Pit Optimization for Improved NPV and Life of Mine in Heterogeneous Iron Ore Deposit

Abstract

Operations planning and management of a large open pit mine is an enormous and complex task, particularly for mines having long life. The long-term planning of open pit mine is a dynamic process and should be reviewed periodically for enhancing the NPV and life of mine. Pit optimization through soft computing can be gainfully applied to resolve a number of important problems that arise in developing suitable planning strategies and management of a mine. Pit optimization starts with the assumption of initial production capacities and the estimates for the related costs and commodity prices. Once the economic parameters are known, the analysis of the ultimate pit limits of the mine is undertaken to determine the portion of the deposit that can be mined economically and safely from geotechnical stability view point. In this research, pit optimization for a heterogeneous iron ore deposit (Deposit-A) has been carried out successfully using Whittle Software. The key aspect investigated was the optimal pit shell across a range of selling prices, as it enables understanding the characteristics of the deposit and potential development strategies considering the areas of greater value. The methodology can be very well utilized when fluctuations in the selling price occur, for predicting the future selling price of the commodity and also strategizing mining plan. For the deposit investigated, it was found that the mine is likely to generate final product of 66.55 MT of Lump Ore (+ 10 mm − 150 mm) and Fines Ore 156.45 MT (− 10 mm) during the life of the mine. The NPV is found to be highly sensitive to the price of Fine ore as quantity of fines in total ore body is around 70%. Except waste, all ore types, no matter how inferior the grade is having (around 10 MT of low grade coming in between Fe @ 45% and Fe @ 25% can be also utilized), are mineable and can be suitably blended to give a product mix of Fe @ 61.68% and more.