performance improvement at both ends of the cycle … · final solids % in tube - 55–60 wt%...

Performance improvement service from CRU Strategies 1

CRU STRATEGIES

http://www.crustrategies.com

31 Mount Pleasant, London WC1X 0AD UK Tel. +44 20 7278 7788 Fax +44 20 7278 0003

PO Box 1269, Langley, WA 98260 USATel. +1 360 321 4707 Fax +1 360 3214709

PO Box 656, Kennett Square, PA 19348 USATel. +1 610 925 1860 Fax +1 610 925 1861

LONDON | SEATTLE | PHILADELPHIA | BEIJING | SYDNEY | SANTIAGO | RIO DE JANEIRO

Performance Improvement at Both Ends of the Cycle

“Making the good times better..” or “just surviving..!”

IMinSouthDecember 12th 2006

Phil Newman, CRU Strategies

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Performance Improvement

• Technical innovation

• New ways to report, measure and improve your business

Where have I come from?

• 1990-2006 : Engineering, mining waste management, recognised expert in paste technology, dealing with slurry handling issues and, in particular novel dewatering methods

• 2006 onwards : Strategy development; project management, modelling of mining from the stope to the boardroom.


CRU STRATEGIES

“…the tailings pond is filling up, we have no money to build another but we must increase production to make a profit…

“..just surviving..”Do you remember 2002?

Zinc at $779/t

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• What is it and how does it work?

• Dewatering Applications

• Case Studies – successes AND failures!!!

• The Mechanism of GAD

Geotextile-assisted dewatering (GAD)


CRU STRATEGIES

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Geotextile Tubes / Bags

• Developed in the 1970’s to aid construction of coastal structures using pumped sand

• Discovered that silts were also trapped

• Dredging solutions developed, dealing with high fines content materials

• Innovative applications in the USA to tannery waste, ketchup waste, paper sludge

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The Mechanism of GAD

• Dewatering is not immediate

• Internal filter cake developed (fragile)

• Pumping rate has significant effect– Pumping Factor (PF) = Q/V

– PF << 0.4 for efficient dewatering

• Empirical observations only

• Research is required


CRU STRATEGIES

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Case Studies

• The proof of the pudding….– Mineral slurries: where I first tried it!

– Topsoil slurry: potential but we needed flocculant and the client resisted

– Bentonite slurry: trials went ok but we needed to be more aggressive on flocculant (stories of skullduggery!!)

– Ochre: worked well in trials

– Contaminated silt: I was nervous, client saw potential and it worked!

– In-situ dam building: it works, but H&S issues need to be overcome

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Lead-zinc mine located in northeastern Greece,~ 450,000 tpa ROM ore

Case Study – Mineral Tailings


CRU STRATEGIES

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The Stratoni Challenge

• Chevalier pond system designed for ~240,000 tpa• Insufficient capacity for increased production

• Coarse tailings from Karakoli can be placed underground to make space for dried fines

• Chevalier ponds require emptying but natural drying takes six months!

• How can we speed up production of dried fines?

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Possible Solutions..

• Geotextile dewatering?

• Mechanical filtration plant?

• Expand tailings facility? …. >$3 million capex…. minimal opex

…. >$1 million capex….. high opex

…. negligible capex…. high opex

Mine needed a minimal capex solution but wouldgeotextile assisted dewatering work?


CRU STRATEGIES

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Phased Approach - Hanging Bag Trials

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Phased Approach - Tube Trials


CRU STRATEGIES

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Phased Approach – Tube Trials

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Tube Trials - Results

23.600.060.030Tube runoff, day 5

32.800.080.028Tube runoff, day 1

53.330.330.231Chevalier Pond #1, re-circulation to mill (2002 average)

TSS (mg/l)

Zn (ppm)Pb(ppm)

Sample

Input Solids - ~7wt% solids with 90% < 44 micronsFiltrate - minimal solids (20-30 ppm)Final solids % in tube - 55–60 wt% solids


CRU STRATEGIES

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Repair / De-construction

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Implementation

• Day shift operation only• Steel manifold system with manual control allows daily

filling of 40m long tubes• Alternative fabrics were investigated (to reduce cost)

and flocculants to increase effective dewatering rate were under consideration

MINE SUSPENDED - 2003


CRU STRATEGIES

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Root vegetable processing / apple processing

Case Study – Topsoil Slurry

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Waste bentonite slurry from piling on CTRL

Case Study – Bentonite Slurry


CRU STRATEGIES

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Effluent slurry from parts manufacturer, high metal content.

Two-week summer shutdown required for removal of slimes build-up.

Case Study – Metal-rich Slurry

Transport reduction:- one sludge tanker per week- 3 or 4 trucks per year!

Recycling facilitation- approx. 3 tons of Ni now

re-cycled to plant

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Coal Authority minewater treatment system

Case Study – Ochre


CRU STRATEGIES

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Drainage ditch on industrial estate – “.. ‘orrible stuff”

Case Study – Contaminated Silt

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Can we build in-situ berms using waste products?Yes we can….. but be careful!

Case Study – In-situ berms


CRU STRATEGIES

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Filled Tube

First tube near full. Note seepage runoff on right side of tube

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Summary

• Geotextile dewatering can work VERY well• Implementation is simple• Opportunities exist for further improvements

in dewatering rate and efficiency

• We have under-estimated the importance of flocculant

• Research is essential and can reduce the empirical approach (makes some clients nervous!)


CRU STRATEGIES

“We have money to invest, lots of money actually, what should we do to optimise our operation?”

“Making the good times better..”

Zn at $4474/tCu at $6818/t

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Optimisation…

• Optimisation is a process, it’s about maximising something…

• What is it you want to maximise? …… NPV? Profit? Productivity? Mine life?

• Do you actually know?

• How will it influence your strategy and what if….?


CRU STRATEGIES

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Lets start with the mine(s)….

• Target a mine plan that increases development (investment) and exploration to develop more reserves and lengthen mine life...

• Mine plan looks good, economic model built on top : delivers profit with 40% chance to double reserves

• Then, opportunity with third party arises for investment in new mine which delivers 90% chance to double reserves but requires cash….

• What if we abandon development and chase this opportunity; what are the risks?

• Oh, forgot to mention, the third party needs to know the day after tomorrow!

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What is an integrated mine model?…Mine End

Stope R14DimensionsGradeSGDistance to crusher

Geological ModelGemcomSurpac

DatamineWhittle (OP)

Drainage RulesVentilation Rules

Blasting andMucking Rules

R14

FORECASTProduction Rate

ManpowerConsumables

R10

R4

R11R16

R8

R22

R- Orebody ForecastProduction Rate

ManpowerConsumables

COSTPROFIT etc..

Mine PlanProduction Rate

ManpowerConsumables

COSTPROFIT etc..

S-Orebody

V-Orebody

X-Orebody

Transactional Model(e.g. SAP)

Site CostsConcentrator

Environmental

Transportation

INPUT TO GROUP


CRU STRATEGIES

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What is an integrated mine model?… Corporate End

Mine A PlanProduction Rate

ManpowerConsumables

COSTPROFIT etc..

Mine B Plan

Mine C Plan

New acquisition?

FROM MINE A

GROUPProduction Rate

ManpowerConsumables

COSTPROFIT etc..

Corporate Costs

Projects

Global AssumptionsWACC

Interest RateInflation

Metal PriceWhat if…. (b)

What if….. (a)

..back to mine AND down to STOPES

ANSWER!

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New acquisition?

Global AssumptionsWACC

Interest RateInflation

Metal Price

Mine A PlanProduction Rate

ManpowerConsumables

COSTPROFIT etc..

Mine B Plan

Mine C Plan

FROM MINE A

GROUPProduction Rate

ManpowerConsumables

COSTPROFIT etc..

Corporate Costs

Projects

What if…. (b)

What if….. (a)

REPORTINGANALYSISDECISIONS


CRU STRATEGIES

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Some Conventional ReportingFormats

Value Measures

Revenue Measures Cost Measures Capital Measures

Operational Measures

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22 33 44

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Kloof Base Case - Components of Value

0

5,000

10,000

15,000

20,000

25,000

30,000

Revenue Total Cost Total Capex Tax Value

Ran

ds (M

illio

ns)

Kloof Base Case - LoM RoM Tons

0

1,000

2,000

3,000

4,000

5,000

6,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Years

Tons

(Th

ousa

nds

)

1SUB 2SUB 3# 4# 7# 8# Dump

Snapshot AnalysisAnalysis Over Time Project Ranking

-1,000

-500

0

500

1,000

1,500

2,000

Pro

ject

1

Pro

ject

2

Pro

ject

3

Pro

ject

4

Pro

ject

5

Pro

ject

6

Pro

ject

7

Pro

ject

8

Pro

ject

9

Pro

ject

10

Pro

ject

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Pro

ject

12

Pro

ject

13

Pro

ject

14

Pro

ject

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Project

NPV

(Ran

ds M

illio

ns)

Ranking AnalysisHow we look at it…

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From Reporting to Diagnostics – Understanding Causality

Understanding the difference between two metrics For example – Actual vs. Budget; or Last Year vs. This year etc.

Or Scenario 1 vs. Scenario 2.

Understanding the difference between two metrics For example – Actual vs. Budget; or Last Year vs. This year etc.

Or Scenario 1 vs. Scenario 2.

Metric OneMetric One

Metric TwoMetric Two

Reason for DifferenceReason for Difference

By stope, or by mine, or by day, or by any combination of theseBy stope, or by mine, or by day, or by any combination of these


CRU STRATEGIES

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Multi-Dimensional Analysis

NPV ($)

Cut-off Grade

Mining Rate ChangeIncreasing the cut-off grade has the

impact of raising margins through the increased gold production. But this will result in reduced life.

Increasing the cut-off grade has the impact of raising margins through the increased gold production. But this will result in reduced life.

Increasing volume has the impact of reducing the fixed costs resulting in lowering the cut-off grade. This will also increase the reserve life

Increasing volume has the impact of reducing the fixed costs resulting in lowering the cut-off grade. This will also increase the reserve life

The optimal cut-off grade / Volume tradeoff for maximizing NPV per mine unit

The optimal cut-off grade / Volume tradeoff for maximizing NPV per mine unit

Current status of the operationCurrent status of the operation

34Note:Source:

Diagnostic Reporting Engine DevelopedEspecially for Mining


CRU STRATEGIES

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Seeing The Enterprise as an “Economic System”

System Implies — A Set of Interacting Variables

Economic Implies — Monetary Variables

The purpose is about alignment to a single objective

From A Reporting Hierarchy to a Model – “Just Add rules”

ProfitProfitProfit

RevenueRevenueRevenue CostCostCost

Sales VolumeSales Sales

VolumeVolume PricePricePrice VariableVariableVariableFixedFixedFixed

TonnageTonnageTonnage LocationLocationLocation ReefReefReef

VolumesVolumesVolumes

DepthDepthDepth

The Objective Function

= Driver

= Operational Metrics

= Economic Metrics

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Phew!!! – Sorry about that explosion of colour…

• Object based modelling can allow powerful models to be built that are limited by only imagination (and budget!) ☺

• CRU has a long history of building economic models on which industry can rely

• The advent of Carbon-L can now allow bespoke models to provide executives with the information and analytical power to make decisions, in a fraction of the time compared to current standards

• Finally, it is simple (believe me, if I can do it, so can you!)


CRU STRATEGIES

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THANK-YOU!Phil NewmanPrincipal ConsultantCRU StrategiesTel: +44 20 7903 2105Mob: +44 7894 264 [email protected]

performance improvement at both ends of the cycle … · final solids % in tube - 55–60 wt%...

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