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Preprint 99-36
NEVADA PLANNING AT NEWMONT GOLD COMPANY
S. Hoerger,
Newmont Gold Co.
Denver, CO
L. Hoffman,
Newmont Gold Co.
Denver, CO
F. Seymour
Newmont Gold Co.
Denver, CO
Operations began. The potential efficiency gains from this tool
were greatly increased. However, the larger Nevada wide model
presented more scaling complications. Furthermore, there were
different planning methods and tools as well as inconsistent cost
information between the sites. A review of the Nevada Planning
functions was undertaken. Mine planning methods and tools
were standardized. A Nevada planning group was formed and
was given the responsibility for examining Nevada wide
scenarios and maintaining a consistent cost database. By the
Spring of 1998 the cost and constraint data had been cleaned up
and production runs on the optimizer were underway.
ABSTRACT
Newmont has a large integrated operation in Northern Nevada
with numerous mines, stockpiles, and processing facilities.
There are over ninety defined metallurgical ore types and over
sixty defined gold recovery process options.
To take better advantage of the available synergies, a complete
Nevada wide mine plan and process model along with a mixed
Integer and Linear Programming optimization tool has been
developed and implemented. This system is maintained and
operated by a Nevada Planning Group. Standard in-house
planning software tools and methods have been implemented at
all mine sites. While increasing the effectiveness of planning in
Nevada, these changes have allowed a significant reduction in
overall Mine Engineering staff.
NEWMONT OBJECTIVE
Newmonts objective with Nevada Operations is to mine,
route, and process material so as to make the most efficient use
of capital equipment over the life of the mines. This amounts to
managing Nevada Operations for cash flow and translates into
making decisions that maximize the Net Present Value. Mining
decisions include the timing of open pit layback and
underground stope development, capital expenditures, and
mining rates. Material routing decisions are based on cost vs.
recovery tradeoffs and are subject to capacity and blending
constraints. Processing decisions include the timing of plant
startup and shutdown, capital expenditures, ore processing rates
and other operating parameters.
HISTORY
In late 1995, Newmont recognized the need for an expanded
planning function to help optimize the simultaneous mining of
multiple pits and processing of ores through multiple plants
along the Carlin Trend. Dr. Kadri Dagdelen, Assistant Professor
of Mine Engineering from the Colorado School of Mines, and
Mr. Edgar Urbaez, Graduate Student, were hired to help develop
a Mixed Integer and Linear Programming solution. By the end
of the summer in 1996, the mathematical formulation had been
developed and small scale tests were successfully run using a
spreadsheet based linear program solver from LINDO.
THE MODEL
Objective Function
Variables
The LP variables all represent material tonnage flows and can
be divided into the following three classes X, Y, and Z.
(X)
Process Plants
INPIT
(Y)
EXPIT
PROCESS
(Z)
Stockpiles
STOCKPILE
Size
Description
Source
50
Sequence
Increment
20
Destination
60
Period
Stockpile
20
8
RECLAIM
NPV = X * MineToProcessCoefficient +
Y * MineToStockpileCoefficient +
Z * StockpileToProcessCoefficient
Where:
MineToProcessCoefficient = ( - INPIT - EXPIT PROCESS +
(GRADE * RECOVERY * PRICE) ) * DISCOUNT
MineToStockpileCoefficient = ( - INPIT - STOCKPILE) *
DISCOUNT
StockpileToProcessCoefficient = ( - RECLAIM PROCESS +
(GRADE * RECOVERY * PRICE) ) * DISCOUNT
Cost Coefficients
The cost coefficients have been divided into components that
represent only two of the variable dimensions at a time. This
keeps cost data entry and management to a reasonable level.
The cost model uses the following five components:
Mining rates
Processing rates
Metallurgical blending limits (CO3/SS ratio etc.)
Cash flow generation rates
Gold production generation rates
Integer Programming
INPIT. The cost of mining material and bringing it to daylight.
This is a function of Source and Sequence only.
Carlin
Management
Mine Engineering
Plant Metallurgy
Accounting
Twin Creeks
Management
Mine Engineering
Plant Metallurgy
Accounting
Nevada
Planning
Group
CONCLUSION
By developing a NPV maximizing mixed Linear and Integer
Programming tool and incorporating it into an integrated
planning process in Nevada, Newmont has been better able to
take advantage of the available synergies from the sites in
Northern Nevada. This has led to increased profitability in
Nevada as a whole which is particularly important in this period
of low gold prices.