steel and bits at $0.26 per metric ton. Those are separate line items, not a single bundle. Tracking them separately is what allows meaningful variance analysis once drilling starts.
Bits and Steel: The Cost That Moves With Every Meter
Bit life is the most variable single input in the equation. The SME handbook's surface blast-hole example (4.9.4 Drill and Blast, p. 283) uses a consumption rate of 2,500 m per bit for the described conditions on a 15.24-cm diameter hole. That figure does not transfer to a different formation. Harder, more abrasive ground cuts bit life, and it does so non-linearly: the first sign is slower penetration, not a sudden change in bit condition.
When bit life drops but penetration rate holds, the shift drills fewer meters and spends more per meter on bits. Both terms move in the wrong direction simultaneously. Tracking bit consumption in meters per bit, not bits per month, is what separates a cost trend from a budget surprise at invoice.
Rod and shank steel wear more slowly than bits on surface rotary blast-hole applications, but underground development drilling carries more steel cost per meter because rod strings are longer and torque loads are higher. The physical development parameter data in the SME handbook (12.2.3.5 Selecting a Rock-Bolting Machine, p. 1153) shows 163 m of face drilling and 31.2 m of rock-bolt drilling per round in a 5.0-m-wide, 4.5-m-high heading. At those volumes, steel wear per advance cycle justifies its own line on the daily cost sheet.
Fuel and Labor: Where the Hours Live
The SME 4.9.4 example (4.9.4 Drill and Blast, p. 283) shows productive drill time of 8.56 h per shift for the rig itself, but total worker time of 9.96 h per shift once drill relocation and setup are included, at 2 minutes per hole across 42 holes per shift. Worker efficiency at 83% lifts the labor requirement to 12.0 hours per day.
Fuel cost tracks engine hours, not meters. When the operator moves the rig between collars, the engine runs but the bit is not advancing. Those hours appear in fuel consumption and operator wages without contributing to the denominator of the equation.
The 2009 supply price benchmark in the SME underground cost model (4.8.6.1 Model Construction, p. 271) puts diesel at $0.719 per litre. Multiply that by your engine's consumption rate from the manufacturer's specification, and fuel is a cost you can calculate from the engine hour meter rather than estimate as a fraction of the all-in rate.
Standby: The Hours That Cost Full Rate and Produce Nothing
Standby is the largest single contributor to drift between the quoted rate and the real cost per meter. A quoted contract rate is typically built on a target utilization. When the actual utilization falls below that target because of blast holds, equipment breakdown, or operational delays, the contractor's fixed costs continue regardless.
30 CFR Part 56 requires surface mines to clear exclusion zones during blasting; the relevant provisions are at ecfr.gov. A blast hold is not a contractor failure. It is a scheduled interruption, and it should appear in the contract as a separate standby rate rather than being absorbed into the per-meter price. When standby is folded into the per-meter rate, a high-standby project looks cheaper at tender and more expensive on the final invoice.
The arithmetic is direct. The worked example shows the shift producing 565 m in 8.56 drilling hours with a total shift cost of $3,177. If the rig sits idle for one additional hour due to a blast hold, the revised cost becomes ($350/h x 9.56 h + $181) / 565 m = $3,527 / 565 m = $6.24/m. That single standby hour pushes the unit cost from $5.62/m to $6.24/m, a rise of $0.62/m across every meter produced. The $350/h rig rate divided by 565 shift meters explains that $0.62 directly: standby cost per meter equals the hourly rig rate divided by total shift meterage.
Why the Quoted Price and Real Cost Drift Apart
The quoted price is built from an assumed best case: formation near the design basis, utilization near the design target, bit life near the design rate, and delays limited to standard mobilization. The real cost reflects what actually happened.
Three mechanisms drive the gap wider over a project:
Formation variability. Harder ground slows penetration and shortens bit life, raising both the rig hours term and the bit cost term while reducing meters drilled per shift. The formation does not need to change dramatically to move the cost materially.
Utilization shortfall. Any hours added to the rig rate calculation that do not add to meters drilled raise cost per meter without changing the denominator. Frequent moves between short-hole patterns, long blast clearances, and unplanned maintenance all accumulate this way.
Consumable price movement. A contract priced 18 months ago at a specific bit cost per unit may be underpriced today if steel commodity prices have moved. Contracts that set a fixed per-meter rate without a consumable escalation clause transfer that risk entirely to the contractor.
The drill productivity calculator lets you run your own rig hours, penetration rate, and bit life against multiple formation scenarios to see where unit cost shifts on your project.
Closing the Gap: What to Measure
The equation tightens the cost estimate only if its inputs come from shift records rather than budget assumptions. Three data points matter most.
Engine hours versus on-rock hours. The rig hour meter counts everything. The drill log records the time the bit was advancing. The difference is standby and rig moves. Tracking both makes the utilization loss visible rather than averaged away.
Meters per bit by formation. A single project average hides the variance. A pit with a hard dyke through the ore zone will have a different bit consumption rate than the surrounding waste. Budget each zone separately and reconcile actual consumption monthly against the drill log.
Shift meters versus scheduled meters. If the daily schedule calls for 565 m and the shift produces 420 m, the cost per meter for that shift is higher than the budgeted rate by a calculable amount. The gap is the number to investigate, not to smooth into the weekly average.
The SME handbook's cost estimation method for surface mines (4.9.4 Drill and Blast, p. 283) builds each cost component from separate estimated parameters before any rig turns a meter. The same decomposition that produces a sound tender also produces a sound variance report once drilling starts. The inputs are the same. The only difference is whether you read them from a budget or from a shift sheet.
Run your own numbers
Rather than work it by hand every time, the drill productivity calculator does this arithmetic and shows its working. The rest of the set is on the mining calculators page.
Common questions
How do you calculate drilling cost per foot?
Add the shift's rig cost to its bit and steel cost and divide by the feet drilled: CPF = (R x H + B) / F. To convert a per-meter figure, divide it by 3.2808, because one meter is 3.2808 feet. In the SME 4.9.4 example, $3,177 over 565 m (1,853.7 ft) is $1.71 per foot, the same as $5.62 per meter.
What is included in an all-in rig hourly rate?
The all-in rig rate covers everything that runs the clock regardless of whether the bit is turning: fuel, operator wages, scheduled maintenance, unscheduled repairs, and rig depreciation or lease cost. The SME handbook (7.3.7, p. 456) lists the direct drilling cost categories as rig amortization or lease, fuel, operator, lubrication, maintenance, and consumables including drill steels and bits.
How does standby time affect drilling cost per meter?
Standby adds rig hours to H in the equation without adding meters to M. In the SME 4.9.4 example, each standby hour at $350/h spread over a 565-m shift adds $0.62 to every meter drilled. On a project with frequent blast holds or equipment moves, that effect compounds across the full drilling program.
When does the cost-per-meter equation stop being accurate?
The equation assumes one rig, uniform ground, and a single shift as the measurement window. It does not separate fixed costs like depreciation from variable costs like fuel and bits, so it cannot support breakeven analysis on low-meterage shifts or compare rig types across different standby profiles without additional modeling.
Getting this off paper
Most contractors already know these numbers. The cost is in re-keying them into a report, then a timesheet, then an invoice. If that is where your week goes, book a 20-minute call and we will look at your actual paperwork.
