Technological Innovations that Captured Significant Project Value at Peña Colorada

"INTRODUCTION Located in the state of Colima, Peña Colorada is one of the largest iron ore operations in Mexico. The project is owned in equal parts by ArcelorMittal and Ternium. Though boasting a production capacity of 4.5 million tons of concentrate per year, Peña Colorada is faced with declining ore grades. In order to respond to this situation, Peña Colorada had to expand production even further. This expansion created various challenges that were overcome by the adoption and application of new technology. Examples of these technological innovations are discussed in detail in this paper and include improvements in geo-modeling, mine planning and mine operations. The successful implementation of these technologies paid for itself many times over, and has led to significant improvements in production and performance, while lowering the operating costs and reducing the variance between planning and execution. PROJECT OVERVIEW Peña Colorada is a mining company which produces about 30% of the iron ore in Mexico. This project generates about 1,200 direct jobs and 3,000 indirect jobs, making a significant contribution to the local economy. Similarly, Peña Colorada invests in its local communities through numerous educational programs, scholarships, university agreements, social development, environmental agreements, etc. Peña Colorada’s operations consist of an open pit mine located in Minatitlán and a pellet plant located in the port city of Manzanillo, as shown in the location map below:TECHNOLOGICAL INNOVATIONS Most mining projects around the world typically follow the logic of “mining the next best ore”. Consequently, head grades tend to decline over the life of the mine. In the case of Peña Colorada, a decline in head grade combined with a decline in iron ore prices forced the operation to adapt to a new business environment and adopt new technologies to face these challenges. However, the first step along this process was to increase the confidence and reliability of the resource model. This task involved additional drillhole campaigns coupled with more detailed modeling techniques. Once the block model was completed, new optimization studies and production schedules were evaluated with new optimization tools that unlocked significant project value in many aspects of the mine plan. Similarly, new geotechnical studies were prepared, which provided new guidelines for pit slope design, and new technology was implemented to monitor ground movement and slope stability. The picture below shows two sectional block model views in MineSight 3D, along with the pit designs and geologic solids"