MI DLA

NDS

STATE UNIVERSITY
FACULTY OF MINING AND GEOSCIENCES

NAME IDAI NYIKA

REG NUMBER R163888B

FACULTY MINING AND GEOSCIENCE

LEVEL 5.2

MODULE MINERAL RESOURCE

MANAGEMENT

LECTURER MISS MPESI

 ASSIGNMENT ONE

1. a. From your own point of view, clearly define the term Mineral Resources
Management. In your description outline at least 5 critical factors owing to the
success of an effective MRM system for any mining organisation (30)

Mineral Resource Management is an integrated approach to resource planning and

management along the value chain activity which focuses on the processes of defining,
identifying, evaluating and providing an optimal extraction, depleting and reconciliation plan
of the mineral resource. This is done to produce a quality product which satisfies the business
objectives of the company, and the requirements of the customer in a dynamic environment.
It performs an audit and quality assurance function to ensure compliance to the business plan,
and customer satisfaction in terms of quality and quantity. The value chain is a linked
arrangement of interdependent business processes or value activities that is designed to
generate linkage between business processes to optimize the total value process.
The key success factor to any Mineral Resource Management solution is the ability to realise
collaborated solutions that incorporate functional specialisation in an integrated decision
making process. To achieve this, it requires integration across the value chain from
exploration to marketing, as well as seamless information availability of all key management
information to all relevant decision makers. Below are 5 critical factors owing to the success
of an effective MRM system for any mining organisation.

a. Resource definition

The biggest risk in the mining business is geological variability hence there is need to
understand and define the resource. This can be done through the processes listed below.

 Understanding the resource geographical and geological so as to obtain updated

and verified geological models.
 Understand the resource in terms of extractive metallurgy which will enable us to
have beneficiation curves for each rock type and blends of rock types as well as
predicted yield.
 Understand the lithology of the resource according to ore types, rock type
characteristics according to colour and texture, defining discontinuities; and
mineralogy. The mine must be scheduled to the compatibility of the lithological
units with regard to the beneficiation process involved as well as, but not only,
 according to grade. A compatibility matrix must be created as defined by the
different rock type lithological units with the highest value indicating perfect
compatibility with the beneficiation plant.
 Understand the physical metallurgical characteristics of the resource
 Understand and investigating ore blending which is need to collect and market
sufficient information through exploration, mapping, analysing and physical
testing to determine the ore characteristics, volume, grade, structure, lump/fine
ratio, hardness, decrepitating, yield and beneficiation in order to satisfy client
needs and to create additional markets.
b. Optimal exploitation of the mineral resource

By looking at the different functional mining departments, the mineral resource can be
optimally exploited by

 Effective exploration

Executing an exploration strategy or programme to optimize the mineral resource, and

develop and follow a formal exploration strategy. The geological and grade models must be
continuously updated so that the most value to the mine planning can be added. This is
normally stated annually by consultants in the resource statements and audits.

 The collection and processing of geological information

Geotechnical, a system must be developed to assess the risk of slope failure versus the
financial benefit that will add the most value. Dewatering must be done in accordance with
the LT mine plan

 Mine design and scheduling

Optimum pit design techniques must be evaluated to allow for maximum utilisation of the ore
grade and mineral resource. By taking macro and micro economic conditions of the day into
consideration, each unit of material in the blocked mine layout should be constantly
evaluated. This is also called selective mining. By doing this, a material will ultimately be
considered as ore or waste on a daily basis. Sets of interactive long term mine layouts for
different long-term macro-economic conditions should therefore be created. Condition based
and activity based costing should be a central part of the economic modulation of the
economic viability of each part of ore, and not using average costs as traditionally done. The
costs allocated to a material unit should be conditions and material based, and not averaged.
Constant testing on a mineralogical base, needs to be done in the plant. This is a valuable tool
in helping to focus on the continuous improvement (CI) initiatives in the value chain and
especially the interaction between the plant and the mine. Risk matrix should also be used to
indicate the risk profile of a specific mine plan. Many a mine plan, short- and long term, had
different scenarios compared to each other without having a feel towards the risk profile of
each mine plan. Mostly the mine plan with the highest NPV value is chosen, without making
an informed risk profile of each scenario in consideration. The risk factors to be taken into
consideration are shown in the table below

type of risk examples

Accuracy level of information used
Information risk Geostatistic expertise
Applicability of models
physical risk Geotechnical conditions
Mining methods used
Beneficiation methods used
Mine layout risk
Geohydrological conditions
production risk Production rate
Equipment availability and utilization
Infrastructure
Material properties e.g. moisture content,
fineness etc.
Quality and recovery risk Risk of contamination;
Degree of homogeneity of the ore
Degree of control
Measuring capability with regard to time
and total value
chain tracing of the material

 Resource exploitation

A pit development strategy (resource exploitation strategy) must be defined by determining

sensitivities from ore quality, stripping, selective mining, waste rock dumping and pit
dewatering strategy, surface structures, adjoining properties and mining Equipment strategy
(Asset Management Policy). Mining methods must be developed along with the equipment
strategy for maximum utilisation of ore reserves, utilizing the best available technology and
the lowest ore losses through the total value chain. Asset Risk Management must be also
being done on a continuous basis.

 Grade control

Development of an efficient grade control system ensuring that the short term mining plans
are followed within approved norms and the ore product grade values are produced within
acceptable limits.

 Plant’s physical capability

For the mine production scheduling, the influences on the mineralogical and physical
properties of the plant on major components and sections must be taken into consideration.
Typically, short- and long term planning that leads to mine layout design and scheduling,
would only indicate ROM and feed grade predictions. The plant performance predictions and
what effect it has on the gold production, must be added in the short and long term mine
planning schedule. A mine plan schedule will therefore be created over the total mineral
resource value chain.

c. Plant design and optimized resource utilisation

This can be archived through considering factors like

 Basic mineralogical characteristics of the ore types such as liberation factor,

maximum recovery potential, harmful mineral influences, maximum mineral
recovery. The total orebody should be described mineralogically and physically as
required for the required mining and beneficiation processes. The exploration
description of an orebody should therefore take the proposed beneficiation and mining
process into consideration.
 Optimum beneficiation

Developing and installing equipment according to the requirements set by the different
harmful effects of other minerals in the ore types as well as the ore type’s characteristics, and
to achieve the plant operating requirements to the desired set standards.

 Optimum product blending

Stack ore on product blending beds according to the correct batch size and blend ore types
homogeneously on designated beds according to the physical properties of the host rock.

d. Full utilisation of existing systems

Full utilisation of existing systems and principles can also be utilised for an effective MRM
taking into consideration systems below.

 Performance Management Systems

Skills gaps need to be determined in relation to job requirements. Diverse candidates must be
identified, evaluated and contracted for fast tracking programs. Formal measurement or
appraisal to sustain the performance of people, needs to be done to identify opportunities and
continuous training needs. Remuneration anomalies need to be identified and rectified.

 Information Systems

Divisional practices and standards need to be evaluated and comply with best operating
practices. It must integrate practices, standards and technical functions with the Information
Management Enterprise System (IMES), and with each other. MRM software makes possible
several iterations at speed, that modelling and simulating what if scenarios improves
understanding of the orebody and mineral extraction processes hence decision making

 Communication

Communicate regional goals for staff involvement and commitment, whilst displaying a
unified participative management approach

 Balance Short- and Long-term financial objectives.

Corporate and Business Unit (BU) strategies need to be aligned while practising normal
good management philosophies.

e. Functional integration, skill and competency

MRM consists of several functional professional disciplines that function separately and they
have to function as a unit to be called a full MRM application, functional integration is so
important, without it there cannot be an MRM application. MRM application only yields
significant results if backed by skilled and competent people. MRM is heavily information
based, hence requiring high skill also experience plays an important role in the quality of the
analysis of such data and information.
b. What are the major challenges hindering local mines from having ideal Mineral
Resources Management systems (20)

Definition of terms

System

It is a set of principles and procedure according to which something is done, an organised

scheme or method.

Mineral Resources Management system

In short, it can be defined as a business principle applied to all levels in the management
chain for the translation of an ore body from a resource to an asset and then managing it as an
asset. For a mine to have an ideal MRM system they are key elements such as exploration,
mine planning, mineral resource extraction etc. that makes up the model for MRM which
need to be optimized to avoid challenges. A minerals and resource management system must
provide the following:

• Better and more accurate information on the orebody, the only revenue generating
asset of a mine.

• Better planning to determine how this orebody can be exploited to maximum

advantage by the mine.

• Better control of the exploitation and utilisation of this orebody by money, men,
material and machines

The major challenges hindering local mines from having an ideal MRM system to achieve
the required provision for the system are:

1. Lack of capital investment (financial challenge).

An ideal MRM comprises of proper, mine design and scheduling, mine planning, exploration
and detailed feasibility studies, selection of proper machinery, optimized resource extraction
and beneficiation, hiring of skilled and competent personal etc. For this to be possible, large
capital investments are required to finance all the operations within the mine cycle from the
beginning of any mining project. Lake of capital investments can affect the provision of
sufficient detail from exploration and feasibility studies and comfort on the value of a project
for the financial institution to provide funding either by way of debt or to promote for equity
raising. Local small scale mines are largely affected as they fail to produce a bankable
feasibility study.

Capital investments also affect mine planning as the best possible mine design and
production scheduling will be directly affected and limited. The geological and grade models
must be continuously updated so that the most value to the mine planning can be added and it
requires expensive mining software. MRM software makes possible several iterations at
speed, that modelling and simulating what if scenarios improves understanding of the
orebody and mineral extraction processes hence decision making. Huge capital investments
are required to acquire mining machinery for optimum resource extraction and beneficiation
in order to turn the resource into an asset. Some local mines are failing to beneficiate mineral
locally due to lack of capital. Chrome and platinum from Zimplants, Unki and Mimosa are
exported to South Africa for further beneficiation due to lack of capital to establish required
plant for the process.

The other financial problem is that some minerals are sold using Zimbabwean dollar currency
e.g. Lafarge Cement Zimbabwe sells it finished products in bond note yet most of its
expenses are in foreign current, so due to the instability of the bond the mines are not
operating at forecasted profits which becomes a challenge as investors my pull out at any
time.

Mining is a project which requires huge capital investment for proper MRM and lack of
funds becomes a challenge hindering local mines from having an ideal MRM system.

2. Lack of intellectual knowledge, skill and competent personals

Within the mining value chain from exploration, exploitation to delivery of beneficiated
mineral resources to the market, different professional skills and intellectual knowledge is
required for an ideal MRM system. Lack of competent personals within the value chain of
local mines especially SSM and most gold mines is affecting MRM. Some of the profession
generally have shortage of qualified personal that can fill the gap within the mines such rock
mechanics which is critical for mine support and safety issue as required for proper MRM.
Below are some examples of how lack of human capital affects MRM of local mines.
 A key part of the mining business is the ability to effectively manage capital
investment so as to ensure acceptable stakeholder returns with the overall strategic
context and in investor relations, as shareholders like mines archiving what they said
they would achieve. This is only possible if local mines have skilled and competent
personal to handle this.
 The task of the mining geologist is to analyse and interpret the geological structures
and to find the key to the grade distribution within these for proper MRM. In this
process, the experience of a skilled geologist is often as important as the actual data
available.
 Mine planning involves a lot of planning software’s which require specific skills to
use, this is also a challenge as some personals are not able to utilise the software
hence affecting proper mine planning and production scheduling for an ideal MRM.
 Production operation which is critical for optimum mineral extraction requires
different skills from different departments for it to be successful such as optimum
drilling and blasting, machine availability and utilisation which is a challenge for
most local mine. As a results mines are failing to meet set production target as per the
extraction plan hence affecting MRM.

3. Marketing challenges

Established markets is a necessity for an ideal MRM as it regulates demand and

supply of minerals hence its production and selling cost, quantity produced and
production scheduling to meet the market targets. The commodity prize, market
demands, market stability and marketing strategies may make the whole process
uneconomical to pursue an ideal MRM for local mines. Fluctuation in market prizes
affect the initial mine planning and scheduled production costs which will affect the
forested returns hence hindering an ideal MRM. Small-scale mines are seriously
hampered by not being able to established markets for their products and services this
is because they do not have skills to collect and analyse marketing information nor the
ability to use this kind of information to make sound business decisions. Therefore,
they continue to make ill-informed decisions as far as marketing is concerned.
Mineral like chrome and platinum lack local markets hence mines like Zimplants and
Mimosa export the minerals to international markets. This means the companies s
 revenue generation is not only determined by local economic challenges but also
international challenges faced in countries they are exporting mineral to, hence
hindering ideal MRM.
As it is in Zimbabwe the sole buyer of gold is fidelity printers. This means that the
market is not decentralized and lack competition. This greatly affect gold prize
regulations and fairness in trading as prizes can be easy manipulated to benefit corrupt
and benefiting personal. As a result, MRM will greatly be affect as this system is not
stable.

4. Technological challenges

Despite technological requirements being different from one operation to another most of the
local mines both LSM and SSM across all regions experience a similar challenge, which is
that they do not have the technology needed to operate effectively and efficiently.

Most of the local gold mines like Sabi and Jena are not mechanized and they do not have
MRM software. MRM software makes possible several iterations at speed, that modelling
and simulating what if scenarios improves understanding of the orebody and mineral
extraction processes hence decision making. In SSM they make use of rudimentary tools
because they do not have the capital to obtain technological equipment. Some mechanized
mines and open pit mines like Lafarge use old survey methods which affect the accuracy of
the information. Technology is very critical in mining activity and MRM as it helps in
increasing productivity and informed decision making hence lack of proper technology
hinders the local mines from having an ideal MRM.

5. Legal and environmental regulations

Mining activities are exposed to many legal and environmental regulations which can affect
the local mines both LSM and SSM from having an ideal MRM. Before SSM are allowed to
initiate operations, compliance with environmental legislation is required (Mines and
Minerals Act of Zimbabwe Ch. 21:05). They are also required to have EIA as approved by
EMA which is a challenges because the fees prescribed for them are very expensive and
unaffordable. SSM will then opt to operate illegally without following the proper mining
procedures and expectations and having a rehabilitation plan in mind. If small-scale miners
do not hold the mineral rights to the site where they intend to operate and are without an
environmental management plan, no authority can engage fruitfully with small-scale mining
including financial institutions. This will hinder the pursue to proper MRM.

For LSM the legal regulation such as land indigenisation and economic act affected MRM in
mines like Shabani mine as they suddenly closed without following any proper mine closure
and rehabilitation procedure. The lifting and banning of exploitation of chrome also affected
the involved mines to maintain an ideal MRM.

Government policies on land ownership also affect MRM.

6. Lack of proper exploration and geological understanding as a challenge

For proper and ideal MRM detailed exploration and feasibility studies are required so as to
identify, discover, understand and define the resource or reserve. After the studies the shape,
size, quantity, grade and other mining and metallurgical factors necessary for decision
making weather to start production and for ideal MRM will be availed. Most of the
geological data that is used within local mines was done long back when little technology
was available for use. This compromises the outcome of the mining activity and an ideal
MRM system as data accuracy is a major challenge.

7. Sanctions, corruption and political instability as a challenge

Sanctions affect the buying of mining equipment and mineral trading within some
international markets. This mean that the mineral trade will be restricted to certain markets
only and the local mines will face challenges to create ideal MRM as there will be limitation
in the company s NPV, cash flow and market options to sell the end products. For example,
blood diamonds from Chiyadzwa where not allowed in certain markets as they were
condemned, hence after production the company faces marketing challenges.

Political instability indirectly affects mines from having an ideal MRM. This is because
political instability is usually associated with a high level of corruption and civil or gang wars
that affect the smooth running of mines and certainties when it comes to future business
security which scares away investors. Local gangs e.g. the one called maShurigwi if not
handled well they might lead to civil wars due to their interference with other people s mining
activities looting the mined minerals. This affect the MRM as accountability is affected.
Political instability can cause sanctions to be imposed on trading area within the country
hence mining activities are also affect. It also prevents achievement of long term legal
regulation within the revenue production sector like mining as the incoming personal would
change the regulation to suit their need. Stability is very necessary in mining because it is a
long term project with long term MRM hence any change have positive or negative impact on
the mineral value chain affecting an ideal MRM.

All these factors above affect the local mines from having an ideal MRM system.

8. Effects of resource curse as a challenge.

The resource curse refers to the failure of many resource-rich countries to benefit fully from
their natural resource wealth, and for governments in these countries to respond effectively to
public welfare needs. While one might expect to see better development outcomes after
countries discover natural resources, resource-rich countries tend to have higher rates of
conflict and authoritarianism, and lower rates of economic stability and economic growth,
compared to their non-resource-rich neighbours. So when there is low economic growth and
stability, having an ideal MRM system can be a challenge. This is because investors like to
invest in stable markets to avoid losses. Economic instability also increases levels of
corruption and chances of sanctions to be imposed on country which will affect the marketing
of the minerals and the prize of the market shares to attract investors.

9. Dutch disease
A large increase in one mineral resource revenues can hurt other mineral revenue and sectors
of the economy by causing inflation or exchange rate appreciation and shifting labour and
capital to a more paying mineral. Local platinum, gold and diamond mines are doing better
than other mines which are finding it difficult and costly to pursue an ideal MRM system.
When inflation raises, those mines mining minerals with less returns in the market are
affected as it will be difficult to continue with the operations following all the required
procedure and maintaining the quality for the benefit of both the company and the customers
as defined by an ideal MRM. This affect the MRM as stability and certainties in business
assurance will be on line. Investors are more likely to pull out and invest in the most paying
commodity in the market

10. Social problems

The point-source nature of extractive mining industries often creates challenges when trying
to balance the needs of the people and environments that surround the mining area. Sharing
and compensating for resources such as land, water and the minerals can create conflict
between the extraction companies and the communities. In addition, extraction projects often
attract large influxes of people, whether or not additional employment is actually available.
This can cause stress on economic, social and cultural relations and these effects, affects local
mines from having an ideal MRM.

REFERENCES LIST

1. Corporate Consultant for SRK Consulting, Strategic Mine Planning by Dr Chris

Page – Normandy Group Mining Conference 22nd and 23rd April 1998, Perth.
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implementing Minerals Resource Management at a base metal mine (Rosh Pinah
Zinc Corporation, Namibia), The journal of The South African Institute of Mining
and Metallurgy, January/February 2003’
3. Macfarlane, A.S. The implementation of new technology in Southern African
mines: Pain or panacea, The journal of the South African Institute of Mining and
Metallurgy, May / June 2001
4. Macfarlane, A.S, Minnitt, R.C.A, and Viljoen, M.J. Education and Training for
Mineral Resource Management, University of Witwatersrand, 2001.
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uncertainty, The journal of the South African Institute of Mining and Metallurgy,
October – December 1999.
6. SAPR/3 Solutions. Mineral Resource Management – A definite description and
discussion of the process of implementation and the application in the mining
industry, Date unknown.
7. Vorster, A. Planning for value in the mining value chain, The journal of the South
African Institute of Mining and Metallurgy, March / April 2001.