I Mining Business Review I
“A strategic mine plan sets the stage and defines the economic and technical direction for the mine. A good plan will optimize the utilization of the principal resources, such as capital, labour, technology and mineral reserves, maximize the strengths and opportunities of a mining company, and minimize its weaknesses and threats.”
Global Industry Process Consulting Director
Following his presentation at the International Mining and Resources Conference (IMARC) Online, we spoke with Dassault Systèmes, Global Industry Process Consulting Director, Andy Mulholland to gain further insights on how to make strategic mine planning decisions confidently in times of uncertainty.
NPV improvements up to 42%
Hundreds of different simulations to address different objectives
The past year has been a challenging year for all businesses and the mining sector is no different. Many mining company operations have been affected due to isolated outbreaks and government mandated shutdowns.
Disrupted global supply chains, the result of sudden factory closures and the temporary suspension of air, maritime, and land transportation, combined with a significant cut down on consumption have created a near perfect storm on the horizon for the sector. According to S&P Global Market Intelligence, it has disrupted 275 operations across 36 countries. The total revenue at-risk from impacted mining projects globally is over $8.8 billion.
In Australia, though considered as an essential service, the sector faced a labour crunch due to restrictions on the movements of people.
While the current pandemic may have exacerbated some challenges, the industry has been facing enormous pressure in the recent years – from volatile commodity prices to shifts in technology, increasing urbanization, and growing environmental concerns. This makes strategic mine planning (SMP) more important than ever.
A strategic mine plan sets the stage and defines the economic and technical direction for the mine. A good plan will optimize the utilization of the principal resources, such as capital, labour, technology and mineral reserves, maximize the strengths and opportunities of a mining company, and minimize its weaknesses and threats.
Planning plays a fundamental role in the evaluation of any mining operation, from the initial resource estimate to the project feasibility stage. Such planning also has to be inherently flexible, taking into account the viability of a resource, whether or not it is economically feasible to extract, how long this will take and the best sequencing of such extraction. What’s more, all of this has to be analysed over the entire life of mine, which could be anything from 30 to 40 years or longer.
The Dassault Systèmes Strategic Mine Planning allows users to generate hundreds of different simulations to address different objectives and identify opportunities to increase the project value with different strategic mine plans. This means we are no longer limited to just a handful of scenarios, and instead we can explore all options – commodity price, mining sequence, mining width, strip ratios, cut-off optimization, production capabilities, CAPEX for mining and processing.
We have undertaken over 10 different case studies across various commodities and demonstrated NPV improvements up to 42% for one particular project.
In these times of uncertainty, it is important to have options and to have looked at all possible scenarios that may eventuate so we can make decisions that minimize risk and maximize outcomes. If there is one thing that 2020 has taught us, it is that the assumptions we make about our operating landscape can change very quickly.