Quantification of risk using simulation of the chain of mining-Case study at Escondida Copper, Chile

Abstract

Quantification of risk is important to the management team of any rapidly expanding mining operation. Examples of areas of concern are the likelihood of not achieving project targets, the impact of a planned drilling program on uncertainty and the change in the risk profile due to a change in the mining sequence. Recent advances in conditional simulation and the practical use of such models have provided the opportunity to more fully characterise mineral deposits and to develop empirical estimates of the recoverable resources and ore reserves. This allows meaningful quantification of risk (and upside potential) associated with various components of a mining project. This paper presents an approach referred to herein as 'simulation of the chain of mining' to model the grade control and mining process. Future grade control sampling, mining selectivity and other issues that impact on the final recoverable tonnes and grades are incorporated. The application of this approach to Escondida, a large-scale open pit copper mining operation in Chile, provided a definitive way to assess the expected risk of a number of alternative development strategies on operational performance of the project. This approach is gaining acceptance as one of the most important steps in developing short-term mining models. The concepts developed here also have implications for assessing the ore that will be recovered from ore reserves during mining.