Fuel consumption in mining industry using partial least squares structural equation modeling approach

Abstract

Purpose Consumption of fossil fuels due to their non-renewability has always been one of the fundamental problems among energy-related issues. Major dependence of mining equipment and activities on energy, fuel and adequate fuel allocation has become of great importance in fuel consumption of mines. Therefore, this study aims to propose a model for optimal fuel allocation for mining industry. Design/methodology/approach In this study, partial least squares structural equation modeling (PLS-SEM), as one of the well-known statistical methods, is used to model and analyze fuel consumption pattern in mine industry. Findings To show the applicability of the proposed model, the study investigates the model for a real mine in Iran. In this regard, real data of important factors affecting mine fuel consumption are collected. Results of statistical models construct a general formula to calculate the fuel consumption based on three main variables. Originality/value Policymaking is one of the important tasks in energy-related organizations. One of the main sectors that uses noticeable amount of fossil fuels is mining industry. Despite the government subsidy for mining in Iran, there is a significant price difference between the price of allocated fuel for mine and the price of the same fuel in the open market. Therefore, this study implements PLS-SEM approach to formulate the fuel consumption pattern under all possible fuel consumption indicators to enable policymakers to make reliable decision for future purposes.