This the final post in a 4-part series on Strategic Mine Planning, by Darrienne Thobaven, one of our Strategic Mine Planning Knowledge Consultants. Part 1 discussed the difference between strategic and tactical planning. Part 2 explored the consequences when a flawed planning process is used. Part 3 discussed the first two phases of mine planning.
Today, we look at how to preserve the Net Present Value (NPV) of the strategic plan through a successful implementation in the tactical plan. The discussion is specific to open cut planning using GEOVIA Whittle™ and GEOVIA MineSched™ , and details one of many ways to achieve it.
When it comes to Mine Planning, the final phase (of the three phases) is the implementation of the strategic plan into the tactical plans so that the company mission can be achieved in production. This phase often has the greatest organizational challenges as strategic planning is usually performed by a different person than the person completing the tactical planning. Furthermore, these two (or more) people are often located thousands of kilometers apart, which can make communication of the plan problematic.
Strategic Planning Requirements
Consistency between schedule inputs, including blocks to be scheduled, is vital for maintaining NPV. For best implementation results, the final strategic schedule should be based on pit designs rather than pit shells. This ensures the locations in MineSched are the same physical pit volumes as the pushbacks (or stages) in Whittle, which will result in the same blocks referenced in both the strategic and tactical schedules.
The requirements to achieve the NPV in Whittle must be identified with the appropriate data, and clearly communicated to the tactical planners. For a complex schedule, such as a SIMO schedule, the following items must be taken into consideration for a successful outcome:
- Schedule of Key Performance Indicator (KPI) results by year
- project sensitivities
- rock code (material) definitions
- total tonnages mined by location by year (actual tonnage rather than the Whittle limits)
- processing limits
- stockpile movements in and out by year
- stockpile definitions
- minimum value processed for each rock code by year
- vertical rate of advance limits by location by year, and
- location start date
It’s important to note that the limits entered into the operational scenario node in Whittle may not be reached in the schedule each year. The value to be entered in MineSched is not the limit, but rather the output value from the schedule. For example, in the images, below, the first image shows a mining limit of 20 Mt in the operational scenario node, whereas the second image shows the actual schedule tonnes to be used in MineSched.
Tactical Planning Requirements
To be able to measure compliance of the tactical schedule to the strategic schedule, an appropriate KPI must be used. As the strategic plan is usually financially driven, the MineSched scenario requires a financial indicator in the block model such as Net Smelter Return or value per bottleneck unit (as identified in the strategic plan when using the theory of constraints). The cash flows can then be reported on an annual basis and compared to the annual cash flows reported in Whittle. Simply comparing physicals between the two schedules does not ensure that the desired financial result is achieved.
For a schedule employing cut-off grade optimization, such as a SIMO schedule, the minimum value processed per year can be implemented using MineSched’s variable cut-off definition based on the financial KPI. SIMO schedules are often sensitive to stockpile movement and, therefore, applying stockpile movement constraints is a necessity. By allowing MineSched to feed lower value material as it is exposed in the pit, rather than sending to the stockpile, can result in a vastly different financial result. Using the maximum capacities and maximum rates of the stockpiles in MineSched replicates the strategic use of stockpiles.
After implementing the strategic outputs as constraints in MineSched, a validation schedule can be run using end of period surfaces exported from Whittle as MineSched locations. This schedule allows validation of the MineSched scenario and provides a general sanity check. Subsequent schedules might be based on stage designs when more flexibility is required across the periods.
It is possible to target a high value for an attribute in MineSched and targeting grade or a financial KPI is often used in an effort to achieve the best financial results. However, targeting the financial KPI gives poor compliance in complex schedules without the appropriate constraints. Instead of using targeting, employing constraints to replicate the mining sequence might give better compliance.
For further details about best practice mine planning, please contact your GEOVIA Services representative.
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