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The Importance of Mining Plans

  • Date14 February, 2022
  • Author Marcelo Fazio, Jessica Reyes

Any well-run business starts with a plan, and a mining operation is no exception. Plans and budgeting or forecasting allow management to prepare for a future period, whether in the short-term or in the long run. Based on projections, management can allocate and prepare the necessary resources required to meet a business’ anticipated demands.

While a mining plan may have certain similarities to a budget or forecast, it differs considerably in relation to its scope. Below we describe the typical mine plan along with its technical features and explain how it differs from a budget or forecast. Most importantly, we explain why consideration of a mining plan is paramount when analyzing a mining loss.

What is a Mine Plan?

A mine plan is a comprehensive set of reports, Key Performance Indicators, maps, etc. that describe the overall operations of a mine with the goal of optimizing the extraction of minerals utilizing the mine’s available resources. In many countries and jurisdictions mining plans are required by law to be filed with the relevant regulatory body on an annual basis. The mine plan can be integrated (depending on software interface) with vendor management, client management and even accounting applications. Put generally, a mine plan forms the basis for the entire operation of the mine.

It typically contains information, such as:

  • Details on all mineral(s) to be mined
  • Detailed estimated information over time (short/mid and long term): volume, grade, yields, etc.
  • Equipment to be utilized / extraction methods
  • Health, safety, hazardous waste, regulatory considerations
  • Detailed mine maps (topographical and cross-sectional) with campaign specifics / expected phasing or sequencing

Mine Plan vs Design vs Scheduling

The expressions “mine plan”, “mine design” and “mine scheduling” are sometimes used interchangeably. However, they differ in respect of their scope or focus.

Perhaps the best way to think of them is as follows:

  • Mine Design = Physical “allocation” of the mine into blocks, benches, faces, etc.
  • Mine Scheduling = Sequencing of equipment, actions/inputs: i.e., the “where / when / how”
  • Mine Plan = Design + Scheduling (Forms the basis for the entire operation of the mine)

What Is A Mining Plan Used For?

Oftentimes we are questioned regarding how a mining plan differs from a general budget. While there are certain similarities, they differ in terms of their depth and breadth. That is, while a budget focuses on short- or mid-term outcomes (volumes and revenue), a mining plan focuses on resources as well as outcomes, and typically drills down to more granular detail and encompasses a longer period of time.

While both budgets and mining plans can provide short-term and (perhaps) mid-term planning information, the mine plan provides long-term planning information. Typically, this long-term planning includes projections related to the entire life of the mine.

Mines take on different forms, but the most typical ones are either underground mines or open-pit mines. As the process of extraction of minerals progresses, either underground or across the different strata of an open-pit mine, different concentrations of minerals are expected to be found at different locations and depths. This concept is important since a mining operation cannot typically be thought of as constantly “uniform”.

This reason is perhaps behind one of the unique elements of a mine plan (compared to other forecasting tools); the mine plan contemplates the anticipated grade, yields and volume of mineral extracted at the different extraction points/locations and depths, and the resources/specialized equipment required at these different faces.

How Can It Help Us When Analyzing a Loss?

The mining plan speaks to the operation of the entire mine, not just a damaged piece of equipment or section of the mine. That is, the mining plan details the overall plan and permits to visualize if the mine was actually performing as management had planned. It also allows us to understand the different limitations of the operations and any related bottlenecks.

In addition, what is perhaps its most important use, a mining plan holds the key as to how management can modify the extraction locations to meet its demands in the case of an unforeseen event. That is, the mining plans helps us to understand what mitigating actions are possible as a result of a loss event. It allows us to visualize if management altered its plan (in the event of a loss), and if so, where and when. Furthermore, a mining plan allows us to ascertain if management later returns to the original mining plan once repairs are completed.

Future or now?

While mining operations have existed for thousands of years, they are no strangers to technological advances and automation. Aside from the use of self-driving vehicles, drones, and modernized equipment, mining operations now have access to integrated mine planning software.

The use of these integrated mine plans ensures up-to-date reporting and allows any modifications to the plans to contemplate surrounding events and factors in “real time”.

Summary

Given the dynamic nature of a mining operation, and the ability of management to reassign extraction points and resources for the purpose of mitigating losses, mining plans constitute essential tools in understanding the mine’s operations, existing bottlenecks, how management intended to operate had no loss occurred,  and what mitigating actions can take place. As such, mining plans form an integral part of the documentation requested and analyzed when measuring mining losses.

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