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By Ronald Benito

El presente texto señala el algoritmo basado en grafos como la técnica que determina el límite óptimo de minado a cielo abierto. Por ello, se adaptó la técnica de Lerchs y Grossmann y intermedias (algoritmos) y fue usada para crear nodos, arcos y estructuras de árboles en tablas para determinar la máxima cerradura de un grafo.

Sep 1, 2013

By P Hawke, J Hurst, B KrapeP

Hancock Prospecting Pty Ltd (HPPL) drilled two deep diamond stratigraphic holes (ECD0001 and RHD0296) within the eastern Fortescue Valley in the Pilbara of Western Australia. Located south of the Roy Hill Iron Ore project, the holes aimed to define the stratigraphy of the Marra Mamba Iron Formation (MMIF) of the Chichester Range and its south-dipping extensions below recent cover. Previous attempts to define the MMIF of the Chichester Range have resulted in differing interpretations due to the data available at the time.The unweathered MMIF beneath the Fortescue Valley in the HPPL drill holes is characterised by dolomitic carbonate interbedded with stilpnomelane-rich shales, chert and banded iron formation (BIF) with hematite staining. This intersection equates to ~75 m of carbonate-facies iron formation, as opposed to the ~230 m thick oxide-facies BIF and shale sequence encountered south of the Fortescue Valley.Various detailed geological core analyses and interpretations from ECD0001 and RHD0296 were integrated with regional diamond and reverse circulation (RC) holes from across the Fortescue Valley. Interpretation of the data indicates that the eastern Fortescue Valley MMIF represents a thinned thickness sequence of the whole formation. The MMIF of the Chichester Range and Fortescue Valley has gamma logs that correlate strongly in parts to the type section used for MMIF south of the Fortescue Valley. Therefore, the outcropping MMIF in the Chichester Range represents an eroded equivalent of the æreducedÆ thickness MMIF observed in ECD0001 and RHD0296.Data from deep diamond drill holes across the valley, from the Hamersley Basin to the Carawine Basin, were correlated. The correlation shows that the depositional site of the MMIF in the HPPL diamond drill holes is consistent with a proximal ramp setting, in which iron-rich shales wedge up-palaeoslope and shelf-derived carbonate turbidites wedge down-palaeoslope. Not only is it the occurrence of these shales that define the MMIF, but they also determine the northward potential to develop orebodies, as they are the source of iron from which iron-rich oxides and carbonates of metamorphic or diagenetic origin form.CITATION:Hurst, J, KrapeP, B and Hawke, P, 2013. Stratigraphy of the Marra Mamba iron formation within the Chichester Range and its implications for iron ore genesis at Roy Hill - evidence from deep diamond drill holes within the East Fortescue Valley, in Proceedings Iron Ore 2013 , pp 91-106 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 12, 2013

By M Eggers, H Baxter

This paper discusses the geotechnical condition of bedding shears and small- and large-scale faults and shears in Archean banded iron formation (BIF) bedrock, based on observations of core and televiewer images. Information that can be collected includes the orientation of defects, infill thickness, strength and material type, defect shape and surface roughness.The spacing and continuity of bedding shears may be critical to slope design where performance is structurally controlled with bedding dipping out of a wall. The intensity of development of the bedding shear is a useful indicator of the amount of shearing a bedding surface has been subjected to. This can allow for engineering judgement to be used in adopting peak or residual shear strengths along defect surfaces when developing the design.The spacing and continuity of bedding shears may also contribute to the blockiness and degradation of a rock mass where the structural orientation is otherwise favourable. Additionally the condition, thickness and strength of infill of major fault structures can affect slope design and performance, depending on orientation.Comparison of the condition of structures observed in core with the corresponding in situ televiewer image has been made to assess what characteristics are most accurately captured by each technique and whether the additional information gathered from using the televiewer technique is justified by the cost. The question of whether the data collected by a televiewer is sufficient to ultimately replace the need for core is considered.CITATION:Baxter, H and Eggers, M, 2013. Fault and shear characterisation in archean banded iron formation bedrock - a comparison between core and televiewer data collection techniques, in Proceedings Iron Ore 2013 , pp 47-56 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 12, 2013

By D Kepert, M Absalom, N Nitschke, C Fowers

The discovery of the Nyidinghu Iron Ore Deposit totalling 2.46 Bt of resource continues FortescueÆs highly successful exploration record of discovering multi-billion tonne deposits under cover with little to no surface expression. Since inception in 2003 Fortescue have discovered and delineated the Christmas Creek and Cloudbreak deposits in the Chichester Range totalling 3.38 Bt and 3.25 Bt in the Solomon region. Together with other deposits Fortescues resource portfolio now approximates 10 Bt of hematite - goethite mineralisation.The Nyidinghu deposit is situated on the southern margin of the Fortescue Valley, 35 km south of FortescueÆs Cloudbreak mining operations on the north margin of the valley. Nyidinghu comprises approximately 70 per cent BID martite - goethite mineralisation hosted by the Brockman Iron Formation and 30 per cent CID beneath alluvial outwash of the Weeli Wolli Creek in to the Fortescue Valley. Minor DID mineralisation occurs at the deposit margins.BID mineralisation is strongly controlled by the pre-existing NE/SW trending Weeli Wolli Fault system and bounded to the north by the Poonda Fault. Both fault systems are interpreted to have had a long and complex history commencing pre Ophthalmian Orogeny (ca 2.2 Ga) and remaining intermittently active through the Proterozoic.CID at Nyidinghu is the downstream continuation of the combined Weeli Wolli/Marillana CID palaeochannel system being mined by Rio Tinto and BHP Billiton at Yandicoogina and Yandi, respectively.Exploration commenced in August 2010 with the inaugural resource announcement of 1 Bt being made just six months later. To date over 1700 RC and 85 diamond core holes have been drilled forming the basis for the resource of 2.46 Bt and ongoing feasibility studies. Current exploration activities continue to delineate new mineralisation at Nyidinghu with an ultimate target tonnage of 3 Bt.CITATION:Fowers, C, Kepert, D, Absalom, M and Nitschke, N, 2013. Discovery, geology and structural setting of the Nyidinghu iron ore deposit, Hamersley Province, Western Australia, in Proceedings Iron Ore 2013 , pp 81-90 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 12, 2013

By G. Eaton

Safety management is an important mortal and business function in construction. Contractors have traditionally tracked and reported lagging indicators, e.g. fatalities and lost-time accident rates, to measure their safety performance and stay in compliance with relevant regulations. Over the last several decades, contractors became more proactive in their approach to safety and developed programs that track leading indicators, e.g. safety audits and safety climate. In particular, safety climate measures workers? perception of safety management and its effectiveness in the workplace. Past literatures indicated that, while some industrial construction contractors ignore safety climate measures, others are limited by a lack of a formal means to measure safety climate. In this study, a survey approach is used to measure an industrial construction contractor?s safety climate through three key areas: management commitment, job control, and general safety climate. As a pilot study, a total of 214 individuals at a fabrication facility participated in the survey to verify the validity and effectiveness of the proposed survey approach. This survey study also confirms that job control and management commitment have a positive correlation and that worker demographics have an effect on respondents? perceptions of management commitment.

Aug 1, 2013

By Ali Montaser

This paper presents an experimental study conducted to facilitate the use of RFID on construction job sites. The study focuses on deployment settings to provide data acquisition with higher accuracy for indoor location sensing. It provides extension to the state-of-the-art in this field as it addresses the impact of metal media proximity to RFID tags, the reasonable duration for data capturing, number of RFID tags employed and the distance between them. Low cost passive RFID tags were used in the experiments where each tag is used as a reference point with a known location. Five hundred and forty (514) experiments were conducted in lab environment using a 3m by 3m test bed that is dynamically rearranged to generate 15 test beds and a total of 67713 data sets were collected and analyzed. The collected data were captured from nine locations for each test bed at four time intervals. Received Signal Strength Indicator (RSSI) was used as the main attribute for signal measurement to process the captured data. Results of the data analysis performed are studied under four main categories: duration, number of tags, locations of tags and metal interference. The best duration was found to be the 15 second in the test bed with the least number of tags; as the short amount of time to capture data did not allow creation of a lot of interference among the emitted signals. Within each test bed, errors occurred most at points where the received signals were not well distributed in a 360 degree vicinity of the data capturing point. It means that the center point of each test bed resulted in lowest errors and the points located on the extremities led to the highest errors. Finally, metal objects were found to have major impact on the accuracy of the captured data; to the level where reliable values for errors could not be calculated in the test beds attached to metal objects. In summary, the results of the experimental study and related findings are expected to provide guidelines to the users of RFID technology for localization in building construction.

Aug 1, 2013

By C. Mawdsley

The Tata Steel mill at Skinningrove in the North East of England produces top hat sections for mineshaft guides in sizes 102 and 150 mm. The top hat section is the technically preferred shaft guide choice for modern deep mine shafts. This paper explores the relative service performance of top hat and square hollow section guides in service. Comparative corrosion performance is reviewed and the paper describes work commissioned by Tata Steel (as Corus) undertaken by Aker Kvaerner Engineering to evaluate relative winding speeds, relative loads and fatigue life in service. The experience of supply to UK Potash mining is discussed and the future view of high capacity hoisting and larger section size market need and availability is assessed.

Aug 1, 2013

By K. Baris

Methane (CH4) present in coal seams, generally known as Coalbed Methane (CBM), Coal Mine Methane (CMM) or Coal Seam Gas (CSG), is a major energy source, as it is the primary constituent of natural gas. At the same time, released methane is a potent greenhouse gas (GHG) and a major safety hazard in underground mining operations. Therefore, a considerable effort has been undertaken to develop coal bed methane extraction and utilization technologies that can achieve both environmental and safety benefits. Countries with significant coal reserves and gassy seams, i.e., USA, Australia, Canada, China, India, Poland and Germany have developed mature methodologies and practices to extract, before and during mining, and utilize significant amounts of methane from coal seams. Nevertheless, on a global scale, methane recovery remains untested and many technical and economic challenges require urgent attention. The research presented in this paper, sponsored by the United States Environmental Protection Agency (EPA), is focused on the Zonguldak Basin, the only hard coal region in Turkey. The basin is known to contain very gassy coal seams and consists of three major regions: Armutcuk, Zonguldak and Amasra. Among the three, the Amasra coalfield is considered as the most favorable for CBM recovery, as it comprises of deeper coal seams and where a private company, Hema Enerji A.S. (Hema) is already developing coalbed methane production facilities. This study aims at developing a reservoir model to predict the potential CBM recovery from the CBM-2 well, the only producing CBM well drilled by HEMA Enerji A.S in the Amasra coalfield. History matching was utilized to model the 15-day production data and uncertainty analysis was performed to estimate the optimum values for the reservoir parameters. The produced model yielded an average production rate of 143 m3/day for 10 years. The total amount of CH4 to be produced during this period was 0.53 million m3. Furthermore, the total amount of GHG to be avoided was estimated at 6585 tCO2e.

Aug 1, 2013

By A. Grimod

The European Guideline ETAG 027 - 2008 (?Guideline for European Technical Approval of Falling Rock Protection Kits?) defines the procedures to test rock fall barriers. Nowadays, this guideline is essentially the only test and construction framework utilized by manufacturers and it is also starting to enter in the mentality of designer who can clearly specify the performances of rockfall barriers. ETAG 27 (and the related European Technical Approval and the CE marking) represents a milestone for the rockfall barrier market, because it gives the possibility to compare the performances of different fences and it ensures the quality of the certified product. For these reasons ETAG 27 presently constitutes the base for tenders all around the world. Although rockfall barriers are in common use, designers and consultants do not have a clear overview of the real performances and the technological limits of these structures. The first problem can be solved using ETAG 27 criteria, which allow designing rockfall barriers at ultimate and serviceability limit state. Even though ETAG 27 uses crash tests performed with the Service Energy Level (SEL) and Maximum Energy Level (MEL), design with these concepts is not obvious or in common acceptance. Some preliminary questions must be solved. When can these energy levels be correctly applied? In the case of rockfall simulations, what probabilistic approach must be used for the evaluation of the barrier? Unfortunately ETAG 27 does not give any information or tests relating to the technological limits of the fences. Therefore some important questions arise. How do the site specific aspects of installation affect the barrier performance? What is the behaviour of the barriers under extreme conditions? And finally, the main question lies in the background: what is the functional reliability of ETAG 27? All of the above questions require comprehensive answers, which is consistent with the experience of designers, installers and producers. Officine Maccaferri S.p.A., with its 130 year experience in the field of rockfall protection, collected a large number of case histories with barriers impacted by single or multiple blocks, debris flows, and snow avalanches. Throughout these case histories and in accordance with a recent Italian standard code, it has been possible to implement a reasonable design approach that considers the efficiency of the barrier, the uncertainties of the input data, and the fore

Aug 1, 2013

The University of New South Wales (UNSW) has been a world leader in the development of innovative virtual reality technologies over the last 10 to 15 years. These developments have included developing the world?s first 360° surround, virtual reality (VR), stereo projection theatre system known as AVIE (Advanced Visualisation and Interactive Environment), which was developed by iCinema, a collaborative venture between the UNSW Faculties of Engineering and College of Fine Arts. The UNSW School of Mining Engineering has been responsible for development of mining applications virtual reality software modules and to date, has developed eighteen different mine safety training and mining engineering education modules which run in the AVIE environment. This platform and technology package provides a unique ?immersive environment? experience for groups of trainees or students who can engage with the simulated environment in the complete safety of the virtual reality theatre. In all of the major international mining industries, safety is of paramount importance, and training of personnel is an essential component of any comprehensive proactive safety management system. All personnel need to be aware of the inevitable hazards around them at all times, as well as understand appropriate safety and operational procedures. This can be done by conventional class-room style training sessions, or by provision of training documentation. However the effectiveness of such systems is often very limited due to the inability of trainers to engage with the audience for a lengthy period of time; or to convey the often complex and variable mining environments and situations which can exist in a typical mine. The ability to immerse the trainees in a virtual mine environment, with all the reality of an actual mine but with none of the physical exposure to actual hazards, provides a far more effective and engaging training experience. Furthermore, in the virtual world, trainees can be exposed to the very unlikely, but nevertheless high consequence hazards such as mine fires, falls of ground or outbursts, without any risk to their safety and well-being. The end result is that trainees will be far more engaged with the learning environment they find themselves in, and will develop a far higher level of understanding of the topics, rather than simply experiencing a passive class-room style learning environment offered by conventional training modes. The UNSW systems have been implemented widely within the Australian mining industry and the mining engineering education sector and are now being adopted internationally. This paper presents an overview of the innovative technologies involved in these virtual reality systems ? as applied to the mining industry. Modules developed for both mineworker training and mining engineering student learning will be presented, to illustrate the effectiveness and value of such a training and education approach.

Aug 1, 2013

By Mosquera. J.

Tailings Storage Facilities (TSFs) are vast structures that respond to site-specific characteristics, rate of production, placement techniques, and the physical and mechanical properties of tailings. As a common denominator, TSFs are in some degree vulnerable to failure due to liquefaction, poor management, slope instability and/or unusual climatic events. In practice, stability of TSFS is determined by calculating a minimum Factor of Safety (FOS) using the Limit Equilibrium Method (LEM). However, it has been proven that relying exclusively on the limit equilibrium approach is not accurate because it is basically a static method that does not take into account the stress-strain distribution and displacement experienced by the constitutive materials of a TSF. In order to overcome these limitations of the LEM, the finite element method - Shear Reduction Technique (SRT) has been used as a more reliable tool for TSFs stability assessment. This paper presents a comparative stability analysis between an upstream tailings storage facility (UTSF), and a water retention tailings dam (WRTD) under static and pseudo-static states using simplified and rigorous LEMs and the SRT. Additionally, and taking into consideration the intrinsic uncertainty of tailings properties, sensitivity and probabilistic analyses in the form of Monte Carlo Simulation (MCS) and the Point Estimate Method (PEM) are applied to determine the Probability of Failure (Pf) and Reliability Index (ß) of each TSF. It is shown that the friction angle of UTSF?s foundation and the core?s cohesion of the WRTD are the main variables that govern stability. Further analysis shows that the WRTD has a higher reliability index and a lower probability of failure than the UTSF.

Aug 1, 2013

By X. Gu

Mining operations, especially surface coal mines, have great impacts on the local ecosystem and the environment. However, it has been a common practice in mine design that the economic evaluation considers only the operating and capital costs, while the costs incurred due to ecological damage are left out. Such practice underestimates the total cost of mining and ignores the difference in ecological impacts between different mine design alternatives. With growing interest in sustainable development, the mining industry is under increasing pressure to operate not only based on economic and engineering principles but also on principles of sustainability. Therefore, estimating ecological costs of mining and considering such costs in the mine design process is an important step towards reducing ecological impacts at the design stage. The objective of this paper is to quantify the ecological costs of open pit coal mining and to demonstrate the influence of such costs on the ultimate pit design. The ecological costs of mining are estimated based on the areas and types of land damaged by mining activities and the carbon emission from energy consumption. Four major components of ecological cost are identified, namely, lost value of direct eco-services, lost value of indirect eco-services, prevention and restoration costs, and the cost of carbon emission from energy consumption. Necessary equations are given for estimating these costs. An algorithm is described for ultimate pit optimization in coal deposits with near-horizontal coal seams. A case study is presented in which the ultimate pits with and without ecological costs are optimized and compared to show the influence of ecological costs on the pit design outcome.

Aug 1, 2013

By S. Aram

Product Lifecycle Management (PLM) solutions have been serving as the basis for collaborative product definition, manufacturing, and service management in many industries. They capture and provide access to product and process information and preserve integrity of information throughout the lifecycle of a product. Efficient growth in the role of Building Information Modeling (BIM) can benefit vastly from unifying solutions to acquire, manage and make use of information and processes from various project and enterprise level systems, selectively adapting functionality from PLM systems. However, there are important differences between PLM?s target industries and the Architecture, Engineering, and Construction (AEC) industry characteristics that require modification and tailoring of some aspects of current PLM technology. In this study we examine the fundamental PLM functionalities that create synergy with the BIM-enabled AEC industry. We propose a conceptual model for the information flow and integration between BIM and PLM systems. Finally, we explore the differences between the AEC industry and traditional scope of service for PLM solutions.

Aug 1, 2013

By Kazem Oraee

Implementing stable final pit walls in open pit mines during the open pit design phase and mine exploitation has become one of the most important concerns of mining engineers in recent years. Failure of mine walls can potentially cause loss of life, roads blocks, and damage to mining machinery, temporarily or permanently halt production at the face and in the worst case scenario, close the mine. Thus, the role of creating stable mine walls is crucial to safety and general operations of mines and any effort to optimize this process has great economic value for mine operators. This paper aims to illustrate the technical aspects of use of the successful presplit blasting method in metal open pit mines. It also shows that using this approach not only increases safety in mines through wall stabilization, but also will boost economic profits by savings in stripping ratio. In this regard, appropriate practical concepts for designing the drilling and blasting patterns and the role of selecting the correct drilling rigs are elaborated in detail through conducting a case study in Chador Malu iron ore mine in Iran.

Aug 1, 2013

By Leslie McHattie

?Intelligent mine? conjures up a futuristic image of unmanned extractors and loaders working in harsh conditions in a remote lunar landscape. The promise of increasing mine fleet productivity and solving the problem labor shortages in mining regions can certainly be achieved today through remote controlled extraction and automated hauling. The technology is available and it doesn?t seem to be so much science fiction when Google?s self-driving cars hurtle down the freeway. ?Intelligent mining,? on the other hand, implies the application of information technology at every phase of the mining value chain, from exploration and geological modeling to equipment, operations and maintenance, and logistics and transportation. These are really industry-specific, enterprise-class software solutions focused on using information technology to support the business processes of mining and make them more efficient and effective. Overlaying the physical world with the digital or virtual world enables us to model and simulate our assets, giving us the ability to effectively design, build, and ultimately optimize the performance and reliability of our assets throughout the lifecycle. The digital asset, often a 3D model, is created initially during the engineering and construction phase, and is handed over to the operator before the mine goes into operation. Combined with geospatial or geographic information systems, the operator has a complete digital representation of the physical world, which forms the foundation for risk and performance management, along with compliance and regulatory reporting. Laser scanning and positioning technology can be used to create point clouds ? information models consisting of millions of data points ? which enable the visualization and representation of the ?as-operated? reality. But consider that once the mine is in operation, it throws off an endless stream of data in the form of performance and condition data from sensors and monitoring devices on fixed and mobile assets through networks, servers, and services. This ?big data? can be processed and analyzed to spot trends, help predict events, and formulate reliability strategies as early as the design stage (e.g., reliability-centered design). ?Intelligent mining? implies that massive amounts of data augment the reality of the physical mine, plant, and equipment. This embedded intelligence can be used to optimize operational efficiency, increase asset availability and utilization, improve safety and environmental integrity, and maximize return on investment. Lastly, the sweet spot for intelligent mining is seen in the convergence of consumerization and industrialization. The application of ?consumer? technologies that we use every day on our iPhones and Android devices, such as cameras, motion sensors, and positioning in an industrial context, are producing ?immersive? experiences. Overlaying the digital world on the physical world and connecting them accurately through intelligent positioning results in ?intelligent infrastructure,? which is safer and more sustainable. Bentley Systems works with many mining companies and engineering, procurement and construction companies involved in all aspects of mining infrastructure development. In fact, 10 of the top 20 mining companies ranked by market capitalization are users of Bentley software, including all of the top five. In addition, Bentley provides software solutions to the world?s leading engineering, procurement, and construction companies, as well as owner-operators, who design, build and operate the world?s infrastructure. Bentley?s solutions for mining and resource extraction industries help increase the efficiency of capital projects associated with the design, procurement, and construction of mines and processing plants, as well as the operation and maintenance of mining fleet and equipment.

Aug 1, 2013

By A. A. Goss

We investigate the relationship between corporate financial performance (CFP) and environmental and social performance (CSP) in a sample (n=165) of large, publicly traded U.S. mining and oil and gas firms. Using optimally scaled principal components analysis to generate aggregate measures of CSP strengths and concerns, we find higher concerns are related to higher volatility of unexpected earnings and discount rates. Furthermore, these earnings shocks are more likely to be negative as concerns increase. Decomposing this relationship shows that negative environmental performance dominates proactive environmental management as a driver of unexpected earnings, but proactive community efforts increase the magnitude of earnings shocks. We document some evidence of the strategic use of CSR, with those firms that have greater risk investing more proactively in CSR.

Aug 1, 2013

By Stephen G. Mlot

The evaluation of mineral projects involves the identification, mitigation and management of significant uncertainty. Benchmarking is an essential and effective way of increasing confidence and reducing uncertainty associated with input parameters and assumptions. Comprehensive and detailed benchmarking will ensure ?best practice? technologies, methods and systems have been considered and that the appropriate practices can be identified and incorporated into the project. In conjunction with the involvement of experienced industry practitioners, benchmarking is best employed throughout project evaluation to enable early identification of ?errors?, producing more accurate and predictable outcomes. Considerable time and effort is required to gather data and information, which should be benchmarked by the project evaluation team. There is a history of mining projects underperforming, on production, on costs and on return to the investors. The quality of mine plans and feasibility studies, and the quality of the input data is being questioned in many ways. Benchmarking assists sound project evaluation practices, by providing a database of actual results, to validate project inputs and outcomes, ensuring they are realistic and achievable. Benchmarking also provides unbiased, statistical support as the basis for sound investment decision making and ensures well considered decisions are made resulting in a more efficient study process. The evaluation of the quality of projects which are the subject of transactions also benefits from the use of real data obtained from a benchmarking database. Vendors are quick to highlight the benefits of their projects, and conceal the flaws, inflating the value. Buyers will want to quantify the potential of a project through the due diligence process relying on actual results from benchmarking. For the reasons broadly outlined above, benchmarking should be considered as an essential component of effective Project Evaluation.

Aug 1, 2013

By Knud Sinding

Many industries have established their own systems for self-regulation. They often do so when companies operate in countries where financial, technical, environmental and social regulation is weak and when the industry is challenged by legitimacy issues related to behaviour in one of these areas. Mining is one industry that has progressed unevenly down the road of self-regulation in these areas. This paper examines how the development of self-regulation for mines and mining companies involves difficult questions of scope, rules, membership, assessment criteria and performance evaluation. Using a range of theoretical and empirical results from research on self-regulation, performance rating and corporate strategy, this paper analyses the strategic and operational issues related to the idea of self-regulation in the mining industry. The analysis indicates that while self-regulation may bring benefits to members, they are likely to take a long time coming; but when they do arrive they may be substantial. Using the fact that in relation to technical and financial issues the industry is quite experienced in self-regulation ? not least as it is more reluctant in areas such as environmental and social performance ? the case is made for a comprehensive and innovative approach, that draws on the areas where the industry is experienced and develops new institutional solutions in the areas where the industry is more reluctant.

Aug 1, 2013

By Sabry A. Sabour

Metal price is among the key variables in the open pit optimization and the economic evaluation process. The common approach to handle metal prices in open pit mine planning is to optimize the ultimate pit and the mining schedules using a fixed, flat metal price. In this respect, metal price is assumed to be known with certainty throughout the entire mine life, which in some cases can reach 80 years. Given the volatile nature of metal markets and the metal price cycles, the conventional pit optimization approach may generate sub-optimized mining plans, which results in either extra costs to mining projects or lost revenues, or both. Long-term operational decisions such as future pit expansions, beyond the currently optimized limits, cannot be handled using the pit optimization approach based on flat metal prices. There is a growing interest in the mining industry to model and manage such market uncertainty in the pit optimization as well as the project evaluations in order to maximize the value of mining operations. In this paper, the author will outline a practical approach to optimize the ultimate pit taking into account the volatility and variability of metal markets. The proposed approach uses a combination of the pit optimizer of the commercial MineSight package and a simulation-based economic modeling real options valuation approach employing the least-squares Monte Carlo algorithm. MineSight pit optimizer employs both the floating cone for initial optimization exercise and the standard Lerchs-Grossmann algorithm. In this paper, Lerchs-Grossmann option will be used to generate the pit shells. Real options valuation approach used in this study is based on generating multiple metal price scenarios. Metal price uncertainty is modeled using stochastic metal price models such as the geometric Brownian motion and the mean-reverting process. The mining operational scenarios corresponding to the simulated metal prices are then optimized using the least-square Monte Carlo approach. The objective is to maximize the discounted cash flow value of the project while incorporating the operating flexibility to revise the operating status of the open pit with time as new information becomes available. The focus of this work is on the practicality of the proposed uncertainty-based pit optimization approach and the difference it can make to the technical operational mining decisions. A case study of a hypothetical open pit poly-metallic mine is provided. The deposit contains copper, gold and silver grades. The run of mine ore is sent to the process plant that produces copper concentrate with copper as the main metal and gold and silver as the by-products. Four uncertain variables are considered here include copper, gold, silver prices and foreign exchange rate. Both copper price and exchange rate are modeled using the mean-reverting process while gold and silver prices are modeled using the geometric Brownian motion. The case study is performed using both the conventional flat price pit optimization approach and the proposed uncertainty-based one to compare results.

Aug 1, 2013

By Margaret Anne Stephenson

Today, in Australia, it is increasingly common to see agreements between Indigenous peoples and resource companies being achieved generally as Indigenous Land Use Agreements or agreements pursuant to the ?right to negotiation? process under the Native Title Act 1993 (Cth). Despite progress in this area, resource development on Indigenous lands is not without its challenges for both the resource proponents and the Indigenous parties. History demonstrates that resource development on Indigenous lands has produced struggles between the traditional owners of the land and the resource proponents. In Australia their relationship is generally defined by issues of access to land and assuring continued access to the land for the life of the project. In this context, divisions in Indigenous communities often emerge. The proposed resource project can have the effect of polarising members of an Indigenous community. It may be regarded by some traditional land owners as an advantageous opportunity for the community and by others as a hazard to country and culture. The process of agreement making has proved not only a test for the Indigenous community but also for the resource proponent. In this paper we undertake a contemporary case study of a proposed Australian resource related-development project on Indigenous lands. This project involved a multi-billion gas hub precinct proposed at James Price Point in the Kimberley region in Western Australia. The James Price Point proposal produced a litany of challenges for all parties. The traditional owners faced fundamental social and human rights issues, including a minority opposition to the project, the project's potential cultural heritage impact, the threat of compulsory acquisition of their native title interest by a State government due to an initial failure to settle an agreement, a fracture of their unsettled land claim and a minority rejection of the agreement ultimately reached. Additionally, the ?green? lobby also rejected the proposed gas hub on environmental grounds bringing the green lobby into direct conflict with both the traditional owners in favour of the project and the resource proponent. Ultimately, Woodside announced its decision not to proceed with the proposed gas precinct at James Price Point, in April 2013. In this paper we analyse the complexity of the James Price Point gas hub negotiations with the traditional owners which resulted in an Agreement that promised to deliver substantial benefits for the Indigenous communities. We question why such a favourable and beneficial agreement for the Indigenous community also produced the plethora of challenges and concerns and we consider how future negotiation processes could be better structured to avoid the difficulties that have confronted Indigenous land owners and resource proponents alike.

Aug 1, 2013