Authored by Cristian Poblete
Here’s how you plan a mine with confidence, even when market conditions are uncertain
Leverage the power of “Robust Design” to perform next-generation strategic mine planning that delivers value and performance that lasts.
While mining companies do not control uncertainty in the marketplace, they are seeking to increase their confidence in the mine plans they produce to stand the test of time. For many of them developing leaner mine plans is also part of the equation that goes into this process in an era of greater environmental concern. For every unit of reduced emissions, there also comes an opportunity to lower fuel consumption costs or fleet size. New technologies available to mining companies and their planning departments point the way forward to achieving these goals.
It’s time for a paradigm shift, a move towards an experience that delivers the confidence mine planners need. It’s centered on Robust Strategic Mine Planning, or RSMP for short. RSMP is based on the “Taguchi Methodology” involving what’s known as “Robust Design”, which has also been applied successfully in many other industries. Its purpose is to add quality in the design of production processes by reducing the effect of controllable and uncontrollable variability on production outcomes.
Mining has historically focused on choosing the optimal mathematical cases without considering that such cases are very hard to achieve, and at that, they usually occur only in very specific conditions. When planning a mine, mining companies must look beyond the most valuable or most optimal result that can be achieved over a short time horizon.
The RSMP paradigm presents the value of considering a high-level plan with satisfactory value that’s less subject to variability. Thus, it is said to be the most reliable — or robust — scenario or plan.
Mine planners need to consider what generates value over the longer term — up to a decade or more — and plan their mine to operate sustainably even before they strike ground. This is possible through the generation of multiple scenarios to evaluate the volatility of external factors subject to different design configurations. In mining, RSMP considers various economic, geological and geomechanical variables.
RSMP begins by optimizing pit design by determining the best mine size and the number, direction and sequence of phases. In a real-world application, a solution that operates with a RSMP paradigm has been demonstrated to compute 1,600 directional alternatives in the nested pits in mere hours. In this case, it increased the net present value of the schedule by 5 percent.
RSMP then helps mine planners make production robust by factoring both uncontrolled and controlled variables like price and cost fluctuations, likelihood of equipment failure, ore grade, fleet dimensioning, scales of production and more. In another real-world case, 40 mining configurations were tested against 100 predicted price series in under 24 hours; that’s 4000 mine plans that were assessed to find the production scale with the most favorable response to price uncertainty. The result? A plan that balanced value generation and volatility management for a mine that has optimally placed dump piles, crew schedules, processing facilities and much more to ensure production keeps pace with key performance indicators over a long planning horizon. That’s robust production.
This is where it gets interesting. The next step, which is to take these simulations a step further and stretch the planning horizon 10 years into the future, happens when the solution is able to simulate thousands of economic scenarios. With this capability, mine planners are able to de-risk their operations. Ore reserves, a key long-term risk, is difficult to predict due to geological variation, economic conditions and errors in geomechanical models. When the estimation of pit reserves are unreliable, it’s difficult to understand a project’s full potential.
This key data point informs production guidance reports that can drastically affect a mining company’s share price. When shareholders rely on your ability to confidently estimate production, the ability to simulate your production projections is crucial, with hundreds of millions of dollars potentially on the line.
That’s why it is necessary to simulate the perfect storm — to consider both the best and worst cases based on your reserves estimates. With RSMP, it is possible to calculate and visualize the probability of a block to be part of the pit or stopes of reserves. In the real world, the solution ran over 1,000 simulations, representing different scenarios, in less than 24 hours to determine the best stope design to meet operational KPIs.
That is what robust strategic mine planning is all about: It’s not just about capturing the most value now; it’s to ensure that value and production can be sustained over a long time horizon in a variety of market conditions. Only with powerful simulation and optimization can mine planners confidently state that they’ve conducted strategic mine planning.
With the right solution that is based on the RSMP framework, it is possible to have a robust mine plan that generates value for many years.
Experience the robust mine from end to end, starting from pit design all the way to scenario simulation. Begin your journey with a video that demonstrates the experience the solution delivers or read an exclusive in-depth eBook that delves into RSMP.
Cristian is a mining engineer with ten years’ experience. He is currently working as a Senior Solution Consultant at Dassault Systèmes in the services area of the GEOVIA Center of Excellence, Americas. His area of expertise ranges from geostatistical evaluation of deposits to strategic mine planning. Cristian leads the development of methodologies within the Robust Strategic Mine Planning framework and is one of the principal consultants in Latin America.