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SAIMM Technical Presentation

APMOT is a non-graphical rules-based production scheduling solution that allows for quick generation of a reliable production schedule. It includes a financial module for cost calculations and labor evaluations. Explore multiple options and scenarios for optimal scheduling.

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SAIMM Technical Presentation

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  1. SAIMM Technical Presentation 15 July 2010

  2. Index • Vision and Positioning • APMOT Production Module at a glance • Standard level and block • Geology • Scheduling • Levelling – Team Sharing • Costing Module • Approach • Rules • Case Studies

  3. What is APMOT? • Anglo Platinum Mining Optimisation Tool • APMOT was developed for Anglo Platinum and is a non-graphicalrules based production scheduling solution that allows a full production schedule to be done very quickly. • In this way many different mine design and production assumptions can be tested and the impact compared. • The APMOT solution also includes a financial module that calculates activity based costs and labouras well asvaluations for the given schedule.

  4. APMOT Vision A solution that allows rapid generation of a reliable production schedule and associated economics so that multiple options/scenarios can be considered and thereby determine the ‘optimal’ deterministic schedule. This required a solution that had: • Enough flexibility and speed to study multiple options • Evaluation of grade at an acceptable level of confidence • Linking Labour and other costs to the production schedule to allow true activity based costing • Incorporating costs and capital to allow NPV optimisation • Incorporating Global Assumptions to allow trade-off’s • Allow iteration and dynamic changes without required re-work • Allow checking against constraints to ensure the production profile is realistic, these should include: • Ventilation • Men and material logistics • Scraping, tramming and hoisting constraints

  5. APMOT Positioning Short term Long term Business Plan Program MES Options Top Down Goals Business Plan Tons and Ounces Budget Iteration APMOT PM Trade Offs and Options Cadsmine Project Stage Gates Scoping – L2C Pre-Feasibility L2B Feasibility – L2A Execution – L1E Desktop – L3 Operations – L1

  6. APMOT Positioning Short term Long term APMOT PM Operations Scheduling Group Value Optimisation Business Plan Program Iteration Cadsmine EssBase MES Options Top Down Goals Business Plan Tons and Ounces Budget

  7. APMOT Positioning Short term Long term APMOT PM Asset Optimisation Budget Driven by and linked to Cadsmine profile Iteration APMOT Labour and Costs Optimisation proven in APMot before incorporation in plan Business Plan Program Cadsmine MES Options Top Down Goals Business Plan Tons and Ounces Budget Project costs feeds into short and long term plans Iteration Opex modelling already done for projects APMOT - Projects Labour and Costs APMOT PM Trade Offs and Options Cadsmine Projects

  8. APMOT Positioning Short term Long term APMOT PM Operations Scheduling Group Value Optimisation APMOT PM Asset Optimisation APMOT Labour and Costs Cadsmine EssBase MES Options Top Down Goals Business Plan Tons and Ounces Budget APMOT - Projects Labour and Costs APMOT PM Trade Offs and Options Cadsmine Project Stage Gates Scoping – L2C Pre-Feasibility L2B Feasibility – L2A Execution – L1E Desktop – L3 Operations – L1

  9. Summary APMOT Positioning Current Ops Geological Representation Mine Design & Layout Activity Scheduling Production Plan Costing, Labour Comps & Valuation New Projects (BUDGET CREATION) (BUDGET MANAGEMENT) A C T U A L S Variance Tracking Multiple plans from multiple operations Short Term Budget Asset Level Performance Management 5Yr & Life of Mine Plan Group Valuation & Long Term Strategy Industry Dynamics Simulation Portfolio Level Performance Management

  10. APMOT – A Half Level as a series of Blocks of Ground Half-level 1 EAST Geological losses Drive to Reef Half-level 2 EAST Foot Wall Drive Raise Line Shaft 1 2 3 4 5 Back length Block Width • A standard half level and block • Standard Half Level - An area containing all the mining activities from the apex either east/west or north/ south on a level • Standard block - The smallest self-contained production unit encompassing development, ledging, equipping, stoping and sweepings, vamping and reclamation.

  11. APMOT - Standard Block for Scattered Breast Standard Block ASG ASG All Block Dimensions are on strike and dip ASG ASG Raise Line ASG ASG Foot Wall Drive Block Length on Dip Cross cut Cubbies ASG ASG Travelling Way Dip Step over Block Width on Strike

  12. Dilution Calculation – Placement of Excavations

  13. Scheduling

  14. Scheduling Window

  15. Natural Schedule 36 000 2021

  16. Team Sharing Choose what to level Choose which excavations to include and assign priorities Choose which levels, half levels or blocks to include and assign priorities

  17. Team Sharing – “Levelling” With team sharing it is possible to introduce constraints and priorities for: • Any mining activity – Limit the number of drop-raise crews • Easy to demonstrate that one crew is enough on average, but two crews are too little to meet the proposed stoping schedule – multiple drop raises may be required simultaneously. • Include different excavations, only flat development, all development, on reef only, haulages only. • Assign priorities, haulage never stops, or on-reef always takes precedence. • The above configuration can be applied to any portion off-, or the whole mine. • Areas of the mine can be prioritised • Shaft over-stoping higher priority • Big strike levels higher priority for tail management • Each half level can be levelled individually, or a global levelling can be done.

  18. Levelled Schedule 17 500 2021

  19. Activity Based Costing

  20. Data Modelling Modelling Detail High-level modelling Extrapolation Tonnage and m2 profiles only Detailed Analysis of Cost Drivers Assumed Fixed Variable Splits Variable and flat labour modelling of teams Actual Fixed Variable Cost Splits Assumed Fixed Variable Splits Labour modelling per designation Assumed Fixed Variable Splits No Labour Modelling Tonnage and m2 profiles only Detailed CADSMine schedule Detailed APMOT schedule

  21. Define Activities, Sub-Activities and Resources Define Activities

  22. Labour Modelling - Labour Rules • Rules can be embedded “if” and conditional statements • These types of rules are derived and validated per designation, per activity, per entity • Labour in essence is derived from first principles. • For Concept and Desktop studies, Labour teams are modelled as either fixed teams for LoM or 100% variable with production. The approach can be summarised as follows: Process followed per activity, per entity Derive team from designation list Compile cost per team Decide on Fixed or variable Apply drivers to team cost and counts

  23. Define Labour Structure Customized Job Grade Definitions

  24. Define Labour Rules Define Rule that drives number of teams

  25. Standard Reporting

  26. Example Pivot Report

  27. Questions/Concerns regarding 2007 planning Production levels were too low to justify the overhead costs. There was uncertainty regarding the ramp up period and desired level of production. Since there were several levels with limited remaining production, it was not clear for how long any particular production level could be maintained. There were opinion differences regarding suitable crew efficiencies. Previous scheduling resulted in a large unprofitable tail. The Mining Engineer was tasked to: Determine a suitable production level. Schedule an appropriate ramp-up period. Evaluate the impact of using several different crew efficiencies – was there enough face length for additional crews? Optimise the tail. Case Study 1– Mothballed shaft Re-Evaluated

  28. Case Study 1– Mothballed shaft Re-Evaluated Development completed Details of Scheduling durations for selected activity Details of delays in selected activity - Raise

  29. Case Study 1– Mothballed shaft Re-Evaluated Peak of 36 000m² Levels with little mining remaining Separate Decline Long life levels Higher grade

  30. Case Study 1– Mothballed shaft Re-Evaluated 18 000 m² can be maintained Second decline as replacement • Once the model has been built it is easy to iteratively: • Change crew efficiencies to a consensus level and check the impact on production level and costs • Improve the grade model for more accurate ounces • Change the sequence of mining or add additional construction, equipping or capital activities. Higher grade up front – close of levels Long life levels as base

  31. Case Study 2 – Improving a business case in a capital constrained environment • Two decline shafts ramping up to 3 million tons annually from 9 levels each. • It was requested to: • Reduce or postpone capital. • Reduce costs. • Reduce perceived risks due to the development and stoping rates. • This translated into the following options which would be modelled in APMOT: • Reducing the number of levels from 9 to 7, thereby reducing capital and working cost development. • Consider the effect of reduced development rates on each option • Consider the effect of reduced stoping rates on each option.

  32. Case Study 2 – Improving a business case in a capital constrained environment • The following were built in APMOT • 6 options were scheduled depicting all the permutations of • high/conservative development rates • high/conservative stoping rates and • 7/9 levels

  33. Case Study 2 – Improving a business case in a capital constrained environment

  34. Case Study 2 Conclusions • The 7 level option ramps up 1-2 years slower than the 9 level option. • Regardless of the production rates, it was possible to man to full production. • The higher development rates yielded slightly higher total annual production. • The lower stoping rates had less of a tail. This allowed an informed decision to be made regarding the postponing or reducing of capital and the impact of these decisions on the business case of the project.

  35. Case Study 3 – Decline position • A decision had to be made regarding the position of a decline for the next phase of a project. Additional considerations were: • Mining through a major fault • Total strike length and length of conveyors • Production in the tail • Capital required • Surface infrastructure required

  36. Case Study 3 – Decline position • 9 Different models were scheduled and costed in APMOT • The results showed that: • Capital estimates did not vary significantly across the options. • Cost were impacted by the duration that a steady state could be maintained • There were not any great variances in working cost rates. • Option 1,3,5,8,9 were chosen to be optimised further at a higher total volume.

  37. Case Study 3 • Improving the production rates and volume of mining resulted in: • Significantly better tail management with the total mine maintaining the higher volume of production. • Life of mine was shortened by 5-6 years. • Significantly increased NPV. • This allowed the option with the best NPV to be put forward with confidence. • Upside and downside scenarios could be quantified through actual scheduling and the impact evaluated in the cost model. • All work was completed within a three month period.

  38. 39 Trade-Off Between Time and Level of Detail. - Time Axis + Current Operations Feasibility • Low Level of Detail – • - Hand Drawn Mine Design or existing design • - Large single Geozones • Average Grade • Standard Block Sizes • High Level Activities i.e. Stoping, on-reef dev and off reef dev • Can replicate scheduling to all blocks • No Significant Data gathering required Time – 2 to 3 weeks per unique option including data Pre-feas - Level of Detail of Input Variables + • High Level of Detail– • - Detailed Mine Design • - Individual Geozones • Grade per horizon per geozone • Individual block sizing • Detailed Activities i.e. stoping, ledging, equiping, FWD, breakway etc • All activities scheduled • Replication of schedule to blocks in same Geozone and design • Significant data gathering required Time – 1 to 2 weeks per unique option including data Concept Study Time – 3 days to 2 Week per unique option including data Desk Top Study Time – 1 day to 1 Week per unique option including data

  39. Conclusions In conclusion APMOT has achieved the following for Anglo Platinum: • Ability to produce a production schedule for a particular mine design within days to weeks depending on level of detail. • Therefore the generation of multiple production options and production schedules to determine ‘optimal’ that meets strategic objectives required. • Quick adjustment of schedule to test different ‘what-if’ scenarios (change team efficiencies, back lengths etc). • Linking of economics to the production schedule (activity costs, labour complements, revenue, profit and value). Anglo Platinum are now able to rigorously test different production strategies and optimise the mine design and schedule within the constraints defined.

  40. Thank you and Questions Thank you to the SAIMM for this opportunity to do this presentation and expose to other mining houses the work that we are doing to improve our mining business. Questions?

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