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i SOCIETY FOR
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MINING, METALLURGY,
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STRATEGIC PLANNING IN OPEN PIT MINE OPTIMISATION
A. J. Basu
S. Belohlawek
Western Australian School of Mines
Kalgoorlie, WA, Australia
B. McFadzean
Kalgoorlie Consolidated Gold
Kalgoorlie, WA, Australia
For presentation at the SME Annual Meeting
Denver, Colorado - February 24-27,1997
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MINING ENGINEERING
Abstract. Computer assisted mine planning and design
are routinely used by many Australian mining
companies, However, the design process requires human
expertise to recognise and evaluate the potential pitfalls.
This paper introduces the application of a commercial
optimisation software (WHITTLE 4D) for strategic
planning of an open pit mine in Western Australia. The
authors present their experience in intelligent application of
the optimisation program while incorporating many
technical and nontechnical obstacles. This paper provides
some guidelines on how to apply the optimisation software
without loosing sight of practicalities. Moreover, this
paper also shows how to build project evaluation
guidelines for nonexperts.
Introduction and Background
This paper is based on an industrial project thesis (final
year in mining engineering program at Western Australian
School of Mines) by Mr. Steve Belohlawek (I 996). The
project included mine planning and design and discussion
ofa case study. The project was the student's first attempt
in any real time mine design exercise and he was ably
supported by his industrial supervisor Mr. Bruce
McFadzean (General Superintendent, Open Pit operations,
Kalgoorlie Consolidated Gold Mines).
The aim of this paper is to share the design experience.
Initially it appears that it is a relatively simple process to
optimise and create a small pit. However, some essential
small checks are required at every step to ensure that a
garbage in garbage out scenario does not occur.
The case study involved preparation of a feasibility study
of a small identified mineral resource, code named Golden
Star. The lease in which Golden star situated, belongs to
Kalgoorlie Consolidated Gold Mines Pty who are the
operators of the Mt. Charlotte underground mine and
Fimiston open pits, both of which are in Kalgoorlie. At the
time of writing Kalgoorlie Consolidated Gold Mines were
the largest producers of gold in Australia with an annual
production of 650,000 oz.
Golden star is the largest potential resource amongst a
multitude of neighbouring pockets of mineralisation and its
location are not revealed for reasons of confidentiality cited
by the lease hold company. This investigation did not seek
to discover new scientific methods nor disapprove old
ones. The main objective of the project was to document a
real-life mineral property evaluation and explain, "What are
the fundamental requirements of a mine design"? The
project was a learning experience for the student
(Belohlawek, 1996) as well as generating a detailed case
. study for use bithe industrial sponsor. Moreover, the
project report will also be used by the principal author in
teaching mine planning and design to the mining
engineering students.
There are a large number of publications in principles of
mine design and optimisation for open pit mines. A very
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good reference is Open Pit Mine Planning and Design
(Hustrulid and Kuchta, 1995). A detailed literature review
is not included here. Readers interested in optimisation
using Whittle software may look up several publications by
the Whittle Programming Ltd. A good place to look up is
the internet site or home page for the software company
(http://www.whittie.com.au). Discussion on mine
planning is limited in this paper to the case study used in
the project.
Levels of Mineral Evaluation
Mine evaluation and associated investment analysis are
usually undertaken in three levels of variable validation,
detail and effort. They are prefeasibility study, feasibility
study and bankable feasibility study.
Prefeasibility Study
The prefeasibility study is the first broad engineering-
economic review of the project as a commercial venture.
The objective of the prefeasibility study is to (1) determine
the potential of the project, (2) identity key variables upon
which the project's validity relies. It's outcome is typically
to secure funding for further investigation. A feasibility
study is recommended only upon a positive outcome of a
prefeasibility study. There is also a growing trend towards
creating a resource model at the prefeasibility stage.
Feasibility Study
The feasibility study is the principal document justitying
capital investment and as such should contain a financial
analysis Ol the project, analysis of key variables and
assessment of down-side risks and upside potential
(Belohlawek, 1996). It should include resource modelling
and pit,designs, haul road and waste dump planning,
process plant design, production planning and scheduling.
Bankable Feasibility Study
The bankable feasibility study focuses on satistying the
financier about the capability ofthe project to repay the
loans. The feasibility and bankable feasibility study are
basically two versions of the same report aiming at two
different professional disciplines. The feasibility study
answers the questions of geologists and mine planning
engineers and the bankable feasibility study addresses the
potential investors. The bankable feasibility study has a
much higher degree of confidentiality and may also be
more comprehensive containing all the financial data and
most of the mine plans.
Finally, if given a go ahead to proceed with mine
development and procurement, the feasibility study will be
used the mine management team to construct working
plans.
Components of Mine Planning and Design
This topic is handled here very briefly and mainly included
for of the paper. A detailed coverage is
available In any standard mine design texts. However
some minor points during an academic exercise such
land acquisition poses a major problem in '
application of mine design. Therefore, the discussion in
this section is limited to highlight the potential problem
areas and warn the novice mine planner for not to
underestimate of these issues. Moreover, where
applicable, integration of these components with the
Whittle FourD software are addressed.
The major are: (1) Land acquisition, (2)
Natural Environment, (3) Geotechnical, (4) Production
planning and scheduling, and (5) Equipment selection.
first two issues are of prime concern when dealing
with commercial mine design. A very careful and
comprehensive study of the proposed land area should be
made and all the possible claims should be included. All
the local laws including state and federal should be given
:ery extensive consideration. The case study in this report
Includes the effect of Native Title Agreement (French,
1995) law passed in recent years.
Moreover, care should be taken to minimise disturbance
to the environment. Environment impact studies are
required in most cases and the guidelines are provided by
the local enforcement agencies.
Geotechnical input to mine design is an area of high
financial leverage, especially in larger operations. Steeper
slopes improve mine economics, but pose safety concerns.
Therefore, a balance has to be reached and geotechnical
engineers provide a valuable input in providing the
operational safety while maintaining profitability. For this
obvious reason geotechnical input is a key design
parameter in the optimisation process using the Whittle
FourD software.
Equipment selection and production planning are linked
to each other. The production information is required
while performing the analysis option (FDAN) of the
Whittle FourD software. The data required are in form of
rock tonnage and mining rate per period.
Optimisation
Optimisation provides an opportunity to integrate the
major design components and helps the mine planner to
look at the objective function of maximising profit. There
are many available literature on open pit optimisation.
However, as mentioned earlier, this paper mainly deals
with application of Whittle FourD in a practical mine
design exercise.
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Optimising with Whittle
?egree of completeness of a pit design and the
considered in its undertaking depends on the
of the person in charge. There are a number of
Items to account for and the ability to include them
:equires forethought of previous designs and good
Judgement for the future. The optimisation software has
total seven modules. There are three program modules
(FDST, FDOP, FDAN) to link the blocks ofa model with
slope to run the optimisation, and to present
econonuc scenanos based on user provided production and
cost data. These are mainly black boxes and the user does
not have much control on execution of the modules. The
other four modules are: (1) an editor to create a parameter
file (FED), (2) a utility tool to perform reserve estimation
and create grade tonnage curves (VEDUTA), (3) a resizing
tool to revise block sizes and apply incremental costs
(FDRB), and (4) to print output files (FDPR).
. The most important input file in the optimisation process
IS the parameter file, because it contains all the valuable
information. First, it includes the geological model
information (including geometry of the model and
blocks) of the orebody. Second, geotechnical
In form of slope bearing and slope angle is
Then other parameters, such as, rock type,
dilutIOn, recovery, processing cost ratio are entered.
Another major piece of information in a parameter file the
metal cost of mining (cost of mining! price) or MCOSTM.
This parameter helps in creating nested pits and an
pit shell is selected by the FDAN module upon
prOViding the necessary information (please refer to the
software manual for more details).
Two major emerging issues here are block sizes and
geotechnical information. A very large model containing
small blocks does not necessarily produce more accurate
resource model. The trade-off in computing time and
expected accuracy may warrant a much cruder model with
larger block sizes. Geologists and Engineers must come to
an agreement on the proper block sizes before running the
optimisation. Geotechnical engineers and Planning
engineers must also agree on the degree of acceptability
and risk involved with a slope design information. Figure 1
outlines the geotechnical engineering cycle. The
recommended procedure for optimisation using the Whittle
F ourD optimisation software in shown in Figure 2.
Figure 1. The role of geotechnical engineering.
r-______________________________
Oevtlop PU!l:rnelerJ File
Detemune
;.. \IC"SlMV:llues
;.. Slope .-\n!Jle
;.. Rod: f)-pet
;.. meu..O<ts,rec;ovmet..t cost f.l!lOS
:
II /' Optimum (?) Pit
, J ;l<)IM
!(t)I1.'1.l uinm31e j.'Irt:unnJo;e
Estlm.lIc realistic ranges o()"llrung r.ue.'MIJllng: rJ.te comblnaUons
fUteptfIllnWnIfWIIII!I(lIIIlling)
Rerun optlmlSlnon 10 investigate the effect of diminishing retUml on the 4bove
comblnanons of dbcoutUed ctulljlow.
A Optimum Pit IS now dc:tined by constralnlS of
, MtnlOgRale
;.. Milling Rate
;.. Capital COSt
,. Discount ROlle
These: tOnstralOts allow the process to delc:mllnc: 3. mme life <1nd thus
enables the nme dependent dlSCOuntlDg of revenues ilnd expenwtures
:unher analysis would typically Include: evaluating senslIIVI1lCS of
, Slope angle
,. Incluslorvc:xcluslon of ore !)'pes
:; Vanatlons 1ft recovenes
:Po other
Figure 2, Procedure for initialisation of an optimisation
using Whittle FourD
Mine Planning Cycle
Mine planning, especially optimisation, is a cyclic process.
The mine planner does not have all the necessary
information in the beginning and may lead to some level of
fiustration. The understanding of the cyclic nature would
alleviate this fiustration and the unexperienced mine
planner would see the wisdom in stepwise refinement of
the planning process. To master the planning process it
requires experience, One has to gain the experience the
hard way, and that is by taking the challenge oflooking
into small details and willingness to learn a wide variety of
computer software, A lighter side of mine planning is
illustrated in Figure 3.
Case Study
The evaluation was a feasibility study of an oxide
resource. The objective was to determine whether
sufficient quantities of oxide ore existed to maintain supply
to an existing milt The mill is scheduled to shutdown in
foreseeable future as its operating life follows the depletion
of remaining oxide in stockpiles,
The evaluation had to consider problems posed by
existing infrastructure, such as, railway lines and a
communication tower. Moreover, it was further
complicated by the native title claim by the indigenous
people,
RESIX1!iC EST/MAToS
Figure 3, A lighter side of mine planning (Northern Miner,
First Quarter, 1996)
The resource has been mined on small scale by
underground methods in the past. There are many old
workings in the immediate area of interest including one
substantial shaft. Aerial photographs clearly show the
workings lay predominantly along the geological contact of
the Devon Consols Basalt and Kapai Slate.
The detailed discussion of the case study is beyond the
scope of this paper, Interested readers should refer to the
industrial project report by Belohlawek (1996), The basic
description ofthe case study already shows the complexity
of the problem The resource model had to be restricted by
the infrastructure and the native title claim, A considerable
effort was made arrive at valuations by running a number
of optimisation scenarios, Figure 4 shows a summary of
these optimisation.
Figure 4. Summary of optimisation runs considering
infrastructure and native title claim restrictions,
The pit was not deep enough to consider major
geotechnical study, but the rock was of weathered type,
Geotechnical information from existing pits around was
used and the GALENA (BHP Engineering, 1994) slope
stability software was used to check the factor of safety
above 1.3. The principal author also created a simple
finite element model which agreed with the results obtained
from the limit equilibrium method of slope stability analysis
using GALENA and design charts prescribed by Hoek and
Bray (1994). The key point here is even if the pit depth is
not deep enough, we need to continue with basic
engineering study and make sure that all the safety
requirements are met.
The optimisation process did not pose any theoretical
problem. On the contrary it was a relatively simple design
for a small pit, but had practical obstacles including the
railway reserve and the communication tower. Moreover,
the planning process was further complicated by native
title claims. The detailed optimisation followed the
standard procedures.
A large number of charts can be made out of the output
analysis. It is very important in understanding and
interpreting the design charts. Figure 5 shows a chart
showing pit shell sensitivity based on price.
PIt ..... ,_YIty

g
;= -;-*M::-:c .... :.-... : ... .. -.;-...

= 2OQ)
;:
f 15C1l
''''''
...
a a a ! R a I a ! a Iii i G 5 i
..... WllUttAlElt
Figure 5. Chart showing pit shell sensitivity on price.
Tulp (1994) provided an interesting paper in using the
charts to interpret the design. In the current example
Figure 6 shows a large increase of recovered metal
between the values of AUD (Australian Dollar) 375 and
AUD 400. At this point a large portion of the resource
becomes economic. Marginal increases in pit size
followed by sudden jump in size to the next pit number
indicates a likely position of a cutback. The chart in Figure
6 provides initial suggestions of possible cutback between
pit shells of375 and 400 AUD).
As stated earlier the case study information was used here
to highlight the important steps in an optimisation process
using Whittle F ourD. A few guidelines for selecting the
optimum pit are addressed here. The guidelines provided
here are not absolute. The user has to apply the relevant
concept if it is applicable to a specific situation. The major
factors affecting the selection of an optimum pit shell are:
(1) Mine life, (2) Completeness of resource definition. In
general, discounted cashflow (NPV) should be used to
select the smaller resources. Where the size of resource
4
:
,
...............
;
, i
:
; ______ r--
;
;
,
v
p-+= .
i
V
i
""1'
,
'U
: : ;
: ;
J
.
;

:'
i :
V
.
.
o .
Figure 6. Example of a chart (generated from optimisation
results) helping in visualising the effect of
incremental mining.
indicates a long mine life the undiscounted cash flow
should be considered.
Whether cashflow or NPV analysis is used it is important
to know if the resource has been fully defined or if more
mineralised material is found every time a further resource
definition hole is drilled.
Conclusions
The authors outlined a few general design principles and
steps used in a practical mine design exercise. It is hoped
that the project report and this paper would help a person
planning to perform similar exercises. The authors also
request comments and suggestions from other experienced
mine planning engineers .
Another very good source of information and guidelines
on using the Whittle FourD software is the proceedings of
conference "Optimizing with Whittle" in 1995 held in
Perth. The proceedings contains a number of case studies
and valuable instructions and guidelines. A similar
conference is planned for April 1997 and will also be a
source of valuable information. The principal author's next
goal is to compile the existing information and produce a
set of simplified rules to follow the optimisation process.
Acknowledgments
The authors from Western Australian School of Mines
acknowledges the sponsorship provided by Kalgoorlie
Consolidated Gold Mines in form of technical support and
advice from Mr. Bruce McFadzean and other staff
including mine planning engineers and geotechnical
engineers.
References
Belohlawek, S., 1996, Mine Design A Discussion and Case
Study, Industrial Project Report, Department of Mining
Engineering and Mine Surveying, Western Australian
School of Mines, Kalgoorlie (Curtin University -
Kalgoorlie Campus), November.
French, R. S., 1995, "An Overview of Native Title", The
AusIMM Bulletin, Journal of the Australasian
Institute of Mining and Metallurgy, No.1, February.
GALENA- User's Guide, 1994, BHP Engineering.
Hustrulid, W. A., and Kuchta, M., 1995, Open Pit Mine
Planning and Design, Vol. 1 and 2, Balkema,
Rotterdam.
Hoek, E. and Bray, J. W., 1994, Rock Slope Engineering,
The Institute of Mining and Metallurgy, University
Press, Cambridge.
Tulp, T., 1994, "Application of Whittle Four-D to Risk
Management in Pit Optimisation, Proceedings, Fourth
Large Open Pit Mining Conference, Perth, September.
Whittle Open Pit Optimisation Software - Four D, 1993,
User Manual, Whittle Programming Pty Ltd.,
Melbourne.
Whittle, J. (ed.), 1995, Optimizing with Whittle,
Proceedings, Whittle Conference, Perth, March 13-14.
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