Java Python MINE5002 MINE SYSTEMS ENGINEERING
REPORT - Strategic Mine Planning Project
Group Submission
Weight towards final grade = 35%
Submissions: Friday, August 23, 2024 at 11:59PM
This report constitutes two parts (Part A and Part B). Both parts must be submitted together as per instructions given below:
Task and File/Folder Name | Submission Mode |
Manual Procedure Tasks I-IV GroupLeaderLastName_Manual_Tasks I IV.xlsx | EXCEL Spreadsheet and WHITTLE software files through Blackboard. Please follow the instructions given below. |
Whittle Software Project Tasks I-IV (folder name: GroupLeaderLastName_Whittle_Tasks I IV) | |
Manual Procedure and Whittle Software Tasks V (GroupLeaderLastName_Report.PDF) | REPORT (PDF of Assessment Submission Declaration, Statement of Contribution, and Executive Summaries with appendices) through Blackboard. |
Submission Instructions:
(1) Create a folder “GroupLeaderLastName” .
(2) Copy your Excel Spreadsheet (GroupLeaderLastName_Tasks_I_IV.xlsx) into the folder in (1).
(3) Copy Whittle folder (GroupLeaderLastName_Whittle_Tasks_I_IV) into the folder in (1).
(4) Create a ZIP (GroupLeaderLastName.zip) of the folder in (1).
(5) Submit this ZIP (GroupLeaderLastName.zip) of Excel and Whittle files through a link in BB.
(6) All members sign Assessment Submission Declaration and Statement of Contribution.
(7) Scan signed Assessment Submission Declaration and Statement of Contribution as a PDF.
(8) Save or Export your word document of "Executive Summaries with appendices” as PDF.
(9) Combine the PDFs in (7) and (8) and save this combined PDF as "GroupLeaderLastName_Report.PDF".
(10) Submit REPORT (GroupLeaderLastName_Report.PDF) through a linkin BB.
Statement of Contribution: Your submission must include a separate Statement of Contribution outlining the individual contribution from each member of the group. All members must agree to and sign this statement of contribution. In addition, we may have a group members interview for allocation of individual marks. In addition, all internally enrolled students must actively participate and engage in Whittle software Lab sessions where they will complete the Whitle software tasks individually.
Learning objectives/outcomes:
1. Outline mine planning processes, opportunities and constraints associated with a mining operation.
2. Develop mine plans through manual procedures, mathematical models, and mining software.
3. Analyse and communicate mine plans for real-life scenarios.
Introduction:
This group project covers the following two aspects of the unit/course learning outomes:
1. Part A: Ultimate pit limit design, production scheduling, and after-tax discounted cash flow analysis of a hypothetical orebody using manual procedures. Note that this document provides information about Part A.
2. Part B: Ultimate pit limit design and production scheduling of large-scale realistic orebodies using GEOVIA Whittle® software.
Part A - Manual procedure - hypothetical copper deposit (20%)
Problem Statement:
Given the following input parameters, you are required to develop ultimate pit limit and production plans of a small-scale (hypothetical) copper deposit.
Economic parameters:
Copper price (p) = $5000.00 per tonne of metal,
Selling/marketing and refining cost (r) = $1200.00 per tonne of metal,
Mining cost (m) = $1.65 per tonne of material, Mining cost adjustment factor (MCAF) = 1,
Processing cost (c) = $10.00 per tonne of ore,
Metallurgical recovery (y) = 88%, Discount rate = 12%.
Ore body model:
Mining block size = 10m×10m×10m, i.e. bench height = z = 10m Material density = 1.50 tonne/m3,
Number of mining blocks = 1536,
Model file = HypotheticalCopperDeposit.xlsx (download from Blackboard).
Operational parameters: Pit slope angle = 45°,
Mining capacity = 52,500 tonnes of material per year, Processing capacity = 15,000 tonnes of ore per year.
Tasks:
Please use Microsoft Excel to complete tasks I to IV.
I. [Marks MINE5002 MINE SYSTEMS ENGINEERING Part AMatlab = 10] Given the x, y, z coordinates, develop plan (bench-by-bench) and section (includeonly those sections that contain metal content greater than zero on different z- levels) maps. Use mining block economic value equations to convert the orebody model into the economic block model.
II. [Marks = 20] Given economic block model, use 1-5 block precedence pattern to develop ultimate pit limit using floating cone (manual) procedure ( however, allow for mining block mutual support). Calculate:
a. The undiscounted value ($) of the pit.
b. The quantity of ore, average grade of copper, quantity of waste, and overall stripping ratio within the ultimate pit limit.
Note: For precedence or slope constraint in tasks II and III, use 1-5 mining block pattern (as given below):
III. [Marks = 40] Given the ultimate pit limit, operational (mining and processing) capacities and precedence constraint (1-5 pattern):
a. [Marks = 10] Develop a production schedule based on a simple bench-by-bench sequence (i.e. mine blocks on bench 1, thenon bench 2,and soon; no stockpiling of ore; do not mine from bench below until bench above/current bench is complete), and calculate:
i. The discounted value ($) of the operation.
ii. Period-by-period quantity of ore, average grade of copper, quantity of waste, and stripping ratio. Present these figures in both tabular and graphical forms.
iii. Present a phase-wise (year-by-year) expansion of the pit in plan and selected section maps.
b. [Marks = 30] Develop a production schedule independent of bench-by-bench sequence, i.e., based on next best ore (or value) concept, and calculate items (i)- (iii) in III-(a).
IV. [Marks = 20] Given production schedules in III-(a) and III-(b) a mining company has acquired the mineral rights of this small scale orebody, and now evaluates the economic potential of the deposit in terms of project after-tax cash flow analysis, NPV, and IRR.
For both production schedules, before performing after-tax cash flow analysis, multiply quantity of material mined per year and quantity of oreprocessed per year by 1000 [for example; if during year 1, material mined = 52,500 tonne and ore processed = 15,000 tonne; then, new values would be material mined = 52,500,000 tonne andore processed = 15,000,000 tonne].
a. Assume:
i. Mineral rights acquisition cost (or cost of purchasing the property) of AUD $100,000.00 is incurred now (in year 0).
ii. The infrastructure development cost of AUD $500,000.00 is incurred now (in year 0).
iii. The company plans to acquire equipment now (year 0) and replace in years 7. It is expected that the capital cost associated to initial purchase will be equal to AUD $25,000,000.00. The company expects a 2% per year escalation in the capital cost associated to mining and processing equipment. The depreciation deductions must begin when equipment goes into service in production years 1 and 8 using straight line method
over seven year depreciation life. iv. Concentrate grade = 45%.
v. Use current exchange rate at AUD $1 = US $0.70.
vi. Smelter deduction and charges: copper metal deduction = 0.5% of Cu value in $ per tonne of concentrate, smelter charge = US $10.00 per tonne of concentrate, transport charge = US $5.00 per tonne of concentrate and refining cost = AUD $175.00 per tonne of Cu (out of the total of marketing and refining cost of $1200.00 per tonne Cu mentioned
in economic parameters at Page 2). vii. Tax rate = 30%.
viii. Losses must be carried forward to the next tax year. ix. Mineral royalties = 5%.
x. The company is expecting a mine closure and rehabilitation cost equal to AUD $200,000.00 in the final year of operation. These costs are estimated in dollars of the year in which they will be incurred. However, as a legal requirement, the company must invest now (year 0) to ensure AUD $200,000.00 available in the final year of operation. The company expects a return on this mandatory investment @ 12% per year.
xi. It is expected that the company requires about AUD $2,500,000.00 of working capital to support production during initial years.
xii. The company operates on a financial structure of 60% equity and 40% debt. Therefore, it funds AUD $1,500,000.00 of its working capital through sale of its shares, and borrows AUD $1,000,000.00 at an interest rate of 10%. The AUD $1,000,000.00 debt will be repaid in equal payments during first four years of ore production. The company expects to recover part (AUD $1,000,000.00) of the working capital by salvaging equipment and other inventories in last year of operation. The company believes its cost of equity capital is 15.34% and use the weighted average cost of capital (rounded up to the next whole number) as the rate for purpose of comparison.
V. [Marks = 10] Write an executive summary of the tasks I-IV and present all calculations (worksheets, drawings/maps, etc.) as an appendix