SURFACE MINING

BLOCK SIZES
There are four block sizes which are relevant in this work.
For Outlining the Ore Body
The size of the block that is needed for outlining the ore body depends on the shape and size of the ore body and on the
particular computer modelling package that is being used. It may be quite small, which can lead to a model consisting
of millions of blocks.
For Calculating Block Values
The value of blocks should be calculated with a block size which is similar to the selective mining size. That is, a parcel
of rock should not be so small that it could not be mined separately, nor so large that grades are artificially smoothed.
This block is sometimes bigger than that needed for outlining the ore body, requiring blocks to be combined and their
grades averaged.
For Designing a Pit
There is now considerable experience in pit design using optimization techniques and, assuming that the pit occupies
most of the width and length of the model and that the outline is not too convoluted, then a full model of 100,000 to
200,000 blocks is usually more than sufficient for pit design purposes. This leads to a block size which may be bigger
than that for calculating values.
If it is necessary to re-block the value model, then it should be done by adding component block values and NOT by
averaging grades.
For Sensitivity Work
If we want to do a series of optimizations using, say, different product prices so as to plot a graph of pit value against
price, a model of 20,000 to 50,000 blocks will give just the same shape of graph with a very small shift of absolute
value. Thus, most optimizations for sensitivity work can be done very quickly and this approach generally leads to a
much more thorough sensitivity analysis.
Again, re-blocking should be done by adding values and not by averaging grades.
SENSITIVITY WORK
Although an optimized block outline and the corresponding detailed design are not the same, they do have a close
relationship and, provided a good optimizer is used, are very similar in value. Consequently, when comparing two
designs, the difference in value between the two optimal block outlines will be very similar to the difference in value
between the two detailed designs. This means that sensitivity work can be carried out without doing any detailed designs
at all.
Also, because a good optimizer produces a result which is objective and single-valued, it is quite reasonable to take
note of small value differences due to, say, changing the slopes by a few degrees. This is not true when designs are
done by hand, because an engineer will probably produce different designs on different days, without any change of
slope.
During sensitivity work, we explore the economic and slope sensitivity of the mine. We sort out the general scale of
mining and hence the operating costs. We decide approximately where the haUl roads are to go and adjust the slopes
in these regions to the average slope.
This requires a large number of quick optimization runs. However, it is probably the most valuable part of the whole
design exercise because it inevitably leads to a much better understanding of the ore body and its economics. Graphs
can be prepared which show how various characteristics of the mine, such as value or tonnage, are related to product
price, costs, etc.
Probably the most significant graph is the one shown in Fig. 7. This relates net present value (NPV) to total pit tonnage
for a given throughput and product price. First, a set of optimal outlines is prepared, where each is optimal for a different
product price. For some fixed product price, each of the outlines is then scheduled as though it was to be the limiting
pit. If an automated practical scheduling scheme is available, it should be used. In producing Fig. 7, two limiting
schedules have been used. Best case.

Fig. 7. Undiscounted. best case, and 40 worst

case NPV plotted against pit tonnage
 PLANNING AND DESIGN OF SURFACE MINES
scheduling involves mining with many small pushbacks or cutbacks. Although in no sense a practical schedule, it
indicates the hizzghest possible NPV. Worst case scheduling involves completing the mining of each bench before
starting the next. This is usually practical, but produces the lowest possible NPV.
The NPV for any practical mining schedule must lie somewhere between the two lower curves, with smaller pits tending
towards the bottom curve and larger pits providing opportunities to get nearer to the middle curve.

This graph, which can be plotted for different product prices, is the single-most useful presentation known to the writer.
It is meaningful to engineers, accountants, and management alike and can usefully be discussed in committee. It allows
profit and corporate risk, in the form of mine life (pit tonnage), to be related and traded explicitly. Once a pit size has
been chosen, it is easy to use the corresponding pit outline as a starting point for the detailed design.
This graph can be prepared by using any good optimizar and by doing a lot of work. However, software now exists
which will produce the data for it automatically and quickly.
CONCLUSION
We have seen how good pit optimizers can be used not only to help design ultimate pit outlines, but also to carry out
sensitivity analysis to an extent which is not posible without them.
Pit optimization is a tool which, used properly, can greatly speed and ease the process of pit design and can significantly
increase the value of most pits. It can also be used to reduce the corporate risk involved in mining.
REFERENCE LIST
 Johnson, T.B., 1968, "Optimum Open Pit Mine Scheduling," Ph.D. Diss. University of California, Berkeley,
CA, 120 pp.
 Johnson, T.B., and Sharpe, R.W., 1971, "Three Dimensional Dynamic Programming Method for Optimal
Ultimate Pit Design," Report of Investigation 7553, US Bureau of Mines.
 Koenigsberg, E., 1982, "The Optimum Contours of an Open Pit Mine: An Application of Dynamic
Programming," Proceedings. 17th APCOM Symposium, AI ME. New York, pp. 274-287.
 Lerchs, H., and Grossmann, I.F., 1965, "Optimum Design or Open Pit Mines," elM Bulletin, Canadian
Institute of Mining and Metallurgy, Vol. 58, January.

5.4 OPTIMUM PRODUCTION SCHEDULING

ERNEST L. BOHNET

The objective of production scheduling is to maximize the net present value and return on investment that can be
derived from the extraction, concentration, and sale of some commodity from an ore deposit. The method and sequence
of extraction, and the cutoff grade and production strategy will be affected by the following primary factors:
1. Location and distribution of the ore in respect to topography and elevation;
2. Mineral types, physical characteristics, and grade! tonnage distribution;
3. Direct operating expenses associated with mining, processing, and converting the commodity into a salable form;
4. Initial and replacement capital costs needed to commence and maintain the operation;
5. Indirect costs such as taxes and royalties;
6. Commodity recovery factors and value;
7. Market and capital constraints;
8. Political and environmental considerations.

The procedure used to establish the optimal mmmg schedule can be divided into three stages. The first defines the
extraction order or mining sequence, the second defines a cutoff grade strategy that varies through time and will be
optimal for a given set of production parameters, and the third defines which combination of production rates of the
mine, mill, and refinery will be optimal, within the limits placed by logistical, financial, marketing, and other
constraints.
In order to develop an optimum production schedule, a sequence or extraction order inside of the so-called ultimate pit
must first be determined. The extraction sequence depends on two subsets of parameters. The first deals with the strip
ratio associated with recovering the ore, the grade of that ore, and the physical location of that ore in respect to
availability through time.
The second subset of parameters consists of costs associated with starting and maintaining the whole operation.
Direct operating costs can be used to define a breakeven cutoff grade and strip ratio, but the objective of mine planning
is to devise a strategy that will optimize the total investment. Operating at breakeven cutoffs and strip ratios is only
optimal for the final phase at the end of the mine life.
Before the mine production planning commences, a great deal of work has already been completed in exploration and
modeling the deposit. From this work, a number of tentative assumptions have been made, including the most probable
mining method and hence, the bench height, type, and aproximate size of the loading equipment and the mining
selectivity. Other test work and assumptions will also have been made regarding the type of process needed to recover
the commodity. These parameters will be used to estimate the most probable range of mining and processing costs.
The design of the mining phases can be accomplished by rough manual approximation after review of the bench plans
and cross sections, or analytically by computer techniques. Each method has advantages and disadvantages as applied
by an experienced engineer, but the method chosen is determined by the accuracy requirements and available funding.
If the study objective is very preliminary, with little basic data available, then manual methods can be justified. If the
study is to be a sound basis for investment and development of the mine, and a great deal of information has been
collected, then a very thorough computer analysis is warranted. Computer designed phases can be determined by
feeding the data developed and stored in a computer block model into a set of programs that can be used to calculate
an economic phase limit. The objective is to develop three dimensional equal profit potential surfaces throughout the
mineral deposit. Each surface has to be sufficiently spaced apart to allow adequate room for mining the slices between
the surfaces. Since the distance between equal profit potential surfaces will vary, some manual adjustments will be
required, as well as the addition of haul roads out of a phase and if required, access left for the next phase. See Fig. 1.
Manual methods depend on having an experienced engineer review the bench plans and cross sections through the
deposit to visually pick out the higher grade targets that have reasonable strip ratios. For example, it would be incorrect
to first target high grade areas for mining having very high trip ratios that reduce the net value of the recovered ore
below the net value of medium grade ore in another área with much less stripping. The manual method is only a first
step estimate and, therefore, it will not be as accurate as a computerized technique.
Computerized pit limit determinations can be made using the 2-D Lerchs-Grossman method, or three-dimensional
techniques, such as the floating cone or the 3-D Borgmann pit design method. The results of the last two systems are
nearly the same, the difference being that the floating cone is a computerized trial-and-error method while the
Borgmann is an analytical method.
The strategy used in developing the computerized pit phases is to use higher costs or lower commodity prices in the
initial phase and then, for each successive phase, lower costs or higher commodity prices are used. The net effect of
this strategy is that the initial phase will have a high breakeven cutoff grade and high net value per ton of ore mined,
and each following phase will have a lower cutoff grade and net value per ton of ore.
The accuracy of the estimated costs, recoveries, and commodity price parameters need only be reasonably precise,
since they are only used to determine the location of the ores with the relative highest to lowest net values. Cost
estimates needed for determining the extraction sequence can be broken down into three distinct major categories:

(1) costs per ton of material mined;

(2) costs per ton
of ore treated; and
(3) costs per pound of commodity produced.

The costs per ton of material mined include the direct mining costs per ton for the drilling, blasting, loading, hauling,
ancillary equipment, and mine general and administrative functions. The cost per ton of the capital and replacement
expenditures for mine mobile equipment related to the total material mined is also included because the major mobile
mining equipment is consumed in approximate direct proportion to the amount of material handled by the equipment,
unlike the major initial capital cost components of the plant and infrastructure. The plant components that are replaced