Integrating Mine Operations to accelerate Business Growth

Integrating Mine Operations to accelerate Business Growth Mining is essentially a capital-intensive industry where success requires optimum utilizati...
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Integrating Mine Operations to accelerate Business Growth

Mining is essentially a capital-intensive industry where success requires optimum utilization of resources in terms of Manpower, Materials, Finance and Equipment. In view of the large investment in procuring land, plant &machinery, property, the primary concern of any top management would be to ensure adequate control over all available assets, impact on financials, condition monitoring / restoration of assets ensuring maximum ROI across the Mining value chain. While Investments in enterprise platforms like Oracle and SAP is being used to rationalize the applications across the supply chain, integrate business process, leverage the single version of truth to power business intelligence the business processes upstream from Mine exploration, development, operations and logistics are often not considered for this exercise due to lack of functionality delivered by the current ERP systems. The current macro level challenges include financial integration during the exploration phase of the project and life of mine planning, detailed production scheduling to align with short term mine planning, constraint based mine operations, lack of modeling the production execution and lack of operations reporting and optimization. The above challenges lead to a lower ROI on the enterprise solutions investment and a less than expected impact to the business. TCS provides a complete solution (TCS Integrated Mine Operations) that automates the business process from Exploration to Dispatch through Drilling, Mine Development and Hoisting. This offering is unique in nature as it provides an approach to bridge the above gaps to develop an Integrated Mine Operations Solution for Detailed Production Scheduling, Production Execution along with integration with out of the box ERP modules like Inventory, Quality, and Asset Management, Human Resources and Cost Management functionality and integration with Mine Planning and Mine Dispatch Systems. This solution supports both open cast and underground mining operations.

Integrating Mine Operations to accelerate Business Growth

About the Author Sudip Kumar Chaudhuri heads the Resources Center of Excellence at Tata Consultancy Services. Having worked with Major metal and mining customers for the major portion of his career in the areas of enterprise solutions and asset management, his current role includes leading initiatives for developing offerings specific to the metals and mining industry, developing proof of concepts and leading initiatives in innovation. Premasish Dan works as a Domain Consultant in the Metals and Mining sub-ISU at Tata Consultancy Services. He has about 9 years of experience in core business functions like Production, Supply Chain Management, ERP Implementation and Business Intelligence Solution. He has been associated in implementing the Integrated Mine Operations Solution in one of the premier client organizations, with deep involvement in the areas of design, development and delivery.

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Integrating Mine Operations to accelerate Business Growth

Table of Contents 1. Introduction

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2. Challenges

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3. About TCS’ Integrated Mine Operations Solution

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4. TCS Integrated Mine Operation Solution Framework

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5. Integration Model for TCS Integrated Mine Operation

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6. The Integrated Mine Operations Solution – Process Flow

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7. Benefits Accrued

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Integrating Mine Operations to accelerate Business Growth

Introduction The core mining business process starts with geological and economic analysis of the mining prospect followed by a detailed mine planning, scheduling, mine development, production & dispatch to the stockpile or concentrator. Mine production needs to take into account the availability of manpower & equipments for its unit operations. The product process is supported by ancillary support infrastructure commonly grouped under general services; these are surveying, dewatering etc. The Mining business process is broadly categorized into two categories – Open Cast and Underground. The business process for Mine Operations broadly described below is for a midsized copper mining company and starts after the feasibility analysis phase has been completed. The various unit processes in mining operation is mentioned as below: Mine Operations l Exploration Drilling (Diamond Drilling) l Core Sampling & Analysis l Blast Hole Drilling (opencast ) l Mine Development - For Underground operations ¡ Large Dia / Long Hole Drilling (Underground) ¡ Production Drilling l Production Blasting l Material Transport – ore / waste transporting system in mine like tramming / hauling / hoisting (underground) Mine General Services l Survey l Dewatering l Ventilation (Underground)

Challenges The Mining business faces a number of challenges some of which are listed here: 1.

Effective Geology and Resource Modeling – This can prove to be a challenge because at the early stages of a mine the ore body has to be fully analyzed to assess its economic potential. This is done through exploration; drilling and geological survey followed by analysis of ore samples. Using geotechnical and geostatistical analysis a block model of the ore body is derived. Each block has certain characteristics like Ore Grade, Rock Type, and Geological Zone and other such characteristics. This is merged into a single data set for future mine planning activities.

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Accurate Life of Mine (LOM) Planning - The LOM plan includes the period starting from the extraction of ore in first block till the extraction of ore in the final block. However, the LOM works on the premise of positive Net Present Value (NPV). The LOM plan typically delivers a set of practical stopes and pit designs (scenarios), which allow planners to decide which of the blocks of the Mineral Resource Inventory they will mine (pay blocks) and in which sequence. For these scenarios, a Net Present Value (NPV) is calculated based on the

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Integrating Mine Operations to accelerate Business Growth

estimation of the tonnage mined, final product recovery figures, and production costs as well as sales and marketing information such as price, demand and risk parameters 3.

Optimum Detailed Production Scheduling - The detailed production plan typically looks ahead a week or a month and is set by shift personnel. For many mining companies, detailed production scheduling is often a critical and difficult area because these companies look for short-term optimisation to achieve low production cost and high asset utilisation while minimizing Run of Mine (ROM) stockpile inventories

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Efficient Production Execution - Detailed production information is typically recorded by each shift. Production actual includes tons mined per block, quality characteristics, consumables used (example, diesel, drill bits, explosives), hours worked by mine operators or contractors, distance hauled by truck, actual production data update material management and product cost information. Data is collected manually by production operators or automatically by plant control or fleet management systems. In all cases, the data may have to be verified or consolidated

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Optimum Human Capital Management - Retaining skilled workforce in the Mining Industry poses challenges due to competitive needs from other allied industries. Typically a variety of schemes are established to reward the workforce depending on operator performance or mine operations parameters such as working on a raise, deeper levels for underground mining etc.

The mining industry today lacks a comprehensive enterprise solution that integrates the entire value chain from Planning, Scheduling, Operations and Processing to Sales. The typical IT landscapes even where enterprise solutions have been implemented are island of information in mining departmental systems which are disconnected from the enterprise backbone. This hinders strategic planning and decision making inaccuracy in management reporting.

About TCS’ Integrated Mine Operations Solution TCS’ Integrated Mine Operations is a fully integrated solution leveraging Oracle e-business Suite as an enterprise platform that enables the Mine operations business process along with information exchange with Mine Planning and Dispatch systems. The solution extends the enterprise backbone to upstream business processes and helps an organization to realize a better value of an ERP Solution investment. This solution provides the following key enablers across the Mining value chain l Helps

architecting a true “enterprise-wide” solution by delivering Mining Operations functionality lacking in out-of-the box ERP l Allows full control of the feasibility phases and their costs due to Financial Integration right at the beginning of the project during the exploration phase itself l Helps reduction in maintenance complexity and the TCO by eliminating and minimizing the mix and match of multiple products across the mining value chain l Provides a flexible solution that can be tailored to specific mining attributes depending on the region specific mining practices l Enabler for developing a Mining analytics solution with cross functional data The following two diagrams Figure:-1.1 and Figure:-1.2 describes the Open Cast and Underground mine bussiness process respectivly.

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Integrating Mine Operations to accelerate Business Growth

Exploration Drilling

Sampling & Analysis No Close

Ore Yes Mine Planning

Blast Hole Drilling (BHD)

Sample & Analysis

Production Blasting Air and Water Sampling

Mine Survey

Excavation / Hauling

Mine Lighting

Dewatering

Ore No Yes Despatch

Despatch

Waste Pass Dump

Stockpile

Fig1.1: Open Cast Mine Business Process

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Integrating Mine Operations to accelerate Business Growth

Exploration Drilling

Sampling & Analysis No Close

Ore Yes Mine Planning

Mine Surveying

Mine Development / Excavation

Air and Water Sampling

Production Drilling Ventilation

Dewatering

Production Blasting

Tramming

Mine Lighting Hoisting

Despatch

Mine Stockpile

Fig1.2: Underground Mine Business Process The guiding principles and approach to enable the above business process are as follows: l Development of the business functions using underlying ERP technology, develop a Mining Operations Custom

Bolt-On leverage the Asset management and Human Resource data available within the ERP system, avoid duplicate data entries l Model the “Mine” as an Inventory organization and seamlessly maintain the ore stockpile and Explosive Inventories l Design roles and responsibilities of Mine Supervisor, Shift In Charge, Planner, Geologist and provide access to the functions on a need basis l Maintain Bore Hole Database either as an option for initial collar, assay, survey and Litho data and as part of Diamond / Infill Drilling/ Blast Hole Drilling l Develop specific functions for Mine General Services l Fully

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Integrating Mine Operations to accelerate Business Growth

TCS Integrated Mine Operation Solution Framework As indicated in Figure-2, the TCS Integrated Mine Operations Solution can be used to maximize data capture and develop further integrations depending on the level of automation required in the Mine. The user interfaces allow to capture Equipment data for detailed scheduling operations considering Production downtime due to breakdown or Preventive maintenance schedules. Vendors with open puchase orders can be selected while developing the schedule for the various mine operations. The HRMS data for the mine personnel considers the Rotation Plan in the HRMS sub system. The solution does an automated stock issue of Explosives after completing the Blasting operation. The assay information is captured using the standard Quality modules available within the ERP and integrated with Mine Operations. The Bench/ Block information for Opencast operations and Level/ Stope for Underground operations is considered alongwith the area and attendance of employees are captured and interfaced to Time and Labor sub system. The aggregate view can be easily used to generate Mining incentives and seamlessly integrated with Payroll.

Integrated Mine Operations Solution CRYSTAL

DYNAMINE

Mine Planning

Mine Planning Borehole Data feed

Mine Dispatch

Assay Analysis

Operations Mine Configuration Mine Information

Mine Dispatch

Equipment Availability

Grade Tonnage

Exploration / Production Drilling

Hauled Ore

Mine General Services Mine Survey

Excavation/ Mine Development

Sampling

Blasting Mine Operations

Mine Ventilation

BHD Tramming / Hauling / Hoisting Deposit Configuration

Oracle eBS

Inventory

Asset Mgmt

Ore ID Stockpile

Equipment ID Equipment Availability

Primary Crushed Ore Blast Explosives

Dispatch

Dewatering

Time and Labor

Payroll

Shift Hours

Mining Incentives

Shift Information

Bench / Level

Fig 2: TCS Integrated Mine Operations Solutions

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Cost Management Cost Elements Departmental Cost

Integrating Mine Operations to accelerate Business Growth

Integration Model for TCS Integrated Mine Operation The initial borehole data can be captured in Mine Planning or in Mine operations and interfaced to Mine Planning software. The deposit model is created in Mine planning and the initial estimates of Tonnage and Grade alongwith the Bench/Block or Stope/ Level and Area is interfaced back to Mine operations. Once the short term mine planning is completed in Mine Planning, the schedule of Block/ Level to be used for operations has been established in Production Planning, the same is interfaced to the Mine operations system, where it is used for detailed production scheduling for operations like Blast Hole Drilling. For the Dispatch system in open cast operations to perform dynamic allocations on a given day, it must know the equipment as well as availability data. This is transferrred from ERP before the shift begins. The available operator information is interfaced to the Dispatch system from the Attendance system in the Mine. Once the haulage operations start, the number of trips as well as tonnage are recorded in the Dispatch system and fed back to ERP/ Mine Operations. This enables a real-time and cross-mine view of production information Dispatch systems for Underground operations consist of tramming and hoisting operations. The tonnage of ore hoisted from the ore pass can be captured automatically and sent to Mine Operations in real time by developing a interface with control system of Mine hoisting system. Figure-3 describes the integration model for Mine Planning and Mine Dispatch Systems

Mine Dispatch Online Health Monitoring Mine Operations Open Cast Mine Planning

Level / Stope, Date , Shift

Production Drilling

Production Blasting

Production Planning

Production Recording Dynamic Allocation Available Operations

Mine Development Tramming/ Hauling

Available Fleet

Block Model Tonnage, Grade

Deposit Model

Underground Deposit Configuration

Tonnage, Grade

Production Recording Hoisting Tramming

Fig 3: Integration Model

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Integrating Mine Operations to accelerate Business Growth

The Integrated Mine Operations Solution – Process Flow Performs Geological Analysis of the Deposit

Indicates the physical locations where bore holes need to be drilled

Instructs the mine surveyors to mark/indicate the places where bore holes should be drilled

Performs drilling based on the instructions received from planning and hands over the extracted core to the geology department

Instructs the mine planning department to drill bore holes to obtain an accurate ore body structure

Surveys the drilled holes and indicate the holes that are ready for blasting to the mine planning department

Analyses the report sent from the planner and confirms the ore body Structure

Reviews the ore body structure and sends the information to mine planning

Surveys the actual drill length against the planned drill length

Survey of stock pile is done to obtain the actual tonnage of ore against the planned tonnage figures

Based on the outcome of the geological report mine planner decides whether further infill drilling is required

Performs Infill Drilling

Blast hole drill plan is communicated to mine operations.

The sample is sent for quality analysis.

Performs blast hole drilling.

Production blasting is performed by operations department once the blast hole drilling is completed

Dispatch to Mine Stock Pile: The muck obtained after blasting is transferred (hauling) to different locations (stock piles) or directly to primary crusher (as per production requirement)

Controls the movement of the stock pile for further consumption by the processing facilities

Analyses the metal content of the sample and sends the report

Fig 4: Process Flow Diagram

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Dispatch to Plant Stock Pile.

Integrating Mine Operations to accelerate Business Growth

The above figure is the process flow diagram for Opencast Mine Operation. An example of the functions performed by the various departments are described below :l Geology

Department does the initial geological analysis for the mine site based on geological survey report. Once the feasibility of the ore body is determined to some degree the geological department will instruct mine planning to drill bore holes to which to obtain a more accurate ore body structure. The collar, lithology and assay data can be directly fed into any available geology and mine planning software. It can also be entered into the borehole database available in Mine Operations which is already interfaced with geology and mine planning software.

l The

Mine Planner develops the initial ore body model and block model of the Mine deposit. To model the ore body more accurately the planning department instructs the mine survey department to indicate the places where bore holes should be drilled and this is interfaced to Mine Operations Solution. Based on the outcome of geology and assay analysis the mine planner will plan for diamond drilling / infill drilling operation for underground and opencast respectively and instruct the same to operations. Once the results of diamond / Infill drilling have been analyzed by the Quality Department, the Mine Planner will use this data to update the ore body model.

l After

updation of Ore body model, the Mine Planner will perform the Short term mine planning and generate block/ area extraction sequence using the Mine Planning Software, this information is passed to Mine Operations to suggest the schedule for detailed Production Operations like sequence of production drilling, blasting, tramming and hoisting for underground operations and production drilling, blasting, loading and hauling for opencast by the Operations department.

l Mine Survey is reponsible for the following set of activites ¡ Indicate the physical locations where bore holes need to be drilled ¡ Verify

the drilled length after drilling and declare completed by production department and report the same to mine planning ¡ Survey of Mine Excavation to calculate excavated volumes ¡ Survey of the stock piles to compare the declared ore tonnage against the actual production of ore l The

Survey department uses the Mine Operations functions and approves the data that has been reported by the Operations department.

l Activities

of the Mine Operation Department enabled by the business process solution described in the paper includes all types of drilling operations (Diamond, Infill, Blast Hole, Long Hole, Large Dia and others), Blasting operations followed by Tramming and Hoisting Operations for underground mines and loading & hauling for opencast mines. The Operations Department is able to view suggested schedules from Mine Planning and prepares the shift-wise plan accordingly.

l For opencast mines the Dispatch System helps in monitoring utilization of capital intensive Heavy Earth Moving

Machinery (HEMM) and captures the critical details like loading time, hauling time, unloading time, idling time and queing time of loading and hauling HEMM alongwith the total tonnage dispatched to Crusher / Stockpile for ore alongwith grade of ore and total tonnage dispatched to waste dumps for waste material in real time. This information is integrated seamlessly with Mine Operations

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Integrating Mine Operations to accelerate Business Growth

l For underground mines, the hoisting data can be interfaced with Mine Operations. Tramming operations from

different stopes can also be captured real time using RFID based tracking system for underground mines. l Quality

Department does the assay analysis during various stages of exploration and production drilling to determine the grade of the Ore body. They also carry out sampling and analysis of ore stockpiles both within mines and at plant.The quality analysis samples and results are entered into the system and are available whenever required for review and for sending this information to Mine Planning.

Benefits Accrued Integrated Mine Operations can bring significant improvements due to better visibility and end-to-end process integration. Some of the key benefits that contribute to better operations are as follows:

l Better Return on Investment (ROI) by integrating Planning and Operations in Mining leading to better execution ¡ The sequence of Block extraction is available to Operations to plan realistic schedules to meet production

and quality targets l Complete visibility of the value chain by seamless recording of Mine production in real time both for opencast and underground operations ¡ Automated recording of ore production as the ore is dumped to the Ore point ¡ Accurately maintain the inventory of the ore stockpile and seamless issue of stock to the downstream concentrator plant l Better Asset Utilization by ability to plan detailed scheduling of Mine operations as per capacity constraints ¡ Detailed scheduling takes into account the equipment availability to accurately create daily or monthly production schedule ¡ Better utilization of Human resources for detailed scheduling l Reduction in the total cost of ownership due to Integrated view of operations across mines - open cast or underground using a single system within the enterprise solution ¡ As the solution resides on a single platform, this enables cross mine view l Financial integration right from the beginning of a greefield project instead of the time when production starts ¡ Detailed cost sheet reports based on Mine operations provides the cost of mine operations There are several intangible benefits that lead to operational effectiveness leading to better business performance. l Improved co-ordination between various mining departments looking at a single version of truth l Better analysis capabilities due to single source of Mining information l Ease of management reporting due to the solution being a part of the enterprise backbone l Enabler for higher levels of mine automation and increased use to equipment level integration l Provide

better insight into financial planning due to measurement of various KPIs available as part of the operations, planning and dispatch data

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About Tata Consultancy Services (TCS) Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and ITenabled services delivered through its unique Global Network Delivery ModelTM, recognized as the benchmark of excellence in software development. A part of the Tata Group, India's largest industrial conglomerate, TCS has over 143,000 of the world's best trained IT consultants in 42 countries. The company generated consolidated revenues of US $6 billion for fiscal year ended 31 March 2009 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com

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