Article 3: Step 3 – Optimise the strategic production schedule
Production scheduling is a critical stage in the design and development of an open pit mine.
In GEOVIA’s Strategic Mine Planning workflow – created using GEOVIA Whittle strategic mine planning software and SIMULIA process-automation tools – this stage comes after the mine planner has decided on:
- the best pushback sequence for nested pits to reach the final pit, offering a high-performing starting point and mining direction to maximize value (see Article 1), and
- production rates that will ensure the deposit is extracted on a scale that takes full advantage of its value (see Article 2).
The mine planner now knows, at least preliminarily, which blocks to mine and when to mine them, so the big question left is how to optimise the production schedule in a way that will align with technical and operational constraints – including geological characteristics as well as economic, environmental and social parameters – and maximise NPV.
Before the mine planner can do that, however, the planner needs to understand what can be optimised in order for the mine production schedule to both achieve that higher NPV and adhere to company objectives. The graphic below lays out the typical steps in the mining value chain:
Steps in the value chain, from: Enterprise Optimisation, G. Whittle, 2010
In this article, we discuss how the mine schedule can be optimised jointly with the next steps in the value chain: cut-off, blend and stockpile. (We do not go beyond stockpile optimisation, based on the assumption that a mine will have fixed processing plant parameters, such as recovery, product quality, logistics and market constraints, making further steps out of scope.)
Schedule optimisation
Schedule optimisation aims to maximise NPV by identifying what material to mine from each pushback and when, since the “what and when” will affect the mine’s order of revenues and costs (aka cashflow).
To help determine that “what and when,” GEOVIA Whittle uses the Milawa algorithm, which balances delaying waste with bringing forward high-grade ore from the supplied pushbacks.
Cut-off grade optimisation
Some years ago, Kenneth Lane proposed a strategy for cut-off grade optimisation that is now widely used in the mining industry.
In (very) simple terms, Lane’s theory was that, if a mine constrains the quality of the ore in the early years of production so that 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.
Stockpiling instead of discarding
There is another way, however, to increase NPV that does not involve discarding viable ore.
The use of stockpiles allows the mine planner to bring forward high-grade ore in the early years of production, just like in Lane’s strategy, but the marginal ore is not discarded – rather, it is stockpiled to be processed in the future. This shifts the balance towards higher quality constraints in the early years of the mining project but also uses the remainder of the viable ore later, increasing NPV over the life of the mine.
Extractive blending
By leading to critical improvements in processing, extractive blending can also increase NPV.
For mines that have blending constraints, extractive blending helps mine planners, for example:
- control the feed's variables, such as average rock hardness and ratio of clay, that affect a mill’s capacity to process the ore, leading to improved throughput
- improve control over how much sulfur content ends up in autoclaves, resulting in reduced costs and faster reaction times, and
- decrease the concentration of deleterious materials processed, leading to increased recoveries and lower processing costs.
To improve the quality of the ore extracted while meeting quality (either minimum or maximum grade) constraints, GEOVIA Whittle provides “blend bins” that allow the mine planner to use existing models without having to manually re-classify the block model data to define the most suitable blendings.
Mining complexes
Often, mining companies have two or more mines that are close enough together to share infrastructure. While this proximity means that scheduling and optimisation should be performed considering the entire mining complex, making the choice of final pit and pushbacks for each mine individually should be done to maintain flexibility in the overall sequence between different mines.
Using GEOVIA’s Strategic Mine Planning workflow, it is possible to:
- identify the best directional pushbacks for each mine (see Article 1) and merge the selected pit shells for each mine into a single block model, and
- vary the Hill of Value parameters (see Article 2) for each mine independently or for all mines together (minding the number of iterations!).
Together, this will define optimised mining for the mining complex as well as the individual mines, and establish processing limits both globally and individually.
Simultaneous optimisation (SIMO)
Traditionally, definitions of cut-off grade optimisation and blending constraints are done one at a time, after defining the optimal production schedule at marginal cut-off grade. However, the two definitions are linked: changing the cut-off grade definition and blending constraints often means that the identified mining schedule may not be optimal for the new scenario.
The last step of GEOVIA’s Strategic Mine Planning Workflow is to use GEOVIA Whittle’s Simultaneous Optimisation (SIMO) to optimise the schedule, the cut-off grades (with blending constraints) and stockpiles together to ensure complete alignment.
Gain in NPV using incremental method compared to gain in NPV with Simultaneous Optimization. Schedule, Cut-Off, Stockpile and Blend optimization provide incrementally lower NPV.
SIMO Steps
SIMO relies on heuristic methods (basically, high-tech short-cuts) to look for the highest performance scenario in three major steps:
Step 1: Aggregating the material inside a pushback’s bench into “blend bins,” assuming blocks with similar grades of material will behave similarly within the optimisation. This binning greatly reduces the size of the problem without affecting the results.
Step 2: Finding an optimal solution using numerous iterations to estimate stockpile grade along with numerical methods, starting from an initial feasible schedule, to determine the total depth mined in each pushback for each period.
Step 3: Finding the optimal solution. Because Step 2 depends on the initial feasible schedule, SIMO repeats the procedure a large number of times by randomly sampling the full solution space. Usually, the heuristic converges towards a maximum value and the chance of finding a significantly better solution decreases.
To find out more details about GEOVIA Whittle SIMO find the 3-part related article series "GEOVIA Whittle: Simultaneous optimization" at the end of this post.
Conclusion
After SIMO, the planner will have the most accurate information possible to build a strategic production schedule that:
- stockpiles marginal ore for later use, increasing NPV
- aims for high quality ore earlier in the schedule, leading to critical improvements in discounted cash flow considering processing throughputs, costs and recoveries, and
- can be customised for a mine complex as well as individual mines.
In Article 4 in this series, we discuss how to assess the risks associated with your strategic mine plan and how to ensure it is the strongest, most robust plan possible.
Joaquín ROMERO is a Mining Industry Process Consultant at Dassault Systèmes GEOVIA with 5 years of experience in Industry and Consulting. Joaquin holds a BEng and MEng in Mining Engineering specialized in the use of simulation techniques for robust strategic planning (SMP) for open pit and panel caving mines. Joaquín´s experience began as an intern at Dassault Systèmes, playing a key role in the development of the SMP-OP methodology using GEOVIA Whittle and SIMULIA Isight. After his internship in 3DS, Joaquín extended his knowledge towards underground panel caving operations as an Extraction Process Chief at CODELCO’s El Teniente Mine. Joaquin returned to the 3DS GEOVIA Services team to help customers such as VALE, ARGOS and CHINALCO among others, with the implementation of SMP.
Related posts: