Mine Planning: Overview and Key Concepts.

Although mine planning is essentially the same as planning conducted by other businesses, it has certain unique characteristics that result from its dependence on a mineral resource. After a mining operation begins, the knowledge of the deposit is gradually enriched as more information is revealed by the ongoing activities associated with the mining cycle. The final product of the mine planning process is a business plan for exploiting the deposit. The business plan includes a mine plan, which is the production schedule that indicates the origin and destination of different materials and respective qualities to be extracted from the deposit (Adapted from Camus, 2002).

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Figure 1: Block model – mining cell 1

Mine Planning can be defined as the process of optimizing the exploitation of mineral reserves for maximum added value aligned with the strategic goals and objectives of the business enterprise. The complex set of activities associated with this process aim to identify the best possible mine design and production scheduling considering, among others, capital investments, operational cost, revenue forecasting, and management of cash flows of a mining operation. It is a critical component to the financial aspects of mining ventures (Adapted from Dimitrakopoulos et al., 2002).

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Figure 2: Large scale mining operations

Mine design and sequencing are based on an orebody model in which the deposit is discretized into a grid of blocks, each of which consists of a volume of material and the corresponding mineral properties; the value of each block, which is determined by comparing market prices for ore with extraction and processing costs; and a geometric model of the deposit. Blocks are used as spatial reference points. Geometrical and geotechnical constraints ensure that the extraction will be carried out in a way that is physically possible (Adapted from Newman et al., 2010).

Typically, two different approaches – cutoff grade approach and operations research approach – are used for determining the best possible mine design of open pit mines (Adapted from Epstein et al., 2012).

  • The basic premise of the cutoff grade approach is that one can use cutoff grades to maximize NPV subject to capacity constraints, with higher cutoffs in the initial years leading to higher overall profits. The approach has important operational advantages, and it is embedded in the background of most mining practitioners. However, the assumption of a fixed cutoff grade—which depends on an aggregated delineation between ore and waste—generates suboptimal solutions because it ignores that the value of a block is not inherent to the block but rather depends on the interaction with the rest of the mine and the capacity of the downstream processes.
  • The operations research approach started with the classic “moving cone” heuristic. This approach takes a block as a reference point and expands the pit upward according to pit slope rules. This solution can be suboptimal, but it is intuitively appealing. Among the algorithms that are guaranteed to reach the optimum, historically the most important are Lerchs and Grossmann (1965) and Picard (1976). The first one is based on graph theory, but its structure is very similar to the dual simplex method. The algorithm by Picard reduces the ultimate pit problem to finding a maximum closure in a graph, so it can be solved as a maximum flow.

The literature on underground mining is limited, partially due to the complicated nature of its operations. In fact, there is no equivalent to the Lerchs-Grossman or Picard algorithms commonly used for open pit. Basically, the literature indicates few applications considering genetic algorithms, floating stope method and mixed integer programming.

Objective

Figure 3: Mine planning objectives (Frimpong, 2011)

In general terms, operations research approach is also applied for solving the problem associated with the best possible production scheduling. The techniques utilized include mixed integer linear programming, Lagrangian relaxation, dynamic programming, branch and cut, heuristic methods and combined approaches.

Traditionally, the mine planning process is divided in stages according to either the level of detail of the analysis or the time scope to which the planning decision apply. However, a more practical classification is based on the distinction between strategic mine planning and tactical mine planning. In operating mines, the scope of strategic mine planning is related to the continuous revisions of long and medium term plans, which is essential for maintaining an up-to date basis that defines the future of the operation. Tactical mine planning, on the other hand, encompasses the routine planning activities required for commissioning the operation and ramping it up.  In operating mines, the scope includes the continuous reworking of short term production plans with the aim of incorporating the new information gathered from the operation into the actual plan. Tactical mine planning also deals with the preparation of budgets; equipment deployment and production scheduling, on a monthly, weekly, and daily basis; grade and quality control; and various other routines activities (Adapted from Camus, 2002).

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Figure 4: Geological cross-sections

As mine planning progresses, initial planning assumptions are refined. This may trigger a review and potential revision of earlier analysis. Improvements in the quality and quantity of available data may help to reduce the uncertainty associated with the mine plan, but do not completely eliminate it. At all stages of the process, from early conceptual and pre-feasibility work through feasibility and detailed long and short range planning, the evaluation of multiple planning scenarios and the sensitivity analysis of input parameters is critical to successful mine planning. The end product should be a plan that is robust enough to remain economically attractive under a range of variations from initial planning assumptions (Adapted from Thorley, 2012).

Feature

Figure 5: Mine site – 3D view with geological formations

Although a well-crafted mine plan is paramount for efficient mining operations, its implementation is what truly adds value for the mining enterprise. I would argue that management must have extra care in communicating effectively the mine plan and continuously evaluating its adherence. Moreover, by applying the concept of PDCA (plan–do–check–adjust) to mine planning, mining enterprises should capture enhanced added value associated with continuous improvement of processes and products.

How is mining safety incorporated into the mine plan?

Kind regards,

Ronaldo

Follow me on twitter @rcrdossantos

References:

Thorley, U. “Open Pit Mine Planning: Analysis and System Modeling of Conventional and Oil Sands Applications”, A thesis submitted to The Robert M. Buchan Department of Mining In conformity with the requirements for the degree of Doctor of Philosophy Queen’s University Kingston, Ontario, Canada (September, 2012).

Camus, J., “Management of Mineral Resources: Creating Value in the Mining Business”. Englewood, CO. Society for Mining, Metallurgy, and Exploration, Inc. (SME). (2002)

Newman, A. M. et al. “A Review of Operations Research in Mine Planning” Interfaces, Vol. 40, No 3, May-June 2010, pp. 222-245 ISSN 0092-2102 (June, 2010).

Epstein, R. et al. “Optimizing Long-Term Production Plans in Underground and Open-Pit Copper Mines” Operations Research vo. 60, No 1, January-February 2012, pp 4-17 ISSN 00330-364X (Print) ISSN 1526-5463 (online) (February, 2012).

Dimitrakopoulos, R., Farrelly, C. T. and Godoy, M. “Moving forward from traditional optimization: grade uncertainty and risk effects in open-pit design”, Trans Inst Min Metall (Section A) 111:A82-88. (2002).

Frimpong, S., “Notes on Mine Planning and Design (Mi Eng 393)”, Missouri University of Science and Technology, Rolla, MO, USA. (July, 2011).

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