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By A Kurniawan, A Sjadat and M Akhasyah

PT Freeport Indonesia’s Deep Ore Zone (DOZ) is a block cave mining operation that has been in production for 15 years. DOZ is located approximately 900 m below surface and has an average production rate of more than 5000 t/d. The footprint of the extraction level will ultimately be 900 m long and average more than 200 m wide. The undercut level is located 20 m above the extraction level.While developing Panel 1K on the northern portion of the extraction level, a major geotechnical problem was encountered when there was a change in lithology and an associated fault intersection. A large collapse of the hanging wall of the extraction level drifts occurred in the area of the fault intersection between February and March 2011. This was followed by a collapse of one of the undercut level drifts directly above the extraction level in May 2011.It was suggested that the best approach to mitigate risk during rehabilitation was to systematically open up the failed area under the protection of a steel set support system. To achieve this, approximately 60 t of grout was injected from the undercut level to fill the voids created when the rock mass between the two levels failed. A ground penetrating radar system was used to survey the condition of the rock mass between the two levels before and after the injection of grout. After the grout injection phase was completed to a satisfactory level of confidence, rehabilitation activities started on the extraction level by taking out the now consolidated material from inside the drift in 2 m advances from under steel sets initially constructed in secured ground.Controlled blasting was the key aspect to the success of the initiative to open up just enough of the drift to systematically support the rock mass before the next set was installed. The systematic support consisted of in-cycle shotcrete sprayed over mesh pinned to the exposed rock, as effectively as possible, with splitsets before spiling the next advance’s protection canopy with rebar. Once secure, a combination of steel set and pumped concrete was installed as the final support. This final support provided a safe platform to repeat the process until the failed zone was safely traversed.CITATION:Kurniawan, A, Sjadat, A and Akhasyah, M, 2016. Rehabilitation of the collapsed panel 1K north in the Deep Ore Zone block cave mine, in Proceedings Seventh International Conference and Exhibition on Mass Mining (MassMin 2016), pp 763–768 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 9, 2016

By A Gustafson, D Johansson, K Jonsson

The underground mining process, from in situ characteristics of the unmined rock mass to the final mill product with fully liberated minerals, consists of a chain of unit operations. Some of them influence fragmentation while fragmentation impacts others. From a production point of view, fragmentation is a key parameter for the proper functioning of many unit operations and affects total production; it influences the ability to load, haul and crush the rock later in the process. Fragmentation varies because of rock mass strength, the presence of joints, the chosen explosive, specific charge (kg/m3) and quality of drill holes. The efficiency and result of unit operations such as drilling, blasting, loading and crushing depend on the rock properties, which vary throughout a mine. Generally speaking, operations are not well adapted to the actual rock properties, leading to a non-optimised flow in production. This paper presents the initial part of a project that will build knowledge on the impact of fragmentation on each step of the production chain in an underground mine. It identifies the key parameters of fragmentation, which influence the overall energy consumption and productivity in a mining operation through interviews, mine visits and a literature review. In the subsequent stages of the project, a number of field tests in the case study mine will address important segments of the production process where fragmentation is a major obstacle to improvements. Optimising the entire process, rather than isolated unit operations, will lead to increased productivity, decreased amount of interruptions and lower energy consumption.CITATION:Gustafson, A, Jonsson, K, Johansson, D and Schunnesson, H, 2016. From face to surface – a fragmentation study, in Proceedings Seventh International Conference and Exhibition on Mass Mining (MassMin 2016), pp 555–562 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 9, 2016

By E Ah Mu and C R Lilley, A D. Campbell

Cave propagation is a complex process due to interacting variables such as mine geometry, rock mass heterogeneity and complex structural networks and stress fields. The Ernest Henry sublevel cave (SLC) is directly below an open pit, which provided an opportunity to observe and measure rock mass failure as the cave initiated and propagated through the pit wall. This paper describes interaction between the open pit and SLC as well as rock mass failure mechanisms observed from the start of the SLC to surface breakthrough.Cave propagation and slope failure mechanisms were found to be governed by intermediate structures, while the cave shape was largely controlled by cave-scale faults. The open pit, production-level geometry and production draw strategy were also important factors for cave and subsidence growth. Cave propagation was episodic and asymmetric in shape due to the orientation and relative position of geological structures, combined with the effects of the increasing SLC geometry and drawdown from the underlying production levels. The precursors and failure mechanism of a 2.5 Mt wall collapse are also reviewed in detail.Cave growth was simulated using a 3D, non-linear, discontinuum finite element model coupled with Newtonian Cellular Automata. Model results are compared to field observations and monitoring data to determine the accuracy of forecasts and compared models versus actual rock mass response during cave propagation.CITATION:Campbell, A D, Ah Mu, E and Lilley, C R, 2016. Cave propagation and open pit interaction at the Ernest Henry Mine, in Proceedings Seventh International Conference and Exhibition on Mass Mining (MassMin 2016), pp 311–318 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 9, 2016

By T. R. Ellis

"In August 2013, the Appraisal Practices Board of the U.S. Appraisal Foundation issued its “APB Valuation Advisory #4 - Identifying Comparable Properties,” which contains analysis and examples that may suggest a broader meaning of the term “comparable properties” than is current convention in real property value appraisal in the United States and internationally. The advisory is directed at the appraisal of real property of all kinds, including interests in mineral properties, as indicated by the inclusion of two mineral property appraisal papers in the appendix that lists suggestions for further reading.This paper firstly reviews as background the historical meaning of a comparable property, with its perceived constraints, against real-world examples of transacted mineral properties that are adjusted to subject properties to provide market value indications. The advisory’s findings are then examined and evaluated as to whether they may influence and benefit the work of mineral property appraisers, particularly in situations where their sales comparison analyses may be challenged. The conclusion is that the combination of constraints that the advisory’s findings specify for use of the term “comparable” will for mineral properties be met infrequently or rarely. As a result, mineral property appraisers are advised to avoid using the terms comparable or “comp” when referring to transactions of mineral properties that they analyze to derive data for appraising the value of their subject mineral properties. IntroductionA mineral property appraiser rarely finds a sale of a mineral property that meets the literal meaning of the term “comparable sale,” by being directly comparable to the subject property of the appraisal in all factors of significance in the determination of the value of the property interest being appraised. Real estate appraisers have long used a more liberal interpretation of the meaning of comparable sale and its commonly used abbreviation, “comp.” Real estate appraisers compare sales to their subject property on the basis of price per hectare or acre of land and price per square meter or square foot of building floor area. Adjustments totaling to within the range of +30 to -30 percent from the sale property to the subject, before factoring in the property area, have generally been viewed as appropriate for the sale to be considered a comparable sale."

May 1, 2016

By N. A. Karl, D. R. Wilburn

"This summary of international mineral exploration activities for the year 2015 draws upon information from industry sources, published literature, SNL Metals & Mining (SNL) (Charlottesville, VA) database and specialists in the U.S. Geological Survey (USGS) National Minerals Information Center. The summary provides data on exploration budgets by region and mineral commodity, identifies significant mineral discoveries and areas of mineral exploration, discusses government programs affecting the mineral exploration industry, and presents analyses of exploration activities performed by the mineral industry.Three types of information are reported and analyzed in this annual review of international exploration: budgetary statistics expressed in U.S. dollars provided by SNL; regional and site-specific exploration activities that took place in 2015 as compiled by the USGS; and regional events that affected exploration activities including economic, social and political conditions, which were derived from published sources and discussions with USGS and industry specialists. Commodity and regional compilations are presented in this summary. Because multiple sources were used to develop commodity and regional compilations, statistics may vary depending on the source and type of data that are being reported.The SNL data summarize planned company budgets for worldwide exploration activities in 2015 for 24 nonfuel mineral commodities and metal alloys and are based on company surveys. Surveys focused on precious metals (gold, platinum-group metals and silver), base metals, (cobalt, copper, lead, molybdenum, nickel, tin and zinc), bulk commodities (bauxite, chromite, iron ore, manganese, phosphate and potash), and other commodities (diamond, graphite, heavy-mineral sands, lithium, niobium, rareearth elements (REE), tantalum, tungsten and uranium).USGS data compilations and analyses are based on information provided by USGS mineral commodity and country specialists, as well as industry contacts and published trade journals. The USGS data summarize exploration site data collected for more than 80 minerals and materials, with a focus on base metals, diamond and precious metals. The USGS analyzed available information to assess the level of exploration activity in 2015 and to report trends in mineral exploration activity for the period 2005 through 2015. These analyses identify where mineral exploration is occurring by commodity and region and the intensity of activity that is taking place in each region for selected mineral commodities, and determines those factors that most affect changes in exploration activity."

May 1, 2016

By John Quiñones de la Cruz

Para tener éxito en el planeamiento de minado, es necesario establecer los requerimientos técnicos y metodólogicos para la automatización, la recolección, manejo y el análisis de datos geológicos e ingeniería. En ese sentido, el presente trabajo señala el uso de un sistema computarizado de modelamiento geológico y planificado tridimensional como herramienta para la planificación eficaz del proceso de minado. La secuencia de minado con 5D Planner, permite planificar la mina para operaciones de explotación subterránea. así como mejorar el planeamiento en etapas previas a la estimación del Valor Actual Neto Económico (VANE) del proyecto.

Apr 1, 2016

By A. Moergeli, Philip Sander, John J. Reilly

"Estimating and managing the costs of complex infrastructure projects – in the planning/design and construction phases, for both owners and contractors – has been a challenge for decades. The more complex and technologically advanced the project, the greater the uncertainty, including potential risks that are important to owners and contractors, such as:• Cost risks to owners – meeting budget and schedule, maintaining public credibility.• Cost risks to contractors – profit, consequences of loss, impacts to reputation/future work.This concern has been addressed in various ways by the underground construction industry for some time (Reilly, 2001). In particular, while significant advances have been made in cost estimating for the planning and design phases (Reilly et al., 2004), that are important to agencies and political decision-makers, it is not apparent that these advances have been widely adopted for construction cost estimates. The reasons for this may relate to lowbid considerations – any method that tends to increase the contractor’s cost estimate, by including risk or likely costs, could lead to an erosion of the contractor’s competitive position – if others are not similarly required to include such costs.Different cost estimating methods produce different levels of information. Specifically, there is a large difference in the character and depth of information if a deterministic (quantities times price plus a contingency) and risk-based cost methods are used. It is this difference in character and depth of information that is the reason that risk-based cost estimating has potential value for owners and contractors. Figure 1 presents hypothetical cost results from deterministic and risk-based methods and illustrates some of these differences.In Fig. 1, the results for deterministic and risk-based cost estimates are given related to the potential profit or loss for a typical project. As is evident in this example, there is significant potential for costs to be realized that are higher than the proposal/bid value estimated using a deterministic approach, with a 15 percent probability of a loss. There is a 30 percent probability that the project will have a reduced profit. There is a 55 percent probability that the project will return a good profit. Using a risk-based approach, it is possible to better recognize this potential outcome in the bid phase and, as a consequence, develop a strategy to:"

Apr 1, 2016

"From April 22 to 28, the eyes of the tunneling and underground construction world will be on San Francisco, CA, as the world’s most influential underground construction industry leaders gather at the Moscone Center for the 2016 World Tunnel Congress.Recognized as the most important international annual meeting for the industry, the 2016 version comes to the United States for the first time in 20 years and will be hosted by the Underground Construction Association of SME (UCA of SME). The conference will be held in lieu of the UCA’s biennial North American Tunneling Conference and will bring the strengths and resources of the UCA of SME and the International Tunnelling and Underground Space Association (ITA). The result will be a conference with unmatched technical programming and a showcase of more than 200 exhibiting companies.A program committee led by Randy Essex of Mott MacDonald, Lonnie Jacobs of Frontier Kemper Constructors, Michael Mooney, of the Colorado School of Mines, Priscilla Nelson, of the Colorado School of Mines and Amanda Elioff of Parsons Brinkerhoff formed the program committee and worked for more than two years to build the program. The result is four technical sessions with five tracks in each session and 185 oral presentations.“One challenge was the sheer size of the group that would be assembled, perhaps 2,500 attendees or more, and the large number of abstracts we were likely to receive,” said Essex. “ We investigated extending the conference a fourth day, but that was not workable with the Moscone Center. We settled on having five concurrent technical tracks – something that has not been attempted in past NAT or RETC conferences to my knowledge. The next step was to develop suggested session titles that would span the breadth of subjects that would interest conference attendees as well as serve the conference theme.”"

Apr 1, 2016

By William Gleason

"Despite the difficult economic climate for the mining industry, more than 6,300 people joined SME for its 2016 Annual Conference & Expo in Phoenix, AZ, Feb. 21-24.Nearly every commodity has been bruised and battered during the past year, leading to one of the more difficult cycles for the industry in the past decade. Coal has taken some of the hardest hits and other commodities, such as copper and iron ore, have felt the sting of a slower growth in China and an oversupply on the market.The difficult conditions could not be ignored, but they did not deter SME from offering a forum for the industry to share knowledge, network with peers and learn about the best products and practices while visiting the sold-out exhibit hall (844 booths and 627 vendors) or while attending any of the 121 technical sessions that were offered.The current state of the industry was one of the overriding themes of the conference and during the challenging times there are often cutbacks as operations look to become leaner and more efficient, however, there is one area that cannot be cut – health and safety.The conference kicked off with a fascinating presentation from Colonel Mike Mullane, a former NASA astronaut who, in 1978, was selected as a Mission Specialist Astronaut in the first group of space shuttle astronauts. He completed three space missions and logged 356 hours in space aboard the shuttles Discovery and Atlantis before retiring from NASA and the U.S. Air Force in 1990.In his speech to a packed audience, he warned of the dangers of cutting corners to get the job done more quickly by guarding against the “normalization of deviance.”Normalization of deviance is a long-term phenomenon in which individuals or teams repeatedly accept a lower standard of performance until that lower standard becomes the norm. Usually, the acceptance of the lower standard occurs because the individual or team is under pressure (budget, schedule, etc.) and perceives it will be too difficult to adhere to the original higher standard. Their intention may be to revert back to the higher standard when this period of pressure passes. However, by getting away with the deviation from the higher standard, it is likely they will do the same thing when the same stressful circumstances arise again. Over time, the individual/team fails to see their actions as deviant."

Apr 1, 2016

By N Cusworth, W R. Mackenzie

"In 2007, the authors presented a framework for the conduct of resource project feasibility studies and provided guidance on minimum standards and best practice (Mackenzie and Cusworth, 2007).This paper will present the authors’ observations in relation to feasibility studies undertaken to support investments made during the unprecedented period of resource project capital investment since 2007. It will also provide comments on general trends in the mining industry’s approach to project assessment and update recommendations on best practice.CITATION:Mackenzie, W R and Cusworth, N, 2016. The use and abuse of feasibility studies – has anything changed?, in Proceedings Project Evaluation 2016, pp 133–148 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By P McCarthy

"This paper is based on 30 years of involvement in feasibility studies as a participant, study manager and the leader of a firm that provides study components and overall study management. The following topics are discussed:the purpose of feasibility studiesaligning the goals of the study team with those of the ownerthe difference between optimisation and designhow the types and levels of studies affect the organisation of the studythe relative merits of various management structures and contractual arrangementssetting scopes of work and tendering the work outthe selection of a study manager and the study management teamcommunications within the study team and externallythe project management trianglemanaging scope changes and maintaining flexibility to respond to study findingsprogress paymentsmanaging a study crisisinnovation, risk aversion and bankabilityreporting the resultsthe dangers and benefits of value engineering.CITATION:McCarthy, P, 2016. Making studies work – organisation, communication and management, in Proceedings Project Evaluation 2016, pp 20–30 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By A A. Roberts, R F. Dewhirst

"Extensive literature surveys, research in the project environment and personal experiences both within and consulting to project teams have revealed some consistent ‘people factors’ that contribute most to ultimate project success. Outside of purely technical and business case issues, there are a small number of leadership characteristics – probably only ten – that if correctly applied can positively leverage a team’s impact on project success.Of the top seven project success characteristics that were consistently highly rated in a recent study, five of them were around leadership. The authors have focused on this topic, noting that good leaders need to display the following traits:passionate commitment to deliveryconsistent modelling and reinforcement of correct values and behaviourfocus on managing relationships well and energising teams and individualscarefully clarifying project vision from front-end loading stages onwardseffective decision making.Not every project manager can and does practise these behaviours all of the time, but being aware of them and receiving training or facilitation in improving their application of these skills can equip project managers with the essential tools to markedly improve their own performance and that of their teams.This paper draws upon experiences in the field and provides lessons – both good and bad – to illustrate. As well as examining leadership traits, the way in which a leader can establish, organise, motivate his or her team and ultimately lead them to success is examined. The paper shares methodologies that have been successfully used to track status within a team and generate appropriate recovery plans where required.In particular, the paper will examine a case study based on an amalgamation of real project issues in some challenging situations using virtual teams (ie physically distant teams located in different centres) to illustrate the importance of strong and positive leadership in achieving success across geographies, time zones and languages.CITATION:Roberts, A A and Dewhirst, R F, 2016. Leadership in projects – a recipe for success, in Proceedings Project Evaluation 2016, pp 49–58 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By L A. Martinez Tipe, J McKibben, S Barry

"Metal prices are central to a mineral investment decision and have a profound impact on the financial performance of companies in the mining industry. At its most basic level, metal prices are influenced by the disequilibrium between international metal volume supply and demand. That is, the commodity price is a regulator that equates international metal supply and demand where inventories act as a buffer between the emergence of this disequilibrium and its dissolution through a price change.From this viewpoint, mining companies are required to forecast metal and bulk commodity prices when evaluating minerals projects through discounted cash flow (DCF) analysis. While supply-demand models are instructive, many companies use historical prices, spot prices, futures/forward pricing and consensus opinion (or a combination of all of these) to develop price forecasts.This paper discusses the definition, fundamentals and differences between futures/forward and consensus pricing and the appropriateness of each in a DCF model for mine project economic evaluation.Our results demonstrate that great care is required when using either futures/forward or consensus pricing and that the decision to use one rather than the other requires consideration of other important elements in the DCF model (ie the risk-adjusted discount rate).CITATION:Martinez Tipe, L A, McKibben, J and Barry, S, 2016. Metal prices and the differences between forward and consensus pricing – which one is better for use in a discounted cash flow model?, in Proceedings Project Evaluation 2016, pp 149–158 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By B E. Hall, D B. Kahler

"'Optimisation' has become a catchcry among many mining companies looking to tell the market how mining businesses will be improved and shareholder value increased. Consequently, the term 'optimisation' has been adopted by many service providers as they look to assist mining companies in achieving their objectives. But the explosion of services and products being offered with the label 'optimisation' has created some confusion. Mining companies ask for help in 'optimising' and service providers offer their assistance because they have a product that has the word 'optimisation' in its title. This is of course an over-simplification, but not by much! The authors' discussions in recent years with both mining companies and service providers have uncovered a number of very different definitions of optimisation.This paper provides a framework for identifying the scope and approach of different mining optimisation products and services, particularly the distinction between optimisation of components of the operation and the business as a whole. The different types of business optimisation are discussed, highlighting the failings of the mining industry's typical approach of strategy selection (as opposed to strategy optimisation). Mining business optimisation is discussed as a wicked problem, with the implication of this on how strategy optimisation models should be used and what the objectives of a business optimisation study should be.Case studies are also included to illustrate how fully flexible strategy optimisation models have been applied to assist decision-makers understand the impacts of changes in one part of the operation on the whole mining and treatment process, from geological models to the sale of product to customers.CITATION:Kahler, D B and Hall, B E, 2016. Strategic decision-making in mining – business optimisation using flexible evaluation models, in Proceedings Project Evaluation 2016, pp 215–225 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By P Mitchell, S Pushpan, G Ferres, K Bobbermien, L Hudson

"Falling commodity prices and a rising supply surplus have ushered in a period of restraint in capital project investment across the global mining and metals sector. Competition for capital project funding has seen fewer projects progress through investment gates and a stronger focus on projects that deliver gains in capital productivity and strategic outcomes.Over the course of the 2015 financial year, EY conducted a study of 108 projects in the global mining and metals sector (EY analysis; Larsson and Ericsson, 2014; SNL Financial, 2015). The projects studied were at various life cycle stages and related to the development of copper, iron ore, gold, coal, nickel and other commodities. Each individual project investment exceeded US$1 B, and the studied group represented a cumulative investment value of US$367 B.The research found that the majority of projects were delayed and/or over budget when measured against the initial estimates made during the early stages of the project life cycle. Of the surveyed projects, 69 per cent were identified as facing cost overruns with an average overrun of 62 per cent above the initial estimate and 50 per cent reported schedule delays, even after remedial acceleration initiatives.The analysis found that budget and schedule overruns could be attributed to five key causes:project management factorsstakeholder conflictsresource constraintsregulatory, and policy-related challengesunfavourable external environment.Improving project delivery performance starts with successful planning, followed by rigorous management during delivery. From global experience on large and complex capital programs, EY has observed a consistent theme of underinvestment and a lack of focus in three often-overlooked but critical areas:implementing effective governance and reporting frameworks with lead indicators that reliably flag emerging risks while they can still be mitigatedallocating adequate cost and time contingency to account for risks across the life cycleenhancing the value of contingency by aligning contingency plans with scenario plans.This paper explores the surprising findings of the study, proposes a root cause model and examines key considerations in applying these critical enabling techniques.CITATION:Hudson, L, Mitchell, P, Ferres, G, Bobbermien, K and Pushpan, S, 2016. Are your megaproject schedules and costs under – or out of – control?, in Proceedings Project Evaluation 2016, pp 75–85 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By P J. Fairfield

"This paper reflects on the author’s experiences in undertaking mining studies and reviewing mining projects and technical reports, particularly over the past five years, and the impact of recent changes in reporting standards and listing requirements pertaining to mining-related evaluation and valuation exercises. It also discusses contemporary changes in the expectations of the investment community and the implications for the role of the technical specialist in providing advice to such stakeholders.Not for the first time in history, the resources industry has experienced a significant downturn after a period of strong, sustained growth in line with the traditional view of the cyclical nature of commodity markets. The resource industry is currently faced with capital austerity in the wake of projects ‘failing’ (not delivering to expectations). In response, the industry has experienced changes in investment behaviour (slowing of investment) and an increasing regulatory burden as stakeholders seek a greater understanding of mining project risks.This paper discusses this response and uses case studies to highlight the key learnings (perhaps re-learnt) by the industry. It also discusses the challenges faced by technical specialists in communicating the results of technical and valuation studies to the investment community.As investors seek to take advantage of the current stage in the investment cycle, the key challenge of the technical specialist is to effectively communicate the uncertainty in technical assumptions, risks and opportunities that drive project value.CITATION:Fairfield, P J, 2016. Managing expectations – from buyer beware to buyer be aware, in Proceedings Project Evaluation 2016, pp 66–74 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By D J. Logan, J Jackson

"As of 1 December 2014, the 2012 edition of the JORC Code requires Ore Reserves to be defined by studies at the pre-feasibility or feasibility level. This paper examines how the pathway for most mining developments is determined in the Pre-Feasibility Study and how a trade-off must be made between the need to make the best decision, the constraints of limited time and resources, and the level of the project’s accuracy and uncertainty in terms of value. Issues considered include framing the scope of the study, planning for robust decision-making and ensuring effective communication between the diverse disciplines within the team.An inherent conflict exists between the immediate value added to a mining business from an increase in ore reserves resulting from a ‘quick’ Pre-Feasibility Study and the long-term value of pursuing a development strategy based on proper investigation and evaluation of the options. Recognition and resolution of this conflict is necessary if a project is to progress into future development stages, both in a timely manner and with the optimal development alternative and strategy.The challenge for project developers and those conducting the Pre-Feasibility Study is to understand what the key deliverables are (ie an Ore Reserve statement, option selection, business evaluation, forward work plan or risks) and how to follow good practice to ensure that these deliver value.CITATION:Logan, D J and Jackson, J, 2016. The pre-feasibility study – big choices, little time, in Proceedings Project Evaluation 2016, pp 122–132 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By A M. Ebbels

"Underground mine scheduling decision-making has been based on production requirements, equipment productivities and the mine planner’s instincts on the best scheduling strategy for the mine to optimise the net present value (NPV) of a project.In the last few years, innovative software has been developed to optimise underground schedules based on NPV. The schedule optimisation tool (SOT) allows the user to set up scenarios based on grade, metal content, capital and operating costs.This paper discusses the results of two case studies undertaken using the SOT software to optimise the NPV of the projects.In each case study, the SOT software has been applied in two ways:using the original mine planner’s scenario and determining whether the NPV could be improved by changing resource capacitieschanging the scheduling goals to determine whether a different mining strategy would have a better NPV outcome.The outcomes of the case studies demonstrate that the mine layout and design were contributing factors to the overall improvement of the NPV and that SOT has a more noticeable impact on the NPV of projects where less sequence constraints are required, such as geotechnical sequencing and access development.CITATION:Ebbels, A M, 2016. Optimising underground mining strategies, in Proceedings Project Evaluation 2016, pp 60–65 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By J Coombes

"In today’s challenging climate of reduced staffing, limited funding and uncertain markets, we are called on to operate more productively and ‘be more innovative’. As an industry, we are quick to identify our practice areas as a mark of our role in the machinery of the mine value chain. We proudly note our profession – ‘geologist’, ‘mining engineer’ or ‘accountant’ – and demarcate our responsibilities and even our physical space. We even subdivide our disciplines into sacred entities such as ‘logging geologist’, ‘resource geologist’ or ‘structural geologist’ to prevent any blurring as though somehow the confusion will cost valuable disciplinary ground. How can we function professionally to heed the call to be more productive and more innovative?The purpose of this paper is to underscore what is expected from project evaluation, examine the ways in which we work as an industry and explore alternatives used in other industries and environments.The paper begins with a summary of project evaluation expectations and the ways in which disciplines typically interconnect when conducting project evaluations. Next, the paper examines alternative work frameworks and making a distinction between multidisciplinary, interdisciplinary and transdisciplinary frameworks. In-practice examples of these frameworks in alternative industries and contexts provide evidence for application as well as an opportunity to examine their pros and cons.The paper closes with a call to re-examine working practices in the mining industry, with a view to enhancing productivity and heeding the call for greater innovation.CITATION:Coombes, J, 2016. Transcending the mining discipline divide – multidisciplinary, interdisciplinary or transdisciplinary?, in Proceedings Project Evaluation 2016, pp 2–10 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By R Knight

"In project evaluation there are two matters of keen interest to non-executive directors: the process by which an investment recommendation is reached, as well as the investment itself, as presented. It is sometimes mistakenly believed that Boards of directors are interested only in the result. That is not so. The process by which project evaluations are derived and socialised with the Board is as important as the result, sometimes more so.Setting aside the gloomy predictions of the doomsayers and looking through short-term volatility in supply and demand, the overall availability of mineral resources more often than not exceeds demand. There are in reality more development projects in prospect at any one time than are needed to meet the market. Only the fittest will prosper, although some others may survive.Optimism springs eternal in the mining industry and every project promoter, executive or entrepreneur has a convincing project development case. Some will create value for shareholders, but the historical evidence suggests that many will fail to meet the expectations set in their evaluation.Boards of directors make the final decision to invest, or not, in a new mine. Knowledge is power, and on that basis the balance of power favours management. Management has the facts (or in some cases, what passes for fact) and the passion to invest. The non-executives have the power of approval – yes or no – but before making a decision directors must demonstrate due diligence, the essential precursor to project approval.Management has a vital part to play in facilitating that due diligence process and in encouraging the independent thought processes of the Board. A closed approach by management fosters a negative, risk-averse attitude on the part of the Board. One that encourages an understanding of the rigour of the project evaluation process and the robustness of the result will allow directors to understand better the implications of their decision.CITATION:Knight, R, 2016. Project evaluation – a non-executive director’s perspective, in Proceedings Project Evaluation 2016, pp 11–19 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016