By Ralph Smith, GEOVIA Sales Expert – Management Director, Dassault Systèmes
The mining sector in the Asia-Pacific faces significant challenges from geopolitical to market driven variations including price and energy costs that impact planning potentially leading to mine closures. A primary requirement for mining success is optimizing the strategic mine plan to ensure flexibility and robustness to secure value for investors, stakeholders, and communities. Strategic mine planning when optimized establishes short-term positive cash flow and profitability while achieving long-term objectives.
Addressing volatility through simulation
Price volatility is a common element of uncertainty in mining plans, which means the strategic mine plan should answer critical questions such as how do variations in elements like price impact operations? Answering such questions helps ensure that mines operate profitably and meet social and environmental norms when commodity or supply prices change. Given the extensive timeline from project inception to actual ore mining — often spanning 15 to 20 years — mining firms invest in ventures that may only begin to return on investment somewhere within this long timeframe.
It must also be remembered that only about 49% of mining pre-feasibility studies make it to a bankable feasibility study stage. In the pre-feasibility phase, if miners fail to grasp the full spectrum of opportunities for ore extraction, studies may need to be redone. Therefore, optimizing strategic mine planning aims to reduce such rework and increase the potential to progress to the next phase while improving the probability of faster progress with a deeper understanding of the impact of project drivers.
Acknowledging the pressing demand for minerals such as nickel, copper, and lithium for global energy transition plans, and the typical 15 to 20-year from discovery to production, miners are challenged to expedite the decision-making processes. It’s imperative to assess all potential risks, even with data containing lower confidence levels or with incomplete data at hand.
Delivering results with scenario simulation builds a complete view and helps identify opportunities to improve on the base case for a feasibility study. Evaluating risks, such as geotechnical challenges associated with pit slopes or grade variations with different confidence levels provides insights into the actual factors that might impact the project. Thus, simulating various scenarios and fully comprehending potential outcomes becomes central to refining the strategic mine plan.
3DEXPERIENCE platform: Enhancing simulation with virtual twins
Using Dassault Systèmes’ 3DEXPERIENCE platform miners can simulate diverse scenarios. Virtual twin technologies help test differing parameters and their influence on pit-optimized designs using generative design tools. Ultimately, the 3DEXPERIENCE platform helps extensively test different theories and operational strategies to assess their impact on project value.
For example, simulating various slope angles can reveal implications for waste disposal costs and efficiency; steeper slopes may reduce waste storage needs and associated costs.
Furthermore, by applying uncertainty to grade and production scale the virtual twin can model the effects of grade reduction on the mining plan and project lifespan. This information helps understand the impact on key financial metrics such as discounted cash flow, net present value (NPV), internal rate of return (IRR), and the mine’s potential lifespan and risk profile.
Design parameters for simulation can encompass production scale, fleet sizing, mining sequences, and extraction levels. External factors such as fluctuating prices and fuel costs, along with estimated ore grades, can also be fed into the system to simulate various scenarios. This comprehensive analysis helps prioritize strategic mine planning and identify high-value mining sequences early within the lifecycle to ensure faster cash flow.
Leveraging the 3DEXPERIENCE platform, companies can run thousands of simulations on hundreds of sensitivities, including mining direction, more swiftly than with traditional methods and tools.
The 3DEXPERIENCE platform provides a unified environment to connect processes and automation, facilitating the rapid assessment of numerous scenarios. This automation also supports strategically determining optimal production scales and mining phases while considering a wide spectrum of operational and capital expenditure variabilities.
Optimization through simulations helps refine strategies for mining phases, tackle production uncertainties to improve cash flow, and identify the best mining locations, while prioritizing high-value areas early. Strategic mine planning teams can run thousands of simulations calibrated for various sensitivities and external factors in a shorter period of time than current practices.
Targeting faster cash flows with the 3DEXPERIENCE platform
The 3DEXPERIENCE platform’s simulation capabilities enable mining companies to utilize ‘value surfaces’—to manage the volume of scenarios and visualize the impacts of parameter variation and their contribution to the outcome.
This approach optimizes strategic mining plans for cash flow, NPV, and IRR, bolstering confidence in mining operations and securing profitability. Additional attributes, such as ESG parameters or mill productivity, can be incorporated and simulated to assess outcomes.
Results from optimized mine plans improve productivity metrics, such as tons per kilowatt hour and potential CO₂ emissions, addressing Scope 1 environmental challenges and aligning with ESG benchmarks crucial for financing mining operations.
The 3DEXPERIENCE platform integrates mining processes, breaking down silos to enhance value while helping achieve sustainability and compliance targets. It offers a comprehensive risk overview when compared to traditional mine planning. By simultaneously running simulations across various sensitivities and scenarios, and testing multiple inputs, the platform enables a more efficient and holistic planning process.
Automation within the 3DEXPERIENCE platform enhances transparency across strategic mine planning teams and stakeholders. Simulations reveal the impact of variables such as a 5 percent lower ore grade or lower productivity to adapt the plan to immediate and future challenges, including commodity price drops, supply chain constraints, or rising fuel costs, thereby safeguarding long-term profitability.
Enabling innovation in mining with seamless collaboration
The 3DEXPERIENCE platform layers simulation capabilities on top of the existing engine or mining technologies, allowing for data to be universally accessed by employees of all profiles and disciplines through the simulated output which becomes a single source of truth. This approach democratizes data and promotes informed decision-making at all levels of expertise, skill and domain.
The power of the solution lies in its ability to run hundreds to thousands of simulations for multiple sensitivities and external factors. All while seamlessly connecting multiple disciplines and department silos, providing a holistic view of the consequences from various decisions effects on a unified project flow sheet.
The data model integrates the inputs of metallurgists, mine planners, and geoscientists into one workflow ensuring everyone has a comprehensive view of their decisions’ real impacts. This seamless collaboration across disciplines fosters innovation and delivers improved value for investors, stakeholders, and the community while ensuring digital transformation and modernization of mining operations.