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Mining Method Selection and Optimization of Transition from Open Pit to

Underground in Combined Mining

Article  in  Archives of Mining Sciences · January 2009

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 Arch. Min. Sci., Vol. 54 (2009), No 3, p. 481–493 481
Electronic version (in color) of this article is available: http://mining.archives.pl

EZZEDDIN BAKHTAVAR*, KOUROSH SHAHRIAR**, K. ORAEE***

MINING METHOD SELECTION AND OPTIMIZATION OF TRANSITION FROM OPEN PIT

TO UNDERGROUND IN COMBINED MINING

WYBÓR METODY WYBIERANIA ORAZ OPTYMALIZACJA PRZEJŚCIA OD KOPALNI

ODKRYWKOWYCH DO PODZIEMNYCH W PODEJŚCIU MIESZANYM

There are occasionally deposits with a potential of exploiting by a combined mining of open pit and
underground. Hence, the most significant query emerges: where is the optimal transition depth from open
pit to underground? In this study, in order to profitably select a single or combined mining of open pit and
underground, as well as to determine optimal transition depth a methodology is presented. The model is
established upon the economical block models of open pit and underground methods together with the
Net Present Value (NPV)s gained by their mining. Main process in the model is economical comparison
among several options of single and combined mining. To evaluate the model in detail, a hypothetical
case is used. In this regard, among the all options a combined was selected that implying a height of
62.5 m as the optimal transition depth and the amount of 25.54 units of currency as the maximum total
NPV achieved by the option.

Keywords: optimal transition depth, open pit, underground, single and combined mining, NPV

Zdarzają się złoża, które potencjalnie wybierać można łącząc metody stosowane w górnictwie
odkrywkowym i podziemnym. W tym momencie pojawia się zasadnicze pytanie: jaka jest optymalna
głębokość przejścia od metod górnictwa odkrywkowego do podziemnego? W artykule przedstawiona
jest metodologia określania optymalnej głębokości przejścia w celu skutecznego znalezienia optymalnej
metody wybierania lub ich kombinacji. Model zbudowany jest w oparciu o ekonomiczne modele blokowe
metod wybierania odkrywkowego i podziemnego, z podaniem wartości bieżącej netto (Net Present Value)
dla każdej z metod. Głównym założeniem modelu jest porównanie poszczególnych opcji wybierania,
metod pojedynczych i łączonych w ich aspekcie ekonomicznym. W celu dokładniejszej oceny modelu
przedstawiony jest przypadek hipotetyczny, dla którego ustalono optymalną metodę wybierania jako
metodę połączoną, z optymalną głębokością przejścia 62.5 m, co daje maksymalną wartość NPV dla tej
opcji jako 25.64 jednostki walutowe.

Słowa kluczowe: optymalna głębokość przejścia, górnictwo odkrywkowe, wybieranie metodą pojedynczą
i metodami łączonymi, wartość bieżąca netto (NPV)

* DEPARTMENT OF MINING AND METALLURGY ENGINEERING, AMIRKABIR UNIVERSITY OF TECHNOLOGY, TEHRAN,

IRAN
482

1. Introduction

Several mining method can be used to optimally extract an ore body. Convention-
ally, there are established two methods for mining: surface and underground mining.
Open pit being one of the surface mining methods, is by and large regarded to be ad-
vantageous over underground methods, especially about recovery, production capacity,
mechanizeability, grade control and cut off grade, ore loss and dilution, economics, and
safety. While, underground mining can be considered as being more acceptable than
surface mining from environmental and social point of view. In addition, underground
will often have a smaller footprint than an open pit of comparable capacity.
Many deposits can be mined entirely with open pit method; others must be worked
underground from the very beginning. Besides these two kinds of deposits, there are
the near surface deposits with considerable vertical extent. Although they are initially
exploited by open pit method, there is often a point where decision has to be made
whether to continue deepening the mine or changing to underground methods. The
point at which economic considerations dictate to change of method from open pit to
underground is called “transition depth”. Accurate determination of this depth- mines
where both methods are used, is of utmost important. A general schematic of the transi-
tion problem is shown in Fig 1.
Some of the biggest open pit mines worldwide will be achieving their final pit
limits during the next 10 to 15 years (Fuentes, 2004). As well as, there are many mines
planning to change from open pit to underground mining due to increasing the extrac-
tion depth and environmental requirements (Chen et al., 2003. In this way, caving stope
methods especially block / panel caving will likely enable the operations as an under-
ground method to continue achieving a high production rate and low costs (Fuentes &
Caceres, 2004).
Up to now, in order to determine transition depth from open pit to underground
mining only a few researches and studies during the recent decade have been accom-
plished. The researches were attained to solve the transition problem of some mines
with combinational potential. In this regard, a few numbers of them led to an optimal
basic method.
Chuquicamata is an open pit mine located in the northern part of Chile. The present
mine plan is for open pit operations to cease in year 2013 at a depth of 1100 m and the
remained deposit must be economically exploited by block caving Arancibia & Flores,
2004; Flores, 2004.
Grasberg copper-gold mine in Indonesia is known as a combined mine of open pit
and underground. Mining by open pit method will have been finished by 2015 (Brannon
et al., 2004; Srikant et al., 2007).
Diavik diamond mine using open-pit method is expected to be completed by 2012
and it will become totally underground (Rio Tinto’s..., 2006).
 483

Fig. 1. A schematic of transition problem from open pit to underground mining

Kanowna Belle gold mine in Australia is the other mine in this class that transition
to underground mining was done by the beginning of 1995 (Kandiah A., 2007).
Current schedules in the Argyle diamond mine located in the eastern Kimberley
region of Western Australia show that the open-pit finishing production by the end of
2007, having reached its economic depth (Bull et al., 2004; Hersant, 2004).
Nearly all of the diamond production of the Ekati Diamond mines in the Northwest
Territories of Canada has been from open-pit mining of multiple pipes. However, as
some mines deepen, it is planned to convert to underground such as the Koala North
combined mine (Jakubec et al., 2004).
The Meng-Yin diamond mine consists of two ore deposits that one of them must
be potentially mined being a combined mining. In order to exploit the deposit, Cut&Fill
can be considered as a proper underground method (Changyu, 1984).
At the Palabora Mine, the transition to caving 400m below the bottom of the 800m
deep open-pit resulted in a slope failure of the North wall that began in 2003, and is still
mobile (Brummer et al., 2006).
There are several other open-pit mines were done, or are planning, or are in the
process of implementing, a transition to underground mining: Bingham Canyon in USA,
Mansa Mina in Chile, Venetia in South Africa, Mount Keith and Telfer in Australia
(Arancibia & Flores, 2004), and Kiruna mine in Sweden (Kuchta et al., 2003).
The first method for determining transition depth from open-pit to underground was
“Allowable Stripping Ratio” which was expressed by a relation with emphasis on exploi-
tation cost of 1 ton ore in underground and in open-pit, as well as, removal cost of waste in
relation to 1 ton of ore extracting by open-pit (Popov, 1971; Soderberg & Rausch, 1968).
484

In 1982, a methodology by Nilsson based upon cash flow and Net Present Value
(NPV) was presented (Nilsson, 1982). Then, in 1992 in order to consider the transition
depth as an important issue with respect to deposits with combinational extraction,
the previous algorithm (in 1982) was again represented and reviewed (Nilsson, 1992).
Furthermore, in 1997 to state the transition depth problem he underlined discount rate
as a most sensitive parameter in the process (Nilsson, 1997).
In 1992, other algorithm for this target was introduced by Camus. This algorithm was
introduced on the basis of block models and considering net economic values of blocks
for open-pit and underground exploitation. The approach consists basically in running
the open-pit algorithm taking into account an alternative cost due to the underground
exploitation (Camus, 1992).
In 1998, Whittle programming (4-x) which has been developed to assist in the inter-
facing of open-pit and underground mining methods was argued and studied. Due to the
applied method in the programming, management can make decision based on quantified
operational scenarios of the open-pit to underground transition (Tulp, 1998).
In 2001 and 2003, an approach with “Allowable Stripping Ratio” method based
and in mathematical form for the objective was introduced. Volumes of ore and waste
within the open-pit limit were assumed as a function of constant (ultimate open-pit)
depth (Chen et al., 2001; Chen et al., 2003).
In order to determine the optimal transition depth from open-pit to underground
mining a software on the basis of a heuristic algorithm was prepared by Visser and Ding
in 2007 (Visser & Ding, 2007).
Also in this year (2007), a simple heuristic method on the foundation of economical
block models with open-pit and underground block values was introduced by Bakhtavar
and Shahriar. The main process in the algorithm is comparison between total values of
open-pit and underground (Bakhtavar & Shahriar, 2007).
Recently, for the purpose that the transition problem might be solved, a research by
Bakhtavar and others were carried out. During the research a heuristic model established
upon a two dimensional block model with the values of open-pit and underground was
presented (Bakhtavar et al., 2008b). The present study is conducted through improving
and developing this version of research.
In a different manner, a method with an economical block model based was intro-
duced so that the transition problem might solve. Although, the main idea was deduced
from Nilsson’s method, some modifications and requirements were performed to the
algorithm. The target of the method can be achieved by comparison among the values
obtained by various alternatives of combined mining (Abdollahisharif et al., 2008).
A different research through an analytical procedure was done to determine open-pit
to underground transition depth of tabulate deposits. In this way, in relation to various
states some formulas concluded by using the allowable and overall stripping ratios.
 485

The contemplated states were differently combined from the deposits with outcrops or
overburden and including maximum or minimum possible pit floor width (Bakhtavar
et al., 2008a).
Recently, there have been many mines with potential of combined mining that fo-
cused on determination problem of optimal transition depth as a new challenge. It seems
accurate determination of the optimal transition depth be more considerable as an utmost
important issue in the near future. Up to now, due to the researches and studies in this
nature just some of the represented methods are able to solve the problem, but not care-
fully. In addition, because of disadvantages of the few methods (algorithms) and their
lacks in optimally finding of transition depth, it is essential to be a new effective model.
The present study highlights a methodology as a means to profitably select a single or
combined mining of open pit and underground, as well as to determine optimal transi-
tion depth. The model is established upon the economical block models of open pit and
underground methods together with the NPVs obtained by their mining. Foundation
of the present method is originated from the Nilsson’s method (Nilsson, 1982), with
employing a part of modifications and adjustments, making some requirements and es-
sential items to the algorithm.
It is notable that the model can optimally solve the transition problem only on the
basis of technical and economical considerations, but without any social vision, working
forces requirements in relation to open-pit mining lifetime, equipments considerations
after open-pit mining closure, and so on.

2. Model explanation

The present method is fundamentally set up due to economical block models of open
pit and underground to emphasis on solving the optimal transition depth problems.
The main idea in the model has been taken from Nilsson’s method, which was
initially introduced in 1982. To reduce the shortcomings of Nilsson’s method as well as
to make some modifications, a number of essential considerations were added. Nilsson
did not consider any barrier such crown pillar between open pit and underground min-
ing. Also, there has not been used any optimization algorithm to determine underground
(stope) mining lay out. Unlike Nilsson’s method, if a deposit has a potential to mine
by open pit or underground separately, the present model will distinguish these cases.
Generally, the present model not only makes principally difference in all detail consid-
erations (such as crown pillar) but also as regards economical issues based on block
models of both open pit and underground mining. The main objective of the model can
be obtained due to make a comparison among the NPVs achieved by various options
(alternatives) of single (open pit or underground individually) or combined (open pit and
underground together in different levels) mining. In the present methodology, authors
seek to find an option including maximum NPV. Furthermore, when selected option is
486

a combined alternative of open pit and underground, its final open pit depth will consider
being optimal transition depth.
With relation to the options of combined mining, below each open pit depth may be
taken into account the most effective crown pillar (if required depends on underground
method), and then economically is assigned an underground layout. In other words, each
combined option may comprise three elements of optimal pit limit, optimum underground
(stope) layout, and a crown pillar between them.
The main part of the present method is associated with decision making and eco-
nomically selection of an optimal option which involves maximum NPV.
During the model, the following assumptions are made:
– In both open-pit and underground economical block models, dimensions of the
blocks are 12.5*12.5 (as more conventional open-pit bench height and bench slope
of 45 degree which is more common in open-pit optimization algorithms, also
the dimensions are applicable being a multiple of underground working stopes
dimensions)
– Allow open pit and also underground as two single mining options
– Related to each option, a level can be mined at most once and via at most one
method (open-pit or underground) with regard to sequencing constraints
– For combined mining options, definition of at most one crown pillar with certain
height being a multiple of the levels (blocks) height considering the selected
underground mining method and geotechnical investigations
– At most one underground stoping method which is known, can be used
– During stope layout optimization all limitations have to performed, as well as all
limitations through pit limit optimization
– All levels in both open-pit and underground methods are contiguous
Fig. 2 indicates a general schematic chart of the algorithm in the model.
Initially, both open pit and underground block economical models must be sepa-
rately created. It is notable that in order to designate various optimal final open pit limits
depending on each level, the optimization algorithms such as Lerchs & Grossmann
(1965) and Korobov (1974) can be used. Furthermore, it is essential to find optimum
underground (stope) layout and consequently the minable blocks in each level. For this
reason, the related optimization algorithms such as Floating Stope Optimizer (Alford,
1995) must be employed.
During determination of optimum underground layout, all limitations of the selected
underground stope method dependant have must be considered. In this relation, a number
of more common limitations are: minimum and maximum width as well as height of
stope in terms of the number of 12.5*12.5 m blocks.
 487

Fig. 2. A general schematic chart of the algorithm

3. A hypothetical example

In this section, in order to describe the model entirely and with all the specifics,
a hypothetical case example is used. This case embodies 154 blocks of 12.5*12.5 m
in 11 levels and 14 columns.
The economical block models and the block economic values achieved by open-pit
and underground are separately demonstrated in Figures 3 and 4, respectively. In both
Figures 3 and 4, positive numbers imply minable (profitable) blocks, whereas negative
and zero numbers indicate waste blocks without any profit due to their extraction.

Fig. 3. Open pit economical bock model Fig. 4. Underground economical bock model
488

During the second step various optimal open pit limits and underground layouts
related to each level are designated. The optimal open pit limits in each level is distinctly
illustrated in Fig. 5. In addition, Fig. 6 totally indicates the optimum final underground
(stope) layout, while optimal underground layout based on combined mining in relation
to each level is shown in Fig. 7. It is remarkable that optimization of underground layouts
in each level is subjected to considering at least two contiguous blocks as a minimum
width and height of stope (Fig. 6 and 7).

Fig. 5. Optimal pit limits related to each level

 489

Fig. 6. Optimal final underground layout and minable blocks in each level

Now, let us assume that height of the crown pillar be one level (12.5 m) on the
basis of geotechnical considerations and kind of mining method (during the hypotheti-
cal example).
In the present conditions, the possible options must be considered. Hence, according
to Fig. 7 there are totally eight options comprising two single and five combined min-
ing alternatives. Then, through the comparison among the NPVs achieved by different
options, the most profitable one can be selected.
Table 1 summarizes the profits gained by each option without any discount rate
included. Based on the offered model, selection process must be made only due to NPVs
achieved by the possible options (Fig. 7), in fact a discount rate is required.

TABLE 1
The economical results without any discount rate due to the hypothetical example

Option 1 2 3 4 5 6 7 8
Open pit profit 0 +5 +9 +16 +22 +24 +26 +26
Underground profit +36 +27 +25 +23 +18 +14 +13 0
Total Profit +36 +32 +34 +39 +40 +38 +39 +26

It takes into consideration that 0.87, 0.76, 0.66, 0.57, 0.5, 0.43 are single present
value factors for a discount rate of 15% and 1, 2,…, 6 year.
In this example, it is assumed that each two contiguous levels have to mine during
one-year. Thus, it is essential to assign the single present value of 0.87, 0.76, and so on,
to the blocks take place in the levels of (1 and 2), (3 and 4), etc., respectively. In this case
and using the discount rate of 15%, the NPVs of the levels achieved by both open-pit
and underground are calculated and summarized in Table 2.
490

Fig. 7. Possible options of single and combined mining of open pit and underground
 491

TABLE 2
NPV of single and combined mining options including a discount rate of 15%

Option 1 2 3 4 5 6 7 8
NPV from open pit 0 +4.35 +7.28 +12.72 +16.12 +15.39 +16.53 +16.53
NPV from underground +23.06 +15.56 +14.8 +12.16 +9.42 +7.1 +6.57 0
Total NPV +23.06 +19.91 +21.32 +24.88 +25.54 +22.53 +23.1 +16.53

According to Table 2, option 5 as a combined mining alternative is selected being

most profitable. This option implies that the initial five contiguous levels should be mined
by open pit. That is optimal transition depth is determined to be 62.5 m. The sixth level
assigned as a proper crown pillar immediately after the optimal transition depth. Finally,
the remain levels below the crown pillar are beneficially highlighted for extracting by
underground mining, meaning from level 7 to level 11.
Selected mining option and related components for the hypothetical case example
are illustrated in Fig. 8.

Fig. 8. The components of transition from open pit to underground for the hypothetical case

According to Table 2, the maximum total NPV gained by open-pit and underground
together in combined mining is calculated to be 25.54 units of currency.

4. Conclusion

Due to the significance of determining the optimal transition depth from open pit
to underground in respect to the deposits which have potential to extract by combined
mining, a model based on economical block models of open pit and underground was
represented. In addition to this, the model is able to select an optimal option among sin-
492

gle or combined mining of open pit and underground. In order to describe the presented
model in detail a hypothetical case example was employed.
Initially, several options of single and combined mining were considered and their
obtained profits without any discount rate were determined. In both case of without any
discount rate and including discount rate of 15% (to considering NPV of each option),
the fifth alternative as more profitable option was underlined. Through the method for
the hypothetical case, the optimal transition depth from open pit to underground was
determined equal to 62.5 meters and consequently the total maximum NPV of 25.54
was gained.

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Received: 01 June 2009

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