The shut-off value for a panel cave mine determines when a draw point will be shut-off and mining will cease from that draw point. In this series we examine which parameters are important for determining the shut-off value and what strategies an engineer can use when deciding which shut-off value to use. Discover a practical example and download the full document at the bottom of this post.

The Regal deposit

The Regal deposit is a fictitious ore body but it is modelled as a massive porphyry copper deposit similar to many of the large panel cave mines currently in operation. A shutoff value analysis will be performed using this deposit. Like most ore bodies, the Regal deposit has high grade cores surrounded by marginal to low grade material at the periphery of the deposit. The chosen elevation for the analysis is at the base of the high grade core. Unlike the ideal case, changing the shut-off value would also change the caving layout. The draw points along the perimeter which are no longer economical, due to the high shut-off value have been removed from the caving layout. For each shut-off value a new caving layout was created and it is assumed that all of the layouts will cave.

The HOD of each draw point is variable and will change throughout the cave. However the NSR is the deciding factor whether a draw point would be included once a shut-off value is applied.

The Analysis

Due to its large size the Regal deposit was broken into two panels, West and East.

The total number of draw points in the caving layout is 2657 with the West panel having 1077 draw points and the East panel with 1580 draw points. Each panel will have a draw point development rate of 120 draw points per year. The target production rate will be 58Mtpa which is 160ktpd. This is the production target planned for the Grasberg block cave in Indonesia. The draw point spacing and average density is the same as the ideal case at 225m and 2.7t/m3, respectively. The two panels will be mined simultaneously starting at the center of the deposit. The mining sequence will be a straight line sequence oblique to the production drives. The West panel will mine from the northeast to the southwest and the East panel will mine from the northwest to the southeast.

Using the above parameters in the production rate formula, the minimum HOD needed to sustain the production rate of 58Mtpa is 398m. The shut-off value which is closest to this height but not below is \$23/t, which has an average HOD of 401m. The mining and processing cost is unchanged at \$15/t.

The shut-off value that will give the highest NPV would need to have an average HOD higher than 398m because of the uneven distribution of draw points between the West and East panels. The total draw point development rate is 240 draw points per year; however, the West panel will run out of draw points to open before the East panel. From Table 3 it can be seen that there are 4 years where only 120 new draw points are being developed. The lack of new draw points to open will mean that the active draw points will require a higher draw column in order to maintain the current production rate such that the draw point closure rate is not greater than the draw point opening rate. The results of the production schedule can be seen in Table 4.

The results show that the shut-off value of \$21/t has the highest NPV. For the \$21/t shut-off value the NPV increased by \$142M and the tonnes decreased by 230Mt compared with the \$15/t shut-off value. The \$21/t shut-off value corresponds to an average HOD of 441m which is significantly higher than the minimum height of 398m but this is due to the uneven draw point distribution between the West and East panels.

Applying a shut-off value to the caving layout will always produce a parabolic shape for the NPV where there will be one shut-off value which will give the highest NPV given the current design parameters. This can be seen in Figure 4 for the ideal case and Figure 8 for the regal deposit. Engineers can use this relationship between shut-off value and HOD to guide them in creating a mine plan which will produce the highest possible return on investment.

The best shut-off value to use will change if the production rate or draw point development rate changes. If the metal prices change then the corresponding HOD for each shut-off value will change but that would not change the minimum HOD required to sustain the current production rate in the panel cave production rate equation. As the shut-off value is increased the HOD for each draw point decreases and the total number of draw points decreases as well. Consequently, the mine life and total ore reserve will also decrease. The NPV of a project will increase by applying a shut-off value above the break-even shut-off value.

To generate even higher NPV values a variable shut-off value strategy can be used. For the early mine life, a high shut-off value can be used to mine the highest grade material first and at the end of the mine life a low shut-off value can be used to mine all remaining ore material. A variable shut-off value would also be used if economic factors such as metal prices or mining costs change throughout the mine life. If metal prices change then the shut-off value used in the design would also need to be changed to reflect the changes in metal prices in order to have the highest NPV.

For this series all of the economic variables were kept constant. A variable shut-off was used to show how more value can be obtained by lowering the shut-off value at the end of the mine life. The constant shut-off value that was used is \$21/t. For the variable shut-off value run a shut-off value of \$21/t was used up until Year 13, then a shut-off value of \$15/t was used for the remainder of the mine life. By changing the shut-off value after Year 13 the NPV increased by \$42M and the tonnes increased by 67.4Mt. Year 13 was chosen to change the shutoff value because Year 13 is when the cave layout was unable to maintain the target production rate. Since the cave was unable to maintain the production rate there was no longer an excess mining capacity and using a high shut-off value is no longer beneficial. Lowering the shut-off value to \$15/t mines all of the ore remaining in the active draw points at Year 13. The tonnes mined at the end of the mine life are low grade marginal ore.

Using a variable shut-off strategy for the end of the mine life does not have a major impact on the overall value because these extra tonnes are lower grade and mined at the end of the mine life which will have more discounting. A variable shut-off strategy is most beneficial for changing economic conditions because the shut-off value can be adjusted to account for the changes.

Conclusion

The shut-off value is a very useful parameter for a panel cave mine to ensure that maximum value is extracted from the ore body. It is the one factor that can be set by the mining engineer during the planning phase or the cave management team of an operating panel cave mine. It is also easy to calculate through the production rate formula of a panel cave mine and easy to implement through the use of the HOD. With proper cave management the shut-off value can easily be adjusted with changing economic conditions. The shut-off value should not be neglected for panel cave mine designs because it could mean the difference between a marginal project and a successful project.

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References

1.Diering, T. (2008). Block cave scheduling with a piece of paper. Massmin Conference Lulea, Sweden

2.Diering, T. (2010). Block Cave production scheduling using PCBC. Proceedings SME conference. Phoenix, USA

3.Isabel, A. (2013). Efficient Evaluation of Block Cave Footprints for a Range of Elevations. Proceedings ME conference. Denver, US