Leveraging Integrated Mine Planning to Control Costs at Agnico Eagle’s Meadowbank Mine

By Alexandre
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Located in the Kivalliq region of Nunavut, about 2,600 kilometers northwest of Toronto, the Meadowbank mine is Agnico Eagle’s largest gold producer, with 1.8 million ounces of gold in proven and probable reserves since the open pit began in early 2010.

Meadowbank completes all of their optimization and design work in-house and regularly performs, multi-scenario economic analyses ensuring they achieve the best results, both accurately and efficiently. Pit design plays an important role in improving Meadowbank’s productivity. In 2013, Meadowbank’s gold production was far higher than expected as a result of creating multiple designs for different scenarios to enhance their operations and productivity.

Meadowbank works with Dassault Systèmes mine planning apps and is supported by its training services.

Stephane Frechette, Engineering Assistant Superintend says: “Working together, we surpassed last year’s production targets. We provided a strong mine plan that we’ve been able to also surpass with clear planning for the mine operation.”

As a result of the training, Meadowbank is now able to perform faster, better optimized adjustments to pit shells and pit designs by their in-house design teams. The staff has gained confidence in their tactical scheduling and planning, and now evaluates various scenarios before defining their long-term plans.

Read the rest of the story by downloading the Agnico Eagle Meadowbank case study.

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On the web: 3DS.com/natural-resources/

The Path to Mining Execution Excellence

By Alexandre
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Mining company profits are being pressured by the uncertainty that remains in the global economy and by a cost and profitability curve that has grown tight over the past twenty years. This is why it is critical Operational Stability – the predictability of expected mine production, costs, and performance levels – be attained. Getting there requires mining and plant processing activities function at higher levels of productivity and efficiency so that conformance plan is always realized.

The quickest avenue to improved Operational Stability begins with reducing the variability in the planning and execution of mining and processing. This requires comprehensive planning, optimized scheduling, and disciplined work management.

Toyota is recognized as being one of the most efficient companies in the world. It is also one of the most studied since it pioneered key methods of reducing variation, with stability being the first and most critical step, because it underpins everything else that follows. Stability includes the general predictability and consistent availability in terms of manpower, machines, materials, and methods. Under each of these basic building blocks of these basic building blocks of manufacturing, Toyota tries to establish consistency and predictability.

Stability increases throughput, reduces waste and associated costs, and ensures production and quality targets are met. The key lies in harnessing operational data. While “big data” may be produced in mining in terms of volume, it must become visible, analyzable, and it must be made actionable to executives, mine management, and frontline workers. If it is, the path to Mining Execution Excellence, and eventually Business Agility, is paved. As we will see, enabling technology is one of the most important requirements to begin the journey.

Operational Stability is the first and most important step a mining company can take to begin transforming itself. It not delivers the benefits of greater productivity and conformance to plan; it ensures improvements gained are sustainable. Operational Stability is also the foundation for Business Agility and the Virtual Mine.

Download the full whitepaper

Follow Dassault Systèmes Natural Resources Industry on Twitter: @3DSNR

On the web: 3DS.com/natural-resources/

Going Lean at Oyu Tolgoi

By Alexandre
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by Dan Headrick originally published in COMPASS Magazine

At Oyu Tolgoi on Mongolia’s vast, windswept South Gobi Desert, where nomads still watch over their herds, a new copper and gold mine stands poised to lead a struggling industry on a great leap forward. The mine, developed by British-Australian multinational metals and mining firm Rio Tinto Group, is a test case for applying the same lean principles that most manufacturing industries adopted at least three decades ago as protection from the buffeting winds of rapidly shifting markets.

Miners know rapid economic shifts all too well. After years of boom, in which demand outstripped capacity and efficiency was a luxury few had time to consider, commodity prices have sagged and new strikes are rare. Many mining companies are responding by slashing capital expenditures and pulling back on critical investments. It’s a no-growth strategy the industry has turned to time and again, closing mines, laying off workers and hunkering down until the next boom.

For the first time, however, a few innovative mines are following a different path.

“We’re in the early stages of a paradigm shift in mining,” said Mike MacFarlane, a Canadian engineer, industry consultant and retired executive vice president of AngloGold Ashanti, one of the world’s largest mining companies. “In the United States, the auto industry in the 1940s and ’50s had no peers; in the ’60s and ’70s, still no peers. In the ’80s, little Japanese cars changed everything. I would say the mining industry, in the little Japanese car analogy, is in the mid-’80s.”

An auto exec tackles mining

Sam Walsh, a 20-year auto industry veteran who is CEO of Rio Tinto, is among mining’s most outspoken champions of lean manufacturing.

“If I had to name one thing I have transitioned from what the automotive industry taught me across to what Rio’s mining operations are doing today, it would be an intense, laser-like focus on value and efficiency,” Walsh told the Australian and New Zealand Chamber of Commerce in Japan during Rio Tinto’s Lean Japan Tour in 2012. “At base level, it represents a concentrated intent to eliminate variation or waste at every stage of production.”

But miners don’t work in sheltered, automated factories with repetitive, predictable processes, and many mining executives argue that the industry’s unique nature makes it prohibitively difficult to apply lean practices. Mining companies, they argue, steer colossal-scale discovery, extraction and processing operations across remote, far-flung regions under conditions so harsh that the word “harsh” is an understatement. The markets for mining’s products are harsh as well, fluctuating with world markets and political upheavals, weather and natural disasters.

Walsh, and others like him, counter that mining is a factory and should be run like one. Rio Tinto, for example, is banishing waste by pioneering new technology that includes driverless, autonomous hauling vehicles and centralized operation control centers located far from the mines themselves. More important, however, is Rio Tinto’s emphasis on collecting and analyzing data and then using those insights to coordinate automation and technology and realize efficiencies. Such efficiencies have lowered production costs, which allow Rio Tinto to invest in expanded operations such as Oyu Tolgoi, which mines the copper critical to emerging clean energy markets.

Finding cross-silo efficiencies

Lean principles also require different functions within an organization to cooperate and coordinate seamlessly. “Mining companies are very sophisticated within their operational silos,” said Emilie Ditton, a mining industry consultant with International Data Corporation (IDC) who is based in Sydney. “They do everything from optimizing truck performance to minimizing fuel costs and conveyor belt material handling efficiency. But if a production operation meets its goals and delivers products to a processing operation that can’t handle all of the material coming in, the ultimate production outcomes are not improved.”

“Mining companies have assets, technology and access to data, Ditton said. “What they require is an enterprise-level data strategy.” Far more than new technology, she said, mines need organizational investment in data interpretation as a business strategy. But, she admits, taking a risk on a new idea requires strong leadership. “We don’t yet have a convincing story to tell on why we would take that risk.”

Oyu Tolgoi may provide that “convincing story.” This year, while most mining operations sell off assets and cut expenditures, Rio Tinto will begin construction on the mine’s US$5.4 billion underground expansion phase, which is expected to reach full capacity by 2021.

Oyu Tolgoi will deploy the latest mining technology. But the mine’s real game changer may turn out to be its application of proven, 30-year-old manufacturing industry ideas about extracting value from the business, not just the land.

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Watch this customer story video  to find out how Dundee Precious Metals realized significant productivity through the application of lean methodologies and enabling software.

Follow Dassault Systèmes Natural Resources Industry on Twitter: @3DSNR

On the web: 3DS.com/natural-resources/



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