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IV SIMPOSIO INTERNACIONAL

DE PLANEAMIENTO DE MINADO

CONVENTIONAL MINE PLANNING:


BENEFIT FUNCTION

M. SC. ALEXANDRE MARINHO


MiningMath

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Conventional Steps

*Taken from https://ge902software.wordpress.com/datamine/

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Possible destinations

$
Process 1*

Mine (s)**

$
Process n*

*Taken from http://www.vale.com/PT/aboutvale/news/Paginas/projeto-serra-leste-testes-na-planta-de-


tratamento-de-minerio-de-ferro-ja-estao-em-anadamento.aspx
**Taken from Micromine ***Taken from http://ita.br.com/jundu-pilhas-de-esteril/

Waste Dump 1*** Waste Dump n***

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Block Model

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Benefit Function

𝐹𝐵𝑒𝑛𝑒𝑓𝑖𝑡 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑏𝑙𝑜𝑐𝑘 − 𝐶𝑜𝑠𝑡𝑠𝑏𝑙𝑜𝑐𝑘

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Value of each block
– Destination
– Grades
– Recovery
– Mining cost
– Transportation cost
– Process cost
– Selling price
– etc.

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Importance of economic values

Process and
Block Cu_% Au_PPM Revenue ($) Diference
sale costs ($)
A 0.26 0.28 1,435.00 -1,435.00 0.00
B 0.28 0.25 1,728.00 -810.00 918.00
C 0.33 0.17 744.00 -1,223.00 -479.00

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Example of parameters for calculating
the economic values of the blocks
Description Cu_% Au_PPM
Recovery 0.88 0.60
Selling price ($) 2000.00 12.00
Selling cost ($) 720.00 0.20
Processing cost ($/t) 4.00
Mining cost ($/t) 0.90
Discount rate (%) 10
Dimension of the blocks in X (m) 30
Dimension of the blocks in Y (m) 30
Dimension of the blocks in Z (m) 30

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Example
𝐵𝑙𝑜𝑐𝑘 𝑀𝑎𝑠𝑠 = 𝐵𝑙𝑜𝑐𝑘 𝑉𝑜𝑙𝑢𝑚𝑒 ∗ 𝐵𝑙𝑜𝑐𝑘 𝐷𝑒𝑛𝑠𝑖𝑡𝑦
𝐵𝑙𝑜𝑐𝑘 𝑀𝑎𝑠𝑠 = 30 ∗ 30 ∗ 30 ∗ 2.68 = 72360.00 𝑡

𝑀𝑎𝑠𝑠 𝐶𝑢 = 𝐵𝑙𝑜𝑐𝑘 𝑀𝑎𝑠𝑠 ∗ 𝐶𝑜𝑛𝑡𝑒𝑛𝑡 𝐶𝑢/100


𝑀𝑎𝑠𝑠 𝐶𝑢 = 72360 ∗ 0.635556/100 = 459.89 𝑡

𝑀𝑎𝑠𝑠 𝐴𝑢 = 𝐵𝑙𝑜𝑐𝑘 𝑀𝑎𝑠𝑠 ∗ 𝐶𝑜𝑛𝑡𝑒𝑛𝑡 𝐴𝑢


𝑀𝑎𝑠𝑠 𝐴𝑢 = 72360 ∗ 0.334444 = 24200.37 𝑔

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Example
𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑉𝑎𝑙𝑢𝑒 𝑃𝑟𝑜𝑐𝑒𝑠𝑠
= 𝑀𝑎𝑠𝑠 𝐶𝑢 ∗ 𝑅𝑒𝑐𝑜𝑣 𝐶𝑢 ∗ 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 𝐶𝑢 − 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝐶𝑜𝑠𝑡 𝐶𝑢
+ 𝑀𝑎𝑠𝑠 𝐴𝑢 ∗ 𝑅𝑒𝑐𝑜𝑣 𝐴𝑢 ∗ 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 𝐴𝑢 − 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝐶𝑜𝑠𝑡 𝐴𝑢
− 𝐵𝑙𝑜𝑐𝑘 𝑀𝑎𝑠𝑠 ∗ 𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡 + 𝑀𝑖𝑛𝑖𝑛𝑔 𝐶𝑜𝑠𝑡

𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑉𝑎𝑙𝑢𝑒 𝑃𝑟𝑜𝑐𝑒𝑠𝑠


= 459.89 ∗ 0.88 ∗ 2000.00 − 720.00
+ 24200.37 ∗ 0.60 ∗ 12.00 − 0.20
− 72360.00 ∗ 4.00 + 0.90 = 𝟑𝟑𝟒, 𝟕𝟗𝟑 $

𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑉𝑎𝑙𝑢𝑒 𝑊𝑎𝑠𝑡𝑒 = − 𝐵𝑙𝑜𝑐𝑘 𝑀𝑎𝑠𝑠 ∗ 𝑀𝑖𝑛𝑖𝑛𝑔 𝐶𝑜𝑠𝑡


𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑉𝑎𝑙𝑢𝑒 𝑊𝑎𝑠𝑡𝑒 = −72360.00 ∗ 0.90 = −𝟔𝟓, 𝟏𝟐𝟒 $

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IV SIMPOSIO INTERNACIONAL
DE PLANEAMIENTO DE MINADO

CONVENTIONAL MINE PLANNING:


PIT OPTIMIZATION AND ITS
LIMITATIONS
M. SC. ALEXANDRE MARINHO
MiningMath

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Pit Limits

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Blocks Precedence

*Taken from Kozan & Liu (2012).

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Blocks Precedence

*Taken from Kozan & Liu (2012).

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Optimization Methods

– Floating cone
– Lerchs-Grossmann
– Maximum flow
– Surfaces based model

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Floating Cone

*Taken from Apostila Planejamento de Lavra, UFMG, 2007.

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Floating Cone: 2D Block Model

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone: Final pit optimized

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone

Cone 1 is not profitable.

Cone 2 is not profitable.

Profitable mining of not profitable cones.


*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Floating Cone: example including
waste

*Taken from Lavra a céu aberto - Teoria e prática, UFRGS, 2007.

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Lerchs-Grossmann (LG)
• Mij = ∑ mij, para j=1,2,…

Pi-1,j-1
• Pij = Mij + Máx Pij-1
Pi+1,j-1

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LG: Blocks Matrix
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 10 10 10 10 8 5 -1 -1 -1 -1 -1 -1 -1 -1 -1

2 7 9 9 9 9 9 7 5 -2 -2 -2 -2 -2 -2 -2

3 -3 -3 4 8 8 8 8 8 8 4 -3 -3 -3 -3 -3

4 -4 -4 -4 -4 4 5 7 7 7 7 7 5 -4 -4 -4

5 -5 -5 -5 -5 -5 -5 3 5 6 6 6 6 6 5 3

6 -6 -6 -6 -6 -6 -6 -6 -6 -6 3 5 5 5 5 5

7 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7 2 3 4 4

8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 1 2

9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9

10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10

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LG: Mij Matrix
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 10 10 10 10 8 5 -1 -1 -1 -1 -1 -1 -1 -1 -1

2 17 19 19 19 17 14 6 4 -3 -3 -3 -3 -3 -3 -3

3 14 16 23 27 25 22 14 12 5 1 -6 -6 -6 -6 -6

4 10 12 19 23 29 27 21 19 12 8 1 -1 -10 -10 -10

5 5 7 14 18 24 22 24 24 18 14 7 5 -4 -5 -7

6 -1 1 8 12 18 16 18 18 12 17 12 10 1 0 -2

7 -8 -6 1 5 11 9 11 11 5 10 5 12 4 4 2

8 -16 -14 -7 -3 3 1 3 3 -3 2 -3 4 -4 5 4

9 -25 -23 -16 -12 -6 -8 -6 -6 -12 -7 -12 -5 -13 -4 -5

10 -35 -33 -26 -22 -16 -18 -16 -16 -22 -17 -22 -15 -23 -14 -15

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LG: Construction of Pij Matrix

1 2 3 4 5 6 7 81 92 10
3 11
4 12
5 13
6 14
7 15
8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 00 00 0
27 0
46 0
65 0
86 0 124
108
0
0 142 159 171 186 199 206 213

1 10 10 10 10 8 5 -1
1 -1
10 -1
27 -1
46 -1
65 -1
86 -1 124
108 -1 142
-1 159 171 186 199 206 213 221

2 17 19 19 19 17 14 62 4
17 -3
36 -3
55 -3
78 -3 125
103 -3
Pij-3 =17210
-3 160
143
+ Máx 10
187 200 207 214 222 223

3 14 16 23 27 25 22 14
3 12
14 5 1 -6 -6 -6 -6 190 203 210 217 22517
-6 175
(a) Matriz Mij. (b) 33 59 86 111
Matriz Pij. 137 156 226 227

4 10 12 19 23 29 27 21
4 19
10 12
26 8
52 1
82 -1 -10
115 142 -10
=18527
163 -10 202 216 223 231 232 233 235

5 5 7 14 18 24 22 24
5 24
5 18
17 14
40 7
70 5 137
106 -4 166
-5 190
-7 208 222 232 242 243 245 246

6 -1 1 8 12 18 16 18
6 18
-1 12
6 17
25 12
52 10
88 1 155
122 0 184
-2 202 225 237 247 250 253 255

7 -8 -6 1 5 11 9 11
7 11
-8 5
-7 10
7 5
30 12
63 4
97 4 166
133 2 189 212 230 249 253 257 260

8 -16 -14 -7 -3 3 1 38 3 -22


-16 -3 -14
2 -3
4 4
33 -4
64 5 136
100 4 163 191 209 234 245 258 262

9 -25 -23 -16 -12 -6 -8 -6


9 -6 -12
-25 -7 -12
-39 -38 -26 -5
-2 -13
25 -4
58 -5
94 124 156 179 204 221 241 253

10 -35 -33 -26 -22 -16 -18 -16


10 -16
-35 -22
-58 -17
-65 -22
-60 -15
-42 -23
-20 -14
9 -15
42 72 107 134 164 181 207 226

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LG: Pij Matrix
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 10 27 46 65 86 108 124 142 159 171 186 199 206 213 221

2 17 36 55 78 103 125 143 160 172 187 200 207 214 222 223

3 14 33 59 86 111 137 156 175 190 203 210 217 225 226 227

4 10 26 52 82 115 142 163 185 202 216 223 231 232 233 235

5 5 17 40 70 106 137 166 190 208 222 232 242 243 245 246

6 -1 6 25 52 88 122 155 184 202 225 237 247 250 253 255

7 -8 -7 7 30 63 97 133 166 189 212 230 249 253 257 260

8 -16 -22 -14 4 33 64 100 136 163 191 209 234 245 258 262

9 -25 -39 -38 -26 -2 25 58 94 124 156 179 204 221 241 253

10 -35 -58 -65 -60 -42 -20 9 42 72 107 134 164 181 207 226

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LG: Construction of pit limit
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 10 27 46 65 86 108 124 142 159 171 186 199 206 213 221

2 17 36 55 78 103 125 143 160 172 187 200 207 214 222 223

3 14 33 59 86 111 137 156 175 190 203 210 217 225 226 227

4 10 26 52 82 115 142 163 185 202 216 223 231 232 233 235

5 5 17 40 70 106 137 166 190 208 222 232 242 243 245 246

6 -1 6 25 52 88 122 155 184 202 225 237 247 250 253 255

7 -8 -7 7 30 63 97 133 166 189 212 230 249 253 257 260

8 -16 -22 -14 4 33 64 100 136 163 191 209 234 245 258 262

9 -25 -39 -38 -26 -2 25 58 94 124 156 179 204 221 241 253

10 -35 -58 -65 -60 -42 -20 9 42 72 107 134 164 181 207 226

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LG: Pit Limit
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 10 27 46 65 86 108 124 142 159 171 186 199 206 213 221

2 17 36 55 78 103 125 143 160 172 187 200 207 214 222 223

3 14 33 59 86 111 137 156 175 190 203 210 217 225 226 227

4 10 26 52 82 115 142 163 185 202 216 223 231 232 233 235

5 5 17 40 70 106 137 166 190 208 222 232 242 243 245 246

6 -1 6 25 52 88 122 155 184 202 225 237 247 250 253 255

7 -8 -7 7 30 63 97 133 166 189 212 230 249 253 257 260

8 -16 -22 -14 4 33 64 100 136 163 191 209 234 245 258 262

9 -25 -39 -38 -26 -2 25 58 94 124 156 179 204 221 241 253

10 -35 -58 -65 -60 -42 -20 9 42 72 107 134 164 181 207 226

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LG: limit optimized superimposed on
the block model
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 10 10 10 10 8 5 -1 -1 -1 -1 -1 -1 -1 -1 -1

2 7 9 9 9 9 9 7 5 -2 -2 -2 -2 -2 -2 -2

3 -3 -3 4 8 8 8 8 8 8 4 -3 -3 -3 -3 -3

4 -4 -4 -4 -4 4 5 7 7 7 7 7 5 -4 -4 -4

5 -5 -5 -5 -5 -5 -5 3 5 6 6 6 6 6 5 3

6 -6 -6 -6 -6 -6 -6 -6 -6 -6 3 5 5 5 5 5

7 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7 2 3 4 4

8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 1 2

9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9 -9

10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10

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Maximum Flow

A maximum closure and minimum cut in closure graphs.

*Taken from Hochbaum, Dorit S., A New-Old Algorithm for Minimum-cut and Maximum-flow in Closure
Graphs, NETWORKS - 30th Anniversary Special Paper (2001), Vol. 37(4), 171-193.

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Geotechnical errors of Precedence
Method
1 2 3 4 5 6 7 8 9 10

*Taken from Whittle, 1998.

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Surfaces-based Model

It always
respects the
angle

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Comparing precedence of blocks and
surfaces-based model

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Comparing precedence of blocks and
surfaces-based model

(a) Case 1. (b) Case 2.

Precedence of blocks: slope angle approximations.

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Comparing precedence of blocks and
surfaces-based model

Model based on surfaces.

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Case study: vertical section

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Case study: transition zones

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IV SIMPOSIO INTERNACIONAL
DE PLANEAMIENTO DE MINADO

CONVENTIONAL MINE PLANNING:


STRATEGIC MINE PLANNING

M. SC. ALEXANDRE MARINHO


MiningMath

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The mine scheduling problem

Taken from addictionrehabnow.com. Taken from sweetclipart.com.

Taken from cliparts.co.

Taken from freeimages.com.

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Operational Constraints

Example of manual manipulation of the pit bottom to achieve a minimum width.

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Operational Constraints

Example of a manipulation that does not guarantee the optimal solution.

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Operational Constraints

High silica Low silica

Pit with $1B and 6% SiO2 Pit with $900M and 5% SiO2 Pit with $950M and 5% SiO2

High silica Low silica

Pit optimization example considering blending.

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Nested Pits

*Taken from http://qspace.library.queensu.ca/bitstream/1974/7577/3/Thorley_Ursula_G_201209_PhD.pdf.

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Nested Pits: Results

*Taken from Guimarães e Marinho, 2014.

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The Gap Problem

1 2 3

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Worst Case

*Taken from Tomi, 2010.

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Best Case

*Taken from Tomi, 2010.

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Nested Pits: Analysis

*Taken from http://google.brand.edgar-


online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=7776715-1564125-
2080685&SessionID=XbC1FvifyECeWg7.

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NPV (US$)
Sensitive Analysis

Variation (%)
*Taken from
http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0370-
44672012000200016.

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Pushbacks

*Taken from http://www.minesight.com/en-


us/company/newsletters/july2012/msep.aspx.

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Mine Scheduling

*Taken from http://www.maptek.com/products/vulcan/scheduler_bundle.html.

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Mathematical Mine Scheduling

*Taken from Guimarães e Marinho, 2014.

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Mine Scheduling: Best Case

*Taken from Guimarães e Marinho, 2014.

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Strategic Mine Scheduling

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Run of Mine
2 `1 1 1 2 3

3 2 2 2 3 4

4 3 3 3 4 5
3.5
5 5

Stripping ratio
4 4 4
5 5
5 5
5 3
5

2.5
1 2 3 4 5
Time

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Run of Mine

*Taken from http://www.africangoldgroup.com/news-releases/updated-preliminary-


economic-assessment-establishes-low-capex-and-high-returns-for-the-kobada-gold-
project.

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Process and Equipment

• Process definition.
• Fleet selection and sizing.
• High recovery and productivity.
• High NPV.

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Panel Scheduling

1 2 3
c b a Bench 1

f e d Bench 2

g
i h Bench 3

j
k Bench 4

l Bench 5

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Period-by-period Scheduling

*Taken from http://mimresources.com/mine-planning-and-


scheduling.html.

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Mixed Scheduling
How does it work?
• Each panel is subdivided in groups.
• Period-by-period or multiple periods.

Drawbacks
• Complexity.
• Limitations.

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Mine Scheduling – Short-term

*Taken from Maptek.

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Mine Design: Geometric Elements

*Taken from SME – Mining Engineering Handbook, 1992.

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Mine Design: Accesses and Ramps

*Taken from SME – Mining Engineering Handbook, 1992.

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Cut-off Grade Optimization

*Taken from Darling, 2011.

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Cut-off Grade Optimization

*Taken from Darling, 2011.

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Cut-off Grade Optimization: Grade-
tonnage curve

*Taken from Rendu, 2014.

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Cut-off Grade Optimization
c + f + Fi
g milling i =
P−s ∗y

g milling i = Cutoff grade to be used in year i


i = 1, … , N mine life , years
c = Processing cost
f = Fixed costs
P = Price
s = Sales cost
y = Recovery

NPVi
Fi = Opportunity cost per short ton of material milled in year (i) - Fi = d ∗
C
d = Discount rate
NPVi = NPV of the future cash flows of the years i to the end of mine life N
C = total processing capacity in year (i)

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Cut-off Grade Policies

(a) constant cut-off grade. (b) decline of the cut-off grade.

*Taken from Darling, 2011.

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Cut-off Grade Policies

(c) decline of the cut-off grade and included fixed (d) Lane method.
costs.

*Taken from Darling, 2011.

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Mine Scheduling (MS) with cut-off
grade optimization

*Taken from Guimarães e Marinho, 2014.

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MS with cut-off grade optimization and
stockpiles

*Taken from Guimarães e Marinho, 2014.

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Mine Scheduling with revenue factor 0.92

*Taken from Guimarães e Marinho, 2014.

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Scheduling with stockpiles

*Taken from
http://www.sec.gov/Archives/edgar/data/756894/000119312512137641/d32566
1dex991.htm.

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