Three biggest challenges when maximising phosphate resource value

Phosphate use has been rising steadily over the past few years and it’s expected that demand will continue to grow into the future as the global population rises. As US mines reach exhaustion, we’ve seen a lot of investment into new projects and increases in mine production elsewhere in China, Morocco, Peru, Tunisia, Kazakhstan, Russia, etc. in order to satisfy global demand.

In Morocco, the OCP alone is investing over US$16.5 billion into increasing its production capacity and reducing costs.

I recently gave a talk at Symphos in Morocco about what we see as the three biggest challenges faced by phosphate miners when working to maximise the value of their resources, and how Maptek meets those challenges.

Challenge 1: Constructing robust Geological Models and dealing with complex geology

For mining companies and their investors, the primary focus is how to efficiently extract their phosphate resource. To begin this process, you need to get a precise idea of the shape, geological features, and material quality of your deposit. So the first thing you need to do is build an accurate model of your geological resource.

Why? Besides helping you determine the economic value of your resource, a precise geological model is also crucial in determining subsequent mine planning and scheduling activities.

Across the globe we are seeing fewer ‘easy’ deposits, with many demonstrating complex geology such as faulting or folding. With complicated geology, modern 3D software and geostatistical tools like Maptek Vulcan, are especially helpful as they allow geologists to determine spatial data distribution at the time the deposit was formed. There are a number of ways we can do this, but essentially, it means we are now able to unfold the deposit, which makes it far easier to accurately determine grade or quality distribution. This in turn gives us a much better idea of the economic value of a deposit with complex geology.

Challenge 2: The Economic Pit Limit and Mine Design

As we all know, an enormous amount of investment capital is usually required to get a project to the mining phase. It is usually in a mining company’s interest to pay back some of that investment as early as possible. To do this, you need to first locate the areas of your deposit that contain the most valuable material, so the highest quality phosphate. Secondly, you need to come up with a mine design that will allow you to extract that mineral in the most economical fashion.

So how do we do this? We perform a process called pit-optimisation, which gives mining firms a precise indication of the most economic order in which they may want to mine different areas of a deposit, and limits the amount of waste. It is a process that helps mining operations to remain flexible in the face of market dynamics.

In the past, pit-optimisation has taken days or even weeks to complete, but with a relatively new methodology in Maptek Vulcan called pit-relabel, the process now takes as little as a few hours, depending on the complexity and size of the deposit.

Pit-optimisation is a process driven by geological variation and unpredictable economic landscapes. Understanding and quantifying this uncertainty improves the decision making processes in mine planning and mine-scheduling.

Challenge 3: Creating a practical, high-value mine schedule

As I mentioned earlier, phosphate consumption is forecast to increase in coming years. With global phosphate producers aiming to increase or maximise production output, mine-planning engineers will face the task of producing a practical, flexible, and high-value mine schedule.

This third challenge can be addressed by a new scheduling approach that offers the unique capability to simultaneously maximise the sequence of resource extraction, waste dumping, and haulage.

The ability to realistically model truck haulage can significantly improve truck productivity and essentially means that fewer trucks are required in early periods of mining. When we consider that trucks can cost up to $3 million, that can make a big difference to mining costs and profitability.

How does modern scheduling achieve this? Maptek’s new Evolution software will take your pit-shells, analyse each block and tell you whether a block should go to the processing plant, a stockpile, or the waste dump. It will also give you the sequence in which you should mine each block in order to extract material in the most efficient way. Further more, if you have multiple routes, it will pick the most efficient one and calculate the associated cycle time, productivity and fuel burn, and therefore the associated cost of haulage. Finally, it will simultaneously build your waste dump and show you how it will look before it’s finished.

For phosphate miners, another benefit of Evolution is that it can dynamically use stockpiles to achieve the blending targets.

A high value schedule is one that will minimise costs, optimises capital expenditure, and maximises value, whilst fully utilising the haulage fleet.

Operations that make full use of new improvements in technology are able to meet these three challenges and will be able to:

  1. Capture the true complexity of mineral deposits
  2. Update and improve their mine plans with new data from the field
  3. Generate accurate production and budget forecasts
  4. Capitalize on quick changing market and operational conditions
  5. Streamline the flow of information between the geological modelling, mine-planning and mine-scheduling processes

Joseph Sykes
Marketing Manager EMEA
June 30, 2015

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