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Challenges of Multi-Mine Simultaneous Optimisation for a

Large Iron Ore Mining Operation

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Challenges of Multi-Mine Simultaneous
Optimisation for a Large Iron Ore Mining Operation
Johann Menezes and Farshad Rashidi Nejad
School of Mining Engineering, UNSW Australia

ABSTRACT: Mine planning engineers are required to develop plans and strategies for the commercial
exploitation of mineral resources. Optimisation techniques can be applied in mine planning, to
significantly increase the value of the mining project by allowing for improved long-term planning
decisions. This paper aims to explain applications of the state-of-the-art model, which simulates
the simultaneous optimisation of mining variables including: mine scheduling, cut-off grade
and stockpiling, and evaluates these variables together. Although at present, several optimisation
methods, such as the multiple ore body systems (MOBS) have proved an increase in projected NPV,
these models are time consuming and restricted in optimisation variables. In this paper, challenges
of the application of GEOVIA Whittle 4.5, which is the standard specialised software for open pit
optimisation and strategic mine planning, of a case study on multiple ore bodies within a large
scale open pit iron ore operation are discussed. The state-of-the-art model featuring simultaneous
optimisation and Multi-Mine techniques provided an increase of 14.7% in NPV in comparison
to the base case. However challenges were faced when simultaneously optimising more than one
function using Multi-Mine. The results proved a successful development and after further testing
this model can be recommended for base metals, precious metals and multi-metallic deposits as
well, but Whittle 4.5 can still be improved in its optimisation techniques.

INTRODUCTION
Mine planners are required to develop plans and strategies for the commercial exploitation of
mineral resources (Chanda, et al., 2009). The process of mine planning heavily focuses on the
importance of a well-defined plan at a long term, medium term and short term levels, to extract a
particular reserve of a certain commodity.
GEOVIA Whittle 4.5, a mine planning software created by Dassault Systèmes, provides min-
ing companies with a tool to simulate plans for mine production, and aid in determining whether
their investment strategy will produce a gain or a loss. Whittle, by taking into account real mining
constraints, can deliver robust mine plans that maximise profitability (Dassault Systèmes Geovia
Inc. 2013).
This paper aims to maximising the Net Present Value (NPV) of projects proposed at mine
operations. The NPV is a measure of the value of a project at a chosen discount rate. Due to the
complexity of mining, with existing intricacies such as grade variations in the deposit and how,
when or where to excavate, there have been several techniques developed to optimise decision mak-
ing, one of them being NPV. The net present value criterion was first applied for capital investment

1009
1010 Mine Operations

screening, whereby a positive NPV implied a net positive return for the company (Camus 2002).
To this date, the NPV is almost always chosen as a decision tool when establishing the actual value
for the project or whether the project should be accepted or rejected.
Manually, using trial and error with the aid of Microsoft Excel, it is possible to determine the
optimal pit for metalliferous ore bodies, by exporting the reserves from mine design software such
as MAPTEK Vulcan 9.0. Mine scheduling using this method can be time consuming, and creating
a schedule for multiple metalliferous ore bodies cannot be efficiently carried out using Microsoft
Excel.
Currently, there are many algorithms in the mine planning industry capable of optimising
metalliferous ore bodies such as the MOBS (Multiple Ore Body Systems) technique. These meth-
ods eliminate trial and error, thus reducing the time consumed in the optimisation process; but
carry restrictions (Joukoff, Purdey and Wharton 2004).
Whittle 4.5 contains two features within its optimisation software, Simultaneous Optimisation
(SIMO) and Multi-Mine, which, when used in conjunction, can successfully optimise multiple
metalliferous ore bodies at the same time, with a fewer restrictions. This paper describes the devel-
opment of the state-of-the-art model created in Whittle 4.5, and the challenges within SIMO and
Multi-Mine Optimisation of mine planning variables to maximise the NPV of an open pit iron ore
operation but first briefly reviews the MOBS technique of optimisation.

MOBS (MULTIPLE ORE BODY SYSTEMS)

The ability to optimise multiple mines together, through a sequence or even with simultaneous
optimisation can provide a potential increase in value to the mining industry.
Traditional and widely used methods of multiple mine optimisation have been in existence for
decades, such as the MOBS method.
Situations involving multiple deposits in proximity require multiple ore body systems. The
MOBS method involves agglomerating the mine block models into one super model, as seen in
Figure 1, and then optimising and scheduling this super model using mine optimisation programs
like Whittle 4.5. There are limitations, however, with this method of optimisation (Tulp 1997).
Within each different deposit area, the respective rock codes require different mining and
processing costs to be defined. Another limitation is the agglomeration of the super model. Once

Figure 1. Super model example in MOBS

 Challenges of Multi-Mine Simultaneous Optimisation for a Large Iron Ore Mining Operation 1011

the model has been optimised as a super model, it then needs to be separated into individual mines
using a polygon intersection feature in Whittle 4.5, in order to observe the optimisation for each
individual mine (Tulp 1997).
When scheduling using MOBS the optimisation of the ultimate pit limit and scheduled push-
backs were restricted. It was only possible to apply the same limit and pushbacks to all mines within
the super model.
Multi-Mine, a feature present in GEOVIA Whittle 4.5 provides a much more sophisticated
and flexible means of optimising and scheduling in a multiple mine situation (Joukoff, Purdey and
Wharton 2004), and will be used to create a multiple ore body model for the five mines in this
project.

OPTIMISATION IN GEOVIA WHITTLE 4.5

Mine Operations
The open pit iron ore operation chosen will be scheduled to mine from each of the five mines.
The ore is first transported via truck and shovel to three primary crushers (Crusher 1 for Mine 1,
Crusher 2 for Mine 2 & 3, and Crusher 3 for Mine 4 & 5). Each crusher is placed within 100 m of
the mines, to optimise ore transportation by reducing haulage and increasing conveyor transporta-
tion. From there the ore is crushed to a lump size of 31.5 mm and fed to the secondary crusher
plant via conveyor. Here the ore will be split into coarse and fine hematite with coarse lumps not
exceeding 31.5 mm and fines not exceeding 6.3 mm. Beyond the secondary crusher the fines and
lumps are fed into the processing plant, where further beneficiation takes place with concentra-
tors. The methodology described is similar to open pit large scale iron ore operations in Australia
(Australian Mine Atlas 2014).

Multi-Mine
Using Multi-Mine, Whittle 4.5 allows for multiple ore bodies to be mined under the same material
rock code, and provides a schedule with a breakdown of material drawn from each mine, without
the need of assigning multiple rock times to different deposit areas. Time is also reduced after the
optimisation of the Multi-Mine model as it is no longer required to split the model to determine
the material from each mine.
Multi-Mine also provides the possibility of individual mine optimisation and the potential for
simultaneous optimisation of all mines. The latter will be used in the creation of the state-of-the-art
model, providing combined cash flows, using the schematic plan illustrated in Figure 2.
In Figure 2, two stockpiles are currently present within the mine site. The high grade stockpile
is near the crusher plant while the low grade stockpile is placed near the pits, to reduce the haulage
distance when low grade is not required, and can be sent to waste.
A base case scenario was created by determining the ultimate pit using Whittle 4.5 and export-
ing the reserves into Microsoft Excel. A trial and error methodology was then used to create a
multiple mine schedule, based on the cut-off grade reserves and parameters in Table 1. All data in
Table 1 is obtained from the mine operations.
The listed iron ore spot price cannot be used at this current time in industry as the price of
iron ore is controlled by the market capitalisation of the larger mining companies (Ericsson, Lof &
Ostensson 2010). The selling price of iron ore was taken as A$ 100/product tonne (Y Charts 2014),
1012 Mine Operations

Figure 2. Multi-Mine schematic

Table 1. Base case parameters

Parameters Units Value
Reference Mining Cost A$/tonne 3
Mining Recovery % 85
Mining Dilution % 5
Mining CAF 1.5
Processing Cost A$/ROM t 6
Processing Recovery % 90
Plant Head Grade % Fe 60
Selling Cost A$/tonne 10
Mining Limit Mtpa 80
Processing Limit Mtpa 24
Slope Profile Degrees 45*
Average Grade % Fe 62.4
Size of Crushed Ore mm 6.3–31.5
*Due to lack of information, this is an assumption.
 Challenges of Multi-Mine Simultaneous Optimisation for a Large Iron Ore Mining Operation 1013

Figure 3. Base case schedule

a benchmarked predicted price based on the selling prices of Vale, Rio Tinto Iron Ore and BHP
Billiton, along with an exchange rate of US$ 0.93/A$ (XE 2014). Additionally, all existing capital
for the mine will be used in the project.
The total mineral resource available to mine is 20,867Mt, however due to the requirement
of the plant head grade being 60%, the mineable ore reserve is 3.2% of the mineral resource, or
659Mt of iron ore with a grade of 60%+ Fe.
Figure 3 illustrates the base case schedule for the mining of all five mines. From this schedule
it is evident that further optimisation can be done to improve the crusher feed and reduce the strip-
ping ratio, particularly mid-way through the mine life.
By applying the Milawa algorithm, Whittle 4.5 produces a different bench lead between each
pushback, for each period and can optimise the pushbacks for the chosen mine so as to bring for-
ward the mining of high grade material within the pushback and delay the waste. Milawa applies a
search algorithm to optimise non-linear objects such as ore bodies (Whittle 2010).
Using the Milawa NPV algorithm, a new schedule was produced, with a new NPV. On aver-
age, across all mines the optimisation of pushbacks using the Milawa NPV algorithm in Whittle
4.5 produced an increase of 8.8% in NPV, which in this case equates to added value of A$810M.
Figure 4 illustrates the Milawa NPV schedule, with a LOM of 27 years, two less than the base
case.
The Milawa NPV algorithm allowed material to be mined from different mines simultane-
ously, while applying various leads and lag constraints to each individual mine. A challenge faced
with the Multi-Mine feature in Whittle 4.5 is the inconsistency of the stripping ratio caused by a
fixed periodic mining limit as opposed to a variable mining limit. To improve the feasibility of the
scenario, the Multi-Mine block model may be further optimised using other planning software, to
vary the mining limit across each of the five mines.
1014 Mine Operations

Figure 4. Milawa NPV schedule

The best case Milawa NPV schedule can be optimised by cut-off grade (COG) and stockpil-
ing. Within the Multi-Mine feature of Whittle 4.5, several scenarios were created, with differ-
ent COG values and stockpile capacities. The best schedule reported an average grade of 62% Fe
with the inclusion of a 600kt low grade stockpile (55–62%Fe) and a 400kt high grade stockpile
(62–68%Fe). The COG optimisation increased the base case NPV by 11.3% while the stockpile
optimisation increased the base case NPV by 12.5%.
Figure 5 display the best schedule with the COG and stockpile optimised, respectively. The
schedule displays the proportion of ore mined from each of the five mines and sent to the crusher
plant. The variation in material obtained from each mine is feasible due to the three primary crush-
ers placed near the mines to reduce the haulage distance.
One of the challenges faced, within the Multi-Mine feature in Whittle 4.5, is that the COG
and stockpile optimisation were carried out in sequence. The inability to combine both optimisa-
tions is a restriction present within the Multi-Mine feature of Whittle 4.5.
Using the simultaneous optimisation (SIMO) feature within Whittle 4.5, it is possible to avoid
such a restriction faced in Multi-Mine, by being able to combine the optimisation of multiple func-
tions (pushbacks, COG, stockpiles, etc.) and run it all together to produce one schedule.

SIMO
The SIMO feature within Whittle 4.5 was used to simultaneously optimise the pushbacks, COG
and stockpile optimisation models created in Multi-Mine. Another challenger faced was the inabil-
ity of Multi-Mine to simultaneously optimise within the feature, so the block models were modified
before running SIMO, with the aid of GEOVIA Surpac 6.6.
In addition to the optimal values taken from the Multi-Mine feature models, two blending
beds were added (Bed 1:55–60.8% Fe and Bed 2:60.81–68% Fe) within the SIMO feature, to
 Challenges of Multi-Mine Simultaneous Optimisation for a Large Iron Ore Mining Operation 1015

Figure 5. Optimisation schedule for COG and stockpiles

Figure 6. SIMO schedule

utilise the low grade stockpile when production is low. Figure 6 displays the SIMO model schedule
for the Multi-Mine operation.
The schedule has now optimised the plant input as the crusher plant will operate at 100%
capacity throughout the mine life, due to the stockpiles and blending beds. Additionally, the opti-
mal pushbacks have reduced the overall stripping ratio.
1016 Mine Operations

Figure 7. Graph showing increase in NPV with optimisation models

The average percentage increase in NPV across all optimisation functions is shown in Figure 7.
The significant increase in NPV as a result of SIMO means a mine is better off scheduling its min-
ing & production by combining all important optimisation functions and running it at once rather
than in sequence.
A successful SIMO model was created using Whittle 4.5, and produced an increase of 14.7%
in NPV from the Multi-Mine base case.

CONCLUSIONS
An assessment was carried out on the possibility of utilising a model where all multiple ore bodies
could be optimised together (MOBS), a traditional method by Tulp (1997) still used in the mining
industry.
The SIMO Multi-Mine model was created and with mine data from a large open pit iron ore
operation, with an improvement in NPV of 14.7% compared to the base case.
Several challenges were faced when optimising a multiple ore body operation, particularly
restrictions within Whittle 4.5.
It is recommended to recreate the optimisations in this paper, on lower average grade ore bod-
ies from different geological regions, to further validate the methods used.

ACKNOWLEDGMENTS
The authors would like to acknowledge Dassault Systèmes GEOVIA, Australia Pty Ltd. for their
assistance in the smooth running of the Whittle 4.5 applications.

REFERENCES
Australian Mine Atlas, 2014. Iron Fact Sheet, Australian Atlas of Minerals resources, Mines & Processing cen-
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[Accessed on: 22 October 2014].
Camus, J P, 2002. Management of Mineral Resources: Creating Value in the Mining Business. pp 31–45
(Society of Mining, Metallurgy, and Exploration, Inc.: Colorado).
 Challenges of Multi-Mine Simultaneous Optimisation for a Large Iron Ore Mining Operation 1017

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