Why Strategic Mine Planning is More Important Than Ever

The health and economic events of the past two years have shaken industries world-wide, including mining. While strategic mine planning is always key to a successful mine operation, in times of uncertainty sometimes the best laid plans can become undone, writes Atlantech Managing Director Mansour Nasrollahzadeh.

Global mining challenges

The past two years of the COVID-19 pandemic has been challenging for businesses throughout the world, and the mining sector has not been immune. Many mining operations globally were affected by outbreaks, government-mandated shutdowns, and disrupted supply chains. A report from S&P Global Market Intelligence suggested the pandemic disrupted 275 operations across 86 countries as of June 2020. The top three most impacted commodity-focused mines were gold, silver and copper.

In the report, the Latin America region was the most impacted: Peru, Chile and Mexico were the top three countries with the highest revenue at-risk globally. In all, the total revenue at-risk from impacted mining projects worldwide, was estimated to be more than $8.83 billion.

Mining in Australia

In Australia, mining was considered an essential service which helped spare the sector from the toughest economic impacts. However, the sector still faced labour shortages due to restrictions that limited the movement of people and/or illness of staff members in rare situations*. (*Health management strategies before vaccinations were available meant Australia was one of only a small number of comparable countries to have kept cases and deaths at a relatively low level.

With Australia's restrictions easing now – albeit with measures in place to prevent the spread of illness – the sector still faces challenges. Along with their own pandemic response planning, miners still face ongoing challenges such as volatile commodity prices, growing Environmental and Social Governance (ESG) concerns, technology changes, growing populations, and increased demands for minerals, metals, and energy. In summary, there is still a lot of catching up to do for businesses, supply chains and transportation providers. With these factors in mind and continued uncertainty, strategic mine planning remains more important than ever.

Importance of strategic mine planning

Unplanned challenges mining operations face periodically can cost miners massively and can even result in permanent closure in some cases. A good strategic planning process could prevent or reduce this impact by precisely considering the factors within miners' control, as well as uncontrolled factors.

Looking at historical data and undertaking in-depth research of market movement can provide a good prediction of the future. This step is very crucial to optimise a strategic mine planning process.

While there is, and always will be a level of uncertainty in global markets, it is essential miners reassess their strategic plans when operating in a fundamentally different environment as well. While a good strategic mine plan is the first stage of mine planning and it sets the economic and technical direction for your project, it may be done with the intention of lasting for the life of the mine, which could be for 30 years or more in some instances. Strategic mine plans need to be flexible to change and adjustments allowed for a multitude of potential scenarios.

Assessing the different scenarios and coming up with the most effective plan is all part of an effective mining operation. It is also important to devleop contingency plans that will help miners be proactive during uncertain times rather than reactive.

An innovative approach

Using technologies like machine learning and Artificial Intelligence can play a significant role in this process; however, many mining operations are yet to adopt these systems in the strategic mine planning process. An excellent example of using these technologies could be through processing all resources' time usage data and training a time usage model (TUM) – using machine learning technology – which then can be used in the strategic mine planning process.

The correct strategic mine plan is vital for the economic, social, and environmental success of each project. At Atlantech, we assists open pit miners to plan their operations with confidence, applying business strategy and simulating all possible economic scenarios to strategise their long-term viability. Contact us to find out more about how we can help with strategic mine planning.

References

1. S&P Global Market Intelligence, COVID-19 Mining Impacts — Mining Projects With At-Risk Production

2. Australian Institute of Health and Welfare, The first year of COVID-19 in Australia: direct and indirect health effects