Recent drops in commodity prices and economic uncertainty have seen many businesses re-evaluate their operational expenditure to ensure mine profitability. The high capital and operational cost of truck and digger fleets has resulted in loading and hauling of material being a significant proportion of a mine's expenses (Nel, Kizil and Knights, 2011), thus it is often one of the first areas to be considered for cost reduction. If an operation requires additional trucks to maintain or improve productivity, a robust justification is crucial due to the expenditure involved. Mining schedules form the basis of productivity and cost estimations for mining operations and therefore must have a significant level of confidence with regards to achievable quantities and rates. Traditionally, a mining schedule is produced without detailed consideration of the trucking capacity or requirements. Although some mine planning software incorporates haulage predictions into schedules, most cannot model the dynamic nature of dumping and haulage. Previous studies have shown that it is necessary to have detailed haulage analysis instead of the traditional mining block centroid to dump block centroid methods for more realistic mining schedules and cost estimation (Doig and Kizil, 2013). Recent developments in software have allowed the dynamic integration of haulage analysis with mining schedules. Engineers can now create mining schedules in conjunction with dumping schedules, allowing mining schedules to reflect the restrictions created by the number of available trucks, combined with dynamic consideration of available in-pit and out-of-pit dumping locations. A study has been completed producing a mining schedule in conjunction with a dumping schedule and haulage analysis. Multiple schedules were run with various haulage strategies (including minimising rehabilitation liability) and truck availability to identify the impacts on coal production, and hence revenue. A financial analysis was then completed where a Net Present Value (NPV) was calculated for each scenario. The study showed that trucking shortfalls can significantly impact mining schedules and cost estimations, both in terms of cost as well as revenue lost when trucks cannot maintain forecast production rates, thus dumping schedules and haulage analysis should be completed simultaneously. If dumping and haulage is not considered when planning the mining schedule, a mining business is ignorant to the impacts trucking has on the mine production, closure risk and profitability.

1. Patrick Doig
February 2015
Presented By:
Date:
Value Impacts of
Truck Limited Haulage
SME 2015 – Denver
Originally Presented at AusIMM
Life of Mine Conference 2014

2. Overview
Benefits of integrated scheduling
and landform to determine NPV
considering entire value chain
from open to closure.
Narrow focus on reduction of unit
cost = value destruction

3. Economics
Economic Cycle
Reduce Cost
• Capital expenditure first to be
cut
• High cost of Loading and
Transportation
• Must consider entire costs, not
individual components

4. Why Detailed Haulage Analysis
Plan material placement
Reduce and understand cost
Selective material placement
Determine final landform
Reduce overall closure risk

5. Cycle Time Variation
Using average cycle time
Insufficient truck allocation
(over and under trucked)
Reduced mining rate
Schedule delays

6. Methods of Truck Model
Methods of predicting truck requirements
Old software requires intense manual input
Difficult to run multiple scenarios
Recent advances allows
• More detail
• Selective material placement schedule
• Integrated with mining schedule

7. Dynamic Integration
Mining
Schedule
Haulage
Integrated Scheduling
& Landform
Reflect trucking restrictions
Optimize haulage strategies
• Maximize Production
• Minimize Cost
• Minimize Rehabilitation Liability

8. Production
Schedule
Calculate
Truck
Requirements
Cost Model
Traditional Method

9. Integrated Method
Production Scheduler
Selective Material
Placement (Dump
Schedule)
Calculate Truck
Requirements
Modify Production
Schedule to Truck
Restrictions
Cost Model
Quickly run multiple scenarios

10. Case Study
How many trucks
Reduce Cost
Reduce Risk
Reduce Rehabilitation Liability
Maximizes NPV

11. Geological Model

12. Pit Design
DraglineSpoilPiles Excavator MiningSolids
TruckDumpDesigns
Dragline MiningSolids

13. Mining Schedule
0
1
2
3
4
5
6
7
8
9
10
0
10
20
30
40
50
60
2014 2015 2016 2017 2018
Coal(milliontonnes)
WastePrimeVolume(millionbcm)
Prestrip Prime Volume Dragline Prime Volume ROM Coal t Product Coal t

14. Landform Model

15. Total Number of Trucks
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
TotalNumberofTrucks

16. Truck Limited Model

17. Integrated Method
Production
Scheduler
Selective Material
Placement (Dump
Schedule)
Calculate Truck
Requirements
Modify Production
Schedule to Truck
Restrictions
Cost
Model
Multiple Scenarios (12-46 Trucks)
Multiple Truck Fleets
Inadequate trucks =
reduced mining rates
Resulted in
• Schedule Quantities
• Total equipment
requirements
• Operational Hours
Required
• Fuel Burn
• Landform Schedule

18. Cost Model
Detailed Cost Model
Variable and Fixed Costs
Included Capital and Operational
Mining Disturbance

19. Results
What to compare
Schedule Physicals
Cost per Product Tonne
Minimum Trucking Cost
NPV

20. -
5
10
15
20
25
30
35
40
45
50
-
50
100
150
200
250
300
12 16 20 22 24 26 28 30 32 34 38 42 46
Coal(milliontonnes)
WasteVolume(millionbcm)
Total Number of Trucks
Prod Coal t ROM Coal t Total Prime bcm Total DRE Prime bcm Total TS Prime bcm
Schedule Physicals

21. Cost per Product Tonne
$151
$110
$90
$83
$79 $78 $77 $75 $74 $73 $71 $70 $70 $69 $69 $69 $69 $69 $69 $70 $70 $70 $71 $71 $72
$-
$20
$40
$60
$80
$100
$120
$140
$160
$/ProductTonne

22. $0
$100
$200
$300
$400
$500
$600
-
1
2
3
4
5
6
7
8
9
10
NPV(million$AUD)
ROMCoal(milliontonnes/year)
AVG ROM t/year NPV $AUD
NPV

23. Truck Unit Cost
$0
$100
$200
$300
$400
$500
$600
$2.00
$2.20
$2.40
$2.60
$2.80
$3.00
$3.20
$3.40
$3.60
0 5 10 15 20 25 30 35 40 45 50
NPV($AUD)Millions
TruckCost($AUD/bcm)
Number of Trucks
Truck Cost
$AUD/bcm
NPV $AUD
Maximum
Business
Value
Minimum
Unit Cost

24. -
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
TotalNumberofTrucksDiscussion

25. Variance in Planned Coal Production
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
ROMCoaltMillions
29 Truck Case Base Case (No Truck Limited)

26. Video

27. Summary
Deficit / excess of trucks = increased costs
Understand how many trucks are required
Integrate landform with the mining schedule
• Reduce the mining schedule
• Better cost estimation
• Decrease cost per product tonne
• Reduce Risk

28. Thanks
Patrick Doig
Senior Engineer
MAusIMM(CP), RPEQ
Deswik Australia