Role of Metal Accounting in Assessing and Managing the Business Risks Involved in Production Planning

"Quantitative information about the quality of metal balance results is often overlooked when making important plant production planning decisions. Not only is this common omission made in a context where many measurements taken in and around mineral processing plants carry significant errors, but it also conflicts with the AMIRA P754 Code of Practice for Metal Accounting. The fact that metal balances are typically published without any indication of data quality may give the wrong impression that the measurements are unquestionably accurate. While it is true that statistical data reconciliation can improve the confidence intervals of redundant variables, there is no data processing technique that brings them down to zero at a finite cost. In this paper, we review the entire data flow, starting from field instruments to metal accounting-based decision-making to show how measurement errors are transmuted into business risks associated with production planning. Necessary conditions for first exposing then quantifying such business risks are stated. Pitfalls to be avoided are also discussed. Finally, a simplified risk assessment and management procedure which considers the quality of metal balance results are applied to a polymetallic mineral processing plant. INTRODUCTION Each and every mineral processing plant has production reporting obligations. In this paper, we are concerned with metal accounting reports (Morrison, 2008) where saleable metal flows and inventories are estimated and published. These metal accounting reports are delivered to a variety of stakeholders who use them for internal management purposes (day-to-day plant production planning, plant operation optimisation, capital spending, etc.) as well as for external management (royalty settlements, tolling agreements, etc.). Hence, there should be no doubt that spotless metal accounting is instrumental to high-quality corporate governance (Gaylard et al., 2014) of mining and metallurgical companies. To this extent, one would have expected industry-endorsed standards to have emerged a long time ago. However, the lack of an accepted set of standard procedures for metallurgical accounting was explicitly recognized as an industry-wide problem only in August 2001 during an SAIMM workshop held in Cape Town, South Africa. Discussions that followed this workshop led to the initiation of the AMIRA Project P754, “Metal Accounting and Reconciliation”, in 2003."