News

New maths to improve ore extraction, mining efficiency

Media Release, Tuesday 9 December 2003

Ore extraction in open-cut mines is set to become more efficient with the start of a two-year $350,000 project between the University of Melbourne and BHP Billiton.

The University and BHP Billiton have pooled their mathematical talents in an Australian Research Council (ARC) Linkage Project that will use the latest mathematical techniques to develop novel models and software to boost efficiency of mining operations and potentially add millions to the bottom line of mining companies.

BHP Billiton will contribute cash and in-kind funding of more than $240,000 to the project with the ARC contributing $110,000.

The key elements to the modeling will allow mining companies to determine, for example, what the pit limit will be, what ore will be extracted and when, what amount of material will need to be extracted to reach the ore, what value the ore will have and if value-adding is a feasible option.

“The models will consider the uncertainties in mining operations and market conditions and allow BHP Billiton to better hedge themselves against these future uncertainties,” says the project’s principle investigator, Dr Natashia Boland from the University’s Department of Mathematics and Statistics.

“People using models to optimise mining operations often take as a given the quality and quantity of the ore underground, but a geologist can only give estimates of these things. Markets for minerals also vary dramatically as do the costs involved in extracting and processing the ore,” she says.

“Mining companies will make many simultaneous complex decisions regarding mining operations, based on a best guess from these uncertainties. Each of these decisions may have many complex interactions that can affect each other in unknown ways.

“We are looking to develop the mathematical algorithms that can model these complex interacting decisions and their consequences.”

Greater efficiency in mining is becoming critical as resources become harder to find and extract and average ore grades continue to decline.

“There is an optimum way of carrying out this process, but current models fail to account for these uncertainties and downstream effects of simultaneous decisions,” says BHP Billiton Lead Researcher in this project, Dr Gary Froyland.

“For example, in one mining operation, grades of ore may vary significantly, but a mining company will have different markets each requiring ore of different grades. The miner must decide which ore to extract and in what way, how to blend these ores to reach market specifications and how to do this cost effectively,” he says.

“In large mining operations, a two to three percent improvement in the efficiency of resource exploitation can increase the life-of-mine value by up to $100 million — and this gain is often available simply by changing the order in which material is extracted, without requiring any investment in new equipment or facilities.”

The project is based on a branch of mathematics called Operations Research that takes complex situations such as patient management in hospitals, crew scheduling on aircraft or running an online shopping business, and suggests ways to predict the system’s behaviour and optimise its performance.

The University of Melbourne has established Melbourne Operations Research (MORe), a consulting group that employs the mathematical tools of Operations Research to optimise operations of business, government, industry and community organisations.