7th BALKANMINE CONGRESS – Proceedings, Prijedor 2017

DOI: 10.7251/BMC170701333R

MODEL OF THE MINE OPTIMIZATION SUPPORTED BY THE

MINING SOFTWARE SOLUTIONS ON EXAMPLE OF
OMARSKA MINE

Irena RAJLIĆ1, Aleksandar LUKIĆ1, Borko PEJIĆ1, Žarko KNEŽEVIĆ1

1
ArcelorMittal Prijedor. E-mail: irena.rajlic@arcelormittal.com, aleksandar.lukic@arcelormittal.com,
borko.pejic@arcelormittal.com, zarko.knezevic@arcelormittal.com

ABSTRACT

Ore mining is a complex, and, most frequently, long-term process. Investments are very high, and the
risks are significant. Hence, use of all available information about the deposit and general terms of
business is highly recommended, as well as implementing the adequate planning and management
techniques, starting from the initial modeling of ore reserves, over mine optimization, to operational
production scheduling.
In mining industry, there are numerous computer programs and software tools, that enable more
accurate and reliable planning and more efficient operation management.
In this paper, an integral mine optimization model is presented, on a real case study, iron ore Omarska
Mine, ArcelorMittal Prijedor. Practical implementation and linking of several specialized software
solutions for individual phases of operation is discussed: Surpac (Geovia, Dessault Systemes) for
geological modelling of ore resources, Whittle (Geovia, DessaultSystemes) for optimization of the pit
shell, OPMS XpacSolution (RPMGlobal) for long-term and medium-term production scheduling and
XERAS (RPM Global) for financial planning and production control.

Key words: ore resource modelling, 3D model, mine planning, mine optimization, mining software
solutions

1. INTRODUCTION

Traditional mine planning and modeling methods are based on manual calculations of the
mine parameters and manual graphic interpretation of ore body, surface pit and waste dumps
contours, bench maps and other mining parameters. Use of information technology in mining,
during several previous decades, resulted in intensive development of specialized program
packages for both geology and mining, and development of new engineering methodologies,
which are significantly different than traditional methods. Using professional computer
programs in all phases of mining operations, starting with ore modeling, optimization of the
mine operation, to detailed production planning, has become a common practice, especially in
developed countries.

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The primary objective of a mining enterprise is to maximize the net present value (in further
text NPV) of its cash flows [1, 2], which requires optimization of the mine operation. This
objective may be achieved by optimization and integration of the entire sequence of the
individual mine planning phases. An integrated model of mine engineering stages may be
created, in a controlled environment, by using the blend of engineering knowledge and
specialized software tools.
Practically applied integrated model for optimization of mine operations is presented in this
paper, by phases, on example of iron ore mine Omarska, ArcelorMittal Prijedor. Specialized
softwares were used to create geological model, block model and economical model of ore
body, as well as life of mine operative model with optimized cut-off grade of metal. Practical
use of integrated software packages system is presented, with 3D tools for each phase of mine
operation. ArcelorMittal is using a set of modern software solutions for production planning
and control, such as: Surpac (Geovia, DessaultSystemes), Whittle (Geovia,
DessaultSystemes), OPMS XpacSolution (RPMGlobal) and XERAS (RPMGlobal).
This approach, which is presented in this paper, has contributed to optimization of business
parameters of ArcelorMittal Prijedor mine.

2. A MODERN APPROACH TO MINE PLANNING

The economic viability of the modern day mine is highly dependent on careful planning and
management. The operation and management of a large open pit mine having a life of several
decades is a complex task. A number of significant issues may arise in the planning and
management of a mine. Most current optimization techniques can be successfully applied to
resolve these problems. There are several software applications which address ore-body
modelling and ore-reserve estimation, design of optimum pits, determination of optimal
production schedules, optimal blends, the best choice of equipment, its maintenance and
replacement policies, design and efficient transportation and logistics network, as the most
important aspects of the mine operation. This paper discusses some of these applications, with
a focus on the major phases of mine planning: 3D ore modelling, pit optimization and the life
of mine scheduling task.
Modern approach to the mine planning refers to merged system of engineering and economic
modeling, planning and monitoring, accompanied by practical usage of advanced IT
solutions, specialized for optimization of phase in mining operation. Traditional methods of
engineering considered manual data processing, which meant long time for processing of
data, manual contouring of ore body, geometric analysis of surface pit, stripping ratio analysis
[3]. Besides that, data analysis meant relatively simple statistical interpretation. Modern
methods, on the other hand, consist of computer aided data processing, with significant
shortening of time for processing, and development of 3D block model of ore body, which
further enables more reliable 3D planning of excavation sequence and life of mine
optimization based on complex mathematical algorithms, using a wide range of input
parameters.
The basic phases of the mine planning process are:
 modeling of geological block model
 modeling of economic block model
 optimization of the pit shell
 life of mine scheduling, with detailed economic evaluation.

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The results of the individual phases are models, which are, actually, subsequent to each other
and represent the main fundament for the following phase in the process (Figure 1).

Figure 1. The mine planning process results

Geological modeling and geological block model. Veracity of the mine planning process is
imposed by the precise and correct interpretation of geological characteristics of ore body. A
geological model is created based on exploration drill-holes data, earlier in 2D, and with
development of specialized computer programs for spatial modeling, now in 3D environment.
Spatial modeling of ore body consists from several phases, which are: creating drill holes data
base, positioning of sections, modelling of ore body domains, detailed statistical analysis,
creating a block model and evaluation of mineral resources and the block model validation.
The drill holes data base is a set of relational tables, in which the data about ore samples,
collected during exploration, are stored. Geological cross-sections of ore body are then
created based on the display the drill holes in 3D graphics environment. Defining the sections
direction and distance between them depends on the spreading and dipping of the ore body, as
well as on distribution of the drill holes in the grid. By connecting each cross-section, a closed
DTM1 areas are created, so-called solids, which represent closed geological structures of the
ore body. Prior to 3D evaluation of grades for each parameter of interest, a detailed statistical
analysis of the samples and its composites data is necessary.

Figure 2. Schematic layout of the ore block model

Block model (Figure 2) representsa spatial model of ore body in blocks, whereby each block
has certain “attributes”, like grade percentage of beneficial or detrimental components of ore,
volume and specific volume of ore, information on different types of ore and similar. Values
of attributes per blocks are assigned or evaluated by geostatistical estimation methods. The
size of the model is defined by X, Y and Z coordinates, set in such manner that the model
envelopes the whole ore body. Rotation of the block model follows the grid of exploration
drill holes and cross-sections through the ore body, while optimal block size is influenced by
distribution of exploration drill holes in the grid and composites size.

1
DTM - Digital Terrain Model

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The most common used methods of geostatistical estimation of ore bodies are Inverse
Distance, Nearest Neighbor and, the most reliable one, Ordinary Kriging. Discussion on the
geostatistical estimation methods are beyond this paper, and are recommended be found in
Practical Geostatistics (Isobel Clark, W. V. Harper 2000) orThe Art and Science of Resource
Estimation, A practical Guide for Geologists and Engineers, (Jacqui Coombes, 2008) or
other.
Block model of the ore body, with attributes related to grades of beneficial or detrimental
components, volume of each block and ore density, enables calculation of ore resources, and
is a fundament for all other phases of mine planning. Hence, it is crucial that geological model
is credible and reliable simulation of real geological characteristics of ore body, since all
mistakes that are made in geological model are transferred to the following phases of the
project.
Well known software packages for geological and block modeling in mining are Surpac
(GeoviaDessaultSystemes), Vulcan (Maptek), Leapfrog (ARANZ), Datamine, Minesight,
Gems and other. Surpac (GeoviaDessault Systems)was used for creation of geological and
block model in this paper.
Optimization of the pit and economic block model: Nowadays, problem of optimization of
the pit shell is managed by the complex algorithms incorporated into the specialized software
solutions. During the optimization procedure, the geological block model is upgraded into an
economic block model for the deposit, with assigned economic values to each block (in
further text EVB). The value is equal to the value of the ore that can be mined, decreased by
the cost of the ore mining and waste removal in order to mine the ore, as well as the cost of
ore processing and marketing. Accurate estimate of the EVB plays the key role in the process
of the mine optimization. Hence, the feed parameters, as well as the business strategy of the
investor have to be wisely and carefully defined, since both have a great influence on the final
results. The results have to represent and artefact of the engineering intelligence, and as such,
must be rational and feasible.
Still, the main downside of the optimization is that the best algorithms and software tools are
providing the possibility to optimize the pit using only a certain set of input parameters,
implying the fact that the optimal pit shell is very conditional to the selection of the right feed.
There are several methodologies used for defining of the optimal pit shell. Their mutual
feature is complexity of the mathematical algorithms, needed in order to deal with the
complex nature and the wide range of the feed parameters that interact with each other.
Lately, the most used method is Lerchs-Grossman 3D Method, which gives the most reliable
results of optimization. Other methods are Floating Cone Method, Lerchs – Grossman 2D,
Linear Programming, Zhao – Kim 3D, and other.
All currently available methodologies are using ore resource block model as a matrix to
determine optimal contour of the pit. In all of them, an iterative process is conducted in order
to determine the list of blocks which have highest possible total value, while obeying set of
spatial and technological constraints of the future pit, like maximal slope grades, metal
recovery and similar.
Analytical problem of optimization can be shown as follows [4]:
Functions V, C and M are defined in each point of 3D space as follows:

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M(x,y,z)= V(x,y,z) - C(x,y,z) ,

where:
M(x,y,z) - profit by unit of volume,
V(x,y,z) – value of ore by unit of volume,
C(x,y,z) – excavation cost by unit of volume.

The problem is to find the function V, which returns the maximum of integral:

Vmax=

Deciding what material in a deposit is worth mining and processing, versus what material
should be considered waste is one of the most important dilemmas to solve in mining. The
optimal cutoff grade is one that strikes the correct balance between the material that will be
wasted and the one that will be processed and sold. If the cutoff grade is too high, much of the
mined material will go to the waste dump area. If the cutoff is too low, then the input capacity
of the entire mining and mineral processing operations will be fully stretched, while revenues
do not necessarily increase. Besides the grade - tonnage distribution, the optimization of
cutoff grade requires the knowledge of detailed operational costs, mining sequence, mining
operation, processing, and product constraints, as well as price of the product [5].
Complex mathematical algorithms behind the process of pit shell optimization impose using
specialized program packages. There are several software solutions for pit optimization, such
as: Whittle (Geovia, DessaultSystemes), Micromine Pit Optimisation Module (Micromine),
SimSched (MiningMath), and other.

Operational and financial scheduling of the life of mine: The next step in mine planning is
detailed scheduling of ore and waste excavation per years, for the whole life of mine.
Scheduling the life of mine is essentially the process which incorporates economic strategy
with engineering optimization, while considering geological, spatial and technological
limitations [6]. This task is already partially done. while optimizing the pit shell, since annual
production is set as one of feed parameters in software Whittle. However, for detailed life of
mine scheduling, besides pit’s geometry and main mining targets, other important mining
factorsneed to be considered. In this phase, a comprehensive operational and economical
evaluation takes place, in order to define necessary main and ancillary equipment, its
maintenance and replacement strategy, haulage routes, waste dumps locations, ore processing
parameters, administration, infrastructural facilities, reclamation strategy and other.
Complex task of the mine scheduling, and a great number of factors in conjunction with each
other, demand taking advantage of modern developed IT solutions. Given the resource model,
data on optimal equipment fleets, availability and utilization, main constraints and targets, life
of mine model is developed, with a detailed schedule for each year. The selection of mining
blocks and the most appropriate waste dumping locations is automatically managed, while
ensuring all rules and constraints are honored.In the process, software determines the
destination for every block that is mined, ensuring haulage is at the core of the schedule.
Quantity of ore which is planned to be excavated by years is usually a constant value, while
quantity of overburden which is planned to be excavated by years can vary, depending on
pit’s geometry and strategy for overburden removal. Details of mining pit configurations, face

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advance, minimum work-area or other calculations can be found in Open Pit Mine Planning
and Design (Hustrulid, Kuchta, 2006).
Current software solutions for mine scheduling can be tailored for complex mining
environments to deliver robust and practical schedules. The advantage of the IT supported
mine scheduling is a possibility to develop a model with all the influential factors in mining
considered, as well as spatial distribution of blocks of ore and waste, on their locations and
time, as a fourth dimension.
Results of the operational scheduling, indicating the required number of engine hours,
required maintenance, fuel and other consumables consumption may be used for the further
economic evaluation of the life of mine schedule, and determination of the maximal NPV of
the mine as a project.
There are compatible software tools that, in integrated system, cover both operational and
financial life of mine scheduling. Good example is a set of RPMGlobal software solutions,
OPMS-Xpac, for operational scheduling of the mine, and XERAS, for the financial evaluation
of the operational schedule results. These two software solutions are used in the case study in
this paper, for the Omarska Mine life of mine scheduling. There are other mine scheduling
tools, also, such as: MineSched™ (GEOVIA, DessaultSystemes), Minemax Scheduler
(Minemax), NPV Scheduler (Datamine) and other.

Figure 3. Phases of geological and block modelling

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3. CASE STUDY – MINE PLANNING PROCESS OF OMARSKA MINE

An iron ore mine considered as a case study in this paper is an iron ore mine, located in
Bosnia and Herzegovina, called Omarska Mine2. The mine operates under administration of
ArcelorMittal Prijedor, one of the mining units of a world's largest steel producers,
ArcelorMittal. The deposit where ore is currently mined is Buvac deposit.The mining of ore
from Buvac started in 2008, and the deposit is partially mined out.
Buvac deposit resources and reserves block model (Figure 4a.) has been modeled using
Surpac software. Geological modeling of ore bodies and its delineation from surrounding
waste rocks has been done based on the exploration drillholes data. The procedure (Figure 3)
is presented on Figure 3b.The main parameters of iron ore, important for production, were
estimated using Ordinary Kriging, as a primary estimation method, and Inverse Distance and
Nearest Neighbor, as a control estimation methods. The block model contains estimated
values for Fe, SiO2, and Mn grade, as well as grain size composition of ore. Total resources
of iron ore amount to approximately 50 million tons, with almost 30 million tons of minable
ore reserves inside the optimized pit shell, at the operational cutoff of 35% Fe dry [7]. Grade-
tonnage curves for the remaining part of the reserves after 2016 are presented on Figure 4b.

Figure 4.a) Block model of Buvac Iron Ore b) Grade-tonnage curves for the deposit

The ore resources 3D block model, created in Surpac, has been used as a base for creation of
the spatial economic model of the deposit and optimization of the pit shell in Whittle
software, implementing the Lerchs-Grossman algorithm. Main operation and economical
parameters were estimated based on experience in the previously mined similar deposits in the
Omarska Mine (Jezero deposit, Mamuze deposit).
This represents the first phase of the software integration. The true advantage of this
approach, versus the traditional, manual approach, in this phase of mine engineering, is the
fact that, having the right inputs, the software is enabling us to very quickly generate several
pits, by variating the main parameters, such as price, cut-off grade, operational cost, or
similar. This outturns aninvaluable knowledge base for any engineer dealing with the complex
process of the mine planning and optimization.

2
Real Omarska Mine data is changed, due to the confidentiality policy. However, the data used is kept
representative enough to present the integrated model in this paper.

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The optimal pit shell obtained in Whittle is an artifact of the block model, shaped in
characteristic block structure (Figure 5a). Such shell is imported back to Surpac, which is then
used for spatial engineering of the correct pit outlines, considering main mining and
geotechnical constraints, such as pit slope, bench height and slope, transportation routes and
other elements of the pit geometry (Figure 5b)

Figure 5. a)Example of pit outlines in Whittle b) Optimal pit reconstructed in Surpac

Although the general ore and waste extraction sequence is determined during the pit shell
optimization in Whittle, in order to schedule the life of mine operation in detail, it is necessary
to redefine the sequence in which blocks should be extracted, in the presence of several
physical and technical constraints. Projected market requirements, equipment availability and
possible utilization, its replacement policy, optimal transportation routes and other cost saving
strategies need to be evaluated in this phase.
Again, detailed mine sequencing may be determined by the traditional methods, by geologists
and mining engineers, familiar with the deposit, using primarily drillholes data, sections and
level stage plans, and engineering knowledge and logic. However, several very powerful tools
are developed in last decades, since the information technology found its ratification in
mining. There are softwares which are user-friendly, comprehensive, and moreover, their
scheduling results may be directly used in the next step – financial evaluation of the mine
plan, in another, consecutive tool. Good example of such integration is the set of RPMGlobal
software solutions for operational and financial mine scheduling, used in Omarska Mine.
Life of mine operational schedule is developed using OPMS-Xpac software. The block model
of the ore reserves and resources remaining after 2016 and obtained optimal pit shell, as well
as the mine-specific data related to time constraints, equipment data, spatial constraints or any
other condition that may be specific for the mine, are used as the base in this process.
An advantage of the software supported scheduling mainly reflects in controlled integration of
the entire set of the mine-related parameters, time saving, and again, the possibility to rather
quickly develop a set of feasible life of mine scenarios, amongst which the optimal one may
be selected. Also, powerful suite of reporting and analytical tools, such as dashboards,
reports, 3D status plots which represent the deposit at any point during the schedule, as well
as 3D animations to accurately visualize how the mine develops over time, allow to quickly
and easily analyze, compare and communicate scheduling outcomes. Stage plans can be
exported as triangulated surfaces to inform other applications of how far the mine will have
progressed at any point in time. Figure 6 shows a set of the reporting tools of the
OPMS_Xpac, which are very useful in the process of decision-making.

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Figure 6. Reporting and analytical tools of the OPMS_Xpac

The results of the operational schedule of ore mining on Buvac pit were imported into
XERAS, where financial aspects were evaluated, considering operational costs, manpower
costs, consumables cost, CAPEX, depreciation, inflation rates and other financial parameters
throughout the life of mine. The software enabled fast and accurate financial planning, easy
importing of data and creating customizable reports, which allows more time for refinement
of the model and analyzing different scenarios, to determine the optimal solution, with the
highest NPV.
Over time, when the mining starts, the selected mine schedule with the highest NPV needs to
be occasionally questioned, considering important changes in operational and economic
aspects. There, the software tools usage and integration of the results and models, come to be
very convenient.

4. CONCLUSION

Throughout the years, in mine planning, new processes and software technologies have
appeared and replaced the traditional ones, because of their benefits when applying them in a
real life. They enabled usage of more complex mathematical algorithms, with better and more
reliable outputs.
This paper shows, on a real mine case study, how a set of integrated mining specialized
software solutions may be used to advance the mine planning process. The main benefit of
this approach is a possibility to integrate and directly use models from one phase in another
phase and another tool, which brings additional control over the process.
Another advantage of the IT supported scheduling is the possibility to simulate a great
number of scenarios in a short time, evaluate them to ensure that the maximal value of the
mine is gained.

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The data presented in the paper are kept general, without too much detailing on the mine
capacities, financial outcomes, implemented technologies, used equipment and other mine-
specific data, since the aim of the paper was to show the benefits and advantages of the
overall integration of the mine planning phases in the computer aided environment, where a
result of one phase and one software output, represents a direct feed to another phase, and to
another tool. That way, overall process, which is driven by the engineering logic and
upgraded knowledge base on the deposit itself, emerges optimal result of the mine operation.
However, if the reader is interested in a more detailed presentation of the real mine modelling
and planning, authors are available for further discussion.

REFERENCES

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[2] Dagdelen, K., (1985).Optimum multi period open pit mine production scheduling,Colorado School of Mines,
Golden, Ph.D. thesis
[3] Miladinovic, M., Cebasek, v:, Gojkovic, N., (2011). Racunarski programi za projektovanje i modeliranje u
rudarstvu, Podzemni radovi, Rudarsko – geološki akultet, Beograd
[4] Lerchs, H., Grossmann, I.F., (1965). Optimum Design of Open Pit Mines, CIM Bulletin. Canadian Institute
of Mining and Metallurgy, Vol. 58.
[5] Hustrulid, W., Kuchta, M., (2006). Open Pit Mine Planning and Design, second edition, Taylor and
Francis/Balkema, The Netherlands
[6] Stevanovic, D., Kolonja, B., Pesic-Geogiadis, M., Stojanovic, L., (2016). Savremeni pristup strateškom
planiranju, primer optimizacije – Površinski kop Delic, II Rudarsko-geološki forum, Prijedor
[7] ArcelorMittal Prijedor, (2016). ArcelorMittal Prijedor Technical Report, AM Mining London

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