3
costs and indemnity for time away from work. Lost-time
claims are generally more severe injuries than medical-only
claims. Mining companies can enter their own injury cost
data or can use one of the default values provided in the
web application.
Looking at the differences between the 25th and 75th
percentiles helps illustrate the wide distribution of the
injury costs. Percentile is the percentage of injuries with
equal or lower cost. After sorting the direct cost data in
ascending order, the n-th percentile describes the value
below which n% of the data falls. For a given injury, a direct
cost in the 75th percentile would mean that the particular
injury is likely to be at most this cost 75% of the time, and
therefore only 25% of claims with that injury type’s costs
would be higher.
Indirect costs usually account for most of the true costs
of an injury, and these costs may be uninsured and unrecov-
erable. The indirect costs used in Safety Pays in Mining are
the costs to the employer beyond those covered by workers’
compensation. Indirect cost estimates can include:
• Any benefits paid to injured workers for absences not
covered by workers’ compensation
• The wage costs related to time lost through work
stoppage associated with the worker injury
• The overtime costs of other workers necessitated by
the injury
• Administrative time spent by supervisors, safety per-
sonnel, and clerical workers after an injury
• Training costs for a replacement worker
• Lost productivity related to work rescheduling, new
employee learning curves, and accommodation of
injured employees
• Clean-up, repair, and replacement costs of damaged
material, machinery, and property
• Increased workers’ compensation insurance premi-
ums (Jallon, Imbeau, &de Marcellis-Warin, 2011
Sun et al., 2006).
To estimate the indirect costs of injuries, Safety Pays in
Mining uses an indirect cost multiplier of 2.12 (Huang et
al., 2007). The indirect cost is calculated by multiplying the
direct cost of an injury and the indirect cost multiplier as
shown in Eq. (1).
Indirect cost =Direct cost × 2.12 (1)
Total cost of an injury is the sum of the direct and indi-
rect costs.
What is the Impact of Occupational Injury?
The total injury cost, profit margin, and annual sales of a
company are used to calculate the financial impact of occu-
pational injuries. Profit margin measures how much of a
company’s sales it keeps as earnings, and in the web app this
is calculated as after-tax profit divided by revenue. The profit
margin used in Safety Pays in Mining v2.0 can be either a
company’s actual profit margin (if the user chooses to enter
it) or a pre-calculated default value. The default value of
11.7% represents the average of after-tax profits per dol-
lar of sales for all mining commodities for the years 2018
through the first quarter of 2023, excluding 2020. Data
from 2020 is excluded due to the COVID-19 pandemic’s
effect on the economy (Chen et al., 2021). The average
was calculated using data from the U.S. Census Bureau’s
Quarterly Financial Reports for Manufacturing, Mining,
Trade, and Selected Service Industries (2023). The default
value gives the best estimate for corporations with North
American Industry Classification System (NAICS) mining
codes and assets of $50 million or more. Annual sales were
averaged using U.S. Census Bureau Economic Census data
for 2017 (2021) and are shown in Table 1. This is the aver-
age yearly sales estimate for the selected commodity based
on NAICS codes. The total cost of the injury as a percent-
age of annual sales is calculated by dividing total cost by
annual sales. To calculate the additional sales needed for a
company to cover the total cost of the injury, total cost was
divided by profit margin.
How Could a Company Spend the Savings from
Preventing Injury?
Although a mining company might choose any number
of ways to spend or reinvest savings from injury preven-
tion, mines could decide to add to their workforce or bet-
ter outfit their existing workers. Safety Pays in Mining v2.0
calculates the number of employees a mine could hire for
one year, the number of employees a mine could enroll in a
hearing loss prevention program for one year, the number
of pairs of MSHA-suitable safety boots, and the number of
MSHA-suitable hard hats a company could purchase if an
injury was prevented. The hardhats, boots, and hearing loss
prevention program enrollment were incorporated because
they are included in the MSHA rules in Title 30 of the
Code of Federal Regulations, and therefore mines may be
required to provide these (PPE/safety programs) for their
employees (Hard hats, 1985 Occupational noise expo-
sure, 1999 Protective clothing, 1974a Protective clothing,
1974b Protective footwear, 1985).
costs and indemnity for time away from work. Lost-time
claims are generally more severe injuries than medical-only
claims. Mining companies can enter their own injury cost
data or can use one of the default values provided in the
web application.
Looking at the differences between the 25th and 75th
percentiles helps illustrate the wide distribution of the
injury costs. Percentile is the percentage of injuries with
equal or lower cost. After sorting the direct cost data in
ascending order, the n-th percentile describes the value
below which n% of the data falls. For a given injury, a direct
cost in the 75th percentile would mean that the particular
injury is likely to be at most this cost 75% of the time, and
therefore only 25% of claims with that injury type’s costs
would be higher.
Indirect costs usually account for most of the true costs
of an injury, and these costs may be uninsured and unrecov-
erable. The indirect costs used in Safety Pays in Mining are
the costs to the employer beyond those covered by workers’
compensation. Indirect cost estimates can include:
• Any benefits paid to injured workers for absences not
covered by workers’ compensation
• The wage costs related to time lost through work
stoppage associated with the worker injury
• The overtime costs of other workers necessitated by
the injury
• Administrative time spent by supervisors, safety per-
sonnel, and clerical workers after an injury
• Training costs for a replacement worker
• Lost productivity related to work rescheduling, new
employee learning curves, and accommodation of
injured employees
• Clean-up, repair, and replacement costs of damaged
material, machinery, and property
• Increased workers’ compensation insurance premi-
ums (Jallon, Imbeau, &de Marcellis-Warin, 2011
Sun et al., 2006).
To estimate the indirect costs of injuries, Safety Pays in
Mining uses an indirect cost multiplier of 2.12 (Huang et
al., 2007). The indirect cost is calculated by multiplying the
direct cost of an injury and the indirect cost multiplier as
shown in Eq. (1).
Indirect cost =Direct cost × 2.12 (1)
Total cost of an injury is the sum of the direct and indi-
rect costs.
What is the Impact of Occupational Injury?
The total injury cost, profit margin, and annual sales of a
company are used to calculate the financial impact of occu-
pational injuries. Profit margin measures how much of a
company’s sales it keeps as earnings, and in the web app this
is calculated as after-tax profit divided by revenue. The profit
margin used in Safety Pays in Mining v2.0 can be either a
company’s actual profit margin (if the user chooses to enter
it) or a pre-calculated default value. The default value of
11.7% represents the average of after-tax profits per dol-
lar of sales for all mining commodities for the years 2018
through the first quarter of 2023, excluding 2020. Data
from 2020 is excluded due to the COVID-19 pandemic’s
effect on the economy (Chen et al., 2021). The average
was calculated using data from the U.S. Census Bureau’s
Quarterly Financial Reports for Manufacturing, Mining,
Trade, and Selected Service Industries (2023). The default
value gives the best estimate for corporations with North
American Industry Classification System (NAICS) mining
codes and assets of $50 million or more. Annual sales were
averaged using U.S. Census Bureau Economic Census data
for 2017 (2021) and are shown in Table 1. This is the aver-
age yearly sales estimate for the selected commodity based
on NAICS codes. The total cost of the injury as a percent-
age of annual sales is calculated by dividing total cost by
annual sales. To calculate the additional sales needed for a
company to cover the total cost of the injury, total cost was
divided by profit margin.
How Could a Company Spend the Savings from
Preventing Injury?
Although a mining company might choose any number
of ways to spend or reinvest savings from injury preven-
tion, mines could decide to add to their workforce or bet-
ter outfit their existing workers. Safety Pays in Mining v2.0
calculates the number of employees a mine could hire for
one year, the number of employees a mine could enroll in a
hearing loss prevention program for one year, the number
of pairs of MSHA-suitable safety boots, and the number of
MSHA-suitable hard hats a company could purchase if an
injury was prevented. The hardhats, boots, and hearing loss
prevention program enrollment were incorporated because
they are included in the MSHA rules in Title 30 of the
Code of Federal Regulations, and therefore mines may be
required to provide these (PPE/safety programs) for their
employees (Hard hats, 1985 Occupational noise expo-
sure, 1999 Protective clothing, 1974a Protective clothing,
1974b Protective footwear, 1985).