Open Pit Planning and Design: G.A. F G C. D, J

Chapter 13.
1
OPEN PIT PLANNING AND DESIGN
G.A. F OURIE AND G ERALD C. D OHM , J R .
13.1.1 BASIC CONCEPTS

G.A. F OURIE
13.1.1.1 Introduction
An open pit mine is an excavation or cut made at the surface
of the ground for the purpose of extracting ore and which is
open to the surface for the duration of the mine’s life. To expose
and mine the ore, it is generally necessary to excavate and relo-
cate large quantities of waste rock. The main objective in any
commercial mining operation is the exploitation of the mineral
deposit at the lowest possible cost with a view of maximizing
profits. The selection of physical design parameters and the
scheduling of the ore and waste extraction program are complex
engineering decisions of enormous economic significance. The
planning of an open pit mine is, therefore, basically an exercise
in economics, constrained by certain geologic and mining engi-
neering aspects.
Several factors are significant indicators of economic and
technological trends in surface mining. Among these are increas-
ing production, a shift in emphasis from underground to surface
mining, a decline in ore grade and quality of some crude materi-
als, and, with few exceptions, an increase in productivity of labor.
Increasing production is the result of a growing demand for
more mineral commodities, induced by an increase in population
and per capita consumption.
Paradoxically, productivity has increased even with declin-
ing grade and quality, which is indicative of the rapid technologi-
cal improvement taking place in open pit mining techniques.
This pattern of change has permitted production from many
formerly uneconomic mineral resources occurring near the sur-
face at a time when higher-grade ores are inadequate to meet
increasing demand.
Fig. 13.1.1.1. Diagrammatic presentation of the design process.
It is generally conceded that surface mining is more advanta-
geous than underground mining in terms of recovery, grade
control, economy, flexibility of operation, safety, and the work- angles, etc. The economics of the mining program, however,
ing environment. There are, however, many deposits that are too depends upon the choice of mining ratio, production rates, and
small, irregular, and/or deeply buried to be extracted economi- equipment, all of which are determined by the mining engineer.
cally by surface mining methods. Furthermore, even where min-
eralization extends to a greater depth in open pit mines, the 13.1.1.2 Open Pit Terminology
rapidly increasing amount of overburden to be handled imposes Persons closely associated with open pit mines have coined
economic limits beyond which mining must either be abandoned terms or phrases for certain operations or for defining commonly
or converted from surface to underground operations. The con- occurring geometric parameters in open pit mining. The follow-
clusions, although valid, are sometimes outweighed by a new set ing are terms that commonly occur in open pit mine planning
of factors that arise from differences in the physical character and are used throughout this chapter. These terms are illustrated
of mineral deposits available for future exploitation and from in Fig. 13.1.1.2, which shows a pit section through an idealized
changes in technology, markets, and public policy. tabular ore body.
Open pit design is conducted in several stages. They consist, A bench may be defined as a ledge that forms a single level
technically, of devising a scheme or set of alternative schemes, of operation above which mineral or waste materials are mined
followed by an evaluation and selection of the optimum scheme, back to a bench face. The mineral or waste is removed in succes-
as illustrated in Fig. 13.1.1.1. sive layers, each of which is a bench. Several benches may be in
The most economic final pit design often depends on factors operation simultaneously in different parts of, and at different
that are largely outside the mining engineer’s control, such as elevations in the open pit mine.
the geometric outline of the ore body, the distribution of ore The bench height is the vertical distance between the highest
within the ore body, topography, maximum allowable slope point of the bench, or the bench crest, and the toe of the bench.
1274
OPEN PIT PLANNING AND DESIGN 1275
exploration. Decisions regarding pit size and layout, production
rate, and the mineral processing flowsheet are critically depen-
dent on exploration data input. Procedures and particulars of
mineral prospecting and exploration are provided in Section 4
and of project geology in Section 5.
A successful exploration program culminates in drilling and
sampling information, useful in establishing mine operation pa-
rameters, geotechnical design, geohydrologic conditions, and
mineral processing or metallurgical extraction. Two of three—
geotechnical and geohydrologic investigations—warrant further
discussion here. For detailed coverage of geomechanics, see Sec-
tion 10.
Geotechnical Investigations. While soil masses are often ho-
mogeneous and relatively isotropic, this is rarely true of rock
masses. The main reason for this is the presence of ubiquitous
Fig. 13.1.1.2. Section through an open pit in an idealized tabular discontinuities in rock masses compared with soils. The behavior
ore body.
and stabilities of rock masses are controlled mainly by the nature
and orientation of these discontinuities, while the stability of soil
masses is controlled mainly by the strength of the intact material.
The importance of geotechnical and geohydrologic factors
on open pit mining operations has been a very popular topic
The bench height is normally governed by the specifications of among researchers and cannot be overemphasized.
operating machines, such as drills and shovels, and by govern- However, there is no definite system available prescribing
ment mining regulations. geotechnical data-collection procedures; for this reason, mining
The bench slope is the angle, measured in degrees, between companies seldom take into account geotechnical considerations
the horizontal and an imaginary line joining the bench toe and during the initial exploration stage of the investigations, resulting
crest. in drill cores being disposed of shortly after completion of the
Pit limits are the vertical and lateral extent to which the open drilling program. Geotechnical engineers are often consulted at
pit mining may be economically conducted. The cost of removing an advanced stage of project evaluation, resulting in additional
overburden or waste material vs. the minable value of the ore is expenditures in order to obtain sufficient information.
usually the prime factor controlling the limits of the pit. Other Requirements for effective geotechnical drilling are briefly
factors that can influence pit limits are existing surface infra- as follows:
structures, such as townships, rivers, etc. 1. Boreholes must be cored from as close as possible (or
In order to enhance the stability of a slope within the pit— practicable) to surface through the overburden to at least 35 ft
and for safety reasons— berms may be left. A berm is a horizontal (10 m) into the footwall. If there is any suspicion of permeable
shelf or ledge within the ultimate pit wall slope. The berm inter- zones at greater depth, the boreholes should be extended.
val, berm slope angle, and berm width are governed by the 2. Cores should preferably be at least 2 3/8 in. (60 mm)
geotechnical configuration of the slope. The overall pit slope in diameter and drilled with triple-tube core barrels to ensure
angle is the angle at which the wall of an open pit stands, as minimal core disturbances.
measured between the horizontal and an imaginary line joining 3. In many cases, it may be desirable to drill inclined rather
the top bench crest with the bottom bench toe. than vertical holes for the purposes of
For the duration of open pit mining, a haul road must be a. Orientating the core, either from the bedding traces or
maintained into the pit. A spiral system is an arrangement by the use of a core orientation.
whereby the haul road is arranged spirally along the perimeter b. Intersecting steeply dipping joints, which are common
walls of the pit so that the gradient of the road is more or less in flat-lying sediments and which are poorly sampled by vertical
uniform from the top to the bottom of the pit. A zigzag or holes.
switchback system is an arrangement in which the road sur- The density of geotechnical drilling will be dependent pri-
mounts the steep grade of a pit wall by zigzagging, generally on marily on the degree of variability of the material over the pro-
the footwall side of the pit. The choice of spiral or zigzag is posed mining area.
dependent upon the shape and size of the ore body, truck eco- Drilling must be supervised by an experienced exploration
nomics, and pit slope stability. geologist to record hole depths, core losses, and any other signifi-
Haul road width is governed by the required capacity of the cant aspects (e.g., water losses) during drilling. Continuous liai-
road and type of haulage unit. The grade may be defined as the son between the exploration geologist and the mine planning
inclination of the road in terms of degrees from the horizontal engineer is important to ensure that all mining-related data are
or percentage of rise to the horizontal. collected.
The angle of repose or angle of rest is the maximum slope at As each core run is recovered, it should be carefully trans-
which a heap of loose material will stand without sliding. ferred to the core tray and allowed to dry before being
The suboutcrop depth represents the depth of waste that has 1. Photographed in color, ensuring that the core trays are
to be removed before any ore is exposed. This waste is often adequately labeled and oriented.
referred to as preproduction stripping. 2. Logged in detail for the following features:
a. Rock type.
b. Degree of weathering.
13.1.1.3 Exploration Input for Open Pit Planning c. Description of weak rocks or weak zones.
In addition to defining the extent and value of a mineral d. Location, description, and orientation of any breaks
deposit, exploration supplies data vital to mine development and in the core.
1276 MINING ENGINEERING HANDBOOK
3. Sampled for materials testing.
Color photographs are an invaluable record of the original
core condition. The core, even if available at a later date, may
have deteriorated or be incomplete as a result of sampling.
Geologic data should be presented in graphical form to high-
light the similarity or variations in properties across the proposed
mining area. Rock hardness and bedding, or joint frequency, can
be plotted in histogram form along the borehole paths. Such
plots can be made with an exaggerated vertical scale to provide
adequate detail, but it is also important to plot natural-scale
sections in order to place the data into its actual physical content.
A basic program of materials testing is required to determine
significant material properties and to confirm visual estimates
during core logging. The relevant testing for open pit mines
includes
1. Slaking and classification tests on weathered or suspected Fig. 13.1.1.3. Block model of an ore body.
weak materials that could influence dump and pit stability.
2. Shear strength tests on soft or weak layers, particularly
in the floor, and on overburden materials showing strong slaking
behavior, for use in analysis of pit stability.
3. Compressive strength, point load strength, and drillabil-
ity tests to provide information for estimation of overburden and
ore excavation characteristics.
Geohydrologic Investigations. The presence of groundwater
in the rock mass surrounding an open pit has a detrimental effect
on mining operations for the following reasons:
1. Water pressure reduces the stability of pit slopes by reduc-
ing the shear strength of potential failure surfaces. Water pres-
sure in tension cracks, or similar near-vertical fissures, reduces
stability by increasing the forces tending to induce sliding.
2. High moisture content results in an increased unit weight Fig. 13.1.1.4. Overall stripping ratio representation.
of the rock and hence gives rise to increased transport costs.
Changes in moisture content of some rocks, particularly shales,
can cause accelerated weathering with a resultant decrease in
stability. Both methods abound with practical difficulties; however,
3. Freezing of groundwater during winter can cause wedg- because of the very important influence of water pressure on
ing in water-filled fissures due to temperature-dependent volume slope stability, it is essential that the best possible estimates of
changes in the ice. Freezing of surface water on slopes can block these pressures be available before a detailed open pit stability
drainage paths, resulting in a buildup of water pressure in the analysis is attempted.
slope with a consequent decrease in stability.
4. Erosion of both surface soils and fissure infilling occurs
as a result of the velocity of flow of groundwater. This erosion
13.1.1.4 Bench Plan Preparation and Presentation
can give rise to a reduction in stability and also to silting up of A key point in the design and operation of a modern mining
drainage systems. operation is the construction of what is called an ore body model
5. Discharge of groundwater into an open pit gives rise to or block model. This model is a representation of reality con-
increased operating costs because the water must be pumped structed from predicted information. The blocks involved are
out, and also because of the difficulties of operating heavy equip- merely subsets of the overall model that allows manipulation of
ment on very wet ground. Blasting problems and blasting costs the contained information on a local scale. In general, block
are increased by wet blastholes. models enable mine planners to effectively select the most prom-
6. Liquefaction of overburden soils or waste dumps can pre- ising means of extracting the ore both physically and economi-
vail where water pressure within the material rises to the point cally. The uses of a block model can be quite diversified, but one
where the uplift forces exceed the mass of the soil. This can must realize that a single model that satisfies all curiosities and
occur if drainage channels are blocked or if the soil structure forms of expertise is difficult to construct.
undergoes a sudden volume change, as can happen under earth- Because material removal or mining takes place along a
quake conditions. particular bench, it is firstly important to prepare a series of
By far, the most important effect of the presence of ground- bench plans that, when combined, forms the overall block plan
water is the reduction in stability resulting from water pressures of the modeled ore body. This is illustrated in Fig. 13.1.1.3.
within discontinuities in the rock mass. With the assistance of modern computer facilities, sophisti-
There are two possible approaches to obtaining data on water cated and complex bench plans can be prepared.
pressure distribution within a rock mass:
1. Deduction of the overall groundwater flow pattern from 13.1.1.5 Stripping Ratio Considerations.
consideration of the permeability of the rock mass and sources
of groundwater. The parameter known as the stripping ratio is almost univer-
2. Direct measurement of water levels in boreholes or wells sally used and represents the amount of uneconomic material
or of water pressure by means of piezometers installed in bore- that must be removed to uncover one unit of ore. Fig. 13.1.1.4
holes. represents an idealized open pit ore body, dipping at angle a.
Fig. 13.1.1.5. Declining stripping ratio method. Fig. 13.1.1.6. Increasing stripping ratio method.
The ratio of the total volume of waste to the ore volume is

defined as the overall stripping ratio:
volume of waste removed to depth d

R =
volume of ore recovered to depth d
ABD
(13.1.1.1)
= BCED
While a volume relationship, calculated in cubic yards/cubic

yards (cubic meters/cubic meter), it is more commonly expressed Fig. 13.1.1.7. Constant stripping ratio method.
as tons/ tons (tonnes/tonne). Note that in mining certain mineral
commodities, however, stripping ratio is expressed in units of
cubic yards/ton (cubic meters/tonne).
A simple and widely used method of analysis to obtain pit Increasing Stripping Ratio Method. In this method, stripping
limits is to utilize the cutoff stripping ratio. First, the pit slope is performed as needed to uncover the ore (Fig. 13.1.1.6). The
is determined from geotechnical and other considerations and working slopes of the waste faces are essentially maintained
the stripping ratio then calculated. The cutoff stripping ratio is parallel to the overall pit slope angle. This method allows for
the one for which the costs of mining the ore and waste are maximum profit in the initial years of operation and greatly
matched by the revenue from that block of ore. Factors used to reduces the investment risk in waste removal for ore to be mined
determine costs should include the added costs of mining as the at a future date. This method is very popular where the mining
pit deepens and the interest charges on the prestripping of waste. economics or cutoff stripping ratio is likely to change on very
In a more complete analysis, the entire ore body is mined on short notice.
paper. The production from each time period is determined, the The disadvantage of this method is the impracticality of
costs and revenues listed, and a cash flow generated. The profits operating a large number of stacked, narrow benches simultane-
from each year are discounted to reflect the time value of money ously to meet production needs.
in one of several ways, depending on management preference Constant Stripping Ratio Method. This method (Fig.
(investment analysis is discussed in Section 6). The result is 13.1.1.7) attempts to remove the waste at a rate approximated
considered to be the value of the mine or production. Mining is by the overall stripping ratio. The working slope of the waste
continued until it no longer increases the value, and so a pit limit faces starts very shallow, but increases as mining depth increases
is determined. The ratio of the total volume of waste to total until the working slope equals the overall pit slope. This method,
volume of ore is then the overall stripping ratio. from an advantage and disadvantage point of view, is a compro-
With fluctuating commodity prices, increasing mining costs, mise that removes the extreme conditions of the former two
and the introduction of more sophisticated mining techniques, stripping methods outlined. Equipment fleet size and labor re-
the overall mining plan and overall stripping ratio can change quirements throughout the project life are relatively constant.
over the total life of any mine. In actual practice, the best stripping sequence for a large ore
For this reason, it is necessary to update the long-term plan body is one in which the rate is low during the initial stages and
of the mining project at regular intervals. Having determined towards the end of the project’s life. The advantages can be
the final pit limits and overall stripping ratio, the mining plan can summarized as follows:
be executed in a number of ways, as illustrated in the following. 1. A good profit can be generated initially to increase cash
Declining Stripping Ratio Method. This method (Fig. flow.
13.1.15) requires that each bench of ore be mined in sequence, 2. The labor and equipment fleet can be increased to maxi-
and all the waste on the particular bench is removed to the pit mum capacity over a period of time.
limit. The advantages of this method are the operating working 3. The labor and equipment requirements decrease gradu-
space available, the accessibility of the ore on the subsequent ally toward the end of the mine’s life.
bench, all equipment working on the same level, no contamina- 4. Distinct mining and stripping areas can be operated si-
tion from waste blasting above the ore, and equipment require- multaneously, allowing for flexibility in planning.
ments are a minimum towards the end of the mine’s life.
The primary disadvantage of this method is that the overall 13.1.1.6 Mine Plan Frequency
operating costs are a maximum during the initial years of opera-
tion when maximum profits are required to handle interest and Mine plans vary in frequency from short- to long-range. The
repayment of capital. most common are (1) daily, (2) weekly, (3) monthly, (4) yearly,
and (5) life-of-mine. The prime difference among these plans is
the degree of detail. The shorter the time span covered by the
plan, the greater the degree of accuracy and confidence that the
actual performance will meet the forecast. For example, the daily
mine plan details the production schedule on a shift basis for 24
hours, while long-range plans can be used to establish financial
forecasts with regards to purchase of new equipment, changes
in the work force, variations in operating costs due to increased
haul distances, and dewatering requirements. Changes in the ore
type may dictate the long-term blending criteria and possible
changes in revenue from the sale of ore.
13.1.2 OPEN PIT FEASIBILITY STUDIES

G ERALD C. D OHM , J R . Fig. 13.1.2.1. Analysis components.
After a mineral deposit has been discovered and evaluated

sufficiently to be considered an ore deposit, the problem then
becomes how to mine and process that ore body in a way that
maximizes the net present value (NPV) within a practical op-
erating format.
The problem facing planners who must recommend mine
plant size, equipment selection, and long-range scheduling is
how to optimize a property not only in terms of mechanical
efficiency but also in project life. Mine planning is dependent
upon the interaction of contributing factors that lead to maximiz-
ing the NPV. Realistic mine planning is basic to the analysis.
The process discussed here is best used when evaluating and
planning undeveloped properties. This procedure is not intended
to replace exacting mine analysis but rather to focus in on prop- Fig. 13.1.2.2. Ore reserve analysis.
erty evaluation for feasibility studies.
Derivation of the various input parameters is discussed only
to the point where a meaningful correlation can be made to the risks. The resulting NPV is a functional yardstick by which
overall analysis. The interrelationship of the parameters is the to compare investment alternatives. Maximizing the NPV is
key as most company guidelines and financial analysts have their primarily a function of production scheduling and ore cutoff
own standards when setting the various inputs. grades. As a basic premise, the sooner the capital write-off oc-
Assume that the data are acceptable and provide at least the curs, the better the optimization level achieved. Therefore, some
following categories of information and guidelines: (1) detailed initial high-grading of an ore body or commencing operations in
drillhole data; (2) mineral and waste inventory; (3) geologic, a low waste-to-ore ratio area would improve the cash flow.
hydrologic, and geotechnical criteria; (4) topographic layout, All capital and operating costs are expressed in current year
including property boundaries; (5) metallurgical flowsheet, re- dollars to forego having to project future cost and value trends.
covery, and design criteria; (6) access, water and power informa- It will also be assumed that the ratio of income to production
tion; (7) environmental baseline data; and (8) financial criteria costs will remain constant throughout the life of the property.
(minimum rate of return, payback period, etc.). In reality, periodic reviews should be made during the operating
Any evaluation of a property involves bringing all these life. Modifications to the ore reserves and operational plans may
parameters together. All, however, are interrelated and depen- result if significant changes occur in the actual operating costs,
dent upon one another. This means that without knowing the commodity value, improved technologies, etc.
cutoff grade, the ultimate ore reserves cannot be calculated; For the purpose of demonstrating the development of open
without the ore reserves, the final pit limits cannot be established; pit evaluation, a simplified numerical case history is presented
without knowing the overall tonnages, the production schedule and evaluated step-by-step through one cycle.
cannot be selected; and without the required capacity-generated For detailed discussion of ore reserve estimation procedures,
capital and operating costs, the cutoff grade and total ore reserves see Chapter 5.6; for mine feasibility studies, see Chapter 6.2; and
cannot be derived. The optimization process is outlined in Fig. for equipment selection, see Chapters 9.3, 13.3, and 17.2.
13.1.2.1.
The iterative process closes in on the evaluation by going
13.1.2.1 Ore Reserve Analysis
through the endless loop analysis cycle until no appreciable
change is noted after continued refinement of the input. A large, low-grade uranium deposit has been discovered and
Where does one start? After establishing the preliminary drilled to outline mineral at depths amenable to surface mining.
geologic and process data, one proceeds with a cursory treatment The mineralization is in sandstone that lends itself to conven-
of equipment, facilities, and production scheduling. Historical tional mining techniques. The property is located in a rather
operating parameters for a region or similar deposit provide a remote region, and while there are unimproved roads into the
sound basis from which to start the evaluation. The data establish area, all utilities have to be developed. The minimum acceptable
the basis for calculating preliminary ore reserves, mining tech- rate of return will be set at 15%.
niques, and process design criteria. The first step is an analysis of ore reserves. The components
Financial evaluations should utilize a discount rate that is of this analysis are indicated in Fig. 13.1.2.2, each of which will
equivalent to the cost of capital to a company plus associated be briefly discussed.
Table 13.1.2.1. Overall Pit Slope (horizontal : vertical) Table 13.1.2.3. Production Costs
Table 13.1.2.2. Mineral and Waste Inventory
The initial cutoff grade does not take into account primary
stripping and associated waste. Using the ratios established in
the first pass, the cutoff grade is recalculated.
Cutoff grade calculations are based on total operating costs,
utilizing the overall ratio of tons of waste to tons of potential ore
(Table 13.1.2.3).
production cost
grade =
value × % recovery
$24.80/ton
(13.1.2.2)
= $25/lb × 0.90
= 1.10 lb/ton (0.55 kg/t)
1.10 lb/ton
= = 0.055%, say, 0.06%
EVALUATION PARAMETERS. There are physical and finan- 20 (conversion factor)
cial evaluation parameters to be imposed.
Physical—A geotechnical evaluation was undertaken that The higher cutoff grade creates a new category of material,
indicated the overall pit slopes in Table 13.1.2.1 as acceptable between 0.040% and 0.060%, which is classified as low grade.
for design purposes. Under certain circumstances, it may be economically advanta-
The specific gravity SG of representative rock samples was geous to process this material. This detail is reviewed later under
tested yielding an average value of 2.00. To convert the volume marginal analysis.
of rock to be mined and milled, a tonnage factor TF is calculated: D RILLHOLE E VALUATION. A simple approach for illustra-
tion is to use the polygon method to assign an area of influence
2000 lb/ton for each drillhole. With the drilling grid on 200-ft (60-m) centers,
TF = = 16 ft3/ton (0.50 m3/tonne) the area of influence is 40,000 ft2 (3720 m2). Dividing the area
SG (2.00) × 62.4 lb/ft3
by the tonnage factor, one finds:
(13.1.2.1)
40,000 ft2
Initial metallurgical flowsheets and design criteria were also = 2500 tons/vertical ft (7440 t/m)
developed. The process is to be conventional acid leach-solvent 16 ft3/ton
extraction with an average recovery of 90%.
Financial— As a starting point for the calculations, regional For simplicity, the deposit is assumed to be dry. The weight
operating and capital costs for operations having similar size, of water, when present, must be added to the weight of the
geology, and equipment are used. Amenability studies on which rock. The total weight will then be used in the determination of
to base process specifications, reagent consumption, and product operational costs, disposal considerations, and capital require-
recovery are performed. ments.
Regional operating economics (expressed in dollars/ton) in- All drillholes are evaluated from top to bottom. The eco-
clude primary stripping (0.65); associated waste and ore mining nomic bottom limit of mining is the depth at which the maximum
(1.50); milling (7.00); direct costs such as salaries, utilities, main- net profit is realized. No credit is assigned to any values con-
tenance, consumables, etc. (3.50); and indirect costs such as tained in material below the cutoff grade as they, in themselves,
taxes, interest, depreciation, and corporate overhead (2.80). cannot justify any change in pit outline. This process is shown
For purposes of this example, the selling price of the recov- in Fig. 13.1.2.3.
ered uranium oxide is set at $25/lb. The evaluation is repeated for all drillholes. This evaluation
The drillhole grid is on 200-ft (60-m) centers, sufficient to should also include those holes that obviously carry a negative
outline the mineralized zone and associated overburden. value. In the expansion of the total reserves, many instances will
BREAKEVEN ANALYSIS. Establishing a cutoff grade for ore be found where profitable holes will offset some negative values.
is necessary for drillhole evaluations. The process involves two The value of each must be known before a final determination
steps and utilizes a tabulation of the mineral inventory in the can be made. The complete analysis is essential in establishing
area being considered for development (Table 13.1.2.2). the ultimate pit limits, as discussed next.
1280
Fig. 13.1.2.3. Drillhole profit/loss calculation.
Fig. 13.1.2.5. Pit slope angle determination.
Overall pit slope angles are not only a function of the actual
rock conditions encountered and the total vertical lift but also
of the duration of exposure and the amount of water indigenous
to or added to the formation. The effects of the latter two can
be lessened by timely back filling and by either or both a mine
dewatering program and a surface runoff diversion system.
Where variable heights affect the ultimate design, a graph can
be utilized relating height to slope angle at a safety factor where
the slope is close to failure but does meet risk standards set
within corporate guidelines.
In the example utilized herein, all slope angles are a direct
Fig. 13.1.2.4. Ore block smoothing. function of height (Fig. 13.1.2.5). It must be remembered that
in rough terrain, it is the difference in elevation from the surface
to the economic bottom of the pit that ultimately establishes the
final slope angle.
O PEN P IT D ESIGN. The ultimate limits of the pit do not Design— One must provide adequate operating room for ma-
precisely follow the economic limits established in the drillhole neuverability and mining flexibility in ore/waste segregation re-
evaluation. Refinements to the pit outline result from various quirements. A 0.5:1 pit slope between benches is used for design
working, financial and safety constraints. In practice, close- purposes. The desired overall slope angle is achieved by adjusting
spaced development drilling will eventually be undertaken to the widths of the benches:
better define pit boundaries and to develop information on where
to commence mining activities. The bottom of mining may also horizontal displacement
be affected by the adjacent drillholes if bottom ore elevations bench width = (13.1.2.3)
vary to any appreciable extent. no. benches required
Operation Efficiency—Operational efficiency increases ad- vertical height × (overall slope ratio –
vantageously as the horizontal section is smoothed by eliminat- slope ratio between benches)
ing projections and generally irregular configurations. The drill-
hole evaluation helps with the smoothing of the pit walls and = (vertical height ÷ bench height) – 1
inclusion of waste by showing where positive values offset nega-
tive values. The objective is to maximize the total value and, at In this example,
the same time, provide adequate access and working room (Fig.
13.1.2.4). 500 ft × (1.5 – 0.5) 500 ft
Overall Pit Slope—Use the steepest possible pit slope with width = =
(500 ft ÷ 50 ft) – 1 9 benches
regards to the safety factor deemed acceptable for the particular
pit. = 56 ft (17m)
Table 13.1.2.4. Marginal Analysis Ore Reserves Table 13.1.2.5. Optimized Net Profit
Individual bench widths may be adjusted to allow for ramps,

lithology changes, etc., as long as the aggregate remains un-
changed.
Having engineered a preliminary design, the ore reserves,
associated waste, and stripping tonnages are now established.
ORE RESERVES. Total ore reserves are a direct result of the
relationship between the drillhole evaluation and the open pit
design. The calculation utilizes the concept of a break-even cutoff
grade based on known or predicted operating costs. Another
method, the break-even stripping ratio, that deals with the aver-
age relationships of the ore body is best suited to homogenous
deposits. In this example, the grade is markedly different from
one drillhole to the next, which requires separate ratios for ad-
joining areas of influence.
MARGINAL ANALYSIS. Once the pit limits are established
and the resulting ore and waste inventories calculated, direct Fig. 13.1.2.6. Production scheduling.
stripping and mining zone costs are estimated and are considered
thereafter as sunk costs. Ore reserve optimization then involves
the deletion of sunk costs from the analysis of the cutoff grade. marginal reserves cannot support capital expenditures for pro-
The ensuing marginal analysis not only increases the ore reserves cess capacity expansion. For the purpose of determining a cash
and tons to be milled but also lowers the waste-to-ore ratio: flow, the marginal reserves are used in the total tonnage of ore
to be milled, with the ends of the analysis spectrum being
marginal cutoff grade = operating cost – sunk cost + load and whether or not the marginal ore should be blended in with the
haul cost from stockpile to crusher ÷ (value × recovery cost) ore or milled separately at the end of mine life.
(13.1.2.4) A recalculation of the drillhole profit/loss calculation (Fig.
13.1.2.3) utilizing the marginal ore results in an improved net
In this example, profit is shown in Table 13.1.2.5.
The net value increases by $131,250, an increase of 16%
over the initial evaluation.
$34.70/ton – $24.00/ton + $0.75/ton
grade = To recap, the break-even analysis is utilized to establish the
$25/lb × 0.9 ultimate pit limits within justifiable economic constraints. Once
$11.48/ton established, the marginal ore reserve calculation allows a greater
= = 0.51 lb/ton (0.25 kg/t) utilization of lower-grade material, resulting in improved overall
$22.50/lb economics.
0.51 lb/ton
= = 0.026%, say, 0.03%
20 13.1.2.2 Production Scheduling
Production scheduling (Fig. 13.1.2.6) is an important facet
The calculation demonstrates that low-grade material can of mine planning. Once the mill feed grade has been established,
be milled profitably under the right circumstances. For planning maximizing the NPV of a property becomes highly dependent
purposes, however, it may not be prudent to consider all the low- on scheduling. Scheduling determines mine life and, therefore,
grade material millable. A cushion should be established to cover cash flows including capital requirements, operational costs, and
profit margin, ore dilution, additional capital requirements, and revenues.
uncertainties at this stage of the evaluation. Of the total low- Initial production scheduling is based on marginal analysis
grade from 0.03 to 0.06%, this example will consider only one- ore reserves, a haulage study based on a conceptual pit design
half the material, from 0.045 to 0.06%, as being economically and overall facility layout.
justified to process (Table 13.1.2.4). SCHEDULING GUIDELINES. The following parameters pro-
It can be seen that the ore tonnage increases from 14 million vide guidelines for scheduling of the operation:
tons (12.7 million t) (Table 13.1.2.2) to a total of 22 million tons 1. Minimizing preproduction costs.
(20 million t) (a 57% increase), and the grade goes from an 2. Assuring adequate working room.
average of 0.103 to 0.084% (an 18% decrease). Recoverable 3. Smoothing of the stripping ratios.
pounds increase by 7.3 million, a gain of 28%. 4. Timely exposure of ore grade material.
While larger reserves appear to be the more efficient utiliza- 5. Reclamation accountability.
tion of the mineral present, it is the cash flow and resulting 6. Maximizing production.
NPV that dictate the cutoff grade. It should also be noted that Each point will be discussed in some detail.
Table 13.1.2.6. Cash Flow
Minimizing Preproduction Costs—Preproduction opera-

tional costs are treated as capital costs because they are incurred
before production starts. These costs are not discounted and, in
fact, should be assessed an interest charge for the time period
used.
The following example only illustrates the time value of
money, where two cases having the same total production costs Fig. 13.1.2.7. Working slopes.
($5 million) and generated revenue ($7.5 million) are compared
on slightly different production schedules. Also slope stability is improved as the back slope is flattened.
The comparison involves a two-year preproduction period Allowing the degree of slope flattening to fluctuate with the
vs. a one-year preproduction period with a total five-year mill overburden ratio allows for a constant production rate and a
(revenue-generating) life for each case. Each example has a bal- predictable ore availability (Fig. 13.1.2.7).
anced production rate with stripping completed one year prior Smoothing of the Stripping Ratios—For initial scheduling of
to the final production date in both cases. operations, the average stripping ratio (tonnage basis) is used
for determining working shifts and equipment required. It is
Case I. Two-Year Preproduction important to avoid peaking the ratios as scheduling or capital
Total Cost: requirements may become excessive.
Stripping $3 million ÷ 6 yrs = $ 500,000/yr Obvious exceptions exist, however. In preproduction strip-
Mining and milling $2 million ÷ 5 years = $ 400,000/yr ping, it could be advantageous to commence operations in a low
Total revenue $7.5 million ÷ 5 yrs = $1,500,000/yr overburden-to-ore-ratio area that would only require utilization
of a portion of the eventual fleet. Also, in instances where the
Case II. One-Year Preproduction stripping ratios change predictably over large areas such that
Total Cost: equipment can be added or subtracted at a future date, it then
Stripping $3 million ÷ 5 yrs = $600,000/yr becomes the average ratio of each area that becomes the schedul-
Mining and milling $2 million ÷ 5 yrs = $400,000/yr ing basis.
Total revenue $7.5 million ÷ 5 yrs = $1,500,000/yr Timely Exposure of Ore Grade Material—Proper sequencing
is achieved through incremental pit design. Each increment is
The actual cash flows (ACF) are the dollars spent each year, directly related to mill requirements within specific time con-
while the discounted cash flows (DCF) indicate the value today straints. Mining sequences are tentatively established and then
of future dollars. analyzed to set the most logical development program. The mine
The cash flow differences resulting from the different prepro- sequencing then assures a predictable mill feed.
duction periods are shown in Table 13.1.2.6. Reclamation Accountability —Environmental regulations re-
This example is oversimplified, but it stresses the importance quire proper production planning and scheduling to minimize
of maximizing cash flow by lessening the preproduction com- the costs associated with mine reclamation, The items most effec-
mitment. tively handled by efficient planning are (1) returning ground
Contract stripping may also prove to be advantageous if contours to approximate premine conditions, (2) minimizing
used to the point where a positive cash flow is realized. Capital surface depressions to the greatest extent possible, and (3) revege-
commitment for equipment and facilities can then be deferred. tating disturbed areas.
Here again, a cash flow analysis should be the determining factor. Selected backfilling can create new slope angles within open
Assuring Adequate Working Room—Especially in projects pits and, in some instances, can completely fill portions of pits
where the stripping ratio varies from one area to another, flat- to achieve original contour. Generally, backfilling shortens waste
tened working slopes should be used up to the point where the haul cycles by reducing haul grades and distances. Waste dumps
final pit configuration is intercepted. As mentioned under pit can be constructed on receding lifts, allowing the creation of
design, the flattening is accomplished by widening the benches. flatter than “angle of repose” slopes with only a minimum of
The resulting working areas are less congested, which provide dozer work required. Whatever topsoil exists should be stripped
for a smoother operational flow and minimizes traffic hazards. and stockpiled for reemplacement at a future date.
With scheduling and design addressing reclamation require- Table 13.1.2.7. Annual Cash Flow
ments up front, operational efficiency is improved. The equip-
ment and operating personnel required to do the work can then
be added into the overall analysis.
Maximizing Production—The following points provide for
more efficient scheduling and equipment utilization: (1) avoid
excessive shovel moves, (2) minimize number of working areas,
(3) work the lowest number of benches possible at any one time,
and (4) reduce haul distances and ramp grades when practical.
Increased productivity lowers operating costs. Additionally, ro- Table 13.1.2.8. Working Efficiencies
tating four crews through a seven-day week (20 shifts/week)
gives the best utilization of equipment.
FINANCIAL C ONSIDERATIONS. Property life directly influ-
ences the amount of capital expenditure required to produce a
future income. While the evaluation of alternatives may identify
an optimum-sized operation, it is wise to remember that mining
plans are based on present-day parameters and, therefore, subject
to changeover time.
Influencing factors are (1) capital and operating cost
changes, (2) new mining and milling innovations, (3) increased
knowledge of the deposit, and (4) changes in commodity value.
Ore and low-grade stockpiles allow the flexibility to supply
a constant feed grade to the mill and also enable the producer
to adjust to changing conditions. In addition, setting aside lower-
grade ore for processing at the end of the operation could extend
mill operations and financial profitability. Another form of opti-
mization involves limited high-grading to cover spot sales, as
outlined in the following example.
As applied to the example set forth in the text, the following
The illustration serves to point out that the time value of
considerations are offered. During mine life, a spot sale was
money is as important when optimizing production scheduling
contracted for over and above the commitments under existing
and resulting income as preproduction capital outlays and re-
contracts. The sale generates a $5/lb or $11/kg premium ($30/
sulting income, as previously illustrated in Table 13.1.2.6.
lb or $66/kg). The extra pounds are only available as above-
Production scheduling guidelines provide the basis for alter-
average-grade ore, as the mill is operating at the designed capac-
native comparisons on which the highest NPV is determined.
ity of 3000 tons/day (2720 t). The spot sale contract would be
The basis for establishing alternatives is to vary the project dura-
for an additional 500,000 lb (226,800 kg) during the third year
tion (size).
of a 20-year production life.
The following discussion on production scheduling concen-
The requirements for added production are:
trates on the development of generalized operating costs for
different production rates. These costs are applied to the current
example.
P RODUCTION SCHEDULING. Scheduling is limited by con-
straints derived from historical data, regional information, and
estimates based on industry-generated records.
Constraints by Equipment Type—
1. ELECTRIC SHOVEL APPLICATION.
The high-grading would reduce the remaining grade of the (a) Diversity Factor: This refers to time lost due to moving,
ore body: cleanup, and queuing of trucks. It is expressed as a factor of
effective loading time. A common factor of 0.83 (based on indus-
try time studies) is used here.
(b) Effective Loading Time: This means full shift minus time
lost to lunch and waiting on trucks. Typical times are (minutes/
shift)
Using the precalculated production costs of $34.70/ton (Ta-

ble 13.1.2.3), a comparison of cash flows is calculated from the
beginning of production through property life.
The value per ton (grade converted to recovered pounds ×
selling price) minus production cost equals the net value per ton.
The results are summarized in Table 13.1.2.7. 2. T RUCK APPLICATION.
(a) Job Efficiency: This refers to the minutes of actual pro-
Case I. Uniform Production duction during a 60-min hour. Manufacturers’ data that apply
Discounted @ 15% on a 20-year life: to all equipment, except electric shovels, are listed in Table
$3,394,500/year × 6.712 (cumulative PW 13.1.2.8. The average efficiency may be used for evaluations until
factor) = $22,783,884 actual times are verified.
Table 13.1.2.9. Shovel Shifts (based on a 7-day Table 13.1.2.10. Scheduling Constraints
working week)
number of trucks required

for loader coverage
= fleet required (13.1.2.5)
availability
(b) Production Time: This refers to operating time (full shift

minus lunch period) times job efficiency (queuing, spotting, fuel-
ing, maintenance checks, etc.) minus travel time (to and from
parking lot): 4. MANPOWER. The manpower requirement multiplied by
the availability factor yields the total number of individuals re-
8 hr – 0.5 hr = 7.5 hr × 50 min/hr quired. The availability factor is a variable based on local aver-
= 375 min – 20 min = 355 min/shift. ages of vacations and absenteeism. For this example, absenteeism
is set at 6% and a vacation average of 2.0 wk/yr as 4%, making
the total time loss 10%. The manpower availability factor, then,
Travel time (to and from parking lot) is optional. Many
is
operations utilize 50 min/hr to account for both inefficiency and
the extra travel time. Distance could be a factor when making
this determination. 100% + 10% loss = 110% or 1.10
3. SUPPORT EQUIPMENT. Operating time is also estimated
to be 7.5 hr/shift, but the actual production time will vary with The total manpower required is
property layout, scheduling procedures, etc.
4. FRONT-END LOADERS. Production time is calculated in No. working shifts
the same manner as for trucks when the unit returns to the × hr/shift
parking lot at the end of each shift, and as for a shovel when it × availability factor (13.1.2.6)
working hr/shift
remains in the work area between shifts.
Overall Constraints— For example, assume there are 35 truck shifts/week:
1. ANNUAL WORKING DAYS. This calculation includes the
total days per year (365) minus holidays and unscheduled shut-
35 shifts × 8 hr/shift
downs (weather, labor disruptions, and major equipment break- = 7 men × 1.10
downs): 40 working hr/wk
= 7.7 or 8 employees required
365 days/yr – 10 holidays – 5 unscheduled days = 350
days/yr ÷ 7 days/wk = 50 wks/yr In this case, the extra person is assigned to the labor pool and is
used as required.
2. AVAILABLE SHIFTS. Selection of the number and dura- Table 13.1.2.10 recaps the constraints that are used later for
tion of working shifts per week depends on required production example calculations.
and equipment utilized. Property life alternatives set annual pro- 5. PROPERTY LIFE. Maximum property life should be an-
duction requirements. An 8-hr shift is the most efficient time other limiting factor. Permanent installations (i.e., shops, mills,
allocation, based on overtime considerations and long-term pro- etc.) tend to become outmoded and wear beyond the point of
ductivity. It is also possible to operate on a 24-hr/day basis if reasonable repair. As a practical limiting factor, this example
required. Only 8-hr shifts are used in this example. uses a maximum property life of 30 years as a basis for evalu-
3. MECHANICAL AVAILABILITY. Mechanical availability is ation.
the availability after mechanical repair, preventive maintenance,
and servicing have been accounted for.
13.1.2.3 Equipment and Facilities
A practical, long-range availability for shovel scheduling is
in the range of 70 to 80% of total shifts available, depending Open pit mining is becoming increasingly capital intensive
upon working conditions and preventive maintenance proce- as pits are enlarged and lower-grade ore is utilized. Contributing
dures (Table 13.1.2.9). factors are (1) increased mechanization to handle the larger
Enough trucks should be purchased to provide 100% cover- tonnages, (2) lower-grade ore resulting in higher plant invest-
age of scheduled loader capacity. Using a 75% mechanical avail- ment per unit of refined product, (3) larger operations requiring
ability factor, full coverage is ensured by adding the appropriate greater preproduction cash outlays, and (4) environmental im-
number of extra trucks to the fleet. pact mitigation requirements.
Table 13.1.2.12. Typical Electric Shovel Capacities
Table 13.1.2.13. Stripping Requirements
Fig. 13.1.2.8. Equipment and facilities.
Table 13.1.2.11. Overburden Swell
The major capital requirements that are a part of the final

investment analysis are (1) plant, mobile units, and ancillary
equipment, (2) preproduction stripping and mining, (3) spare
parts inventory, (4) plant start-up, (5) working capital, (6) licens-
27 ft3yd3
ing and environmental assessments, and (7) cost of capital. = 1.35 tons/yd3 (1.60 t/m3)
Both capital requirements and subsequent operational costs 20 ft3/ton
are developed at length to provide the basis for the selection of
loading and haulage equipment. One should minimize and/or Using an average bucket fill factor of 0.9, the dipper capacity is
delay capital expenditures as long as feasible to improve the bucket capacity (yd3) × tons/yd3 × fill factor = tons/dipper:
NPV. Capital expenses that do not lower production costs and
increase earnings should not be considered. This segment is di- 6 yd3 × 1.35 tons/yd3 × 0.9 = 7.3 tons/dipper (6.6 t)
vided as shown in Fig. 13.1.2.8.
EQUIPMENT SELECTION. The selection of a fleet of equip- Shovel production is
ment is accomplished by comparing production requirements
against the capital and operating costs of appropriate alterna-
tives. A pit haulage study is required to size and select types and
number of haul trucks. Production requirements, rock character-
istics, and desired flexibility are parameters guiding selection of
the primary loaders. Equipment size should be standardized
whenever possible.
Basic requirements for loader selection include rock break-
age patterns, mine life, size of haulers utilized, tonnage factor,
and swell factor. From drillhole log composites, lithologies are
expressed as a percentage of the overburden. Using published For the sake of simplification, only electric loading shovels
tables, the weighted averages are made (Table 13.1.11). are evaluated in this exercise. However, large front-end loaders
and hydraulic face shovels offer advantages where increased
1 mobility and lower capital investment may be required. Table
Swell factor = = 0.8 13.1.2.12 is based on typical manufacturers’ recommendations.
1 + 0.254
The example in Table 13.1.2.13 utilizes the ratio between the
stripping tonnage of 364 million tons (330 million t) and 22
The tonnage factor for broken muck is
million tons (20 million t) of ore as generated in the topic on
marginal analysis (see Table 13.1.2.4). Stripping requirements
in-place TF are based on production levels and the number of shovel shifts
TF =
swell factor scheduled.
Using the required stripping tons per shift, the shovels are
16 ft3/ton selected by matching the nominal shovel production per shift
= = 20 ft3/ton (0.62 m3/t) (13.1.2.7)
0.8 to the production requirements for each case (compare Tables
Table 13.1.2.14. Dipper Selections
13.1.2.12 and 13.1.2.13). A property should not be dependent Rolling resistance is the measure of force required to over-
on one prime earthmover because of downtime considerations come the retarding effect between the tires and the ground.
and reduced flexibility in the operation, and to reiterate, equip- RoRi is primarily the cumulative effect of vehicle weight, tire
ment should be standardized whenever possible. Therefore, the penetration, and road grades.
following examples consider only two or more of the same shov- Vehicle weight is the primary factor in the amount of force
els as viable options. required to overcome RoRi. Using level, compacted roads as the
It should be noted that the production from a nominally base, the RoRi is 40 lb/ton (18 kg/t) vehicle weight, or expressed
sized bucket does not always meet requirements. However, by as a percentage:
upsizing the bucket within the manufacturer’s guidelines, the
required capacity will be generated. 40 lb
Once a shovel is selected, the dipper capacity is sized to = 2%
2000 lb/ton
accommodate various truck capacities. Manufacturers’ guide-
lines suggest that with the overburden specific weight of this Tire penetration or road flex is an added resistance factor
example, dipper capacities shown in Table 13.1.2.14 may be due to soft conditions. Use 30 lb RoRi/in. (0.54 kg/mm) tire
utilized. Four or five passes per truck is considered optimum, penetration. When expressed as a percentage:
although six is acceptable under normal conditions.
Truck fleet options are generated by matching dipper sizes 30 lb
to number of passes to rated hauler capacities. Maximizing truck = 1.5%/in. (0.06%/mm) penetration
size to shovel capability is an effective objective, although adverse 2000 lb/ton
haulage grades, equipment availability, and cumulative bucket
capacities also contribute to the final selection. In the planning stage some basic assumptions must be made
A modifier to be used when establishing shovel cycle times regarding penetration in various areas. This example utilizes the
is to increase cycle times by 1 second for each 2 yd3 (1.5 m3) following:
above nominal dipper capacity. It also should be noted that
nominal truck capacity may be exceeded by up to 5%; however, l Loading areas and waste dumps 2 in.
increased maintenance and tire wear can be expected under these l Approaches 1 in.
conditions. l Established haul roads 0 in. (base)
Although not limited to the shifts or truck sizes in Table
13.1.2.15, the choices that follow have been made to simplify the For grades both positive and negative, use 20 lb RoRi/ton (10
comparison process. kg/t) per % grade. Expressed as a percentage, this becomes
After sizing the truck, it is important to select the engine
horsepower, gear ratios, and tire size necessary to provide satis- 20 lb
= l%/% grade
factory performance under anticipated working conditions. 2000 lbs/ton
Manufacturers provide performance charts that relate the power
provided by the vehicle power train (rimpull) to the vehicles To bring all the factors together, consider a truck leaving the
weight and total rolling resistance (RoRi). shovel approach area on a gentle 2% uphill grade:
Table 13.1.2.15. Truck-Shovel Combinations
(13.1.2.10)
The example in Table 13.1.17 typifies a truck cycle time of a 50-

(13.1.2.8) ton (45-t) unit traversing a complete load, haul, dump, and
return cycle.
The RoRi reduces the rimpull available from the power Haulage studies should consider the following:
train. A loaded 50-ton (45-t) truck has a gross weight of approxi- 1. Overall layout indicating centroids of pit excavation se-
mately 175,000 lb (80,000 kg). A 6% RoRi reduces available quences and incremental waste dump growth.
2. Haul road widths, passing lanes, intersections, and curves
rimpull is available for acceleration. 3. Pit profiles detailing level hauls and grades and the length
Vehicle speed under a given set of conditions results from of each.
the relationship of the truck’s weight and RoRi to the vehicle’s 4. Waste dump geometry including height, width, and traf-
performance chart, published by the manufacturer. The maxi- fic patterns.
mum speed, as determined by this relationship, is then modified Truck fixed times are nonproductive periods that include
by speed factors that convert maximum speeds to average speeds truck spotting, loading, and the time required to turn and off-
over segments of the haul. load at the waste dump. The times are based on industry norms
The first step in establishing speed factors is to determine and can be used or modified as local situations warrant.
the vehicle weight to flywheel horsepower (FWHP) ratio: A typical example for a 333-hp (250-kW) loader and a 50-
ton (45-t) hauler is as follows:
vehicle weight (with or without load) Shovel spotting 0.42 min
(13.1.2.9)
FWHP Shovel loading 1.92 min
Turn and dump 0.85 min
A loaded 50-ton (45-t) hauler (175,000 lb or 80,000 kg) with 600 Total fixed time 3.19 min
FWHP (450 kW) has a ratio of 282 lb/hp (175,000 ÷ (600)
(170 kg/kW). This ratio is used to select the proper table to The total truck cycle time for the 50-ton (45-t) unit is
determine the speed factor. The factors are then obtained by
matching the haul road length to the point where the truck is 10.04 min travel time + 3.19 min fixed time = 13.23 min
starting from 0 mph (or stopping), or where the grade is level,
downhill or uphill and the unit is in motion when entering this
The number of trucks required for the 30-year property life
section.
shown in Table 13.1.2.15 is determined as follows:
The average speed for each haul segment is obtained by
multiplying the maximum speed times the speed factor (Table
13.1.2.16).
Speed limits become the final modifier in the calculation.
Speeds should be based on reasonable guidelines to ensure safe
operation. This example utilizes the following:
l Loading and dump areas 5 miles/hr

l Long uphill and level roads 25 miles/hr
l Downhill grades 15 miles/hr
The number of trucks needed to move the required tonnage

is a time function involving the sum of fixed and travel times. Production scheduling is set by limiting stripping tonnage
Travel time is by truck coverage and not shovel capacity. The latter is usually
Table 13.1.2.16. Speed Conversion Factors (under 300 Ib/hp only)
Table 13.1.2.17. Pit Haulage Study
Table 13.1.2.18. Total Truck Requirements
slightly higher. When determining the total number of trucks access road, electric power, water, and natural gas. The assigned
required, round 0.00 to 0.29 to zero, and above 0.29 is rounded costs are listed in Table 13.1.2.19.
up. A recap of truck requirements is shown in Table 13.1.2.18. One should establish specifications for the major equipment.
C APITAL C OSTS. No attempt is made in this example to Work closely with vendors who not only have access to their
derive the costs of the mill and related administration and main- technical data, but are also experienced with applications over
tenance facilities nor of any offsite facilities. Offsites include diverse conditions. Once the major rolling stock has been speci-
Table 13.1.2.19. Mill and Offsites Costs Table 13.1.2.21. Production Equipment Capital Costs
Table 13.1.2.20. Ancillary Capital Cost Breakdown

Tools and initial spare parts inventory include only those
purchased prior to operations start-up. Preproduction mining is
also a capital item, expensed for tax purposes. However, it will
be addressed only as a function of production scheduling in this
example.
Capital costs of the shovels and trucks are given in Table
13.1.2.21.
The overall capital costs for each case (Table 13.1.2.15) are
assembled in Table 13.1.2.22.
It should be noted that with options utilizing more units of
smaller-sized equipment, a higher initial capital cost is generally
experienced.
fied, send out requests for quotations to the manufacturers being OPERATING COSTS. Capital requirements alone cannot serve
considered. A cost pattern should emerge on which to base the as the basis for selection of production and ancillary equipment.
estimate. Combine operational and capital costs to arrive at a single-fleet
Accurate capital cost estimating of production equipment, choice for each property life alternative. The four fleets selected
both shovels and trucks, is essential to the evaluation for two provide the framework for the financial analysis and ultimate
reasons: pit optimization.
1. Overall costs are usually the basis for fleet selection. Again, as in capital costs, no attempt is made to derive mill
2. The cost of ancillary equipment can be estimated on the operating costs. Assigned costs are listed in Table 13.1.2.23.
basis of the major rolling stock. The first step is to determine the operating hours/year for the
As a general rule, capital committed to shovels and trucks loaders and the haulers involved in each option (Table 13.1.2.24).
can be the basis for prorating ancillary equipment capital costs Hourly operating costs are generated based on field experi-
for estimating purposes. The combined ancillary capital costs ence and manufacturer’s guidelines.
represent approximately 30% of the total capital costs. When A 525-kW shovel will be costed out in detail. The operating
expressed in terms of the shovel-truck cost, this percentage be- costs of other shovels are calculated in the same manner, but
comes 43% (3/7). they are only summarized here. The primary costs include elec-
The breakdown in Table 13.1.2.20 is based on averages gen- tric power, labor, maintenance, and repair.
erated from equipment lists sufficient to handle the total material Power costs are generated by multiplying kilowatt hours by
generated from 10,000- to 200,000-ton (9000- to 180,000-t)/day the commercial rate. Consumption is rated at 525 kWh with the
operations. Individual situations may dictate different percent- rate being $0.05/kWh:
ages, but they should be altered only if sufficient detail has been
developed to warrant changes.
525 kWh × $0.05/kWh = $26.25/hr
Drilling utilizes rotary production units with average rock
condition suggesting the following relationship: one large diame-
ter (9 to 12 in., or 229 to 305 mm) rotary drill per 30,000 to Labor costs are calculated by multiplying combined operator
40,000 tons (27,000 to 36,000 t)/day of stripping. Smaller drills and oiler rates by payroll burden. Next multiply that figure by
(6 to 9 in., or 152 to 229 mm) will suffice for the lower tonnage 8 hr/shift divided by 7 productive hr/shift. Hourly rates are $12
operations at the rate of one per 10,000 to 15,000 tons (9000 to and $11/hr. The payroll burden is 35%. Payroll burden includes
13,600 t)/day. vacation, holidays, overtime, unexcused absenteeism, payroll
Blasting covers the explosive-handling vehicles and the air- benefits, FICA, health insurance, unemployment insurance and
track drills that are required for secondary breakage in most workmen’s compensation. Labor costs become
operations.
Field and miscellaneous support equipment includes dozers, ($12 + $11) × 1.35 × 8 ÷ 7 = $35.50/hr
patrols, light duty and maintenance vehicles and cranes. The
support equipment is very dependent upon local conditions, Repair and maintenance is expressed as a cost/ton multiplied
making detailed relationships an impractical matter. However, by the tons/hr. Assume that the cost/ton is $0.02 ($0.018/t)
the overall relationship to the total capital remains fairly con- (experience factor). Production is 17,314 tons (15,707 t)/shift
stant. divided by 7 hr/shift equals 2473 tons (2244 t)/hr, or,
Utilities include transformers, power distribution, water, air, $0.02/ton × 2473 ton/hr = $49.50/hr
gas, firewater, and telephone lines.
Buildings cover administration, maintenance, welding, lube The total cost of power, labor, and repair and maintenance
and tire shops, changerooms, and warehousing. is $111.75/hr (Table 13.1.2.25).
Table 13.1.2.22. Overall Capital Costs For Equipment and Facilities
Table 13.1.2.23. Mill Operating Costs $11.00/hr × 1.35 × 8 hr/shift

= $15.85/hr
7.5 productive hr/shift
Tire cost is the cost/tire times the number of tires divided

by the hours of expected life:
$7500/tire × 6 tires
= $11.25/hr
4000 hrs
Fuel cost is the gallons consumed/hour times cost/gallon:
Table 13.1.2.24. Equipment Operating Hours per Year 30 gal/hr × $0.80/gal = $24.00/hr
Maintenance, service, and repair are covered by utilizing the

relationships between:
1. Mechanics wages, including burden ($11/hr × 1.35 =
$14.85/hr).
2. Wearable items, historically related to truck horsepower.
3. Working conditions.
The first relationship, between mechanics’ wages and truck
size, generates a cost factor of wearable items and mechanical
labor. Once derived, the factor is related back to truck size to
generate the cost per hour of maintenance, service, and repair.
The cost per hour is then modified by the working conditions,
expected to be experienced-based on haulage analyses and overall
site conditions.
Working conditions impact the costs as follows:
Average: costs @ 100%

Favorable: Includes light duty resulting from gentle
grades, low RoRi, minimum traffic
restrictions, etc. Cost × 80% (lower limit)
Adverse: Includes long ramps, steeper grades, high
RoRi, adverse weather, etc. Costs × 130%
(upper limit)
Manufacturers’ graphs are utilized to obtain costs suitable

for estimating purposes. For this case, 120-ton (109-t) haulers
and a cost of $25.90/hr under average conditions for mainte-
nance, service, and repair will be utilized.
The operating costs of a 120-ton (109-t) hauler is detailed Total cost of operators, tires, fuel and maintenance, service
utilizing experience factors and local wage rates. and repair for the 120-ton (109-t) hauler is $77.00/hr. Table
Operator costs are obtained in the same manner as the shovel 13.1.2.26 lists operating costs for all trucks used in this compar-
labor is calculated: ison.
Table 13.1.2.25. Shovel Operating Costs Only the cases with the asterisk are used for further mine
comparisons. The following points should be noted:
1. Utilizing 20 shifts/week results in the lowest initial capital
investment but not necessarily the lowest 0 and 0 cost.
2. The largest equipment produces the lowest overall 0 and
0 cost.
3. In the 8.6-year example, case 2 was selected over case 3
because of the increased scheduling and operations flexibility
resulting from more available equipment and shifts if required.
This option should only be used where 0 and 0 costs are similar.
A summation of stripping costs based on total required op-
erating hours is shown in Table 13.1.2.32. The costs are ex-
Table 13.1.2.26. Truck Operating Costs pressed in dollars/ton for ensuing financial analyses.
Selective Mining Differential. Under many circumstances,
enough information now has been generated to recalculate the
ore reserves based on appropriate 0 and 0 costs for the alterna-
tives being considered. However, this example is somewhat more
involved in that the selective mining requirements of the ore
zone require a separate calculation of direct mining costs. As in
any instance of highly selective ore mining, operating costs run
higher than stripping costs because of slower rates, tighter super-
visory control, and extra equipment requirements.
Refined mine operating costs are not calculated here in de-
tail. However, by using parameters as previously generated, new
Table 13.1.2.27. Ancillary Operating Cost Breakdown operating costs are established.
The equipment shown in Table 13.1.2.33 is considered capa-
ble of producing 3500 tons (3175 t)/shift of combined ore and
associated waste. Being a mid-range calculation, the operating
costs/ton are appropriate for all four options.
In cases where mining has no bearing on stripping fleet
selection, additional costs are not added to the total 0 and 0
costs. Mining costs shown in Table 13.1.2.33 will contribute to
revised ore reserves and are included in the cash flow analysis.
The direct operating cost/ton is
The fleet operating costs become the basis for estimating the
ancillary operating costs. Allocation of operating costs is highly
variable. Expected operating conditions are influenced heavily $6102.50/shift
= $1.74/ton ($1.92/t)
by weather conditions, rock characteristics, general terrain, etc., 3500 tons/shift
and should so be anticipated when assigning operating costs.
This example utilizes the generalized percentages outlined in
Table 13.1.2.27.
The total ancillary operating costs represent 20% of the total The mining fleet will be depreciated over an average life
operating costs. When expressed in terms of shovel-truck cost, 50,000 hours. The ownership cost/ton milled is the same in all
this percentage becomes 25% (2/8). four cases as mining-fleet size is directly proportional to mining
The production fleet overall operating cost/hour for mine tonnage requirements.
lives and equipment combinations is given in Table 13.1.2.28
based on the same equipment options shown in Table 13.1.2.22.
OWNING AND OPERATING COSTS. Capital costs are depreci-
ated, using the straight-line approach for simplicity, over the 50,000 hrs
expected useful life of the individual components. The results Ownership period: = 8.89 yr
5625 hrs/yr
are expressed in dollars/operating hr and, when combined with
operating costs, provide total ownership and operating costs
(0 and 0) from which a single fleet will be selected for each mine
life. Tonnage: 8.89 yr × 2,100,000 tons of ore, low-
Ownership costs are obtained by dividing capital costs by grade and associated waste/yr. =
the expected life of each type of equipment. Ancillary costs are 18,699,000 tons (16,964,000 t)
split between mobile and stationary equipment because of the
difference in their expected lives. Operating hours for mobile
ancillary equipment should be the same as the truck fleet. The
stationary equipment is utilized for 8 hr/shift (Table 13.1.2.29). $3,975,000 capital cost
A compilation of the 0 and 0 costs for the 12-year life case, Ownership cost: = $0.21/ton
18,669,000 tons
utilizing 525-kW shovels and 120-ton (109-t) trucks, is shown in
Table 13.1.2.30. Total 0 and 0 costs for the equipment combina-
tion options are listed in Table 13.1.2.31. ($0.23/t)
Table 13.1.2.28. Overall Fleet Operating Costs
Total 0 and 0 costs for the mining fleet are $1.74 + $0.21 = jected operating costs to modify criterion illustrated in Fig.
$1.95/ton ($2.15/t). 13.1.2.9.
CUTOFF GRADE. The calculation utilizes the initial cutoff
13.1.2.4 Ore Reserves Reanalyzed grade of 0.06% and original waste and low-grade-to-ore ratios
to establish new cutoff grades. The second step uses the revised
The original ore cutoff grade of 0.06% was based on prelimi- cutoff grades to establish new waste-to-ore ratios.
nary data. New cutoff grades are now established reflecting re- Direct operating costs are tabulated in Table 13.1.2.34 and
spective operating costs of each case. Reanalysis utilizes pro- extended to calculate total direct operating costs for each ton of
ore processed. The resultant cutoff grades are then calculated.
Ore reserves generated for each case are different. Ore grades
change as do the waste to ore ratios, as shown in Table 13.1.2.35.
Table 13.1.2.29. Anticipated Equipment Life DESIGN ALTERNATIVES. At this point it would be prudent
to reanalyze drillhole data as some alteration in pit design may
result. This example will not make that iteration, because all four
cases bracket the original example without significant deviation
( ± 15% of grade).
MARGINAL ANALYSIS. The new stripping ratios have the
potential to further alter cutoff grades. This process can be re-
Table 13.1.2.30. Total Fleet Ownership and Operating Cost Breakdown (12-yr life case)
Table 13.1.2.31. Summary of Total Fleet Ownership and Operating Costs

Table 13.1.2.32. Stripping Costs Annual revenue is determined by using the marginal analysis
ore reserve grade of 22 million tons (20 million t) at 0.084%, a
mill recovery of 90% and a selling price of $25/lb ($55/kg)
(Table 13.1.2.37). Operating costs/ton of ore processed are sum-
marized in Table 13.1.2.38.
Ownership costs thus far have included both initial capital
investment (ICI) and replacement capital for direct comparative
purposes. Setting up a cash flow statement requires that these
costs be separated. Replacement capital applies to the stripping
and mining fleets only. The mill and related facilities will be
considered functional for the life of the property. Mill mainte-
nance is a component of direct operating expenses.
Table 13.1.2.33. Mining Capital and Operating Costs Equipment replacement is based on scheduled hours of oper-
ation and expected useful life. Where equipment is spared or only
selected shifts are worked, equipment operating hours should be
adjusted accordingly (* in Table 13.1.2.39). For example, it can
be demonstrated that mining capital costs already calculated are
adequate for the 2000-ton/day (1800-t/day) at 2 shifts/day and
3000-ton/day (2700-t/day) cases, while the 5000- and 7000-ton/
day (4500- and 6400-t/day) cases require capital increases of
50% and 100% respectively. The replacement factor is based on
capital investment. Table 13.1.2.39 details the derivation of the
replacement costs for case 1 at 2000 tons/day (1800 t/day) and
30- years life.
The annual replacement cost is then $37,240,000 ÷ 30 yr
= $1,241,000.
Straight-line depreciation may be applied to total capital
expenditures over the life of the mine for tax calculations. For
simplicity, this evaluation does not consider salvage value at the
end of mine life as the present value would be heavily discounted
and would not influence the outcome substantially.
In Table 13.1.2.40, the initial capital investment and the
total replacement capital are summed and then divided by mine
life to obtain the average annual depreciation.
The next step is to establish a cash flow statement that
provides the basis for calculating investment criteria such as net
present value, investment efficiency (IE), and return on invest-
ment (ROI). The statement provides a common basis for evaluat-
ing project alternatives.
ROI is the interest rate earned on an investment. ROI stan-
dards are the minimum acceptable rates of return on a project.
A higher rate than required by capital markets is used to provide
a safety factor to cover risks inherit in any new project.
NPV is the value today of future net cash flows. The NPV
Fig. 13.1.2.9. Ore reserves reanalyzed. of a project is calculated by discounting the cash flow at the ROI
standard used for the project.
IE is the ratio of the NPV of the project to the amount of
initial capital investment. The ratio provides a quick visualiza-
peated, with diminishing returns, until no further change is tion of value added per initial dollar invested.
noted. However, the accuracy at this stage is considered suff- Depletion is a deduction from taxable income that approxi-
cient for a feasibility study. mates the value of the exhaustible mineral deposit. The percent-
The milling rate needs no adjustment as the upper half (0.045 age allowed is multiplied by the gross revenues, but the total
→ 0.06%) of the marginal ore reserves was used to set mill amount cannot exceed 50% of a property’s net income.
processing tonnage. Verification that marginal reserves (0.03 → The present value factors used are for mid-period to average
.06%) still cover the four cases is analyzed in Table 13.1.2.36. the flow of money over a year. Standard tables are available for
In each case there is sufficient marginal ore to satisfy milling this purpose. Table 13.1.2.41 compares the four selected cases.
requirements at the previously established milling rates. This In the cash flow statement, it is obvious that the NPV and
example will then use the previously established milling grade ROI continue to grow with the increasing size of operation.
of 0.084% for all four cases. Theoretically, it could be demonstrated that a duration of one
year would yield the highest NPV. That is an absurd situation,
but it does highlight the need to approach the evaluation from
a practical operating standpoint and also to evaluate project
13.1.2.5 Financial Evaluation gains incrementally.
The steps to be followed to obtain the financial evaluation With an extremely short duration project, an inordinate
are outlined in Fig. 13.1.2.10. amount of capital equipment is required, most of which cannot
CASH FLOWS. Annualized cash flows need to be generated be properly sized nor fully depreciated. The equipment becomes
for use in the economic evaluation. salvage and must be transferred or sold. Operating problems
Table 13.1.2.34. Revised Production Costs
Table 13.1.2.35. Revised Ore and Waste Inventory
Fig. 13.1.2.10. Financial evaluation.
Table 13.1.2.36. Marginal Analysis
such as traffic congestion, skilled manpower availability, etc.

become magnified. The optimum plant size is, in part, obtained
only by increasing the size to the point where the most workable
plant operation exists.
The 30-year, 2000-ton/day (1800-t/day) case fails to meet Table 13.1.2.37. Annual Revenue
the 15% ROI standard and is eliminated from further consider-
ation. The remaining three cases all satisfy the minimum accept-
able rate and continue to increase in value as the plants become
larger. However, by analyzing incremental growth a different
picture emerges.
Using the data available from Table 13.1.2.41, the delta gains
between the four cases are determined. Table 13.1.2.42 examines
the incremental returns on investment.
Table 13.1.2.38. Operating Costs
Table 13.1.2.39. Replacement Costs
Table 13.1.2.40. Replacement and Depreciation Costs
It is apparent that the incremental gains do not warrant the Postponing the milling of marginal ore to the last years of
expenditures necessary to increase the size of the project to 7000 mine life results in a net NPV increase of $22,795,415 or 12%.
tons (6400 t)/day. After 5000 tons (4500 t)/day, the IE drops From a practical standpoint, unless the higher-grade ore is
substantially and the capital investment requirement, per percent located in distinct areas of the pit and can be accessed in a
gain, blossoms almost fourfold. normal operational flow, the preceding illustration is not possi-
Based on the preceding analysis, the optimum plant size is ble. However, the engineer should always keep his eyes open to
in the range of 5000 tons (4500 t)/day. Adjustments may be the potential of opening the pit in a higher-than-average grade
possible by bracketing the case with 4000 and 6000 tons/day area and sequencing the advances such that higher-grade mate-
(3600 and 5400 t/day) options and repeating the analysis using rial is exposed first. If that opportunity exists, an improved cash
data generated in the first iteration. flow often is possible.
MARGINAL ORE UTILIZATION. As earlier mentioned, post- The time value of money is critical when planning property
poning the milling of the marginal ore to the last few years of development. Deferment of the ICI is possible by the following
the property enhances the NPV. The ore reserves and values for steps:
the 5000-ton (4500-t)/day case are listed in Table 13.1.2.43. 1. Contract out the initial stripping until a positive cash flow
To illustrate the difference in values, cumulative NPV fac-
is experienced.
tors are applied to each scenario.
2. Strip initially in areas with lower overburden to ore ratios
Option 1. Marginal ore milled after ore milled:
to reduce equipment requirements.
3. Minimize the preproduction construction and mine devel-
opment period to the greatest extent possible.
A final consideration is what to do with the low grade be-
tween 0.030 and 0.045%. This material will not contribute to
Option 2. Uniform milling of combined reserves:
the economics of the project, but it should not be treated as
12 yr @ $31,536,000/yr × 5.813 = $183,319,760 waste. Low-grade stockpile areas should be provided so that an
Table 13.1.2.41. Cash Flow Statement
Table 13.1.2.42. Incremental Gains Analysis 5000-ton (4500-t)/day target can be bracketed and ancillary cost-
ing performed in addition to the loading and hauling costs. The
analysis should then be repeated in the same manner until one
is satisfied that more significant improvement is not likely.
SENSITIVITY ANALYSIS. The analysis is sensitive to the un-
certainties inherent in any new project. The most critical parame-
ters in terms of effect on the evaluation are
1. Ore reserves: Has the mineral been properly sampled?
2. Mill recoveries: Are the amenabilities studies based on
representative samples?
3. Product selling price: What is the market volatility in this
commodity? Are long-term sales contracts obtainable?
Each can have a profound effect on the ultimate outcome of
the property as they all have a direct influence on the total value
option exists to mill the material after the mine has closed or if of the deposit. Capital and operating cost variations also can
market conditions improve substantially. have an effect, but because these are generally more predictable
The first evaluation has now been completed. The degree and less volatile, their variations have less impact on the overall
of accuracy presented herein is adequate for many engineered cash flow.
feasibility studies. Further optimization is probable, first by re- As the major sensitivities directly influence the anticipated
analyzing the ore reserves using the recalculated ore cutoff grade. revenue, it is a relatively simple exercise to generate a spectrum
Reconfiguration of the pit boundaries may result. Secondly, the of annual revenues based on variations in ore reserves, mill recov-
Table 13.1.2.43. Ore Reserve Values

eries and selling price. Recalculation of the cash flow statement bility to provide as detailed a basis as possible upon which a
for the 5000-ton (4500-t)/day option will indicate how much particular project can be evaluated.
revenue loss can be experienced before the project drops below
the 15% minimum ROI.
In any event, a decision must be reached on whether or not BIBLIOGRAPHY
the potential project will become a reality. Decisions must be Dohm, G.C., Jr., 1979, “Circular Analysis-Open Pit Optimization,”
based on sound engineering and financial judgments to decide Open Pit Mine Planning and Design, J.T. Crawford and W.A. Hus-
on the basic merits of the investment. It is the engineer’s responsi- trulid, eds., SME-AIME, New York, pp. 283–310.

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Chapter 13.

13.1.1 BASIC CONCEPTS

The ratio of the total volume of waste to the ore volume is

volume of waste removed to depth d

While a volume relationship, calculated in cubic yards/cubic

13.1.2 OPEN PIT FEASIBILITY STUDIES

After a mineral deposit has been discovered and evaluated

Table 13.1.2.2. Mineral and Waste Inventory

Fig. 13.1.2.3. Drillhole profit/loss calculation.

Fig. 13.1.2.5. Pit slope angle determination.

Individual bench widths may be adjusted to allow for ramps,

Minimizing Preproduction Costs—Preproduction opera-

Using the precalculated production costs of $34.70/ton (Ta-

number of trucks required

(b) Production Time: This refers to operating time (full shift

Table 13.1.2.13. Stripping Requirements

Fig. 13.1.2.8. Equipment and facilities.

Table 13.1.2.11. Overburden Swell

The major capital requirements that are a part of the final

The example in Table 13.1.17 typifies a truck cycle time of a 50-

l Loading and dump areas 5 miles/hr

The number of trucks needed to move the required tonnage

Table 13.1.2.17. Pit Haulage Study

Table 13.1.2.18. Total Truck Requirements

Table 13.1.2.20. Ancillary Capital Cost Breakdown

Table 13.1.2.23. Mill Operating Costs $11.00/hr × 1.35 × 8 hr/shift

Tire cost is the cost/tire times the number of tires divided

Fuel cost is the gallons consumed/hour times cost/gallon:

Maintenance, service, and repair are covered by utilizing the

Average: costs @ 100%

Manufacturers’ graphs are utilized to obtain costs suitable

Table 13.1.2.31. Summary of Total Fleet Ownership and Operating Costs

Table 13.1.2.35. Revised Ore and Waste Inventory

Fig. 13.1.2.10. Financial evaluation.

Table 13.1.2.36. Marginal Analysis

such as traffic congestion, skilled manpower availability, etc.

Table 13.1.2.39. Replacement Costs

Table 13.1.2.40. Replacement and Depreciation Costs

Table 13.1.2.43. Ore Reserve Values

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