Mineral Resource

Throughput Management
A new and predictable approach to
dramatically reducing variability in Mining
Operations that has delivered dramatic EBIT,
Throughput and Life of Mine improvement.

Coal Mine
Improved ROI from 7% to
43% and decreased cost per
ton by 30%
Iron Ore Mines

How to get the most out of my mine, in pure business terms, over
its life and at any given point in time? is the question ubiquitously
posed by Mine GMs, Mining CxOs and Operational Managers.
It is this two part question that Mineral Resource Throughput
Management (MRTM) method answers. MRTM is the only mine
optimisation approach that tackles, and is able to tame, variability
in all the key drivers of a mining operation.
The ability to synthesise ore, plant and supply chain constraints has
enabled the flow based approach of MRTM to predictably deliver
step change improvements in material throughput, product

25% - 50% improvements in

Yield, ROM, Product, LOM,
Over 100% EBIT
improvement
Manganese Mine
Over 3 fold increase in
Payability
Global Steel Producer

payability , EBIT and life of mine within short delivery time frames.

MRTM Success Credentials. Applying the flow based approach of

MRTM has demonstrated

Variation in product quality

reduced by 50%. Enabled
closure of one blast furnace
Gold Miner

EBIT and NPV improvements of 20% and above in more than

80% of cases

35% ROM production

improvement

Elevation of a mines operating performance from below 50%

of its design capacity to over 80%

Chrome

Reduction of operating variability from the 20%+ generally

accepted by miners to below 10%.

Up to 700% increase in
ROM tonnes

Product Payability - how much of the inherent or potential monetary

value of the valuable component(s) in the mineral resource was retained
or recovered in the exploitation of the mineral deposit and sold at the
optimum potential price to the market.

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The Mining Context

Other than Safety, there are really only two topics that keep a mining GM awake. How to maximise
"Return on Reserve" and how to contain the variability in output that plagues any mining operation.
These challenges are compounded by current economic uncertainty and the prevailing mining
industry context where mineral deposits are getting harder to exploit, closure costs are increasing
and there is a general inability to effectively or actively manage product payability. These interlinked
topics underpin the short and long term incentives of operational managers and form the very
foundation of the performance of a mining business.
Operating sites have endured waves of Business Improvement initiatives and while some of these
have delivered benefits, they have typically focused on spot solutions and procedural improvements
rather than concentrating on how ore can be mined, processed and sold optimally in a sustainable
manner. Most improvement approaches fail to consider, in an integrated manner, the nature of the
ore and the ore body, the flow of materials and specifics of the related processes.
Variability Why mining really is different to most other industries
Mining is a complex
environment with numerous
Capacity
Ore
Constraint
Characteristic
Resources
factors, dependencies and
Ore Body
Plant
Morphology
Characteristic
& Reagent
interdependencies. These
Threshold
factors may also vary over
Diverse
Plant
Mining
Processing
Processes &
time within each operational
Cycles
Methods
mining and plant processing
cycle. This variability also
Operational
Operating
Resources
Culture
needs to be managed within
an ever changing business
Mining
context that includes
Am biguous
Operational
Decision
Mining Cycles
Making rules
commodity demand and price
Variability
fluctuations, safety,
compliance and regional risks.
The ability to consider all of
these related factors in an integrated manner is where traditional business improvement and quality
methods have only delivered partial value for miners and where the opportunity for step change
improvements exists.
The MRTM Promise
MRTM provides an accurate prediction of EBIT and product payability improvements, achievable
from addressing identified constraints. It guarantees EBIT growth, if identified in the MRTM
Investigation phase. It also provides an improvement blueprint for mine designs to enable optimum
value exploitation for the full Life of Mine and for the creation of a stable and predictable operating
environment.

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MRTM Origins
The revolutionary MRTM methodology was developed by PG Laurens and Andre Dunne over 15
years, based on vigorous debates with Theory of Constraints (TOC) founder Eli Goldratt, and through
the application of its principles in real-world successes in mining business optimisation.
MRTM applies TOC principles to mining by merging key product payability and physical material flow
attributes to optimise value output.
On-going research, refinement and education around the concepts of MRTM are driven through
collaboration with the University of the Free State, South Africa, which has offered a MRTM Masters
qualification program for over 10 years.

How MRTM differs from other Mine Operations Improvement Methods

MRTM focuses on the Return on Reserve over the traditional Cost or Capacity Based perspectives.
It extends the Theory of Constraints principles for mining with the concept of product payability.
Mining has variability across the full Value Chain

Variability in
the Ore
Body

Material
Movement
Variability

Variability in
ore
characteristics
and plant
configuration

Price and
Market
Fluctuation

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TOCs optimised flow decision logic is extended with the merging of the variability in ore and
ore body characteristics with material flow and matching these with plant processing
thresholds. Traditional business improvement methods, such as TOC, originate from the
manufacturing sector and therefore assumes that component and raw material quality has
negligible variability (i.e. components and raw materials not compliant to specifications are
always discarded).

In mining, TOC has typically been limited to physical material throughput and the
management of related flow constraints. MRTM includes the above, but incorporates
recoveries and quality by integrating specific and detailed characteristics of the ore, the ore
body and the plant beneficiation thresholds in the analysis and simulation process.

Typically, flow and production capability evaluation has been limited to a reductionist
approach (i.e. using on average, most probable, single values) to measure and manage
operational output. MRTM removes the uncertainty associated with these approaches and
uses actual values for measuring and managing the key output drivers.

MRTM integrates a mines financial context and focuses on EBIT improvement

MRTM is the only mining optimisation methodology that considers all inter/dependencies,
constraints and related variability.

MRTM creates a framework for the effective management of complex mining environments

MRTM establishes a platform for sustained improvement

Comparison of MRTM against traditional Balanced Capacities

management methods applied to mining.

Focus
Drivers
Improvement
approach

Outcome

Balanced Capacities management

methods applied to mining

Optimised Flow (MRTM) management

frame work - exclusively for mining

Focus on mining maximum ore

Systems are a silver bullet
Departmental production targets
Push production at all cost
Functional excellence
Department level integration
Focus is on total cost
Decoupled constraint focus
High level of fluctuations and
deviations from targets

Focus on Return on Reserve (ROR)

Systems focused on supporting ROR
Total value chain and EBIT targets
Product value focus
Manage all flow constraints
End to end mining value chain view
Focus on value chain throughput
Focus on cost per unit produced
Stable and predictable value chain output

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The key MRTM outcomes

The outcomes of MRTM generally deliver quantum EBIT improvement rather than incremental
change, with major gains realisable over short periods. This is achievable through:

Reliable determination of the current operating capability of a mine

Reliable determination of the maximum potential flow capability of a specific mine

configuration and the prevailing way of working

Simulated and proven recommendations for physical capacity flow, yield & grade blends to
maximise product payability and the strategies to balance these factors to achieve
maximum EBIT

The real value chain KPIs of a given mine. These may be different to boiler plate Value
Driver Tree based KPIs and may be fewer in number than imagined, simplifying
management identification of both logical and physical value drivers (Logical value drivers
are non physical value drivers such as policy and ore body attributes)

Ore and ore body throughput and product payability classification

Development of condition driven standards

Transformational Plans articulating initiative dependencies and sequences

Decision making attribute strategies (roles, policy, systems , governance and reward
systems)

Sustainability of the Improvements

MRTM can deliver significant gains within a short timeframe, but the real objective is to establish
practices and management models that support a stable and predictable operating environment.
Once payback has been demonstrated from the initial application of MRTM, attention is focused on:

Aligning the operations management models :

o to the identified value drivers (the product payability and material flow attributes)
o with throughput principles underpinning the MRTM approach
Information Technology systems to provide the information necessary for the key measures
and to deliver these to the right stakeholders
Driving the required culture change through focused training and interventions

MRTM Industry applicability

MRTM is highly effective in industries where the raw materials processed are susceptible to changes
in flow, volume, composition, quality, grade and specific value while transforming to higher value.

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The MRTM Approach

The Theory of Constraints process has proven to be highly effective in identifying and managing
many types of operating constraints. MRTM follows the process flow of traditional TOC, leveraging
many of its core concepts. These are however extended at the Identify, Exploit and Subordinate
Constraint stages with some critical enhancements which are unique to mining.
Identify the Constraint

Exploit the Constraint

Diagnostic to Analyse & Validate (including across

LOM) - Ore Body Variability, Ore Variability ,
Waste Variability, Impact on whole of Mining
Value Chain

Diagnostic of ore body information use

Define Yield and Quality Threshold of Plant

Define Limitation (equipment, mining practices)
Define Mining Decision Making Attributes (Roles,
Policy, Systems , Governance)
Define Value Chain capacity plus product
Payability and mining cycles

Build Constraint simulation Models

Apply MRTM Constraint

simulation models to develop
options to :maximise:

Physical Capacity Flow

Yield & Grade (Payability)

Apply MRTM Mining Operating

Model Simulation (that
determine how to make the
system wor k to maximise flow
and Payability and assess LOM).
Incorporates broader Mining
Decision Making Attributes
(relevant to the identified
constraints)
Test & validate simulations

Subordinate and
synchronise to the
constraint
Compile Or e Body Classification
and Condition Driven Standards
to support recommendations
Define additional Decision
Making attribute strategies e.g.
Mine Planning
Geological Modelling
Operational KPIs
Grade Control
Met/Ore accounting
Logistics
IT systems
Roles & Governance

MRTM s mining extensions to the Theory of Constraints process

A significant advantage of MRTM is that it provides a focus for data capture, thereby eliminating
capture of unnecessary data at non-constraints. A consequence of MRTM is the people challenge at
the non-constraint departments, where subordination or not locally optimising, requires a
behavioural change. MRTM is able to leverage the significant Change Management experience TOC.
SM

The MRTM method is delivered through a tailored and structured methodology called xRTM .
SM
xRTM comprises a comprehensive toolset that includes:

Mining Variability Diagnostic - A detailed, cross functional tool that constructs a clear view
of the operations current reality logic and the complete set of factors affecting
operational output. The diagnostic enables drill-down into all relevant areas of the mining
value chain. Its outputs include physical and product payability flow analysis, root cause
analysis and value chain flow diagrams, clearly depicting dependencies, interdependencies
and constraints that impact output. These analytical outputs combine to identify the key
focus areas for flow and EBIT improvement.

Operations simulation models - simulation models to evaluate mine operating model

scenarios and substantiate product payability and physical flow recommendations

Analytical and syndication tools - quantified and diagrammatic views of the impact of the
existing variability. These analytical tools also provide a communication framework to
stakeholders for key findings that enable effective critique and validation.

Disciplined delivery framework - a structured MRTM project management methodology

and Portal that maintains focus on the core objectives of the method

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The MRTM Project

SM

xMRTM is typically employed in three distinctive phases with engagement options for clients at
each phase. There are clear deliverables and toll-gates at each phase where benefit scenarios are
rigorously evaluated before proceeding to the next phase.

Investigation
1

Mining Variability
Diagnostic

Design
2

Evaluate Scenarios and

Prove Payback

Implementation

Objectives

Typical
Duration

Outcomes

Define the mining operations c urrent operating model in

terms of cause and effect, showing dependenc ies,
interdependencies and variability through the value chain.
Form preliminary view of Payability and physic al flow
improvements opportunities.

4-8 Weeks for

an operating
unit. 3-4 weeks
per follow-on
operating unit.

Focus areas for physic al

material flow and Product
Payability identified.
High level constraints
defined.

De tailed view of current operating model, linking and

quantifying impacts to operating unit EBIT.
Simulate and c onfirm c onstraint analysis, product payability
attribute impacts and ore blending requirements .
Define key flow and payability constraints and relate d
measures and management rules
De termine the effective flow capability of the operation
Define product loss discounting factors , geological model
and planning standards and ore accounting logic

12-16 Weeks

Proven flow and payability

improve ments
Constraints , key
management roles, tools
and metrics defined
EBIT improve ment targe ts
Low Hanging Fruit
improve ments executed
ICT requirements defined
Improvement Program

Establish implementation roles , tracking and governance

structures
Develop MRTM measures and dashboards
MRTM training and embedding
MRTM Simulation model tuning
Establish Change Program and monitor
Manage Benefit Realisation Process

Plan Based

EBIT targets achieved

Anticipated improvements and benefits are quantified. Projects can be delivered on a Fee for Service
basis or through a negotiated Shared RiskReward model.

BEDROCKmg
BEDROCKmg has a proven track record in delivering MRTM engagements with successes spanning
SM

the worlds leading miners. As the Australian licensee of xRTM , our team comprises some of the
most experienced mining professionals and MRTM practitioners, including MRTM founders, PG
Laurens and Andre Dunne . The MRTM masters degree, to which we are prime contributors, has
trained transformative leaders in the worlds largest and smallest miners. Our team continues to
draw in this remarkable talent pool to deliver our projects with the best people.
Australia Patrick Bernau : +61 (0) 434 307 859
:patrick.bernau@bedrockmg.com
Africa PG Laurens : +27 (0) 82 872 7027
:pg.laurens@bedrockmg.com

We know Natural Resources

www.bedrockmg.com

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