This article was first published in the Snowden newsletter in July 2011 and we believe many of the ideas presented are still relevant today.
Many mines combine open pit with underground mining, and on many occasions the underground mine is an extension of the open-pit. This article is the first of two articles that looks at some of the challenges associated with this situation, and some methods with which to determine the cut-over point from open pit to underground mining and the implications these have on project value.
As open pit mines deepen they often become burdened with excessive waste stripping requirements. Transitioning to underground mining is sometimes considered as a strategy to maximise both the value of the project and the resource recovery. In these cases appropriately managing the interaction between open pit and the underground is key to the ongoing success of the project. From a practical point of view, planning for the transition requires a long lead-time as the implications on the ultimate pit and the underground design can be significant. This means that determination of the cut-over point and strategy should be thoroughly examined prior to the commencement of construction. Economically, there are significant value opportunities and risks associated with the success of this planning.
The open to underground transition problem typically manifests in two ways. These are presented in the diagram below.
In sequential mining the economic mineralisation is continuous over depths that could be economically extracted by open pit and underground methods. The open pit and underground operations are competing for the same resource.
Transitioning to underground from open pit mining becomes a viable option because of the increasing strip ratio encountered at depth in the open pit as shown in the diagram below. While underground mining has higher ore mining costs than open pit mining, the costs typically increase by less as a function of depth, as opposed to the contrary occurring in open pit mining. There is a point whereby the waste stripping to access additional ore at depth is greater than the underground mining cost. This may be at a depth shallower than the economic depth of the pit as a stand-alone option.
In determining the optimal transition point the following issues need to be evaluated:
- Availability of feed – often, the open pit will have a greater productive capacity than an underground mine due to the viability of lower grade material and faster vertical advance rates
- Feed grade – if the underground access is from within the pit, the higher grade underground material is deferred until the completion of the open pit.
- Resource utilisation impact – there will be a lower marginal cut-off grade used in the open pit than that used underground. This means that the open pit is able to economically extract a greater portion of the resource in a given area.
A variant of this case is where the orebody is first mined using underground, then by open cut. In this case underground mining should occur much earlier than open pit mining of the same area; the additional mining costs associated with underground mining and waste stripping (i.e. double counting), rather than a single cost, needs to be compensated by a large discounting benefit of underground mining earlier. This strategy is currently being used by several large base and precious metals mines in Australia. The strategy is largely driven by the increase in commodity prices over recent years. The increase in commodity prices has made larger open pits economically more attractive.
In the parallel mining scenario there is an opportunity to mine both open pit and underground operations simultaneously.
Parallel mining has its own challenges which include:
- Sequencing complexity – the mining of higher grade underground material may be brought forward in the schedule.
- Access costs – these costs are likely higher than if the underground was mined after the open pit, due to longer shafts or declines.
- Process capacity – this is planned on the basis that the open pit mining capacity may lead to a shortfall of ore supply if the open pit is exhausted and the underground mine is the only ore source.
- Management – the operational complexities associated with managing two mining fleets and two mining cultures include the potential blending of high and low grade ore sources which will affect the optimisation of processing performance.
Part two of this article will discuss difference approaches to determine the optimum open pit and underground cut-over.
For more information please contact us at moc.p1600718258uorgn1600718258edwon1600718258s@ned1600718258wons1600718258