Part 2: Production-scale Plan, Optimized Production Schedule, SMP’s Risk Assessment - By: Engr. Mae Ann R. Cabasag
Ensuring optimal resource extraction, maximizing value of increasingly scarce resources, and having confidence in mine plans amid market uncertainties is possible through DS GEOVIA’s SMP solutions.
In Part 1, we elucidate differences between mine plan and schedule, and strategic and tactical mine planning. We covered the approach in defining reserves and directional strategies.
Establishing the Optimal Scale of Production
After determining the best starting region and corresponding pushback directions, mine planners need to create a production-scale plan that can adapt to shifts in demand over life-of-mine and make three (3) major decisions: mine sequences, cut-off grade and production rate. These decisions are correlated, thus, changing one will alter the other two decisions.
With the Hill of Value, we can visualize a value surface based on cut-off grade and production rate at the same time identify the point in the value surface that generates maximum value.
Using the GEOVIA Whittle and SIMULIA process-automation tools, mine planners can run 9,680 sequences with various production rates, cut-off grades, and economic and market prices in less than a day.
Optimizing Strategic Production Schedule
In this approach, the mine planner can now identify which (blocks) to mine, when to mine and is left with a question: “How to optimize strategic production schedule that aligns with constraints, both technical and operational, and also maximize value (net present value)?”
The answer? The need to understand what can be optimized in the mine production schedule— the schedule itself, cut-off grade, stockpiling and blending.
Optimizing schedule can maximize net present value (NPV) by identifying what material to mine from generated pushback and when these will affect mine’s revenue and cost orders. The use of Milawa algorithm in GEOVIA Whittle helps determine the “what and when."
The widely used cut-off grade optimization is Lane’s theory. It states, “Low-value material is discarded even if it is above the marginal cut-off grade. It will increase the mine’s NPV because the mine will spend more time early on processing higher-grade ore that otherwise would have been mined and processed later.”
Extractive blending maximizes value. GEOVIA Whittle provides “blend bins”, allowing mine planner to utilize the existing model without needing to manually re-classify block model data to achieve the most suitable blending.
Assessing Risks of Your Strategic Mine Plan
Mine planners assess risks in the plan using multiple scenarios. GEOVIA Whittle alone produces tens of scenarios. Thousands scenarios can be produced using GEOVIA’s SMP Workflow, and a combination of GEOVIA Whittle and SIMULIA tools.
Moreover, GEOVIA’s SMP Workflow enables planners assess risks in each workflow’s steps by incorporating uncontrolled variables’ sets. It also allows mine planners to “use uncertainty analysis to determine the accuracy of the definition of the final pit and pushbacks as well as the production scale and schedule,” said Romero.
Further, Monkhouse and Yeates, in Beyond Naïve Optimization (2007), identified five (5) sources of these uncertainties:
- Orebody
- Processing
- Market
- Discount rate
- Changing technologies
Assessing the risks associated in processing, market and discount rate is easier compared to orebody uncertainty for it does not require the use of conditional simulations.
However, it was found that the use of Monte Carlo simulation enables to address orebody uncertainty easily by incorporating to pit optimization routine the “to-be-assessed” input variables along with performing optimization routine for each scenario, resulting to pit shell sets.
From some studies, GEOVIA SMP enabled customers to improve NPV from 10% to 50% and reduce stripping ratio by 16-20%, resulting lower mining costs. It also improved grade forecasting accuracy by 30%, reduced development cost by 10%, revealed best possible performance scenarios, and saved time by converting manual one-month process to semi-automatic process of three days.
With Dassault Systèmes GEOVIA’s SMP, customers can focus on the importance of analyzing results and making decisions. To know more about SMP and other Dassault Systèmes Solutions and Services, contact DS Value Solutions partner Paramina Earth Technologies, Inc. through paramina_solutions@paramina.com or visit www.paramina.com.
REFERENCE: Dassault Systemes. (2022). Strategic Mine Planning Articles 1-4.
