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A comparison of open pit design and scheduling

techniques
a a
Tad S. Golosinski & Terry Bush
a
University of Missouri-Rolla , Rolla, USA
Published online: 10 May 2007.

To cite this article: Tad S. Golosinski & Terry Bush (2000) A comparison of open pit design and scheduling techniques,
International Journal of Surface Mining, Reclamation and Environment, 14:1, 53-61, DOI: 10.1080/13895260008953298

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 International Journal 01Surface Mining, Reclamation and Environment 14 (2000): 53-61

A comparison of open pit design and scheduling techniques

Tad S. Golosinski & Terry Bush

University of Missouri-Rolla, Rolla, USA
Downloaded by [New York University] at 13:03 19 May 2015

ABSTRACT: Two competingsoftware packages are commercially available for open pit production
scheduling: Whittle Four-X and Earthworks NPVScheduler. In this study NPVScheduler was
benchmarked against the Four-X using a statistically designed experiment for accuracy, optimality
and technical practicality. The ultimate pits generated by both packages were foundto be essentially
the same in value, size and shape. The optimalpits generated by NPVSchedulertended to be smaller
in size but similar in value to those generated by Four-X.

KEYWORDS: Open pit mining, mine scheduling, mine planning, pit limits, scheduling software

1 INTRODUCTION

As applied to open pit mine design, optimization is more readily used to selection of eco-
nomical mineable limits of an orebody rather than to the design and scheduling of the ex-
traction sequence. Over the years numerous approaches have been proposed to solve the
mine design/scheduling problem. Most recently Thomas (1996) and Bush (1999) have
chronicled the related developments. Currently only two competing software packages are
commercially available for mine production scheduling at: Whittle Programming Four-X
and Earthworks Corporation NPVScheduler.

2 SCHEDULING SOFTWARE

2.1 Whittle Four-X

Te use and advantages of the Four-X methodology are well documented by Whittle Pro-
gramming Ply. Ltd. (1995, 1997, 1999). Yet it is important to highlight a number offea-
tures of this software that are relevant to the comparison with NPVScheduler.
Four-X uses the Lerchs-Grossman algorithm to generate a set of up to 100 nested pits
outlines, which can be used in one of two ways:
- For choosing the final pit limits based on a variety of criteria including maximum NPV
of the pit, its sensitivity to changing economic inputs, and the like.
- Combined to define pushbacks, which allow for the simulation of mining the push-
backs under assumed economic and production scenarios.

© 2000 A.A.Balkema, Postbus 1675, Rotterdam, Netherlands. www.balkema.nl

 54 T.S. Golosinski & T. Bush

Four-X generates three mining schedules: the Worst Case, the Best Case and the User-
Defined Case. The Worst Case schedule assumes mining each bench of the pit completely
before the next bench is mined. The schedule, which is always feasible, sets the lowest
limit to NPV of the pit. The Best Case schedule assumes mining out a pit completely from
top to bottom before subsequent pits are mined. The schedule is seldom feasible because
the nested pits are usually too narrow to serve as pushbacks. This schedule sets the maxi-
mum possible NPV of the pit. To approximate a more realistic mining sequence, feasible
push backs need to be defined. Four-X offers the choice of mining pushbacks (I) with a
constant lag, (2) to improve NPV with the Milawa Algorithm, or (3) to improve through-
put balance with the Milawa Algorithm. The Milawa algorithm is a strategic, long term
scheduling tool that employs the scheduling techniques presented by Halatchev &
Moustakerov (1996). It uses linear programming to solve the mine scheduling problem af-
ter the push backs were defined. As such it does not address the interdependence between
the pit design and the extraction sequence. Instead the feasible domain is strategically
Downloaded by [New York University] at 13:03 19 May 2015

sampled and the search gradually focuses until it converges on a solution.

Whittle's Four-X version 1.04 released in June 1998 was used in the reported study.

2.2 Earthworks NPVSchedu/er

Tolwinski & Underwood (1996) proposed the approach that concurrently produces incre-
mental pit designs and extraction schedules by finding the highest valued path (defined as
a progression from one possible pit to the next) through a deposit. Through the sampling
of a small, yet representative, portion of all possible paths the algorithm attempts to learn
the characteristics that produce both high and low value paths. The transition form one pit
to the next in a path (a 'state change') is governed by a probability distribution derived
from the number of times that a particular state has appeared in a highly valued path.
Tolwinski (1998) provides detailed explanation of the techniques used in the development
of this 'guided search' algorithm.
The algorithm is capable of taking into account the time value of money, slope restric-
tions, minimum mining widths and uniform ore flow to the mill requirements when devel-
oping a schedule. The algorithm was first incorporated into L-TOPS software package
(Tolwinski & Golosinski, 1995) and now has been successfully implemented into com-
mercially available NPVScheduler of Earthworks Corporation. NPVScheduler is designed
to generate ultimate pit shells, practical pushbacks, interim pits and production schedules
- all optimized to define the maximum cash flow to a project. The program has the ability
to treat multiple ore types, processing methods and grades or products.
Normally pits are extracted in a sequence of pushbacks, with each pushback designed
to meet certain constraints on mining rates and width of working benches. NPVScheduler
accommodates the stated constraints, within the limits of the ultimate pit and governed by
the optimal extraction sequence, to produce practical and optimal pushback sequences.
Targets including mill feed, grade, stripping ratio, ore blending or ore contamination may
be defined in terms of either rates or ratios with user defined mathematical expressions. In
addition multiple targets can be specified and varied over the term of the schedule. The
optimizer attempts to find the optimal schedule that satisfies all targets and maximizes
NPV. If an optimal solution is not found, the scheduler selectively relaxes targets until a
feasible schedule is obtained.
NPVScheduler version 1.5 released in 1997 was used in the reported study.
 A comparison of open pit design and scheduling techniques 55

2.3 Ultimate vs. optimal pit

The terms 'ultimate pit' and 'optimal pit' are often used interchangeably. However, such
usage can be quite misleading. In this study the ultimate pit is defined as the pit that deliv-
ers maximum, undiscounted cash flow. The optimal pit is defined as the pit that maxi-
mizes discounted cash flow. It follows that the optimal pit will almost always fall inside
the ultimate pit.

3 INVESTIGATIONS

3.1 Study objectives and methodology

The objective of the reported study was to analyze the two software packages in a variety
of production scenarios. The analysis concentrated on the following issues:
Downloaded by [New York University] at 13:03 19 May 2015

- Comparisons of ultimate pit limit definitions,

- Practicality and mining feasibility of final pit design,
- Comparisons of production scheduling techniques and methodology.
The methodology involved generation of numerous pits for a variety of predetermined
scenarios using both Four-X and NPVScheduler. This was done for a selected, representa-
tive geological model of an orebody. The criteria used for optimization of pit limits and
production schedules were: maximization of cash flow and maximization of the net pre-
sent value of the defined pits. Considering wide use of Four-X in the mining industry, the
NPVScheduler was benchmarked against Four-X. The resultant ultimate pit shells were
then evaluated and compared for accuracy, optimality and technical feasibility.

3.2 Orebody model

The geological model included with Tutorial of Whittle's Four-D package was chosen for
comparisons. The model represents a small gold orebody comprised of three material
types: weathered (WTHR), oxide (OXID) and sulfide (SULF). An additional waste mate-
rial zone rwASTE) was added to this model. The oxide and sulfide comprise the mineral-
ized gold bearing ore within the orebody. The block model contains 640,320 tonnes (t) of
oxide and 6,667,920 tonnes (t) of sulfide. The oxide zone contains 64,675 oz of gold grad-
ing 0.101 ozlt and the sulfide zone contains 465,812 oz of gold grading 0.070 ozlt.

3.3 Assumptions
To successfully determine the ultimate pit for an orebody, using either Four-X or
NPVScheduler various inputs need to be defined. These comprise operating and design
parameters and range from the model dimensions to metal prices and process capabilities.
For the purpose of this study the inputs were divided into two categories: (I) constants
and (2) experimental inputs or variables. Constant inputs are those that do not change
through the investigations. Values of the constants selected for this study are reported by
Bush (1999). Variables are the experimental inputs investigated to determine their effect
on NPV, cash flow and shape of the ultimate pit. The four key variables analyzed in this
study were: (I) discount factor, (2) metal price, (3) mining cost and (4) milling rate, yield-
ing fifteen possible combinations of variables. The effects of discount factor were investi-
 56 T.S. Golosinski & T. Bush

gated over a range of 6% to 14%, effects of gold price over the range of $200/0z to
$400/0z, the effects of mining cost over the range of $1.00/t to $2/t and milling rate over
the range of 200,000 tlyear to 400,000 tlyear.

3.4 Experiments
Screening experiments were used to reduce the number of experimental software runs by
allowing identification of the factors that may have little or no effect on the experiment
response (Montgomery, 1997). Minitab (1998) software package was used for a full facto-
rial design of experiments facilitating definition of the variable combinations with signifi-
cant influence on the NPV of a pit design. A simple two-level design with four factors
(cost of capital, mining cost, metal price and mill rate) requires a 16 run screening ex-
periment. An additional center point was added to the experiment for a total of 17 ultimate
pit runs required to identify significant parameters.
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The maximum NPV for each of the 17 runs was determined for the Four-X Worst
Case, Four-X Best Case and NPVScheduler. Once incorporated into a coded data matrix
the results were screened using Minitab. The results of the screening experiments identi-
fied the factors with significant impact on pit NPV. These are shown in Table I.
A total of seven experiments were run, in each the singe significant factor, or a signifi-
cant combination of factors, varied over a range of five values while the other factors were
held constant. Each of the seven experiments consisted of a total of 25 ultimate pit runs.
The results of each experiment were then compared and evaluated. The comparison in-
cluded that of optimal pits and ultimate pits. Also compared were shapes of graphs on
which: cumulative NPV, cumulative cash flow, total tonnage mined, total oxide mined, to-
tal sulfide mined, total waste mined and gold produced were plotted against time.

4 RESULTS

Large number of ultimate pit runs across the seven experiments does not allow for presen-
tation of all the results in this paper. Instead, a representative comparison has been se-
lected to demonstrate the differences and similarities between the results of the two pack-
age runs. It comprises investigation of the evolution of ultimate and optimal pits using the
following values of variables: discount factor at 14%, metal price of $400/0z, mining cost

Table l. Results of the screening experiments.

Combination no. Four-X Best Case Four-X Worst Case NPVScheduler
I Metal price Metal price Metal price
2 Cost of capital Cost of capital Cost of capital
3 (CC) x (MP) (CC) x (MP) (CC) x (MP)
4 Milling rate Milling rate Milling rate
5 Mining cost (MP) x (MR) (MP) x (MR)
6 (MP) x (MR) Mining cost Mining cost
7 nla nla (MC) x (MP)
CC = cost of capital, MP = metal price, MR = milling rate.
 A comparison of open pit design and scheduling techniques 57

of $2/t and a milling rate of 400,000 t/y. Details of all 175 runs, each including separate
Four-X Best Case, Four-X Worst Case and NPVScheduler runs, were documented by
Bush (1999).
Comparison of ultimate pits in terms of value and shape was done by benchmarking the
NPVScheduler maximum cash flow and corresponding rock, OXID, SULF, waste and
gold production against corresponding values obtained from Four-X. Comparison of the
optimal pits in terms of value and shape was done in the same manner, with the focus of
comparison being NPV. The evolution of the ultimate pits was compared graphically by
comparing plots of maximum cash flow and the corresponding rock, OXID, SULF, waste
and gold production against time.
Table 2 quantitatively compares the ultimate pits generated for the selected case. The
values of the ultimate pits, in terms of total undiscounted cash flow are essentially the
same. Likewise the final pit limits are essentially the same. Similarities in the final ulti-
mate pits are also clearly visible in pit plan views and cross-sections as reported by Bush
Downloaded by [New York University] at 13:03 19 May 2015

(1999).
Table 3 compares the optimal pits generated by Four-X and NPVScheduler. It shows
that while the NPV of pits defined by the NPVScheduler falls within the range defined by
the Four-X Worst Case and the Best Case, its maximum value is reached much earlier in

Table 2. Comparison of ultimate pits for the sample case.

FWC FBC NPV FWC and NPV FBC and NPV
difference, % difference, %
Cash flow, $ 41,575,116 41,575,116 41,143,000 1.0 1.0
Pit life, periods 14.87 14.87 14.84 0.2 0.2
Rock, tonnes 17,242,560 17,242,560 16,941,840 1.7 1.7
Mill-OXID, tonnes 635,600 635,600 625,600 0 0
Mill-SILF, tonnes 5,322,240 5,322,240 5,311,440 0.2 0.2
Ore, tonnes 5,947,840 5,947,840 5,937,040 0.2 0.2
Waste, tonnes 11,294,720 11,294,720 11,004,800 2.6 2.6
Gold,oz 416,323 416,323 413,334 0.7 0.7
FWC - Four-X Worst Case, FBC =Four-X Best Case, NPV = NPVScheduler.

Table 3. Comparison of optimal pits.

FWC FBC NPV FWCandNPV FBC and NPV
difference, % difference, %
NPV,$ 16,458,613 20,270,643 18,494,391 12.4% 8.8%
Pit life, period 9.92 14.87 4.97 49.9 66.6
Rock, tonnes 9,218,160 17,242,560 5,674,320 38.4 67.1
Mill-OXID,t 635,600 625,600 625,600 0 0
Mill-SILF, t 3,343,680 5,322,240 2,185,920 34.6 58.9
Ore, tonnes 3,969,280 5,947,840 2,811,520 29.2 52.7
Waste, tonnes 5,248,880 11,294,720 2,862,800 45.5 74.7
Gold,oz 286,684 416,323 207,923 27.5 50.1
FWC =Four-X Worst Case, FBC =Four-X Best Case, NPV = NPVScheduler.
 58 T.S. Golosinski & T. Bush

the life of the mine. This is the case for large majority of the 175 software runs analyzed
in this study. This leads to the conclusion that the NPVScheduler attains the optimal pit,
similar in value to that defined by Four-X, with significantly less material to mine. In a
way the NPVScheduler 'high grades' the deposit, a legitimate approach to mining an ore-
body if the objective is to maximize the project NPV.
The major problem encountered in this study relates to definition of pushbacks. A
number of variables must be taken into account when defining the size of a pushback,
such as mining rate, metal content, etc. of the two packages difficult. For a comparison to
be reliable pushbacks designed from Four-X nested pits should be the same as pushbacks
designed by NPVScheduler. Unfortunately neither software generates the same number of
nested pits in terms of rock, OXID, SULF or waste tonnage. Therefore, mine life (time)
was used to facilitate the comparisons. Pushbacks were defined using the amount of time,
in years, required to mine each one. Although not practical in an actual mining operation
this approach allows for fairly reliable analysis of mine evolution over its life.
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To evaluate evolution of the ultimate pit five pushbacks were defined for the selected
model that could be mined in approximately the same time using either Four-X Best Case
or NPVScheduler approaches. Visual inspection of the pit plans and cross-sections, re-
ported on in detail by Bush (1999) indicates that the ultimate pits are essentially the same,
except for pit fringes. However the noticeable difference in pit evolution is clearly identi-
fiable. As a general rule, the initial push backs generated by NPVScheduler are larger than
those generated by Four-X. This changes as the mining advances with the final Four-X
pushbacks much larger than those defined by NPVScheduler.
This trend is also noticeable in Tables 4-6 and Figures 1-3, all of which point out to a
significant difference in the evolution of the ultimate pit, even though there is little differ-
ence in the shape and value of the ultimate pit itself. This confirms the previous observa-
tion of 'high grading' on the part of the NPVScheduler. A number of other observations
can be made as follows:

Table4. Cumulative net presentvalue (NPV) comparison.

Four-X BestCase NPVScheduler
---'--'-~--------
Phase NPV,$ Phase NPV,$
8 6,934,944 2 11,154,194
13 13,377,351 24 17,342,156
16 19,504,140 39 14,792,043
18 20,035,685 41 12,690,254

Table 5. Cumulative gold production comparison.

Four-X Best Case "NPVScheduler
--------------
Period end, years Gold produced, oz Periodend, years Gold produced, oz
0.87 37,201 0.84 61,684
2.77 96,877 2.80 141,941
9.92 286,684 10.02 333,212
11.82 337,044 11.69 363,745
 A comparison ofopen pit design and scheduling techniques 59

Table 5. Cumulative cash flow comparison.

Four-XBest Case NPVScheduler
Period end, years Cash flow, $ Period end, years Cash flow, $
0.87 7,895,260 0.84 11,981,660
2.77 16,975,679 2.80 21,828,160
9.92 35,446,837 10.02 38,378,200
11.82 38,733,157 11.69 39,882,520
14.87 41,575,116 14.84 41,143,000

NPV (Cumulative) versus Time

Discount Factor = 14%. Mining Cost = S2.00Jlonne. Metal Price = $4OOIoz.Mill Rate :::400,000 tonnes/year

$25.000.000 .-,.----.---------r---,----,--------,
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$20,2 ,0.643

$20.000.000

$15,000.000

~ $10.000.000

ss.ooo.ooc

$O __.L-~..L...._~--~--..L....~..L...._~--"-~---...J
o 10 15 20
Time
1-+- Whittle Worst Case Whittle Best Case --.- NPVScheduler 0 Max NPV - Comparison I
Figure 1. Plot of cumulative NPV versus time.

NPVScheduler mines more material earlier in the life of a pit, while Four-X mines
more in the later stages of pit development.
NPVScheduler tends to excavate more material at a greater depth through the earlier
stages of pit life.
NPVScheduler defined pits tend to be smoother and more contiguous, which may result
in more practical pit design.
Final limits of the ultimate pit as defined by each package are either the same or the
difference between them is insignificant.

5 OPTIMAL SCHEDULING

The major limitation to comparing the two scheduling packages revolves around the defi-
 60 T.S. Golosinski & T. Bush

Gold (Cwnulative) versus Time

Discount Factor = 14%. Mining Cost =$2.00/tonne. Metal Price = $400/oz. MillRate
=400 000 tonnesl ear

400.000

! 300.000

."

8 200,000

100,000
Downloaded by [New York University] at 13:03 19 May 2015

10 15 20
Time

1 Whittle Best Case --.- NPVScheduler 0 Max NPV 0 At Max Cash Flow - Comparison I

Figure 2. Cumulative gold production versus time.

Cash Flow (Cumulative) versus Time

Discount Factor = 14%, Mining Cost =$2.00/tonne, Metal Price =$400/oz,
Mill Rate =400,000 tonnes/year

$40,000.000

$35,000,000

$)0,000,000

~
~ $25.000,000

~
~ $20.000,000
(.)

$15,000,000

$10,000,000

$5.000,000

$0 __ _ _l -
-"---~---'-'- -----.JL-_.L-~_---!L-~ ----'

o 10 15 20
Time
1 Whittle Best Ca,e -.- NPVScheduler 0 Max NPV - Comparison I

Figure 3. Comparison of cumulative cash flow.

 A comparison ofopen pit design and scheduling techniques 61

nition and use of pushbacks. Four-X requires the user to define the pushbacks using the
nested pits. The NPVScheduler generates the pushbacks automatically with user specify-
ing only their number. In this study it was impossible to match exactly the size and lor
shape of the pushbacks generated by the two packages. Clearly, if the pushbacks differ
significantly then each package schedules are not comparable. This means that reliable
comparison is very difficult to made.

6 CONCLUSIONS

The reported study has led the authors to the following conclusions:
1. The overall values of the ultimate pits generated by Four-X and NPVScheduler and
practically the same. Similarly the final shape and size of ultimate pits is practically
the same.
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2. The value of optimal pits defined by NPVScheduler falls in-between the values de-
fined by Four-X Best Case and Four-X Worst Case scenarios.
3. The size and shape of optimal pit defined by NPVScheduler is typically smaller than
that defined using any of the Four-X scenarios
4. NPVScheduler maximizes the NPV of a deposit through the process of its 'high grad-
ing'.
Further work needs to be performed to define the limits of application, if any, of the above
conclusions. The conclusions may not be valid for the deposits that are distinctly different
from that used in the evaluations, such as bedded deposits, steeply dipping deposits, etc.
Furthermore considering that NPVScheduler 'high grades' the deposit comparison with
Whittle Programming Opti-Cut software package may be appropriate. The latter is also
designed to 'high grade' the deposits in order to improve the initial cash flow.

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