Mr Horsley, mining manager at Coffey International Limited subsidiary, Coffey Mining, said that in the current economic downturn, mine optimisation is something all mining companies should be focusing on right now. According to Mr Horsley, it is much easier to make hard decisions - such as changing mining methods - when an operation is in ‘a do or die’ situation.
“This is the third commodities downturn we have seen in 20 years, and in times such as these, mine planning and optimisation is as important as ever,” he said.
“Mine optimisation doesn’t need to take a lot of time or be an expensive exercise, but it has very real potential to add significant value, sometimes in the order of hundreds of millions of dollars over the life of an operation.”
Big picture planning
Mr Horsley underlined that such gains can only be made by looking at the big picture of the entire operational process.
“Mine optimisation should be approached from a broad perspective, as it is rarely the case that parts of the process can be optimised in isolation. If you specifically focus on one part of the value chain there is a risk of transferring costs or reducing revenue elsewhere.”
“The key is in providing a robust and flexible mine plan rather than the ultimate theoretical optimisation ‘black box’ solution,” he said.
Mr Horsley believes in a balanced approach to mine planning and optimisation, emphasising that it is vital to work with a strong understanding of the synergies that exist between different areas within a mine project and to focus on solutions that can be implemented with a practical action plan.
“Synergies between the processes can add or destroy value and so it is vital that the project process is assessed from the in-situ resource through to cash revenue generation,” he said. “There is significant value to be realised in being able to model and understand these synergies, particularly with respect to the definition of ‘ore’ locally within a mine and how this impacts on productivities, costs and the downstream processes.”
Flexibility the key
Mr. Horsley has a level of expertise in ‘differential cut-off grade analysis’, which has particular application to underground mines where the ore geometry, grade distribution and mineralogy are complex.
“A ‘one size fits all’ approach to cut-off grade in many mines can be clearly demonstrated to be sub-optimal,” he said. “A more flexible and practical approach can make a big difference in value by defining more stable and productive mining areas that might be of lower grade, but more than make up in lower costs and higher mill throughput. On the other side of the coin, there may be value in lifting the cut-off grade and apply more selective mining methods.”
One such example is by applying what Mr Horsley refers to as ‘companion mining methods’.
“Sometimes there may be opportunities to introduce a secondary mining method that may, on face value, be a higher cost method but actually adds value when considered in the full context of the operation because of the flexibility it can add to the production schedule.”
Decision making in tough times
Mr Horsley said that stepping outside the box and making a radical change to the mine plan can be a difficult decision for many operators.
“Many sites, and in some cases mining companies, regard themselves as practitioners in a particular area of mining. Open pit operators, for example, may be uncomfortable about going underground, and vice versa for underground operators, which can lead to bias in decision making. Such reluctance to change often requires significant incentive, however, lows in the price cycle, such as we are currently experiencing, present an ideal opportunity to make these changes.”
Planning for the price cycle
Although the current resources downturn has meant that many mine operators are looking to make savings wherever they can, Mr Horsley believes that mine optimisation is such an important process that it should be prioritised by organisations throughout the price cycle.
“The key to a mine’s longer term viability is to maintain a continuous focus on optimisation in good times as well as bad,” he said. “A thorough study can provide compelling ways of streamlining a mine’s current operations and would provide a life-of-mine optimisation model which can be periodically updated, and optimisations re-run with minimal effort.”
“Keeping such a model current provides a valuable tool for scenario analysis planning and allows a mine operator to react very quickly to changing circumstances.”
According to Coffey Mining chief executive officer, Dan O’Toole, it is the cashed up companies that often neglect to pay attention to optimising value and keeping costs as low as possible in good times.
“The first things to go in a downturn are exploration and drilling, and so it is the organisations that have planned for the cyclical nature of the industry who will survive and see the cycle out in relatively good shape.”
“Just as no battlefield general would go into a fight without a backup plan, planning for a downturn and optimising your operations so you are running to peak efficiency in good times as well as bad is the most prudent management strategy.”
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Media contacts
Diana Krause, Global Manager External Communication
T: +61 3 9473 1300; M: +61 420 959 942; E: diana_krause@coffey.com
