The norm for new SAG milling plant start-ups has, until now been accepted by industry as taking from 6 to 12 months to achieve full production. By accepting this as normal, large projects suffer massive revenue shortfalls, in the order of ¼ to ½ a billion dollars during the first year because of inability to process design tonnage from day 1. In some cases, the first year is also plagued by modifications and equipment additions to rectify the production shortfalls, resulting in low net cash flow generation.
The value of investing in the proper sAG mill for start-up and the decision to make this investment, need to include an incremental analysis of the extra capital required to achieve design production at start-up versus the pay back that the expenditure creates by eliminating the ramp up period losses. This approach will shorten the project payback period and increase the confidence of the financial stakeholders in the project.
The goal of this paper is to highlight that often these production shortfalls result from financial misunderstanding, where reducing the capital cost of the grinding equipment is done without regard for production capability and risk assessment. If proper grinding equipment is selected, the production target can always be achieved without shortfalls. Clients need to participate and take responsibility for sizing the grinding mills, using their own or inde- pendent consultants and preferably, open power based technology, prior to requesting quotes for grinding equipment or verification by a third party. Geo-metallurgical studies and data, while helpful to refine day to day throu- ghput predictions, are not required for the accurate design of new mills.
Since it is now possible to achieve design tonnage at start-up, it is recommended to use a ‘mill design by ore hardness measurement and calculation’ method, similar to Bond methodology, except including a sAG test. Good samples, test accuracy and understanding the basic principles of sAG mill design and operation, are the keys to make this possible.
> Design SAG mill production when you need it most: In day 1 and year 1