Worth its weight: a flexible approach to mine optimisation

Coffey Mining's mining manager Tim Horsley says that in the current economic downturn, mine optimisation can bring significant benefits to the bottom line of any mine operation.

In mining, as in life, it is much easier to make hard decisions when in a ‘do or die’ situation.

Mine optimisation doesn’t need to take a lot of time or be an expensive exercise, but it has very real potential to add significant value, sometimes in the order of hundreds of millions of dollars over the life of an operation.

However, the larger gains are most likely to be made by looking at the big picture of the entire operational process.

BIG PICTURE PLANNING

In my experience, in order to realise the full potential of a mine, a mine optimisation process should be approached from a broad perspective, as it is rarely the case that parts of the business can be optimised in isolation. If you specifically focus on one part of the value chain there is a risk of transferring costs or reducing revenue elsewhere. The key is in working to provide a robust and flexible mine plan rather than the ultimate theoretical optimisation ‘black box’ solution.

Synergies between processes can add or destroy value and so it is vital that the operation is assessed from the in-situ resource through to cash revenue generation. There is significant value to be realised in being able to model and understand these synergies, particularly with respect to the definition of ‘ore’ locally within a mine and how this impacts on productivities, costs and the downstream processes.

FLEXIBILITY THE KEY

For instance, if an organisation runs underground mines where the ore geometry, grade distribution and mineralogy are complex, a ‘differential cut-off grade analysis’ may identify potential areas where value can be found by adopting a more flexible approach to cut-off grade parameters.

It is clear that a ‘one size fits all’ approach to cut-off grade in many mines can be demonstrated to be sub-optimal. A more flexible and practical approach can make a big difference in value by defining more stable and productive mining areas that might be of lower grade, but more than make up in lower costs and higher mill throughput. On the other side of the coin, there may be value in lifting the cut-off grade and apply more selective mining methods.

One such example is by applying ‘companion mining methods’. Sometimes there may be opportunities to introduce a secondary mining method that may, on face value, be a higher cost method but actually adds value when considered in the full context of the operation because of the flexibility it can add to the production schedule.

DECISION MAKING IN TOUGH TIMES

It is an understatement that stepping outside the box and making a radical change to a mine plan can be a difficult decision for many operators. Many sites, and in some cases mining companies, regard themselves as practitioners in a particular area of mining. Open pit operators, for example, may be uncomfortable about going underground, and vice versa for underground operators, which can lead to bias in decision making. Such reluctance to change often requires significant incentive, however, lows in the price cycle, such as we are currently experiencing, present an ideal opportunity to make these changes.

An important aspect of any optimisation work is to be able to ‘sell’ the results to enable management to make informed decisions with confidence. To do this they need to clearly understand the options, the magnitude of the benefits and the risks involved. This is not always a simple task, particularly for large and complex operations, and may require that a decision map to be prepared to clarity the path to the proposed solution.

PLANNING FOR THE PRICE CYCLE

Although the current resources downturn has meant that many mine operators are looking to make savings wherever they can, I believe that mine optimisation is such an important process that it should be prioritised by organisations throughout the price cycle.

The key to a mine’s longer term viability is to maintain a continuous focus on optimisation in good times as well as bad. A thorough study can provide compelling ways of streamlining a mine’s current operations and would provide a life-of-mine optimisation model which can be periodically updated, and optimisations re-run with minimal effort.

Keeping such a model current provides a valuable tool for scenario analysis planning and allows a mine operator to react very quickly to changing circumstances.

By planning for the cyclical nature of the industry, organisations can ensure that they not only survive the downturn but emerge in relatively good shape. Planning for a downturn and optimising your operations so you are running to peak efficiency in good times as well as bad is a wise management strategy.

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