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I'UIU1Ufllentals
Reibell, H.V. 1969. Deep open-pit optimization. In: A Decade of D' 't Ie" .
(A. Weiss, edi tor): 359-372. New York: AIME. Igl a omputlllg III the MInerai Industry
Lehrchs-Grossmann algorithm for open-pit design. In: Proceedings
. ympos/Um, aust ai, Germany, 1975: B-IV 1- 17
Robmson, R.H. & N B Prenn 1973 An ope ' t d' ad I .
. . . . n-pl eSlgn m e. In: Proceedings of the JOth APCOM Sym
pos/Um: 155- I 63. Johannesburg: SAIMM. -
G.M. 1970. Computer-based design of open cut mines. Proc. Aust. IrlSt Min Met (6)(234)' 49 57
edr
t
r)g, I
A
41&16
D
5
0
N Rausch 1968. Chapter 4.1. Pit planning and layout. In: Suiface'Mini;,g (E. P.
e I or . - . ew York: SME-AIME. '
Tanays, E., R. Cojean & D. Hantz 1992. DEGRES: A software to design open-pit geometry and to draw
open-pit plans. Int. J. of Surface Mining and Reclamation (2)6: 91-98.
West, FJ. 1966. Open-pit at the Adams Mine. c/M Bulletin (657)59(3): 392-33 1.
Beyond optimIzatIOn 10 open-pit design. 1st Canadian Conference on Computer Applications
In t e lOeral Industry, Laval University, Quebec City, March 7-9, 1988.
J. 1989. The facts and fallacies of open-pit opti mization. Whittle Programming Pty. Ltd. (I).
DE & IE.M. 1974. Computer use in determining ore reserves and stripping ratios at Eagle
ountam. n. Proceedlllgs of the 12th APCOM (T.B. Johnson and D W G t d' ) V< I
H59-H71. Colorado School of Mines. . . en ry, e Itors, 0 ume II:
Williams, C.E. 1974. Computerized year-by-year open-pit mi ne scheduling. TraIlS 256. SME-AIME.
Williamson, D.R. & E.R. Mueller 1976. Ore estimation at Cyprus Pi ma Mine. Paper presented at the AIME
Annual MeetlOg, Las Vegas, Feb. 22-26, 1976: preprint 76-AO-13.
Yegulalp, T.M. and JA Arias 19. 92. A fast algorithm to solve the ultimate pit limit problem.
23rd APCOM (YC. Kim, editor): 391-397. Littleton CO' SME In: Proceedings
Zhao' ' . .
M' Y & syc. KIm 1990. A new graph theory algorithm for optimal ult imate pit design. SME Annual
eetlOg, alt Lake City, UT, Feb. 26-Mar. I, 1990: preprint No. 90-9.
Zhao, Y & yc. Kim 1992. A new optimum pit limit design al gorithm. In: 23rd APCOM (YC Ki d' ).
423-434. Balt imore: Port City Press/SME. .. m, e Itor.
CHAPTER 6
Production planning
6.1 INTRODUCTION
In this chapter some of the production planning activities involved in an open pit mine
will be discussed. Speci fically, attention will be devoted to mine life - production rate
determinations, push back design and sequencing, as well as providing some general
guidance regarding both long and short range planning activities.
The basic objectives or goals of extraction planning have been well stated by Math-
ieson (1982):
- To mine the orebody in such a way that for each year the cost to produce a kilogram
of metal is a minimum, i. e., a phi losophy of mining the 'next best' ore in sequence.
- To maintain operation viability within the plan through the incorporation of adequate
equipment operating room, haul age access to each active bench, etc.
- To incorporate sufficient exposed ore ' insurance' so as to counter the possibility of
mis-estimation of ore tonnages and grades in the reserve model. This is particularly true
in the early years which are so critical to economic success.
- To defer waste stripping requirements, as much as possible, and yet provide a
relatively smooth equipment and manpower build-up.
- To develop a logical and easily achievable start-up schedule with due recognition
to manpower training, pioneering activities, equipment deployment, infrastructure and
logistical support, thus minimizing the risk of delaying the ini tiation of positive cash
flow from the venture.
- To maximize design pit slope angles in response to adequate geotechnical inves-
ti gations, and yet through careful planning minimize the adverse impacts of any slope
instability, should it occur.
- To properly examine the economic merits of alternative ore production rate and
cutoff grade scenarios.
- To thoroughly subject the proposed mining strategy, equipment selection, and mine
development plan to 'what if' contingency planning, before a commi tment to proceed
is made.
Planning is obviously an ongoing activity throughout the life of the mine. Plans are
made which apply to different time spans.
There are two kinds of production planning which correspond to different time spans
(Couzens, 1979):
465
466 Open pit mine planning and design: Fundamentals
- Operational or short-range production planning is necessary for the function of an
operating mine.
- Long-rang.e pro?uction planning is usually done for feasi bility or budget studies. It
supplements pit design and reserve estimation work and is an important element in the
decision making process.
. Couzens (1 979). has provided some very useful advice which should be fi rmly kept
In rrund by those Involved In the longer term planning activities:
How would I plan this if I had to be the mine superintendent and actually make it work?
In guiding the planner, Couzens (1 979) has proposed the following five pl anni ng 'com-
mandments' or rules:
.1. We. must keep our objectives clearly defi ned while realizi ng that we are deal ing
With estimates of grade, proj ections of geology, and guesses about economics. We must
be open to change.
2. We must communicate. If planning is not clear to those who must make decisions
and to those who must execute plans, then the planning will be either misunderstood or
ignored.
3. We must remember that we are dealing wi th volumes of earth that must be moved
in sequence. Geometry is as important to a planner as is ari thmetic.
4. We must remember that we are dealing with time. Volumes must be moved in ti me
to realize our production goals. The productive use of time will determine efficiency
and cost effectiveness.
5. We must seek acceptance of our plans such that they become the company's goals
and not just the planner' s ideas.
T his chapter will focus on the longer term pl anning as pects both during feasibility
studies and later production.
6.2 SOME BASIC MINE LIFE - PLANT SIZE CONCEPTS
To introduce this very important topic, an example problem will be considered. As-
sume that a copper orebody has been thoroughly dri lled out and a grade block model
constructed. Table 6.1 presents an initial estimate for the costs and recoveries.
Since they will be refined later, this step will be called Assumpti on I .
The best estimate price (in this case $ lIlb) is also selected (Assumption 2). From
these values an economic block model is constructed. The break-even grade for final
Table 6.1. Costs used to generate the economic bl ock model.
lI" : _: ___ _ _ "
- --'-"'0 .... , ... . _)
Mining cost (waste)
Milling cost
G&A cost (mining)
G&A cost (milling)
Smelting. refi ning and sales
Overall metal recovery
=
= $1.00/lOn
= $2.80/IOn
= $0. I 7/ton
= $0.40/ton ore
= $0.30Ilb Cu
= 78%
pit li mi t determination is
$ 1.00 + $2.80 + $0.40 + $0.17
g(% Cu) =
0.78(1.00 - 0.30)
$4.37
= 10.92 0.40% (Cu)
Production planning 467
It is noted that the costs chosen at this stage might be considered as 'typical'. No at-
tempt has been made to include capital related costs nor a 'profi t' . Using the float-
ing cone, Lerchs-Grossmann or another technique, a fi nal pit outline is generated.
The intersect ions are transferred onto the corresponding benches of the grade block
model. A mi neral inventory using appropriate grade class intervals is created bench
by bench. These are later combi ned to form a mineral inventory for the material
withi n the pi t. Table 6.2 is the result for the example orebody (Hewlett, 1961, 1962,
1963). The number of tons in each grade cl ass interval (0.1 %) are plotted versus grade.
Thi s is shown in Figure 6. 1. From this curve a plot of total (cumulative) tonnage
above a given cutoff grade can be constructed. The result is given in Figure 6.2.
As can be seen, the curve is of the shape typi cal for a low grade copper orebody.
Figure 6.3 shows the straight line expected when a lognormal plot is made of the
data.
One can also determine the average grade of the material lying above a given cutoff
grade. Figure 6.4 presents the results. Table 6.3 contains the data used in constructing
Figures 6.2 and 6.3. These two curves are very usefu l when consi deri ng various plant
size - mine life options.
At thi s point two destination opt ions wi ll be considered for the material cont ained
within the pi t:
Table 6.2. Mineral inventory as a function of grade class interval.
Grade class int erval Tons Grade class inter val Tons
('Yo Cu) ( 10
3
) (% Cu) ( 10
3
)
>3. 2 (Ave = 5.0) 25 1.5-1.6 205
3. 1-3.2 7 1.4- 1.5 130
3.0-3. I 15 1.3-1.4 270
2.9-3.0 5 1. 2-1.3 320
2.8-2.9 5 1.1- J.2 570
2.7-2.8 10 1.0-1.1 -160
2.6-2.7 33 0.9-1.0 550
2.5-2.6 40 0.8-0.9 420
2A-2.5 - 15 0.7-0.8 950
? 4.
.,,,
n Ii-n 7 'lRn
2.2 2.3 30 0.5-0.6 830
2. 1-2.2 30 0 ... -0.5 1,200
2.0-2. 1 50 0.3-0.4 1,050
1. 9-2.0 75 0.2-0.3 1.30U
1.8-1.9 60 0.1-0.2 2.700
1.7-1.8 150 <0.1 18.020
1.6-1.7 170
468 Open pit mine planning and design: Fundamentals
18.0
11
Tonnage
3.0
( 10' tons)
2.5
2.0
1.5
1.0
0.5
1.0 2.0 3.0
Grade Class Interval ( % Copper)
Figure 6. 1. Tonnage versus grade class interval for the Silver Bell oxide pit (Hewlett, 1961, 1962).
14r----,-----,----r---r-----,---.-------,
12
Cumulative
Tonnage 10
( 10
6
)
'-

0.5 1.0 1.5 2.0 2.5 3.0 3.5
Cutoff Grade ( \ Copper)
Figure 6.2. Cumulative tonnage versus cutoff grade for the Silver Bell o.,ide pit.
Production planning 469
Cumulative
Tonnage
( 10
6
)

Figure 6.3. Logarithm of cumulative tonnage versus cutoff grade.
5.0
Grade
( " Copper)
to
3.0
2.0
j
o 0.5 1.0 1.5 2.0 2.5 3.0 3.5
Cutoff Grade ( " Copper)
Figure 6"+. Average grade versus cutoff grade.
470 Open pit mine planning and design: Fundamentals
Table 6.3. Cumulative tons and average grade as a function of cutoff grade.
Grade (% Cu) Tons above
Cutoff Average cutoff (10
3
)
0.0 0.30 30,800
0.1 0.65 12,780
0.2 0.78 10,080
0.3 0.86 8,780
0.4 0.94 7,630
0.5 1.04 6,430
0.6 1.11 5,600
0.7 1. 21 4,620
0.8 1.32 3,670
0.9 1.38 3,250
1. 0 1.47 2,700
l.l 1.56 2,240
1.2 1.70 1,670
1. 3 1.8 1 1,350
1.4 1.92 1,080
1. 5 1. 99 950
1.6 2. 11 745
1.7 2.24 575
1. 8 2.41 425
1.9 2.5 1 365
2.0 2.65 290
2. 1 2.78 240
2.2 2.87 210
2. 3 2.97 180
2.4 3.07 155
2.5 3. 13 140
2.6 3.37 100
2.7 3.72 67
2.8 3.89 57
2.9 3.99 52
3.0 4.10 47
3. 1 4.60 32
3.2 5.00 25
- Destination A: Mi ll.
- Destination B: Waste dump.
There are other possible dest inat ions which can be considered later. This destination
stipulation becomes Assumption 3. Since all of the material will eventually have to be
relTIOVeO frnm thp :-:::: .:.:,;-1..:.... UI lIUl Inll1l ng. tor the sake
of this example it will be assumed that the mineral distribution is uniform throughout
the pit. This is generally not true and thcre will be high and low grade areas of various
extent.
A cutoff grade must be selected differentiating ore (that going to the mill) and waste
(that going to the dump). Assumption 4 will be that the mill cutoff grade is 0.40% (the
same value used in the pit limit determination). From Figure 6.5 one finds that there are
7.8 x 10
6
tons of ore with an average grade (Fig. 6.6) of 0.92%.
Production planning 471
IS
IS
14
10nnage
12
l lOS tons )
10
0.5
2.5 3.0
Figure 6.5. Mil l tonnage for a 0.4 cutoff grade.
The next question is with regard to the size of plant to be constructed. An equivalent
uestion is 'What is the expected life of the property?' Although there are several
of approaching this, the one chosen here is
I A ....... .. _ .. _ .. : ,... - C::\ .. 1-. .... .. ,.. .-.......1, ...... ._. __ -,--- .- .. - - - - - rr-- ----- -- ----
and daily production rates as well as the mine life can
now be computed.
Assuming that:
Mill recovery = 80%
Combined smelterlrefinery recovery = 97.5%
Operating days = 250 days/yr
472 Open pit mine planning and design: Fundamentals
4.5
4.0
Average Grade
( " Copper ) 3.5
3.0
2.5
2.0
1.5
1.0
Figure 6.6. Average mi ll feed grade for a 0.4 cutoff grade.
we obtain the following milling rates (R
mill
)
R . _ 5,000 tpy x 2,000 Ibslton
mil l - 092
100 x 0.80 X 0.97 X 2,000 Ibs/ton
= 700, 360 tpy
Rmill = 2, 80 I tpd
Kn ' .
owmg the mlil production rate and the ore reserves the milUmine life can b al
lated: e c cu-
Mi ne life (yrs) = Ore reserves (tons)
Ore production rate (tpy)
7,800,000
700,360
= 11.1 years
The requi red mine production rate (Rmine) is:
R. _ Mineral reserve (tons)
mine - Mine life (yrs)
30,800,000 = 2 775 000
11.1 " tpy
Rmine = I I, 100 tpd
The total amount of copper recovered is
Copper recovered = 55,500 tons
and the overall stripping ratio is
23,000,000
OverallSR= 7,800, 000 =2.95
Knowing the mining and milling rates and the mine life
Mi ll ing = 2,801 tpd
Mining = 11,000 tpd
Mine life = 11.1 years
Production planning 473
one can now go back to Assumption I and improve the operati ng cost estimates. Usi ng
these values one can recalculate the economic block val ues, the fi nal pit limits, the
grades-tonnages, etc. Event ually a solution will be found which changes littl e from run
to run.
Knowing the plant size, the required capi tal investment can be determined. The cash
flows are calculated as is the net present value. Obviously other economi c indicators
such as total profit , internal rate of ret urn, etc., coul d be calculated as well. One mi ght
then ret urn to Assumpt ion 2 and examine the sensi ti vity with price.
It will be recall ed that Assumption 4 dealt wit h the mill cutoff grade which was
chosen as OA. If a mi ll cutoff grade of 0.2 is assumed ins tead the process can be
repeated maintaini ng the 5,000 ton copper output. As Figures 6.7 and 6.8 show, the ore
tonnage and average grade become
Ore tonnage = 10.8 X 10
6
tons
Average ore grade = 0.77% Cu
With the same assumptions as before the milling rate, mil l/mine life and mining rate
become:
Mill rate:
o
...... 111111
5,000 x 2,000
Q'J6 x 0.80 x 0.97 x 2,000
= 836, 800 tpy
Rmill = 3,350 tpd
Mill/mine li fe:
M,
'lll,'fe= 10,800,000 - 129
836, 800 - . yrs
474
Open pit mine planning and design: Fundamentals
18
16
14
Tonnage
12
( 10
6
tons)
- _1M
10
6
=1
~
4
=1
" I
1
<->1
=1
2 1
1
00
Figure 6.7. Mill tonnage for a 0.3 cutoff grade.
Mining rate:
30,800,000
Rmine = 12.9 = 2,387,600 tpy
Rmine = 9,550 tpd
The amount of copper recovered increases to
Copper recovered = 64, 500 tons
Production planning 475
4.5
4.0
Average Grade
( % Copper) 3.5
3.0
2.5
2.0
0.5
1.0 1.5 2.0 2.5 3.0 3.5
Cutoff Grade ( % Copper)
Figure 6.8. Average mile feed grade for a 0.3 cutoff grade.
and the overall stripping rati o would drop to
20,000,000
Overall SR = 10,800,000 = 1. 85 : I
A summary of the res ults for the two mill cutoff grades is given in Table 6.4.
These would be expected to yield different economi c resul ts. The incremental financial
analysis approach to thi s type of evaluat ion will be discussed in Section 6.6.
There are a number of iterati ons which must be performed as the various assumptions
are examined. In thi s simple example, there were five assumptions made in order to
proceed:
- Assumption I. Cost-recovery val ues.
- Assumption 2. Commodity price.
- Assumption 3. Destination options.
- Assumption 4. Mill cutoff grade.
- Assumption 5. Yearly product mix.
476 Open pi! mine planning and design: Fundamentals
Table 6.4. Summary for the two mill cutoff grades.
Quantity
Tons mined
Tons milled
Tons waste
Avg. are grade
Milling rate (tpd)
Mining rate (tpd)
Mine life (yrs)
Overall SR
Recovered copper (tons)
Mill cutoff grade (% Cu)
0.2
30.8 X 10
6
10.8 X 10
6
20.0 X 10
6
0.77%
3.350
9.550
12.9
1. 85
64.500
0.4
30.8 X 10
6
7.8 X 10
6
23.0 X 10
6
0.92%
2.800
11 .100
11. 1
2.95
55.500
Clearly, a large number of combinations must be considered, many of which could
provide satisfactory results. Because of the many uncertainties associated with the grade,
tonnage, price, and cost data, the meaning of some sort of 'optimum' solution is tenuous
at best.
6.3 TAYLOR' S MINE LIFE RULE
Taylor (1977, 1986, 1991) has, over the years, provided some very practical and use-
ful advice regarding mine life. This secti on is based on extractions from his writ-
ings. In theory, it is possible to calculate an ' optimum' rate of extraction from an
orebody. To do thi s, however, knowledge or precise assumption of the total tonnage
and its sequential grades (including the effects of varying the cutoff grade), and of
all costs and product prices throughout the project life is required. This information
is unavailable for early studies and may indeed never reach high certainty or even be
necessary.
Even with certain knowledge of everything, optimizing theory yields different answers
depending on what quantity is selected to be maximized. The maximi zed quantity might
be total profit, total cash fl ow, the net present value or the internal rate of return. Fur-
thermore, the peaks of such curves are rather flat. Thus when allowing for the practical
inaccuracies of data, the calculated results cannot be considered critical. Hence, although
valid, a highly mathematical approach to mine life determination is seldom of practical
use. Other ways must be found to provide a reasonable first approximation for mine
life.
Too Iowa production rate sacrifices possible economies of scale and defers possible
profits too far into the fu ture. Conversely, too high a rate may drive up the project's
capital cost beyond any ability to repay within the shortened life. Too high an output
may be unsalable, while too short a life for a large enterprise may be wholly undesirable
on social grounds. One hazard of short life mines merits special mention. Since base
metal prices seem to move in cycles of four to seven years' durat ion, an operation of
under four years' life may find itself depleting all its ore in a trough of the price cycle,
and be left with neither are nor time to recover.
Production planning 477
In real life, rates of output are strongly limited or influenced by practical problems.
One of the most important of these is working space. A mine may be able to increase
output as it gets older solely because its ever expanding workings offer more points of
attack.
In an open pit the working space for equipment and hence maximum production
rate tends to vary with the area (ft
2
) exposed while tonnage varies with volume (ft
3
).
Thus one might expect the production rate for groups of more-or-Iess similarly shaped
orebodies to be proportional to the two-thirds power of the orebody tonnage. The life
would then be proportional to the cube root of that tonnage.
Taylor (1977) studied many actual projects (some operating and others only planned)
involving a wide range of orebody sizes, and shapes (other than thin deposits of very
large lateral extent), for which the total ore reserves were reasonably well known before
major design commenced. He found that the extraction rates seemed proportional to the
three-quarters power of the ore tonnage rather than the two-thirds power. The designed
lives were proportional to the fourth root of the tonnage.
This lead to the formulation of Taylor's rule, a simple and useful guide that states:
Life (years) 0.2 x \!Expected ore tonnage (6.1)
In this equation, it is immaterial whether short or metric tons are used. It is more
convenient to use quantities expressed in mil lions and except for special condit ions, the
practical range of variation seems to lie within a factor of 1.2 above and below. The
rule can thus be restated as:
Life (years) (1 0.2) x 6.5 x \,ITonnage in mill ions (6.2)
At a preliminary stage, 'are tonnage' could represent a reasonable though not optimistic
est imate of the are potential. Later, it could comprise the total of measured and mdtcated
are, includi ng probable are, but excluding possible or conjectural are.
This empi rical formula generates the values presented in Table 6.5.
Table 6.5. Mine life as a function of ore tonnage (Taylor. 1977).
Expected Median Range Median Range
ore life of lives output of outputs
(10
6
tons) (years) (years) (tpd) (tpd)
0.5 3.5 4.53 80 65100
1.0 6.5 7.5-5.5 450 400-500
5 9.5 11.5 8 1.500 1. 250 1.800
10 11.5 14.9-5 2.500 2.100-3.000
25 14 I / I L ).U\J\J 4. LU1J.t>.U\JU
50 17 21- 14 8,400 7.00010.000
100 21 2517 14.000 I I .500 17.000
250 26 31-22 27.500 23.00032.500
350 28 332-1 35.000 30.000-42.000
500 31 37-26 -16.000 39.00055.000
700 33 4828 60.000 50.000 72.000
1.000 36 4430 80.000 65.000-95.000
478 Open pit mine planning and design: Fundamentals
The rule provides an appropri ate provisional output rate for preliminary economic
appraisals and will define a range of rates for comparative valuation at the intermediate
stage after which a preferred single rate can be selected for use in the feas ibility study.
6.4 SEQUENCING BY NESTED PITS
Of the various techniques used to develop mining sequences, the most common is to
produce a nest of pi ts correspondi ng to various cutoff grades. From a practical point of
view this is accompli shed by varying the price of the metal (commodity) being extracted.
The final pit limit is generally determined using the most li kely price. For prices lower
than this value, successively smaller pits will be produced. The pits will migrate toward
the area of highest grade and/or lowest amount of stripping. Thi s will be ill ustrated by
way of an example.
The topographic map for a molybdenum prospect (Suriel, 1984) is shown in Figure
6.9. As can be seen, the majority of the deposit area has moderate surface reli ef with
the exception of some steeper topography in the north-central project area. The relative
position of the deposit is southwest of the hi ll. It is shown by the dashed lines on the
figure.
A grade block model has been prepared using blocks 50 ft x 50 ft x 50 ft. The
tonnage factor is 12.5 ft
3
/st hence each block contains 10,000 tons. The following data
were used in prepari ng the grade block model and in running the floating cone.
Mining cost = $0.74/ st
Processi ng cost = $1.89/st ore
General and administrat ive (G&A) cost = $0.67/ st ore
Mill recovery = 90%
Selli ng price = $6/ lb contained molybdenum (F.O.B. mill si te)
The ore grade is expressed in terms of % MoS
2
. Si nce one pound of MoS
2
contai ns
0.60 Ibs Mo, the equivalent price is $3.24/Ib MoS
2
.
In determining the final pit limits, the costs and revenues involved in mining and
processing 1 ton of material containing X% MoS
2
are first determi ned.
Cost ($Ist) = 0.74 + 0.67 + 1.89 = $3.30/ st
X
Revenue ($/st) = 100 x 2,000 x 0.90 x $6.00 x 0.60
= 64.8X
Equating costs and revenues
U ... . OA = J .JV
one finds that the breakeven grade (X%) is
X = 0.05% MoS
2
Thi s cutoff grade corresponds to a commodity price of $6/lb contained molybdenum.
Using these costs and the $6/1b price one generates the pit shown in plan in Figure 6.1 0.
It can be referred to as the $6 pit or equivalently the 0.05"k clitoff pit.
Production planning 479
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