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Mining begins with a small pit in the surface, then proceeds to a larger

pit. which encloses the small pit, and the process continues until a final
pit is reached. A mining sequence is obtained from a series of nested
pits. Figure 2 shows, in two dimensions. one possible series of nested pits
composed of 6 pits. Two possible mining sequences, Sequence A and
Sequence B, each formed by the nested pits shown in Figure 2, are given
in Table 1. Neither of these two sequences includes Pit 6 which is
assumed to contain low grade ore. Therefore, including Pit 6 in the mining
sequence would generate an economically inferior plan since the cost of
mining Pit 6 would be higher than the revenue it would generate.

A new production planning method overcoming the problems of conventional

methods has been developed in the Department of Mining Engineering at
the Southern Illinois University. Through this method, the optimum mining
sequence, ore and waste productions, ultimate pit limits and mine life
can be simultaneously obtained. The optimum milling cutoff grade can also
be determined by a systematic search using the developed method.
The model consists of three major phases.
In the first phase, a block
model is formed based on the surface
boundaries of the deposit.
bounding algorithm is then applied to this block model to form the largest
feasible pit so that the computation of the second phase can be started
with a pit rather than a prismatic block model (Wang and Sevim, 1993).
In the second phase, a spectrum of milling cutoff grades is considered,
and for each cutoff grade a series of nested pits are generated inside the
largest feasible pit. These pits are generated in such a way that each
pit in the series contain the highest amount of metal among all possible
pits of the same size , and that the increment from one pit to the next
is uniform. The pits in the series become best pushback candidates in a
period. This method of pit generation uses the metal content reported for
each block rather than the misleading dollar value.
Hence, it avoids
making any assumptions on the production rate. In the third phase , all
possible sequences of pushback are formed with the generated pits, and
these sequences are economically evaluated using the NPV method. A
search is then conducted among all sequences to find the best sequence for
the given milling cutoff grade. The process is repeated for every cutoff
grade in the spectrum. The best sequences for all cutoff grades are then
compared to find the final best sequence. Once the final best sequence is
obtained, the cutoff grade, ore and waste production rates, ultimate pit
limits, and mine life emerge as a natural consequence of the evaluation.
The above described process
network shown in Figure 4. It
cutoff grade in the spectrum,
being the inner-most and the

is illustrated with the aid of the simple

is assumed that, for one of the milling
5 maximum-metal pits were generated; Pl
smallest, and P5 the outer-most and the

largest. Also, the incremental block numbers between two consecutve

pts are uniform throughout the series and equivalent to the smallest
possible production rate that the engineer envisions. The network indicates
that one may decide to mine any size pit in the first year. For example, if
P5 is mined in the first year, the end of mine life will be reached in one
year. On the other hand, if Pl is mined in the first year, P2, or P3, or P4,
or P5 may be reached in the second year by a pushback from P l. The
other connections in the network can be explained the same way. Each
path , formed by pit sequences, starting at time O and ending in one of
the pits in any year constitutes a feasible production plan. The net cash
flow for each pushback along a path is calculated and discounted back to
time O to obtain the NPV of the path.
The optimum path
be 0-Pl-P3-P4 as

for the network shown



4 is assumed


indicated by the thick line. The implication of this path is that the
optimum mine life is three years and the optimum UPL are defined by P4.
The optimum mining sequence reveals that Pl should be mined in the first
year, and that P3 should be reached by a pushback from Pl in the second
year, and finally P4 representing the ultimate pit should be reached in the
third year by a pushback from P3. lt is noted that, P5 is not selected as
the ultimate pit since mining the pushback from P4 to P5 would have
lowered the NPV of the project. The optimum production rates of ore and
waste are also obtained simultaneously since the ore and waste contents
of each pushback are known for the selected cutoff grade.
As seen in this simplified example, no mplicit assumption on production
rate was made to assign dollar values to the blocks, no mining or milling
production ratos were targeted, and the UPL are not determined
independent of the mining sequence.

The nested pits generated in this model are the best candidates for
mine sequencing because they are maximum-metal pits. A maximum-metal
pit , composed of M blocks, is the pit that contains more metal than any
other pit of the same size. The idea of generating maximum-metal pits stems
from the objective of maximizing the NPV of the project which can only
be possible if the pits scheduled to be mined contain the highest possible
metal. The algorithm is based on the idea that, finding the maximummetal pit of M blocks, out of a total of M + N blocks, is equivalent to
eliminating the N blocks that contains the least-metal quantity, provided
that the geometric constraints of the pit are maintained.
Before the
process starts, the top and bottom levels of each block column in the
block model are defined. The algorithm considers the first block column
and starts building downward cones from the bottom up as shown in

Figure 5 on a 2-dimensional block model. Each time, the upper block of the
column becomes the apex of the next larger downward cone. A downward
cone template is used for this purpose. The reason to consider a cone is
that, the shape of the pit can be approximated by an upward cone at all
times due to the fact that as mining progresses downward from the
surface the walls of the pit must be below certain angle for safe operation.
In this algorithm, a downward cone is used because we are starting from
the bottom and trying to exclude those blocks with low grades, rather
than starting from the top and including high grade blocks. It is noted,
however, that downward cone still keeps the safe slope as the pit
progresses downward. The average ore grade of each cone is calculated
and the cone is saved in an array where all the cones are ranked in
ascending order of their average ore grade. Downward cone building along
a column ends when the number of blocks in the last built cone exceeds
the predefined N incremental blocks. Then, the algorithm moves to the
next column and continues in building additional cones. The process is
repeated until ali the columns are evaluated. At the end of a round of
evaluation, the union of (k) cones containing the predefined N incremental
blocks and having the lowest possible average ore grade is excluded from
the pit block model. Let us assume that the block model shown in
Figure 5 contains M + N blocks and that the union of the cones that are
arbitrarily marked as Cone 5 and Cone 11 contains the N blocks with the
lowest average grade. When these cones are excluded from the block
model, the remaining is a pit of M blocks with maximum metal content.
All other pits of M blocks contain lesser metal. In Figure 5, the M + N
block maximum-metal pit
is shown by the dashed lines, whereas the M block maximum-metal pit
is shown by the thick solid lines,
After each round of evaluation, the bottom blocks of each column are
updated and a new round starts for finding the next smaller maximum-metal
pit. The series of pits obtained through the pit-generation algorithm is then
used to form sequences as portrayed in Figure 4. The details of the
algorithm were published elsewhere (Wang and Sevim, 1995).
The above pit-generating algorithm is heuristic, and, as such, it does
not guarantee the truly pits. The parameterization
technique, which is essentially the Lagrangian multiplier technique, may be
used to obtain the truly
maximum-metal pits
( Coleou,
transforms a constrained optimization problem to
unconstrained one.
In maximum-metal
parameterization, the grade of each block in the block model is reduced
by an amount equal to , and the unconstrained problem is solved using
a method such as the maximum closure in graph theory or maximum flow
in network theory. The size of the pit increases as the
value of ,decreases. The outcome is a series of truly maximum-metal pits.
However, the series gencrated by parameterization technique may have a

problem called gap.

A gap is a large size difference between two
adjacent pits of the series, and it may occur more than once in the
series. Gaps are inherent in the Lagrangian multiplier technique (Everett,
1963). If these pits were used to devise a production schedule, the gaps
would inflict serious problems. In general, a series of pits with gaps of H
blocks cannot be used in devising a mining sequence if the targeted
production per period is smaller than H blocks. Besides the gap, the
series generated by the parameterization method may not have a uniform
number of incremental blocks between adjacent pits in the series. The
uniformity is essential in devising a production schedule that does not
fluctuate significantly during the life of the mine.
Using an actual ore deposit, it is demonstrated that the above described
heuristic algorithm generates not only nested maximum-metal pits that are
equivalent to those generated by the parameterization method, but also,
the pits are uniformly incremented without any gaps in the series (Wang
and Sevim, 1995). It is, however, necessary to conduct a few more
comparative analyses before making the above statement with a certain
degree of confidence.

The search for the optimum path in the above network can be viewed as
a sequential decision making problem which can be conveniently formulated
by using the dynamic programming (DP) technique. In this formulation, the
stages can be defined by the years and the states by the pits. An important
requirement in DP formulation, however , is the satisfaction of the state
property which dictates that the value of an are must be calculated
independent of the decisions made in the previous ares. The value of an
are in the above network is the Net Cash Flow (NCF) generated by
mining the pushback from one pit. to the next. An are represents the
activities in mining a pushback. It is unfortunate that the capital investment at
an are is dependent upon the capital investment that has already been
committed in previous years, and capital investment is directly related to
production decision.
For example, referring to the network of Figure 4,
Jet. us assume that the pushback from P4 to P5 requires 4 units of mining
equipment, and that pushbacks from P3 to P4 and from P2 to P4 require
2 and 3 units of equipment, respectively. lf P4 were reached from P2, then
only one unit of equipment would be acquired in Are 4-5. On the other
hand, if P4 were reached from P3, then two units would be acquired in
Are 4-5. It is clear that the capital cost in Are 4-5 is dependent on the
investment that have already Leen made in previous stages.
implication of this is that , there is not a single are connecting P4 to P5
as portrayed in Figure 4, but rather there are as many ares as the
paths reaching P4. In other words, there are 3 ares connecting P4 to P5
because there are 3 paths, namely, Paths 0145, 0245, and 0345, reaching

P4 from previous stages. This example illustrates that a DP formulation

where the state is defined by a single parameter (the size or the ID of
the maximum-metal pit) will not be suitable. The information on capital
investment along each path must be made readily available to Are 4-5 so
that the capital investment at Are 4-5 can be figured out and that its NCF
can be calculated without visiting the previous ares of the path. The
application of DP can only be possible if this information is provided to Are
4-5. Otherwise, the search for the best path becomes an exhaustive
search, and in an actual case with billions of paths the problem becomes
A successful DP application was made possible by a modified formulation
where the states of the network were defined by two variables; the first
one is the maximum-metal pit and the second one is the equipment
configuration. The equipment configuration is a record that contains the
number of equipment units and their ages. Along each path, all the
changes in equipment status such as purchasing new equipment, replacing
old equipment, and storing extra equipment are recorded in the equipment
configuration of that path and used at the beginning of each are for
determining the equipment requirement of that are.
lt is important to note that the equipment configuration of some of the
paths may be similar. We take advantage of the DP technique when these
similarities occur. To illustrate the DP based search algorithm, the encircled
section of Figure 4 is redrawn in Figure 6 whereby all the distinct paths are
shown. There are 19 distinct paths in this section; 3 paths in the first
stage, 6 in the second, and 10 in the third. The paths in the first stage
are composed of single ares, whereas those in the second and third
stages are composed of 2 and 3 ares, respectively. The equipment
configurations of only two paths reaching the third stage are shown in
this figure. It is assumed that to mine Pit. PI one unit of equipment will be
needed. Similarly, two units will be needed to mine P2, and three units to
mine P3, etc .. Hencc, Path 01 has one unit of equipment that will be one
year old when Pl is mined out (1(1)]. The NPV at that time is calculated
to be $-23.3. The next path is Path 013, and the pushback from Pl to
P3 requires 2 units of equipment. Since we already have one unit, which will
be two years old at the end of year 2 [1(2)), we need one more unit [1(1)].
The NPV at that time is $9.6. The next path is 0134 where only one
unit is needed to mine the pushback frorn P3 to P4. The unit bought in
the second period is then stored as one year old unit [l ( 1 )] , the other
unit will turn to three (1 (3)), and the NPV is
$24.4. When similar logic is followed for Path 0234, it can be found that
the ares connecting
P3 to P4 have the same equipment configuration. In other words, these
two ares, by ending up in the same pit and with the same equipment
configuration, generare an identical state. The NPV of Path 0234 is $27.6

and is higher than that of Path 0134, thus the next are should
extended from Path 0234 rather than Path 0134. This reasoning can be
observed from paths
02345 and 01345; both paths have the same are extension, Are 4-5. The
cash flow generated at this extension is the same for both paths since it
depends on the incremental material (waste and ore) to he mined in Are
4-5 and the equipment configuration at the beginning of the are. Therefore,
the DP logic will eliminate the economically inferior Path 0134 and carry
forward the inforrnation on the economically superior Path 0234. As seen
in this figure, there are two more identical states in Stage 3. Hence, the
nurnber of distinct states at Stage 3 decreases from
10 to 7. As a consequence of this
significantly reduces after

decrease, the size of the network

Stage 3.
After all the paths are evaluated, the algorithm compares the NPVs of the
paths and finds the highest NPV. The state with the highest NPV
determines the last pit along the path. Then, starting from this last pit,
thc algorithm traces back the ares that make up the path with the
optima! pit sequence. It is emphasized th at a NPV exists for every state
in the network, and that the NPV may decrease from one state to the
next along a path if mining activity at the are connecting those states does
not provide a positive incremental discounted NCF. The specifics of the DP
algorithm were published elsewhere (Sevim and Lei, 1994).


A case study for a midsize actual gold deposit was conducted using the
developed model. The block model was composed of 43, 000 blocks of 50 x
100 x 40 feet. Four series of maximum-metal pits, corresponding to the
cutoff grades of 0.005, 0.025, 0.05 and 0.01 oz/ton, were generated. The
number of pits in the series were 57, 57, 55, and 50, respectively. The
NPVs of the best sequence corresponding to each cutoff grade are shown
in Figure 7. As seen in this figure, the sequence with the highest NPV was
found to be $39.36 and it corresponded to the cutoff grade of 0.025 oz/ton.
The optimum mining sequence was formed by pits 3-6-9-12-15-17-20-23-2629-32, indicating an optimum life of 11 years. Natur ally, the ultimate pit
limits were defined by the last pit in thc sequence, that is Pit 32. Mining
the pits larger than Pit 32 decreased the NPV of the project. The ore and
waste productions resulting from the optimum mining sequence are shown in
Figure 8.

An exhaustive evaluation and search of the paths in a network formed

by 57 pits would have required the evaluation of 1.28 x 1011
sequences. Such an evaluation would be computationally impossible. The
actual sequences evaluated and searched by the DP algorithm were
approximately 1O million.