Professional Documents
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in Pit Optimisation
T Tulp1
ABSTRACT
Nine case studies are presented to illustrate how risks can be: minimised
or quantified during pit optimisation, utilising Whittle Four-D software.
Each case study covers a specific problem that has been encountered from
a wide variety of pit optimisations.
Case A: Maximising profits when the tenement owner is paid a royalty
on tonnes processed.
Case B: Allocating product prices, rather than a single commodity
price during optimisation.
Case C: Quantifying processing costs that are affected by penalty
elements in the ore.
Case D: Exploration expenditures below current pits can be quantified
through the use of simulation techniques.
Case E: Alternative strategies can be quantified when pits are restricted
by tenement boundaries.
Case F: Relocation of mine infrastructure that requires large capital
expenditures, can be simulated by allocating costs to an area during
optimisation.
Case G: Evaluating alternative corporate strategies during pit
optimisation.
Case H: Sensitivity analysis for price, processing cost and mining cost.
Case I: Quantifying the advantages of using additional mining capacity
during the early periods of mining.
INTRODUCTION
Whittle Four-D consists of a suite of programs to optimise and
analyse open cut mines. The optimisation uses the
Lerchs-Grossmann algorithm, and the analysis takes time, mining
and processing costs and the entire mining cycle into
consideration.
Thoughtful application of the software can substantially assist
in the analysis of risk factors associated with financial and
management decisions related to open cut mining.
Several case studies will be presented aimed at addressing
various applications of 'pit optimisation' and its uses in
identifying and simulating risk factors.
Four-D is a modular set of programs that are used to set up
inputs (FDUT, FDED, FDST), optirnise (FDOP), check (FDPR)
and analyse (FDAN) the results from an ore model.
The optimisation process requires the following to be
available:
1.
2.
3.
183
TTULP
CASEA:
An old mining claim is located within the proposed pit boundary
processing cost than the 'ore' outside the old tenement area. Since
the 'ore' under the old claim is more expensive, the pit may be
shallower, with less ore being mined and profits to the tenement
owner and the company will consequently be less.
By uniquely identifying the 'ore' beneath the claim, royalty
rates can be changed during optimisation and the differing profits
can be itemised (refer Figure 1). This will identify the optimum
royalty for the pit so that both the company and the tenement
owner will make the maximum profit.
$140 - , - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ,
Optimum profit/or company
anti claim own.r.
$120
$1.50
$100
~~
E~
._
c:
..
$80
.!!12
U:I
_0
Ill:
C: ...
'Q- $60
'l:
$40
$20
an~ysis
$O..L..-+----1----f-----t----f----t-----+----lH4'l;OO
9803929
9724384
9753150
9783404
9791652
9797985
9813714
9848445
Company Profit
1--
184
CASED:
CaseB
Ore Block
Value = Metal
* Recovery * Price
Fine
Low
$O.40/Unlt
Grade
Ore
type
Ore A
OreB
OreC
0.50
10%
0.50
4%
0040
0040
10%
4%
0045
0.48
0.36
0.38
0.938
1.000
0.750
0.792
Ore 0
High
OreE
Dust was lost from the system and no processing methods were
allowed. The rest of the products had a 100 per cent metallurgical
recovery.
To allow for the various product prices, recovery fractions
associated with the process method were adjusted to reflect the
price ratio associated with each product.
Value = Metal
Dust
Low
High
$O.SO/Unlt
Price
$/unit
RoYalty
Final
price
Price
ratio
Grade
Product
Price
High
low
High
Grade
Royalty
Iron ore and coal often have contract rates set for different
products produced from the processing of the 'ore'. The example
comes from the iron ore industry where the ore is crushed and
screened, producing both a coarse and fme product.
Mined 'ore' was processed and resulted in the following
tonnages:
Coarse
Low
Grade
Classltlcallon
OreE
185
TTULP
CASE C:
Gold-eopper mineralisation is common and can have
metallurgical problems. Copper minerals react preferentially with
cyanide instead of gold, consequently affecting the cost of
processing (refer Figure 3).
Optimisation of this type of deposit using a single 'ore type'
increases the risk of including gold mineralisation which has a
high copper content and is uneconomic.
CuContent
100 ppm Cu
200ppmCu
300ppmCu
400 ppm Cu
500ppmCu
800 ppm Cu
1200ppmCu
2000ppmCu
2500ppmCu
5000ppmCu
Process Price
$12.30/t
$12.51/t
$12.94/t
$13.36/t
$13.79/t
$14.64/t
$16.13/t
$18.68/t
$25.76/t
$33.11/t
$35.00 . , - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1
$30.00
Cl
C
'iij $25.00
III
11
~
Q,
1ii
0$20.00
.............
'-0',"""
L~_;_~_:;_t_:.c_a_t_io_n_O_{_'o_re_TY_'P_e_S_'_ba_s_.e_d_o_n_c
__
u-J
.. ..
.....
$15.00
$10.00
..L--+.------t---f---+---t---+------j---+---+---t100
200
300
400
500
800
1200
2000
2S00
SOOO
Cost of processi~l
186
CASED:
Exploration risks below eXlstmg pits can be minimised by
applying simulation techniques.
Extrapolation of the 'orebody' below the current pit using the
re-blocking facility in Four-D can quickly add ore zones below
the CWTent orebody, which have similar plunge/dip characteristics
and similar tonnage and metal distributions as the known
mineralisation. Refer to Figures 4'and 5.
Optimisation of the simulated orebody will allow:
Identification of limits for the future expansion of the cWTent
pit.
Definition of the maximum perimeter of mining, to allow
rational relocation of surface infrastructure.
Preliminary identification of the surface-underground
interface.
With the aid of sensitivity analysis the minimum and maximum
extent of the exploration target can be estimated.
Using this type of approach to exploration, drilling targets can
be defmed and exploration can be staged to allow the minimum
risk of capital expenditure.
Simulating
exploration targets
Ropresenfatlve
secI10n 01 the
'erOllcx!'(
~Icotod
FIG
----------------------------------
ss
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l__
49
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i.
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43
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1=-----"---+---+1-- -
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1000
SQO
-+-. 1500
---j
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2000
187
TTULP
CASEE:
Being able to optimise selected regions within the total model has
great advantages when there are several alternatives to a decision.
Each alternative can be evaluated, thereby defining the risk
factors, and a logical course of action can be implemented.
When pit perimeters encroach or extend beyond defined
boundaries, such as tenements or townships, Four-D can be made
to work within selected regions of the total model. This situation
can occur when the orebody is parallel to the boundary which
constrain the pit perimeter and consequently limits the depth
extension of the pit (refer Figure 6).
Using the reblocking facility a set of high cost blocks can be
included in the model. This will restrict the limits of the
optimisation, and financial difference can then be quantified
(refer Figure 7).
When the company is well informed before negotiations
commence, financial risks can be defined and can be used to limit
final settlements.
$16 1--------;=::::===============~T------T5
$14
__ . __
.
Diffuence in opuating profit could be used to negotiate
rthu mining on the adjacent tenement
~ .............
'
$12
11
::I
..
$10
>1/1
DIg
~i
ii_
$8
"'"
s.-
$6
$4
$2
11
13
15
17
19
21
--------------------
188
CaseF
CASEF:
Mills, railway lines and old tailings dams, are all major structures
that may have to be re-located to allow for pit expansions. They
all represent large expenditures of capital and have a spatial
relationship to the pit and orebody.
Utilising Four-D's capacity to link areas together as additional
'arcs' the appropriate areas can be linked to the 'orebody' model
making them an integral part of the model which is to be
optimised (refer Figure 8).
Costs to relocate each feature can then be added to a single
waste block by giving it a very high tonnage which represents the
relocation costs.
Capital .. pendln..
to r.locat. the M11
_'4""
:,~:~ -----:=r'-r"-oL1
Opllmuml'lt
""'.~.
Diagram shows
the nested structure of the pit shells
generated from the optimlsation
of the block model.
189
TTULP
CASEG:
The Lerchs-Grossman algorithm produces a pit with the
maximum profit.
Corporate strategies and risks may incorporate alternative
objectives which do not demand a maximum profit from the
mining operation. To achieve the alternative objectives however
some of the optimum profit has to sacrificed.
During the analysis of an operation it is worthwhile to examine
and quantify these alternative strategies. Output from the Four-D
analysis module can easily be imported into a spreadsheet for
further evaluation of the project.
3500 1--------~=======;---1
3000
~-'"T'600
.
500
~.
2500
400
300 c
'-P_it_S_he_u_-,.-
~
CL
_
200
500
..
100
4
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73
Pit Shell Number
Optimum Value ($) ~ Cost $/oz
190
300
------
-----------------
PIT OPTIMISATIO
600
250
--- ..
400
=~
cC
C
~.
u
C
::I
::1150
0::1
~o
=~
::e-
300 ~
100
()
200
50
100
7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73
Pit Shell Numbers
~
Mill Tonnes
L--
__
---------------------------------------------,
50
E
::I
E
0.8
1i
,g
..
~==================::::;~_:J~~'_=_=_'~~~~.------_1_ 0.6 ~
l
il:
~
0.4
it-
or
exttnding tlte mint lift
can all bt qua"tifitd
-100
0.2
~~~~~~-H++++H_Hf+++++++++_~~~f+H+t_+-t++H_H+H++++++_J0
181
248
200
346
315
382
368
442
432
468
537
475
449
Recovered Gold
-<>-
._------------------------- -
------- -----
191
TTULP
CASEH:
TABLE 1
. Sensitivity analysis for Case H.
Cost M
CostP
-5%
Base
+5%
+100/0
+15%
$17.81
$18.75
$19.69
$20.63
$21.57
Price
$/oz
-5%
$1.19
Al
A2
A3
A4
A5
Base
$1.25
B1
B2
B3
B4
B5
+5%
$1.31
-100/0
-5%
$351.50
$333.00
C3
C4
C5
+10%
$1.37
D1
D2
D3
D4
D5
+15%
$1.44
El
E2
E3
E4
E5
Base
$370.00
+5%
$388.50
$407.00
Cl
C2
+100/0
16.,----------------------------------.
14
12
10
.................
...
/'
/..
..
miJlln, IIIId
o -'--~=--t--t_-+--+--r--+---+-_____1I_-+__-_+_-_____1--+__....J...O
o
500000O
100000oo
1500000O
200000OO
2500000O
300000OO
Operating Value (S)
192
CASEI:
CONCLUSION
8 -
---- ---
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--=::--<
/-
--------
$16
,.
$14
$12
$10 .:
"
S8
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../
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---........
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,
$6
....-
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-,-
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$2
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--,_...L.
3
Period
.. .2
ii
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so
5
193
194