Engineering & Mining Journal

JAN 2013

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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MINE DESIGN Tools to Assist in Planning and Design As mining companies face rising costs and volatile commodity markets, making the right design decisions is a must. E&MJ; looks at worrying capex trends, and some of the software available to help keep costs under control. By Simon Walker, European Editor Optimizing resource utilization has always been a challenge for mine designers, with nature still eminently capable of throwing up surprises that can both delight or confound. Brownfield exploration is often the key to the former—take Neves Corvo in Portugal or Garpenberg in Sweden as examples here—while unforeseen stress regimes, water or weak strata are often the cause of forced changes in plan. Cameco's flood-related tribulations at Cigar Lake are a case in point. In consequence, mine design systems have to be capable of addressing sudden amendments as well as providing the overall framework for getting the most out of a given deposit, in both tonnage and financial terms. Sovietstyle planning focused on the former at the expense of the latter, while examples abound of operations that have been run exclusively on financial rails and have closed early, only to find new leases on life under a different operating regime. The development of mine design software, which has been on-going since the first systems such as Datamine were introduced over 30 years ago, has resulted in a strong supply base of competitive concepts. Not surprisingly, there has been a degree of consolidation within the mainstream players in recent years, as well as acquisitions of suppliers by larger companies who have realized that the mining-sector market is no longer a niche. Such moves can, of course, bring significant benefits in terms of having greater development resources available, as well as the potential to merge software systems with different focuses into more comprehensive packages. As with machinery manufacturers, the goal is often to be able to meet all of a customer's needs from one source, rather than risking part of the business (and its potential for long-term support) going elsewhere. The Cost of Making Wrong Decisions The latest release of GemcomÕs MineSched software, version 8.0, provides a number of speed and schedule-visualization enhancements that allow users to quickly generate short- (top) and long-term (bottom) schedules necessary to meet a mineÕs development and production targets. 34 E&MJ; • JANUARY 2013 Looking first at greenfield project development, one of the most obvious trends of the past 10 years has been the rapid escalation in capex costs that companies worldwide have had to face. One of the first examples to come to widespread notice was BHP Billiton's Ravensthorpe nickel laterite project in Western Australia, where the initial $1 billion cost more than doubled between 2005 and 2008. The mine failed, and BHP sold it to First Quantum Minerals for $340 million in 2010. First Quantum in turn spent some $370 million on re-engineering it and bringing it back into production, which itself was nearly double the company's original $190 million re-engineering estimate. In point of fact, cost overruns are more of the rule than the exception. In November, the management consultwww.e-mj.com

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