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Strategic mine planningFinding the optimal in pursuit of the idealby Ryan Bergen

At one point during the Second World War,researchers took another look at what colourBritains Royal Air Force should paint its bombers.

The prevailing wisdom that led the planes to be black, itturned out, was wrong. In fact white planes are harder tospot against a night sky.

The review of strategy also prompted a change in thedetonation depth of its explosives and the RAFs efficiency

in crippling German U-boats doubled. There can be fewcases where such a great operational gain had been

obtained by such a small and simple change of tactics,wrote a physicist who contributed to a number of suchadaptations during the war.

These innovations didnt introduce new technology butrather, they made better use of available resources.Progress came from challenging and systematically testingwhat had previously seemed assured.

After the war, this research approach was adopted by

civilian industry, mining included. Operations research, as itcame to be known, showed how things can be done better.

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46 | CIM Magazine | Vol. 5, No. 1

From innovation to application - a page from Lerchs and Grossmans Optimum Design of Open-Pit Mines with a photo of the Sadiola Gold Mine in Mali.

Photoo

fSadiolaMinecourtesyofIAMGOLD

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For the mining industry, it planted the seeds that havegrown into strategic mine planning, a discipline that at itscore matches mining operations to long-term strategicobjectives. It relies on the knowledge and collaboration ofevery arm of the mining operation, including finance, geol-ogy, mining and production scheduling, processing, engi-

neering and human resources; the informed application ofoptimization tools. It also calls for a clear strategic vision forthe company. Capturing and managing all of these aspectswith a defined goal in mind can spark a shift in thinking,and counter-intuitive approaches that can effect: how and when minerals are extracted; how facilities are designed and where they are installed;

and how much value is ultimately realized.

The latest recession toppled many assumptions. A ded-icated strategic mine planning approach will test theassumptions still intact. How far will conventional stan-dards take us? Where can new, substantial value be found?

A durable solutionForty-five years ago, the CIM Bulletin had a radical

answer. Helmut Lerchs and Ingo Grossmans paper,Optimum Design of Open Pit Mines, outlined an algo-rithm based on graph theory that could help plannersdetermine the ultimate limits of an open pit mine in threedimensions by maximizing the difference between thetotal mine value of ore extracted and the total extractioncost of ore and waste.

But even as the two IBM researchers opened up a newfrontier in optimization, they also traced its limits. Markets,

processing facilities, mining methods, production schedul-ing, transport options, they noted, had, and continue tohave, a bearing on plans. There is an intimate relationshipbetween all the above points, and it is meaningless to con-sider any one component of planning separately, they

wrote. A mathematical model taking into account all pos-sible alternatives simultaneously would, however, be of for-midable size and its solution would be beyond the meansof present know-how.

Over the decades, a cascade of algorithms and newoptimization programming methods led by Jeff Whittlesefficient implementation of the Lerchs-Grossmanalgorithm in a commercial software package along withthe efforts of software designers and the exponential

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Students at McGill Universitys COSMO laboratory learn modelling techniques that

integrate geological uncertainty.

PhotocourtesyofMinazKerawala

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increase in the power of the tools at their disposal havepushed the boundaries of know-how.

The advances in computer capacity the speed have enabled us to bring down the processing time,says Cindy Tonkin, technical product manager forGemcom, which markets Whittle software. Models thatonce took days can take minutes. That provides us withthe ability to examine multiple options, to look at

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Whittle enables visual validation of the results of its optimization output.


scenarios to determine a mine plan that can take us intothe future or a range of different futures but to berobust enough to deliver value in that range of futures.We can generate optimizing models that are now up tothree gigabytes. That would have been unheard of 15years ago.

The scope and complexity of optimization applicationsthat serve the strategic mine planning process continue togrow. Australia-based Whittle Consulting is pressing aheadwith a third version of Prober, an in-house proprietaryglobal optimizer. Prober combines an algorithm with linearprogramming to create an optimized schedule thataddresses a litany of issues including ultimate pit limits,mining methods, schedules, equipment needs, cut-offgrades and blending. Twenty-five years ago, the optimiza-tion software that Jeff Whittle first developed for the mar-ket using the Lerchs-Grossman algorithm could calculateone option for pit design alone.

Way back, says Jeff Whittle, I used to talk about a pro-gram such that each morning, you fed into it all the latestproduction figures, drill results, costs and prices, etc. It thenthought a bit before telling you precisely where to minetoday optimally! I dubbed it The Hallelujah Program. Idont expect to see such a program in my lifetime, [Whittle is now in his 80s] but we can work towards it,and Prober is a step along the way.

Finding higher value at depthExpectations for automated underground optimization

solutions remain more modest. Unconstrained by thetop-to-bottom progression that is given in open pit plan-

ning, underground planning and scheduling is far morecomplex.

Its a problem that researchers at Sudbury-based MiningInnovation, Rehabilitation and Applied ResearchCorporation (MIRARCO) have been tackling with backingfrom industry. As a part of an AMIRA International projectcalled PRIMO (Planning and Rapid Integrated MineOptimization), the MIRARCO developers who created anunderground schedule optimization tool (SOT) are collabo-rating with others focused on stope design, ore access,financials and mixed-integer programming a form thatallows solutions to be expressed in greater detail than a

binary true/false answer to create an automated opti-mization solution to support the planning, design anddevelopment of underground projects. SOT organizes theinformation gathered from other programs using a geneticalgorithm the same approach as Internet searches andgenerates mine schedules that account for a range of geo-logical and financial variables.

Moving forward, says MIRARCOs scheduling develop-ment project leader Bryan Maybee, work will focus oncombining the growing range of tools designed to addressvarious constraints related to issues such as geotechnicaland ventilation systems. The ability to start to look at these

things in a risk management context provides hugeopportunities, he says.

PhotocourtesyofGemcom

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A fresh perspectiveHarnessing new computer tech-

nologies, optimization advances andmathematical modelling can onlytake strategic mine planning so far.Before scenarios can be tested, they

must be imagined or, in some cases,re-imagined.This recently drove Canadian min-

ing company IAMGOLD to inaugu-rate an operating strategy group. Theaim, explains Gordon Stothart,IAMGOLDs executive vice-presidentand COO, is to provide opportunitiesto explore new ideas. It is like revis-iting the original concept and prefea-sibility study that went into an opera-tion, he explains. We want to goback and look at a deposit with fresheyes, almost as if we were trying toengineer it from scratch.

Part of the exercise, he says, involves setting existingconstraints, such as processing capacity and methods,aside, which often proves to be a challenge. Engineersand finance people like concrete things; they like con-straints, explains Stothart. Introducing a greater degree of

freedom is sometimes uncomfortable for people. Theyoften get pet ideas about what is possible. Sure, we willevaluate a pet idea, but what we want to do is to evaluatea range or surface of opportunities. If you have looked atprice scenarios and, for example, you are presented with a

February 2010 | 49

innovation

Innovation relies on execution a team confers at IAMGOLDs joint venture Sadiola Gold Mine.

Need to Optimize Profits?Get Your Free Strategic Mine Planning White Paper to Learn How

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bear market going forward, this approach helps you designproactively rather than reactively.

A suite of optimization software, including GemcomWhittle and COMET from Strategy Optimization Systems,helps analyze these scenarios. The work may just validate

what you are already doing, says Stothart. Or, it may openup some doors that people havent considered.Ultimately, he says, the people, not the process or the

tools, will be the decisive factors in the new approach.The operating strategy group is composed of miningengineers, metallurgical engineers, geologists, mine plan-ners and financial analysts, he explains. Its a mixed disci-pline group on purpose. The ones on site who are in touchwith the project on a daily basis need to be on board.Theyll support the execution of the plan because theyplayed a role in creating it.

Evaluating the unknownEven with todays optimization tools, uncertainty is still

woven through each aspect of strategic mine planning.Settling on a single value of the ore in one mining blockof a model to start the optimization process, for example,can provide an answer, but it is almost certain to be incor-rect. This guesswork affects every subsequent step in theplanning process. It is like looking out the window a

couple times in a week and then making a forecast forthe rest of the month, says Roussos Dimitrakopoulos ofMcGill University and Canada Research Chair in sustain-able mineral resources development and optimizationunder uncertainty. The question of how to address such

uncertainty fuels the work of the researchers in theMcGill University COSMO stochastic mine planning labo-ratory headed by Dimitrakopoulos.

Dimitrakopoulos and his team are trying to find not oneanswer, but a series of them weighted with different prob-abilities of accuracy. COSMOs work builds on modellingconducted in the petroleum industry where there is alonger tradition of including risk management in the plan-ning process. Currently, he explains, optimizers cannot han-dle a range of possible values. They tend to underestimatewhat is in the ground, which affects sequencing, how youmine, as well as production.

Accounting for the uncertain stochastic variables forany given mining block (metal, recovery, commodity price,costs) will result in various scenarios with different proba-bilities. Each has its respective advantages and disadvan-tages, but they all have the same character, he explains.They come closer in meeting production targets and thenet present value is substantially higher than modelscreated the conventional way. The method, says


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Dimitrakopoulos, has been tested in numerous settings,including at KCGMs Super Pit gold mine in Kalgoorlie,Western Australia, where it generated production sched-ules 25 per cent higher in value.

The approach has not yet been widely embraced by the

industry. BHP Billitons exploration and mining technologygroup has begun developing optimization software thataccounts for ore body uncertainty. However, at least onegeologist, reported the National Post, labelledDimitrakopoulos uncertainty-based approaches and sto-chastic optimization bullshit. In this regard, hes in goodcompany. Jeff Whittle recalls that 25 years ago when hebrought his software to market, there were plenty ofnaysayers. No one believed it would do what we said itwould. We also heard optimization is crap, and My grand-daddy taught me how to design a pit and thats goodenough for me.

Ensuring mining engineering students and industryprofessionals are exposed to new methods will help theindustry leave these prejudices behind, saysDimitrakopoulos. Over the summer, he is leading a

course on ore reserve risk and mine planning optimiza-tion for those working in the industry. He maintains thatindustry associations like CIM should foster a strategicmine planning community to focus and grow the field inthis country.

The volatility in the global markets will also help smooththe introduction of methods like stochastic optimizationand tools such as SOT, says Andrew Dasys, who was, untilFebruary, MIRARCOs startup director. There will be a pullfrom the investment community that is looking todecrease their risk. Some of the leading mining compa-nies are focusing on tools that provide more robust riskassessment tools and, he continues, once the rest ofindustry particularly juniors start seeing the potentialbenefits you can have from this type of analysis, it will beof huge value for anyone looking for financing or trying toadvance a project.

The shift will also rely on a sustained commitment tolong-term strategic objectives, says Dimitrakopoulos. Howdo you increase your margin of profits? You plan and minesmarter. CIM

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