Table Of ContentMETPLANT 2011
Metallurgical Plant Design and Operating Strategies
8 - 9 AUGUST 2011
PERTH, WA
The Australasian Institute of Mining and Metallurgy
Publication Series No 7/2011
Published by:
The Australasian Institute of Mining and Metallurgy
Ground Floor, 204 Lygon Street, Carlton Victoria 3053, Australia
© The Australasian Institute of Mining and Metallurgy 2011
All papers published in this volume were refereed prior to publication.
The conference convenors and the Institute as a body are not responsible for the facts
and opinions advanced in this publication.
ISBN 978 1 921522 44 4
Compiled on CD ROM by:
Visual Image Processing Pty Ltd
PO Box 3180
Doncaster East VIC 3109
CONTENTS
Keynote Speakers
Guidelines for Economic Evaluation of Projects P Card 1
Keeping Projects on the Rails J Canterford 12
Predicting Variations in Mill Feed P McCarthy 19
Setting Processing Plant Projects up for Success in Australia R Young and A Hollonds 26
Building Skills
Reducing Mining and Mineral Processing Plant Fatality Rates N Cann, S Casey, R Mills and 27
J Ross
Professional Development for Metallurgists – Improving Technical D Drinkwater, D Bradshaw, 39
Skills P Tilyard and P Munro
Differences between the Engineering Cultures of Australia and Brazil C Fountain, P Libânio and 49
G Lane
Comminution
Crushers – An Essential Part of Energy Effi cient Comminution Circuits R Bearman, S Munro and 66
C M Evertsson
Reducing the Energy Required in Grinding Clinker to Cement – H Benzer, N Aydogan, 86
Some Case Studies H Dundar and A J Lynch
The Importance of Evaluating Grinding Performance R L Koenig and K T Broekman 100
Increasing Capacity and Effi ciency of Grinding Circuits with High J Wheeler and B Packer 107
Frequency Screens
Comminution and Gravity
Recent Improvements to the Gravity Gold Circuit at Marvel Loch A Bird and M Briggs 115
In-Line Pressure Jig Preconcentration Plant at Pirquitas Mine A H Gray, G Delemontex, 138
N Grigg and T Yeomans
Energy Effi ciency Opportunities in Milling – Improving Comminution F M usa, M S tewart and 154
Circuit Effi ciency G W eiss
Non-Contact Acoustic Measurement of Dynamic In-Mill Processes for R A P ax 163
SAG/AG Mills
IsaMill™ Design Improvements and Operational Performance at C Rule and H de Waal 176
Anglo Platinum
The Infl uence of Liner Wear on Milling Effi ciency P Toor, M Bird, T Perkins, 193
M Powell and J Franke
Design
Energy Effi ciency Assessments in Design – Seminal Decisions and M Allen, N Rosaguti, B Innes 213
Effective Processes and M Stewart
Filtration Test Work – Extracting the Whole Story for Studies and G B ickert and B L änger 228
Design
Sensible Cost Cutting for Resource Projects D Connelly 250
Integrating Sustainability Principles into Mineral Processing Plant G Corder and S Green 264
Design
Chirano Gold Mines Expansion – A Case Study S Ellis and I Dunlop 280
Engineering and Science in Flotation Cell Design J Euston 292
The Wonawinta Silver Project – Value Engineering at Work P G Greenhill 312
An Approach to High Solids Slurry Pipeline Design M G riffi ths and N S teward 328
The Integration of Geometallurgy with Plant Design G Harbort, G Cordingley and 339
M Phillips
Cost Effective Concentrator Design G Lane, P Dakin and D Elwin 364
‘We’re Metallurgists, not Magicians!’ E McLean 374
In-Pit Tailings – World’s Best Practice for Long-Term Management of G M M udd, H D S mith, G K yle 391
Tailings and A T hompson
Flotation and Pyrometallurgy
Flotation Mechanism Design for Improved Metallurgical and Energy R Coleman and A Rinne 405
Performance
The Great Oil Debate – Does Quenching Oil have a Deleterious Effect C J G reet and J K inal 419
on Flotation?
Carbon Prefl oat Circuit Improvements at Century Mine D G Rantucci, T J Akroyd and 430
L J Grattan
Quantifying Plant Flow Availability for an Alumina Refi nery B R eynolds and S C ollins 442
Expansion using Dynamic Simulation
Secondary Copper Processing using Outotec Ausmelt TSL Technology J Wood, S Creedy, 460
R Matusewicz and M Reuter
Hydrometallurgy
Solvent Extraction of Uranium – Towards Good Practice in Design, P Bartsch and S Hall 468
Operation and Management
Fosterville Gold Mine Heated Leach Process M Binks and P Wemyss 480
Leach Residue and Pregnant Liquor Separation – Process and Capital R Klepper and P McCurdie 488
Comparison of Counter-Current Decantation and Counter Current
Washing with Vacuum Filtration
Agglomeration – The Key to Success for the Murrin Murrin Ni Laterite D Readett and J Fox 506
Heap Leach
Scale Suppression using Swirl Flow Technology J W u, D N airn, B N guyen, 515
J F arrow and D S tegink
Plant Case Studies
On-Belt Analysis at Sepon Copper Operation T A rena and J M cTiernan 527
The Casposo Gold-Silver Project – Process Selection and Design D Connelly and K Nilsson 536
Optimising Western Australian Magnetite Circuit Design D David, M Larson and M Li 552
Contract Commissioning and Operation of Western Areas’ Cosmic Boy C Dick, D Boska and 563
Concentrator C Fitzmaurice
Float it, Clean it, Depress it – Consolidating the Separation Steps at V Lawson and M Xu 589
Clarabelle Mill
Flotation Process Control Optimisation at Prominent Hill J L ombardi, N M uhamad and 602
M W eidenbach
Ore Ageing Test Work for the Ok Tedi Skarns M Morey and R Cantrell 615
Author Index 630
Guidelines for Economic Evaluation of Projects
1
P Card
MAusIMM, Peter Card Mining Evaluations, 48 Station Street, Aspendale Vic 3195.
Email:
Project managers and plant operators would insist on metallurgists doing the processing study
work, insist on engineers doing the design and epcm, would want accountants to do the books,
but probably would accept almost anyone willing and able to perform the economic evaluation.
This person probably would be allowed to do the evaluation however they believed was best.
This is because the discipline of economic evaluation has evolved over recent decades to bridge
between operations/engineering and accounting without an academic or professional foundation.
Older style project managers and plant operators see economic evaluation as a backroom
activity to be hurriedly completed, typically when the last of the cost estimates are finished the
night before the submission is due to management. They see the activity as a mathematical
computation to fill in the paperwork with NPV, IRR, payback etc. Fortunately these are a dying
breed.
These older style managers do not really understand they are designing or operating a
business, but live in a closed world of professional engineering or hands-on plant operating.
They are very confident that they are ‘working on the important stuff’ and ‘getting things done!’
They do not realise that contemporary managers demand an economic evaluation up and
running from Day 1 as a tool to steer the project or operating plant through the study process into
the optimum state of business. The economic evaluation specialist should be the second best
role in the team; after the leader.
Mantras of best practice
A few mantras of best practice in economic evaluation are: -
“If you do not readily understand and comprehend my evaluation then you do not have a
problem, I do!”
“Every worksheet should be as easy to read as a school text book!”
“Do not try to impress with sophisticated Excel functions, but use your intelligence to
convert complex interactions into simple steps on the worksheet.”
And definitely not “Trust me! I am the expert in evaluation modelling!”
Financial analysis versus economic evaluation
Completion of a Project requires two separate money-focussed activities:
1. Economic Evaluation, and
2. Financial Modelling
The first, Economic Evaluation, is all about understanding the business health of the Project.
What cash will be required to establish, operate and pay taxes versus the cash generated or
saved by the project. This is the simple economics of cash-in and cash-out over time. Economic
Evaluation does not worry where the cash comes from (i.e. financing) but rather it wants to
understand the cash generating power of the underlying project including what sort of prices and
operating environment is required to cover costs and generate an economic return. (The
discount rate is usually before financing)
Everything is computed in cash in the year it is actually spent or received. There is no
accounting depreciation, no accounting charges for future closure and no other non-cash items.
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There is no equity raisings nor company borrowings, and so no financing charges on borrowings
during construction. Taxes are included and computed before the apparent benefit of debt.
The second, Financial Modelling, is all about sourcing the cash to establish and run the project
until it becomes self-sustaining. What mix of company internal cash flow, debt, new equity,
convertible notes, derivatives and hedging will the company use to progressively pay for owner’s
costs, epcm, first fills, commissioning, ramp-up to commercial operations and interest on these
borrowings? How will each type of capital raising impact company profits, its balance sheet and
share price?
Economic Evaluation might be best lead by a person with a technical-operating background
whereas Financing might be best lead by an Accountant. Both perform spreadsheet modelling of
the future business but they are very different in purpose and process. Both should be presented
in simple language and easy-to-understand concepts.
The two activities should not be woven together because:
a) Each is a stand-alone decision.
b) Combining their mathematics is very tricky, especially adjusting the discount rate as debt is
introduced. (Do people still get fooled by false claims of improving project returns by using
debt?)
c) The spreadsheets will become unnecessarily complex to use and audit and so alienate all in
the Team except specialists in finance.
The financing spreadsheets could be appended to the end of the economic evaluation workbook
providing the flow is one-way and nothing feeds back to the economic evaluation worksheets.
Evaluation, valuation, modelling
‘Modelling’ is a component of, but not all of ‘Valuation’ which is a component of, but not all of
‘Evaluation’. They form a hierarchy with ‘modelling’ at the bottom providing the hands-on
computations that feed results for various cases and scenarios up into ‘valuation’. This
‘valuation’ quantifies and characterises the value of the project or metplant. In turn this
‘valuation’ feeds up as one element in the intellectual activity of ‘evaluation’ by fully
understanding the project or metplant as a business.
Anyone thinking that economic evaluation is all about pouring numbers into a spreadsheet model
to get NPV and IRR is living in the past. Today it is all about having a working knowledge of the
whole project or metplant from ore in the ground through all activities and influences to the
market. It encompasses nearly everything from engineering to paying taxes. It is about
understanding the key drivers and key interactions of the business. It is getting a helicopter view
of the total entity, deciding how it fits the existing business and helping to test ideas and create
better projects and metplants. It is all about putting the ‘E’ into Evaluation. Yes, the economic
evaluation specialist should have the second best job in the team: after the leader.
Best practice in economic evaluation
Best Economic Evaluation Practice in the mining industry is described in the draft guidelines
released last year by the AusIMM: 2010 AusIMM Draft Guidelines for Technical Economic
Evaluation of Minerals Industry Projects. They are awaiting feedback.
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8 - 9 August 2011 Perth, WA
www.ausimm.com.au/content/docs/guidelines_tech_economic_evaluation.pdf - 2010-05-11
The first part defines what represents best practice in ‘spreadsheet modelling’, and has a worked
example in pdf form in an appendix. The second part deals with key aspects of ‘valuation’ and
‘evaluation’. Together they represent a collation of sound practices that competent practitioners
in economic evaluation have developed over the years.
Part 1 – Guidelines for Spreadsheet Modelling
These Guidelines were developed for economic evaluation but apply equally to geologists,
mining engineers, metallurgists, engineers, project manager and plant operators using a
spreadsheet such as Excel.
There are six Principles at the top of the hierarchy.
KEY PRINCIPLES
The key principles to which one should adhere when performing spreadsheet modelling are
simple but extremely effective. They are:
• Easy to follow
• Tailored‐to‐Purpose
• Transparent
• Disciplined, Rigorous, and Consistent
• Recording Sources of All Data
• Rapid to Audit
CHARACTERISING EACH PRINCIPLE
Each of these Principles has a profile. For example ‘Easy-to-follow’ is characterised as: -
• Intuitive and Visual
• Time to do it properly
• Architecture: Workbook Layout
• Worksheet Layout
• Modular Construction
DESCRIBING EACH PROFILE
Each of these profiles is described. For example ‘Worksheet Layout’ is defined as:
• A non‐expert should readily understand the function of each worksheet, how it is
arranged into component parts, how the data is entered, the computations, and the
relative importance of the parts.
• The visual flow down and across each worksheet should be intuitive and logical.
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• Each worksheet should have a bold heading followed by a brief outline of its purpose,
and where helpful, its important links with other worksheets.
• Sections within each worksheet should be in discrete work blocks, with obvious
subsections and subheadings using a cascading layout for subtitles.
• Visually each work block should be self contained with an obvious step‐by‐step
development toward a bold subtotal for that work block.
• The separate work blocks should be in a logical sequence down and across the
worksheet and their aggregation is obvious.
• Complex and extended computations should be shown in a series of small steps so that
the logic is visible and the input parameters are obvious. There is no need to interrogate
the algorithm. Explain the logic of complex algorithms in a note.
• Usually if a row of data that has already been presented above is needed again in a work
block then the entire row should be repeated so that there is visual flow of the logic. If
referenced from another worksheet then it should be coloured coded.
• Key inputs and results should be shown in graphs as a self‐check and for rapid
understanding.
• The Data Group and Outline facility can be used to define worksheet structure, collapse
related groups of rows or columns to reduce visual clutter, and aid navigation.
WORKED EXAMPLE OF MODELLING
This profile of ‘worksheet layout’ is illustrated by the worked example in the AusIMM draft
Guidelines. One of its worksheets is extracted and reproduced in Appendix A below.
READY MADE EVALUATION MODELS
There was unanimity amongst the AusIMM Members who generated the Guidelines that ready-
made economic evaluation models, where users fill in the blanks, were too dangerous to use.
Experience is that these black-box models transgress the six principles of Best Practice, but
more importantly have a bad history. Their computations cannot be audited, the models must be
exceedingly complex (or deficient) to accept a wide variety of scenarios and they simply cannot
be trusted.
Part 2 – Best Practice Valuation and Evaluation
The AusIMM Guidelines describe key issues in valuation and evaluation but are not intended to
be a comprehensive ‘how to do” manual. Key topics covered are:
Theory and Computation of NPV, IRR and Risk
Economic Evaluation and Financial Modelling
Evaluation and Valuation
Stand Alone or Incremental Value
Stand Alone, Synergies, Using Tax Losses
Gearing (Debt)
Expected Values and Results
Alternatives
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