Strategic and tactical mine planning considering value chain performance for maximised profitability
R Smith1, F Faramarzi2 and C Poblete3
1. Global GEOVIA Services Director, Dassault Systèmes, Brisbane Qld 4000.
2. Global Senior Mining Industry Consultant, Dassault Systèmes, Brisbane Qld 4000.
3. GEOVIA R&D Apps Portfolio Senior Manager, Dassault Systèmes, Santiago, Chile.
In the minerals industry, ‘value’ is the difference between the expected revenue derived from saleable minerals and the costs required to liberate them from gangue. In the early 1990s, it was
found that the interconnected nature of mining and minerals processing provides an opportunity to unlock additional value by breaking from the established practice of silo-based cost minimisation to focusing on maximising profit across the value chain. The approach of ‘Mine-to-Mill’ was thus formalised as an operating strategy aiming to improve profitability through leveraging blast intensity for increased milling throughput. However, today the mining sector not only has to deal with more complex orebodies at lower grades, but there is also an accelerating need to develop sustainable capabilities and continuously upgrade its practice for addressing other challenges; of the intensified global demand for commodities, limited resources, market volatility and also new environmental and social regulations/responsibilities. Therefore, this level of sophistication necessitates innovative solutions for effective response to changed situations, hence setting real-time optimising strategies towards risk mitigation and value maximisation.
The constant challenge for any mining operation whichs to align strategic and tactical objectives. Strategic Mine Planning is a long-range production planning which aims at maximising the value from the exploitation of an ore deposit, while Tactical Mine Planning focuses on short-range plans to maintain operational viability. With recent advances in technology and data analytics, there is an opportunity to integrate key mining and processing stages. That is, integrating existing isolated mine production planning and optimisation strategies with the downstream KPIs, assessing performance through scenario-based simulations, and then dynamically re-optimising production plans for maximised profitability across the value chain over the mine lifespan.
This paper offers a methodological framework for integrating mine production planning and downstream process performance. A ‘Holistic Model of Mine Optimisation’ is conceptualised, which relies on GEOVIA’s capabilities ranging from mineral resources modelling, design and planning to simulating process plants through evaluation of ‘what-if’ scenarios. A case was exemplified for a Cu-Ag-Ag deposit, and the potential impact of implementing Mine-to-Mill improvement strategies was quantified at a strategic level through simulating several scenarios. Improvement ranges of three key variables of mining rate, milling rate and Cu recovery were onsidered for analyses which were based on several reported Mine-to-Mill projects. The results implied the potential to improve the Net Present Value (NPV) by 15 per cent without deploying Capex only through maintaining Mine-to-Mill optimisation strategies. This approach offers sustainable solutions for unlocking the potential for improving the NPV over life-of-mine for green – and brownfield projects through practicing Mine-to-Mill basics, which essentially would assist with better decision-making by aligning optimisation objectives across the value chain. The developed approach is proposed, case examples presented, and implications discussed.