Publication: Application of Enterprise Optimisation Considering Grade Engineering® Strategies

Date: July 2016

           
 

Title:

Application of Enterprise Optimisation Considering Grade Engineering® Strategies

 Category:

Grade Engineering

 

       
 

Author:

Nick Redwood1, Michael Scott2

 

       
 

Affiliations:

1.  Whittle Consulting
2.  CRC ORE

 

       
 

Abstract text:

The Cooperative Research Centre for Optimising Resource Extraction (CRC ORE) has worked with Whittle Consulting to combine the principles of Grade Engineering® with Enterprise Optimisation.

Grade Engineering® involves the use of coarse-separation techniques to remove lower-value or uneconomic material prior to energy, water and cost-intensive mineral processing activities. CRC ORE has performed technical proof-of-concept and economic evaluations for Grade Engineering in partnership with more than 20 mining operations and projects around the world. Central to these evaluations are the characterisation of coarse-separation responses within the deposit, identification of value adding strategies for operation and the development of a business case for Grade Engineering within existing and re-optimised strategic mine plans.

Whittle Consulting provides a business optimisation service to the mining industry using a whole-of-business Enterprise Optimisation methodology that models a mining and minerals processing system from resource to market. Prober, Whittle Consulting’s proprietary Optimisation software, is used to produce a mathematically optimal schedule of material and financial movements through the operation. Of primary consideration is the effect of bottlenecks which control the rate of flow of money through the system. NPV is used as the financial objective as this accounts for the time-value-of-money and allows direct comparison of different cases. The Enterprise Optimisation approach allows determination of the full value from Grade Engineering, as Prober may alter the behaviour of all elements of the mining and mineral processing system to produce an optimal holistic solution.
The synergy between Grade Engineering principles and Whittle Consulting’s Enterprise Optimisation was assessed through a case study that examined a potential response for three coarse separation techniques in a hypothetical, but realistic, mining operation. The case study established an optimised base case without Grade Engineering for comparison to all combinations of Grade Engineering coarse separation techniques examined. The coarse separation techniques included screening for natural deportment of grade by size, differential blasting to induce and enhance the deportment of grade by size and sensing and sorting of bulk material streams, using realistic responses from CRC ORE’s global database. The implementation of all Grade Engineering techniques yielded a net improvement of 9.9% in NPV over the optimised Base Case.

Whittle Consulting’s Enterprise Optimisation considered all components of the mining and mineral processing operation from resource to market. The process optimised the ultimate pit, phases, mining schedule, cut-offs, stockpiles, grind size, product specifications, logistics and capital investment for the Base Case and Grade Engineering Scenarios. The financial result and observations of this case study support previous findings from CRC ORE’s technical and economic evaluations of Grade Engineering performed in partnership with mining operations and projects, as well as outcomes previously presented and published.

Grade Engineering’s coarse-separation processes yield financial value through two complementary mechanisms that become available as a result of separating a parcel of mined material into higher and lower-value components before processing. The first is a reduction in the pressure on high-value, high-cost processing bottlenecks by separating and rejecting low-value and uneconomic portions of ore previously destined to be processed at these bottlenecks. The second is the replacement of that rejected material with higher-value portions of Grade Engineered material that would otherwise be directed to lower-value destinations such as Heap Leach, Stockpile and Waste. This process has been termed “Metal Exchange” as metal (and material) is separated and exchanged between processing destinations to yield a higher economic value overall.
When the operation is not limited by the quality and quantity of ore being mined, the rearrangement of mined material into higher and lower-value streams using Grade Engineering will raise the cut-off to the processing facilities, and accelerate the rate at which metal is recovered. This generally occurs early in the life of a mine, when discounted cash flows have a higher weighting on NPV, and may be further supported by increasing the mining rate. The reduced pressure at high-value, high-cost processing bottlenecks allows greater use of higher-value process plant settings, including fine grinding for improved flotation recovery in the case study examined. At the end of the mine’s life, Grade Engineering allows the economic processing of the high-value portion of low-grade material that would otherwise be classified as waste. Therefore, the minimum economic cut-off grade is ultimately lower in a mine with Grade Engineering and ore reserves and resource utilisation are higher.

The value realised by adding multiple Grade Engineering processes to a mining enterprise is not cumulative. The first process added typically yields a larger financial benefit than subsequent processes. This is particularly true when the Grade Engineering processes compete for the same material.

The work documented in this report provides validation for the evaluation of Grade Engineering within Whittle Consulting’s Enterprise Optimisation framework and supports the findings of Grade Engineering assessments performed by CRC ORE. The financial benefits of coarse separation responses used in the case study were found to be in line with business cases previously developed by CRC ORE in partnership with real-world mining operations and projects. Whittle Consulting’s systematic approach was demonstrated to be suitable for the optimisation of entire system value with Grade Engineering within a realistic mining context.

 

       
 

Full paper:

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Contact us:

Cooperative Research Centre Optimising Resource Extraction (CRC ORE)

 

       

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