Sub-Committee on Mining Innovation

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Ontario Mineral Industry Cluster Council (OMICC)

• Sub-Committee on Mining Innovation
• Working Group
• Integrated Mining Process Engineering
• Mine Planning and Design -
• (Cutifani, Wood, Nickson, Kaiser)

February 11, 2005 Sudbury, Ontario
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Mining Innovation I M P E

• Integrated Mining Process Engineering (IMPE)
• a process of optimal utilization of data and
  knowledge across the mining cycle to make the
  best possible decisions

EXPLORATION
Mining Method ASSESSMENT

VERIFICATION
OPERATIONS DATA


cost

performance
properties

CLOSURE
SIMULATION
IMPLEMENTATION
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Mining Innovation I M P E - Justification

• Observation
• Sudbury has some of the best technical and
  operating expertise in the mining industry, but
  it doesnt always show up in the development and
  execution of our mining plans
• Mark Cutifani, President, Ontario Operations,
  Inco Ltd.
• Challenges
• Sustain profitability within existing operations
  throughout the metals price cycle and attract
  financing for future mine development
• Relevance
• This can be accomplished through Excellence in
• Mine Planning and Design
• Bottom line
• Lets move mine planning towards the rigor of
  commercial aviation design!

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Mining Innovation I M P E - SWOT

• Mining cycle strength and weaknesses

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Mining Innovation I M P E Mining complexity

• This program is about advancing the
  state-of-the-art for
• production enhancement, cost saving and safety
  performance
• in shallow, deep, high and low grade, narrow vein
  and bulk mines
• by advanced mine planning and design

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Mining Innovation I M P E Best Mining
Practices

• Some of the best mining practices in the
  world are used in Sudbury.
• Narrow vein footwall copper deposits mined by
  Falconbridge and Inco are unique
• Worldwide sublevel caving expertise is limited
  and concentrated in Australia, Sweden and also in
  Canada through Sudburys Stobie Mine and
  requires research and development efforts ? There
  is significant potential to develop low grade
  reserves and resources in Ontario
• Remnant mining practices in Sudbury basin are
  well established (i.e. Frood Mine) an important
  factor in optimizing mineral balance sheets and
  responsibly extracting maximum amount of mineral
• VRM and Blasthole Stoping methods were largely
  developed from experience in the Sudbury Basin
  offering a cornerstone of mining method best
  practices
• One of the greatest opportunities to secure our
  future in mining is to become smarter in planning
  and design
• Steve Wood, Manager, Business Planning and
  Development, Inco Ltd.

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Mining Innovation I M P E - Opportunity

• The ability to influence positive outcomes is
  highest in the early stages by streamlining and
  optimizing the mining process

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Mining Innovation I M P E - Urgency

• Our Reserve/Resource history
• Inco (1993 2001)
• Reserves 306 Mt to 196 Mt
• Treated Ore totalled 82 Mt
• (Brook Hunt 2002)
• Falconbridge (1992-2000)
• Added 27 Mt with exploration
• Mined 23 Mt
• (Web site, Brook Hunt 2001)
• Declining Trend??
• Established reserves require particular attention
  to preserve their integrity (NI43-101)
• Companies can also maintain large mineral
  inventories that could have potential (low grade
  mineralization, remnant areas, difficult mining
  areas, pillars, etc.)
• Urgency also exists to target sustainability by
  moving mineral inventory and exploration
  potential to beyond 100 reserve/resource
  replacement

(Brook Hunt 2002 and Inco 2004)
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Mining Innovation I M P E Way Forward

• Develop the ability to modify mineral envelopes,
  mining methods, mine layouts, mining techniques
  and sequences to simultaneously enhance safety
  and minimize cost risk (quickly and efficiently)
• Develop innovation in engineering mining process
  by
• improved handling of the complex 5-dimensional
  mine planning and design process through the
  integration of geological and geomechanics
  information, planning/scheduling procedures, and
  economic assessment processes
• use of IT for data capture and integration to aid
  decision-making, communication, and investors
  relations

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Mining Innovation
Mining Innovation I M P E Key Research Focus

• Objectives will be achieved by
• Leveraging information technology (acquisition,
  processing, visualization, interpretation)
• to develop innovative mining methods and optimal
  planning to minimize risk and optimize returns
  (attract capital for future mines)

• Key RD priorities include
• Integration of exploration data into mine design
• Innovative mining methods satisfying constraints
• Intelligent modeling for mine planning and design
• Intelligent simulation of mining processes
• Reducing risk of injury by identifying risk
  mitigation opportunities
• Drill / blast / muck cycle optimization

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Mining Innovation I M P E Conceptual End
State

• Ability to work from a mine scale to a
  stope-by-stope level to develop multiple mine
  design scenarios for a mineral envelope
• Ability to work with different mining methods,
  outside conventional approaches
• Incorporate tools that will be developed in
  phases to look at
• mining reserve evaluation
• mining method optimization
• exploration potential enhancement
• economic modeling
• geomechanical modeling
• 3D visualization
• infrastructure design
• Key Abilities
• rapid assessment of multiple scenarios
• early modifications of mining method and mining
  layout
• techniques that enhance safety and minimize cost
  risks

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Mining Innovation
Mining Innovation I M P E Key Research Focus

• Goals of IMPE-program will be achieved by
  projects falling into three categories
• Feasibility level planning Mining Method Filter
  
• mining method filter to select best possible
  alternatives
• Mine-scale evaluation and planning
• considering high level constraints to develop
  economic scenarios
• Detailed mine planning and design
• stope level / detailed planning tools - modules

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Mining Innovation I M P E Example Projects

• Develop tools to enhance the planning process,
  full evaluation of multiple mining methods (e.g.
  Floating Stope Optimizer, Datamine)
• Develop of tools to enhance the design process,
  infrastructure, stope design, support selection
  (e.g. Orepass locator engineering design and
  operation management)
• Many others operational data centre seismic
  hazard mapping, design review and mine plan
  auditing, environmental monitoring, financial
  analysis,

Looking down an Ore Pass
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Mining Innovation I M P E - Benefits

• Scenario - Ore value vs mining costs
• One scenario reviewed at Inco illustrates the
  ability to vary the mining cash contribution (ore
  value mining costs) by greater than 500
  million through looking at a range of mining
  options
• Regular blasthole stoping suggested a 6 million
  cash contribution
• Low cost bulk mining approaches suggested a 546
  million cash contribution
• ? There is a strong need to provide the ability
  to generate multiple scenarios that consider
  different mining approaches
• Only a limited number of different approaches can
  currently be looked at mainly due to limited
  ability to integrate all available data and the
  lack of tools to facilitate the integration and
  assessment process

versus
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Mining Innovation I M P E - Benefits

• Effectiveness of engineering teams
• adopting an integrated mine planning and
  scheduling software can compress the planning
  process (Inco determined that this was equivalent
  to 8 person-years of time)
• An integrated drill and blast software was found
  to reduce the time to design blasthole rings by
  95.

As Is
Integrated
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Mining Innovation I M P E - Benefits

• Scenario Mining Alternative 1

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Mining Innovation I M P E - Benefits

• Scenario Mining Alternative 2

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Mining Innovation I M P E - Benefits

• Scenario Mining Alternative 3

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Mining Innovation I M P E - Benefits

• Bottom-line
• Millions of dollars can be saved/earned by
• Better planning and design
• Scenario analysis
• Better utilization of human resources
• We need to apply more intellectual rigor to the
  mine planning stage to ensure we extract long
  term potential and sustainable value.
• Mark Cutifani, President, Ontario Operations,
  Inco Ltd.

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Mining Innovation I M P E Resource
requirements

• As per draft proposal
• Key people are in place!
• Excellent research personnel with extensive
  expertise and an established foundation for mine
  planning and design through MIRARCO
• Geomechanics Research Centre (GRC)
• Centre for Mining Technology (CMT)
• Centre for Environmental Monitoring (CEM)
• Need funding to add highly qualified personnel
  (researchers, PDFs, students and for secondment
  of industrial collaborators to research)
• Recommend IMPE Chair at MIRARCO
• Capital (Infrastructure) Requirements
• Key requirement is SPACE (offices, laboratories)
• CIMTEC and NAVNET can form the backbone
• Funding of operating, up-grade, maintenance
  required

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Mining Innovation I M P E Resource
requirements

• As per draft proposal
• Preliminary cost estimate
• 7M/yr scalable to final agreed scope
• funding ratio 1/2/1/3
• (sponsor cash / sponsor in-kind / research
  matching programs / government)
• Timeline/Milestones
• 5 to 10 year program
• scope scalable to available resources (in-kind)
• yearly milestones beta-versions of IMPE tools
  for verification and calibration during follow-up
  year

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Mining Innovation I M P E Success factors

• Collaboration
• - Industrial co-sponsors
• - Sponsor mine sites
• - Provincial and national research organizations
• - Software developers
• Lead Organizations
• - INCO and partner companies program
  definition, project direction
• - MIRARCO and collaborators research approach
  and execution

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Mining Innovation I M P E - Summary

• Along with our people, the orebodies in Sudbury
  are our most important assets and differentiate
  us from other nickel producers. A significant
  competitive advantage for Sudbury should lie in
  the exploration and mine design steps for the
  nickel business.
• Mark Cutifani, President, Ontario Operations,
  Inco Ltd.
• IMEP is key program for and International Centre
  of Mining Excellence
• Fits a northern strategy to develop a unique
  mining engineering services niche
• Fits the Cluster strategy to bring compatible
  skill together to succeed in global market
• Brings huge economic benefits
• Jobs, discovery, niche, sustainability, export,
  tax revenues

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Mining Innovation I M P E - Summary

• and mines will fly Thank you!
• Questions ?