Reconciliation along the Mining Value Chain

"SynopsisMetal accounting and reconciliation is an increasingly important governance issue in all mining operations, in that it is required, from a risk management perspective, that the company is in control of its product throughout the whole mining value chain. Reconciliation is a grossly misunderstood term. It means different things to different people, and therefore one of the purposes of this paper is to ensure a holistic and integrated understanding of ‘reconciliation’.Previously, where reconciliation was done, it was often for internal control purposes and loosely applied, sometimes with a low degree of confidence and understanding of the underlying parameters and their natural variability.In most mining operations, issues such as dilution, stope performance, and recovery are critical to profitability and long-term value, and thus understanding and control of these key value drivers is essential, not only from the governance perspective, but also from the perspective of maximizing shareholder returns. In order to implement a system for metal accounting and reconciliation, it is important that the cause and effect of these value drivers is understood, and that a systematic control system be established.While a number of off-the-shelf solutions exist for this work, it is the contention of this paper that a full understanding of the metal flow, its variability, its underlying loss potential, and its control points is necessary before a systematic approach to reconciliation can be undertaken.The paper also advocates that this approach should ensure that the reconciliation system clearly addresses the reconciliation needs, within a consistent framework. Such a framework has been developed by AMIRA, in terms of a metal accounting code. However, up until now, this code has been aimed at plant processes, whereas this paper shows how the concept can be extended to cover the full reconciliation requirements for a base metal mine.IntroductionReconciliation is defined as ‘the process of finding a way to make two different ideas, facts, etc., exist or be true at the same time’. In terms of a mining process, this refers to the comparison of measures and estimates along the value chain, and at different points in time, in order to track and optimize metal recovery. This leads to the notion of having a system in place for accounting for the metal. The University of Cape Town defines metal accounting as ‘… the estimation of (saleable) metal in a mine and subsequent process streams over a defined time period. Comparisons of estimates, from different sources over a specific time period, are called reconciliation.’Traditionally, metal accounting has consisted of geological reconciliations of mineral resource to mineral reserve conversion, mine planning reconciliation related to the reconciliation of long-term plans to short-term plans, grade control reconciliation of head grades to sampled or block grades, and mine survey reconciliation of tonnage discrepancies and mine call factors. In addition, metallurgical reconciliation has tended to be based on metal balancing, followed by some commercial metal accounting that links dispatched product to sales quality, quantities, and revenues. Miners disparagingly refer to this plant process as ‘millmatics’."