Meet CSA Global Principal Consultant (Corporate and Business Development) Alexey Tsoy at the 25th World Mining Congress 2018 when he presents on “Strategic Schedule Optimisation” between 19-22 June 2018 in Astana, Kazakhstan.
The 25th World Mining Congress is an event of global significance – Kazakhstan’s President Mr Nursultan Nazarbayev, Australia’s Prime Minister and other heads of states are scheduled to participate; including, more than 3000 delegates from more than 50 countries.
Alexey will present at 10.00am on Wednesday 20 June 2018 in Hall 2, Open Pit Mining Session.
This abstract describes strategic optimization approach that may be suitable for complex marginal projects and is based on modern scheduling techniques.
The approach is focused on analysing impact on a project’s NPV caused by using advanced schedule optimization techniques. The techniques are an attempt to solve limitations of the Lerch Grossman algorithm that became an industry standard for defining ultimate pits and nested push backs.
Currently the Lerch Grossman (designed in 1964-1965) algorithm is used to define economic viability of a pit by outlining the ultimate pit using economic and mining parameters.
It gets a bit more complicated when the mining project has several alternative processes for the same ore. For example when it has fresh and oxide Cu in the same block (Katanga mineralization style). The solution for pit optimization often requires a customised routine in the optimization software.
Mine scheduling is done based on nested shells approach where the same LG algorithm is used to define nested pits with different revenue factors. A deficiency of Lerch Grossman is the lack of the concept of time hence no concept of constraints related to the time. Currently this is partially solved in scheduling software. But the solutions usually lack flexibility. For example, change in cost over time, or implementation of several constraints, or implementation of flexible residence time with different economic result are all problematic even in the most advanced packages such as Maptek Evolution.
The proposed approach is based on a software called SimSched Direct Block Scheduling (DBS) that uses linear programming to optimize the schedule trying to achieve maximum NPV. The approach was initially described in “Optimum Open Pit Mine Production Scheduling” by Thys Jonson in 1968. Back then computer processing power was not sufficient to run intensive algorithms.
The software applies a simplistic approach where a block model is optimized on economic values assigned to each block in pre-processing. The simplicity allows a great degree of flexibility on assigning the economic values. Moreover it allows definition of variable costs based on time, residence time, or indeed any other parameter that can be calculated and limited in time.
The constraints can be defined in different units and applied in parallel. For example, a total mining capacity in tons, plus total crushing capacity in BWi (energy), oxide ore capacity (in tonnes), total deleterious elements content (in tonnes) in a period and other parameters can be defined simultaneously. Plus they can vary in time. For example, a company expects to build a conveyor belt that will reduce ore hauling cost in 2 years from the start of operation and this will affect only a part of the pit, or a company is replacing mobile crushers with stationary option that is reducing crushing cost, or company is switching from shipping ore to shipping concentrate at certain point in mine life. All those scenarios can be implemented into a model and built into the schedule optimization.
The ultimate goal is to get a schedule with maximum NPV. At the same time, once scenarios are defined, flexibility in changing them becomes an easy and quick process. That allows to run several options and asses their viability and compare results.
Limitations of the approach are the consequences of its advantages – the initial model building requires some time, the resulting schedule is strategic in nature and will require further analysis and design work, and sometimes what is the most economic solution in long term is not always what a company may require right now. An example of the latter may be a cash strapped miner that would prefer to sacrifice long term NPV to this year’s cashflow.
Diploma – International Economics, OERN (Subsoil Use Expert Society of Russia)
Principal Consultant (Corporate & Business Development)
Alexey is a Principal Consultant of Corporate and Business Development and possesses more than 15 years’ commercial experience in contract negotiations, sales, marketing and business development. He led several complex resource and reserve estimation projects as Project Manager. He is also a contributor to major Russian mining and geology magazines on international reporting standards for reporting on resources and reserves, on the impact mining has on the general economy and the required changes to maximize it.