DETERMINING THE MOST EFFECTIVE FACTORS ON

OPEN PIT MINE PLANS AND THEIR INTERACTIONS

Rahmanpour Mahdi and Osanloo Morteza
Amirkabir University of Technology, Tehran, Iran

Abstract. Determination of ultimate pit limit, and sequence of blocks extraction through the mine
life is referred as mine design and planning. The aim of mine design and planning is to develop a
yearly extraction plan which guides the mining operation to the highest Net Present Value (NPV).
Future mines are going to be giant mines that exploit low grade material. Protecting the environment
and its reclamation is one of the main issues in future mining activities. These issues highlight the
importance of mine planning in the texture of future mines. Mine plans are classified as long term,
medium term, and short term plans. These plans consider all the technical constraints of the specific
mining operation.

The preciseness of date and the required constraint differ in long term and short term plans, which
cause the deviation of plans from the predetermined objectives. This paper provides a list of factors
and their importance on mine plans. This way, those factors that affect the interactions of long term
and short term mine plans are also determined.

Keywords: Open pit mine planning, effecting factors, interaction of plans, long term, short term plan.

1 INTRODUCTION

The aim of mine design and planning is to develop a yearly extraction plan which guides the mining
operation to the highest Net Present Value (NPV). This plan considers the constraints such as blending
requirements, block sequencing, and pit slope. The mine plan affects the economy and the pay back
of mining operations.

Mine planning is procedure based on which the profitability of the mining operation is guaranteed in
a changing and uncertain conditions [1]. Thus, determining the time and extraction sequence of blocks
through the mine life is referred as mine planning [2]. Also, mine planning is a procedure that should
be followed in order to reach the predetermined goals [3].

With regard to this, different types of data are required to establish a mine plan (Fig.1). According to
sustainable mining requirements, environmental, economical and social aspects of mining and mine
reclamation planning should also be considered in mine planning procedure. These data contribute
more or less on the mine planning procedure and especially on the long term, medium term, and short
term plans.
The characteristics of future mining activities and also inherit uncertainty of the data highlighted the
importance of mine planning. These issues motivate the study of the importance of those data that
affect mine planning.

There are different definitions of mine plans and these definitions are somehow overlapping [2-8].
Based on these definitions, long term and short term plans are considered as the main plans which are
essential for a mining operation. The long term plan is a plan which is established for whole life of
the mine or a main portion of mineable reserve, or a period of 20 to 25 years of operation for large
deposites. The short term plan is a plan which is established based on the long term plan and it is
prepared for a period of 1 to 5 years.
The long term plan is established to justify the economy and development of the mining operations,
but the reliability of the plan is low. This is because the data and information needed for a long term
plan are estimated and forecasted data. The other word, the role of uncertainty is more significant in
long term plans. This will render the preciseness of this plan.

Fig. 1 Required data and the process of mine planning (adapted from [3])

Apart from that, the short term plans are established using all the present and touchable data. This
will increase the preciseness and reliability of short term plans. It means that mine plans must be
studied as a whole system in order to identify the interactions of the plans. Each mining plan affects
the other plans.

Any changes in short term plans will affect the long term plan and the following short term plans as
well. Going through these definitions assure that, each mining company has its own definitions and
standards in preparing a mine plan. Long term and short term plans are those plans that are mentioned
by all the researchers.
2 RANKING OF FACTORS

There are two types of techniques to calculate the weight of influence of some factors over a decision
or choice. The first group requires decision matrix and the second group requires pairwise comparison
matrix to calculate the weight of factors or criteria. In this paper the latter group is applied to
determine the affecting weight of factors on mine plans. D is a pairwise comparison matrix such that

This matrix is reciprocal [9], i.e.:

Within which, i w is the weight of the ith entity or factor. In Analytical Hierarchy Process (AHP)
method, it is assumed that 1/9 a ij 9 [10]. This matrix (D) is said to be consistent if the following
condition holds

If the pairwise comparison matrix is consistent then the weight of each entity could be determined
using the following formula

But if the condition of consistency (formula 2) does no hold, then the error or the difference should
be minimized. Considering formula 1, the error is equal to

The weight of each entity must be determined such that the amount of error (eij ) is minimized.
Solving the mathematical model (5) will result in the weight of entities.
This mathematical model could be solved using Lagrange multipliers. Thus, the mathematical model
in (5) could be solved using the following modifications [11]:

This method requires pairwise comparison matrix to be determined. Here, Delphi technique is applied
to determine the pairwise comparison matrix. The Delphi method [12, 13] is a structured
communication technique, originally developed as a systematic, interactive forecasting method which
relies on a panel of experts. The Delphi Method belongs to the subjective-intuitive methods of
foresight [14]. Each expert is asked to give a score for each factor considering the importance of that
factor. These scores are used to construct a pairwise comparison matrix to determine the weight of
influence of factors over long term plan, short term plan, and their deviations.

3 FACTORS AFFECTING MINE PLANS

The uncertainty inherited in any mining activity is the main issue in mine planning stage [15- 17].
These uncertainties could be classified into 4 major groups: (1) geological, (2) technical, (3)
economical, and (4) uncertainties due to events and accidents. In general, the uncertainty of an
element occurs due to nature of that element or it is normally costly to explore the exact value of the
element. For example the uncertainly of price is an inherited characteristic, however, ore grade
uncertainty can be reduced by increasing the exploratory workings in the mining area. The factors
that affect the mine plans could be classified as controllable and not controllable factors. In the next
section the mentioned major factors are studied in detail. Totally 41 type of uncertainty and factors
that affect mine plans are recognized and summarized in Tab.1.

Table 1 Uncertainties affecting mine plans

4 CLASSIFICATION OF INFLUENCING FACTORS

The factors mentioned in Tab.1 are classified into 4 major groups of geological, technical,
economical, and events and accidents. In this section they are reclassified in order to determine the
most effective factors. Here, the factors are studied based on their dependencies and controllability.
It should be noted that Physical properties of rock mass is replaced with geomechanical uncertainty.

Moreover; grade distribution, definition of resource and reserve, geological interpretation, delineation
of ore and waste, the boundary between ore and waste, and geologic complexity are replaced by a
single factor named geological uncertainty, and totally 36 factors are selected for the next stage.

4.1 Dependent and Independent Factors

In this section the independent factors are identified. This way, the dependent factors are removed
from the analysis, thus, they could be controlled explicitly by controlling their independent factors.
Tab.2 summarizes the dependent and independent factors affecting mine plans. Here, the
operational costs are categorized as independent factors. Operational costs are a function of site
characteristics, mining method and the technology used. Each mine should be designed such that its
operational costs are lower than the average operational cost among other producers in the world.
This will help the mine to remain competitive in the periods of price reductions. Therefore, in this
paper operational costs are categorized as independent factors.

Table 2 Dependency and controllability of factors

Table 2 (continued)

4.2 Controllable Factors

Other aspect of these factors is the possibility of their control. From this aspect, all those factors that
could not be controlled are put aside and the role of mine planner is to provide a plan that could
manage and control these factors. This way, the adverse impacts of these factors are minimized;
also, the possibilities of any deviations in mine plans are minimized. Tab.2 also summarizes the
controllable and not-controllable factors affecting mine plans. Ore type, depth and shape of the
deposit, hydrology, and presence of contaminating elements, infrastructures, price, and accidents
are not controllable factors. However, there are some measures to make these factors controllable.
This will increase the capital and operation costs.

Moreover, it will decrease the NPV and risk of the mining operation. For example; commodity price
and its changes are not controlled by the producers of that commodity. Thus, in order to decrease
the adverse effects of price changes, the mine planner and mine manager could supply their products
via long term contracts. This will decrease the mine incomes in case of price increases and prevent
the mine from low incomes if the commodity price decreases. It must be understood that, although
these contracts provide the predetermined incomes of the mine with certainty, but the overall NPV
of the mine and the risk of attaining that NPV is lower compared to the case where the commodity
is supplied according to the daily prices.

Moreover, there are other techniques such as real option that could be applied to take the advantage
of price changes. Here, the mine planner must define any possible options such as stockpiling,
mining low grade or high grade block, temporary mine closures and reclamations, to improve the
flexibility of mine plans. According to these, price can be categorized as a controllable factor.

Ore type, depth and shape of the deposit, and infrastructures are also not controllable factors. These
factors affect the mining method and when the mining method is determined, these factors are
controlled by the selected mining method and they become less effective in the next stages of mine
 planning. Presence of contaminating elements and hydrology of the mining region affect the type
of operations in mining and post mining periods which increases the mining costs.

These factors are controllable through the increase of mining costs. After recognition of dependency
and controllability of affecting factors, those factors that are dependent to other factors and are not
controllable, are removed from the list and the weight of influence is determined for the remaining
factors.

5 WEIGHT OF INFLUENCING OF INDEPENDENT AND CONTROLLABLE

FACTORS

Considering the classification on dependency and controllability of the factors, the dependent and not
controllable factors are put aside. Thus, 20 controllable and independent factors are selected out of
the 41 factors mentioned in Tab.1. The weight of importance of these factors is calculated following
the procedure described in section 2. Fig.2 to Fig.4, show the weight of these 20 factors affecting
short term plans, long term plans, and the deviation of short term and long term plans respectively.

Fig. 2 Ranking of factor in short term plan

Fig. 3 Ranking of factor in long term plan

 Fig. 4 Ranking of factor that cause deviations in short term and long term plans

6 DISCUSSION AND CONCLUSIONS

Mine planning is a procedure based on which the profitability of the mining operation is guaranteed
in a changing and uncertain conditions. Mine plans are developed for a specific period of time, which
affect the preciseness of the plans by the quality and quantity of available data on that particular
period. The amount of error in the long term, and short term plans is 25%, and 5% respectively.
Discount rate (DR) acts to reduce the present value of future incomes. Considering a discount rate of
15%, present value of any incomes beyond a period of 20 years is not significant (Fig.5). Thus, the
determined discount rate for a mining project governs the length of significant incomes, and it could
be used as the length of long term plans.

Fig. 5 Effect of discount rate on cumulative NPV of annually constant incomes

So, a long term plan is a plan for the main portion of mineable reserve or whole life of the mine, or
for a period of significant incomes (which one is smaller). Short term plans are the step by step plans
in order to reach the objectives of long term plans. So, a short term plan is a plan which is established
based on the objectives of long term plan and it is prepared for a period of 1 to 5 years.

Uncertainty is inherited in any mining activity. These uncertainties are classified into 4 major classes
of geological uncertainties, technical uncertainties, economical uncertainties, and uncertainties due
to accidents. These major factors are then divided into 41 sub factors that could affect mine plans.
Other factors such as discount rate and exchange rate are assumed implicitly in price; therefore, these
factors are not mentioned in the tables and figures. These factors contribute more or less on the mine
planning procedure that motivates the study of the importance of them in mine planning. The 41
selected factors are studied based on their dependencies and controllability, and 20 independent and
controllable factors are selected (Tab.2). Delfi method is applied to score the importance of these
factors in each mine plan. Then, these scores are used to determine the pairwise comparison matrix
based on which the weight of importance of each factor is determined. According to the results, the
most important factors that must be considered in long term and short term plans are summarized in
Tab.3.

Table 3 The most important factors in long term and short term plans

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