Modern open pit strategic planning
Considering the current resurgence in commodity prices, strategy optimization should be the focus of every mining company to ensure that operations move from acost-focussed mindsetto concentrate on value maximization and reap the benefits of the next upturn in the mining industry.
Recent advances in open pit strategic mine planning software enable the optimization of intricate mining problems associatedwith a complex and vast array of parameters and constraints. These programs make use of mixed integer linear programming to enable the simultaneous optimization of the mining sequence, cut-off grade selection, mining equipment number and capital expenditure to maximize the net present value of a project or deliver on corporate goals.
Modern mine planning techniques should be adopted by every company at the strategic or life-of-mine planning level to ensure thatmines are developed in the most valuable fashion within the bounds of practical mining.
At the strategic level, traditional mine planning involves following a series of sequential processes to evaluate the merits of different mine planning scenarios. Typically, a mine plan is produced based on fixed cut-off grades and strives to achieve a primary goal, such as a target mill feed, while maintaining a smooth total material movement to simulate the operation of a pre-determined mining fleet. The mine plan is then used as a basis to calculate equipment hours and numbers. The latter form the input into cost modelsthat calculate mining costs and overall project value. The process is repeated with different assumptions for total material movement, sequencing, or cut-off grades. Once the mining engineer driving the mine plan is satisfied that an adequatenumber of scenarios have been evaluated, the best outcome is selected and used for the rest of the process such as waste dump and stockpile design.
The problem with a traditional approach is that the entire process can be time-consuming, sub-optimal from a value perspective, especially when the operation being planned is complex, and heavily reliant on the mining engineer’s understanding of the deposit and their experience.
The use of advanced mine planning software is becoming more and more widespread among mining companies and consultancies. Mixed-integer liner programming processes and advanced algorithms used in modern mine planning software allow rapid evaluation of complex problems and help engineers and management make educated decisions regarding the best mine development or optimization strategy to adopt.
The power of advanced mine planning software lies in their ability to achieve multiple targets while respecting a variety of constraints by“looking-ahead” to ensure that the choice of mine development made in Year 1 of production, for example, does not jeopardize its ability to achieve targets in subsequent years and achieve optimum value. This is a vast improvement from a traditional approach whereby a mine plan is derived one period at a time.
Improving a project’s NPV can be achieved by applying variable cut-off grades by scheduling period. This is achieved by defining grade bins based on the spatial distribution of the ore and grade tonnage curves. Advancedmine planning softwarecan define a high-grading strategy that brings high grade material to the processing facility earlier in the mine life while balancing the total material mined, and therefore the mining costs to do so. Following a high-grading strategy can typically result in a 15% higher NPV compared to directly processing run-of-mine ore.
One of the issues with high-grading is that miningadditional material necessitates additional miningequipment. The impact of additional equipment capital expenditure can be evaluated within the software by accountingfor equipment hours as a variable in the model. Assigning a capital costto additional mining fleet allows the software to gauge whether and when to increase production capacity to optimize the project’s NPV. Capital expenditure decisions are not limited to mining equipment fleet and can extend to evaluating the merits and most suitable timing forincreasing processing plantcapacity or incurring capital cost associated with developing a new pit (for example relocating a village or building an access road).
Optimizing project value becomes increasingly difficult for mining engineers when they are faced with having to satisfy multiple targets or constraints. In iron ore depositsfor example, it is common to have to deal with stringent grade specifications on iron ore grade and levels of several contaminant levels. Minimum and maximum grade constraints can be input into the software to ensure that they are respected for the life-of-mine while achieving production targets and optimizing cut back sequencing to obtain the highest possible project value.
An optionality of theseprograms is their ability to simultaneously consider the constraints or variables mentioned earlier while optimizing the shape of waste dumps to maximize project value. Dump envelopes, representing the maximum possible waste storage capacity, can be imported into the software for evaluation. Cycle times from each mining block to each dumping block within multiplewaste dumps are then used to generate hauling costs. Subsequently, the hauling cycle times and costs help define the most suitable waste destination for each waste block to minimize hauling costs or level the hauling fleet over the project’s life.
Despite the advances in mine planning software, mining practicality still needs to play centrepiece toadoptingthe bestdevelopment strategy. To avoid the “black box” solution effect, that cannot be explained by the engineer,it is in the engineer’s best interest to producemultiple scenarios to demonstrate theincremental value generated and help tell the story behind the decision-making process.
This article covers only a few of the many applications benefiting from the use of modern mine planning software to maximize project value. However, it should highlight its potential as one of the tools that should be adopted by mining companies to ensure that the maximum value is extracted from their active mines or future projects.
Philippe Lebleu () has extensive consulting and operational experience in the mining industry. He currently works as a Principal Engineer for AMC Mining Consultants (Canada) Ltd