100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010 Practical final pit depth considering the future underground mining- A case study Title of paper: Authors: 1- Ezzeddin Bakhtavar; Urmia University of Technology University of Stirling, Stirling, UK 2- Kazem Oraee; University of Stirling, Stirling, UK 3- Kourosh Shahriar; Amirkabir University of Technology 4- Farhad Samimi Namin, Zanjan University

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Introduction Method description The Case study (Gol-e-Gohar Area 3 iron ore) Conclusions Determination of final open-pit depth considering the underground option

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  In some cases it is considered that the most suitable and economical method for the exploitation of an ore deposit (such as the investigated case study) is to combine open-pit and underground methods.  In this regard, the most critical problem is the determination of optimal final pit depth with considering the underground alternative.  Here, to determine optimal final open-pit depth of Gol-e-Gohar Area 3 mine (case study) a method, which was recently introduced on the basis of economical block models of open-pit and underground, was used. 3

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Method description The Case study (Gol-e-Gohar Area 3 iron ore) Conclusions Introduction Determination of final open-pit depth considering the underground option

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  The main idea of the applied model was concluded from the initial algorithm of Nilsson.  In order to reduce the shortcomings of the Nilsson algorithm and to accomplish some modifications, a number of essential requirements were added to the algorithm, for instance, to take into consideration to a suitable crown pillar.  The target of the model can be achieved by comparison between the obtained values of various scenarios of combined mining. 5

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03,  In this method, it is necessary to split up the future pit volume into several level-cuts (independent pit).

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  Considering and below each level-cut, an underground option can be included, but after to bear in mind the most effective crown pillar. 7

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  At most, a crown pillar with a height as a multiple of blocks height considering the selected underground mining method and geotechnical investigations must be contemplated.  The main part of the present method is associated with selection of a combined mining scenario includes maximum NPV. 8

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Introduction Method description The Case study (Gol-e-Gohar Area 3 iron ore) Conclusions Determination of final open-pit depth considering the underground option

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, General description of the site  Ore complex located in Kerman province of Iran and includes six areas. 10 Gol-e-Gohar Iron Ore complex

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  The Area 3 zone is approximately 1730 meters above sea level in an area of planar desert topography.  Length of the Gol-e-Gohar Area 3 ore body is about 2200 m (N-S).  Average width of the ore body is nearly 1800 m (E-W).  Thickness of overburden and waste rock above the ore zone varies from 95 to 560 m.  Depth of the ore body varies from 95 m at the north end to 600 m at the southern end.  Ore body thickness varies from 15 to 130 m with an average of 40 m.  The indicated resources have been estimated to be 496 Mt and an Inferred resource of 147 Mt. 11

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Technical considerations of the open-pit option  A bench height of 15 m (Therefore, the block height of 15 m used in the block model)  Pit slopes of 45 degrees in ore and waste rock and 32 to 33 degrees in dry overburden  A safety berm height of 2 m  A drainage ditch width of 2 m  The required width of the haul road is 26 m with a grade of 10%.  Four shovels with 9-m 3 buckets for use primarily in ore and 15-m 3 buckets for use in overburden. 12

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  During the production stage, 13 to 29 hauling tracks with capacity of 136 ton will be required.  Other mining support equipments: one wheel dozer, four track dozers, two motor graders, one water truck, one ANFO / emulsion truck, and etc.  Four rotary blast hole drills  Burden by spacing in ore is 5.5m*7m  Burden by spacing in all waste rock zones is 5.5m*6m  Burden by spacing in dry and wet overburden zones are 8m*10m and 8m*9m, respectively.  Sub-drilling is 1.5 m in ore and waste rock and 2.5 m in overburden. 13

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Selection of a suitable underground option  During the selection of a low cost and productive underground method the following assumptions are considered and finally “room and pillar” has been chosen. o Backfilling of openings will not be economically viable; therefore mining will be by room and pillar or open stoping methods. o Due to the potential height of the mining, multiple levels would be required, separated by sill pillars. o Due to the plunge of the ore body (approximately 20 degrees to the south) and the potential for low friction contacts (gouge and broken zones) between the ore zone and hanging wall / foot wall rocks, it is assumed that pillars left in place will be continuous ribs generally oriented in a N-S direction (i.e. along dip). 14

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Technical considerations of the underground option  A room width of 10 m  Pillar height varies from 60 m at 100-m depth to 9 m at 400 m depth.  A 60% of ore extraction and recovery  The rock support consists of bolts, screen and concrete (for waste).  A sill pillar thickness of 6.7 m  One production shaft with a diameter of 6.71 m, one service shaft with a diameter of 7.62 m, and one exhaust ventilation shaft with a diameter of 7.62 m  Two crusher stations (each crusher can crush 900 ton/hr) 15

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  Conveyor belts at the bottom of the crusher will transport the ore to a 1000-ton bin.  A two-boom electric-hydraulic drill jumbo  A crawler-mounted, Single-boom, electric hydraulic bench drill will drill 12.5-m long, 64-mm diameter holes on a 1.2-m by 1.4-m burden and spacing pattern.  Each bench hole will contain 1 m of water gel explosives followed by 8.5 m of ANFO prills and 0.3 m of collar stemming materials.  50-ton trucks and 16-ton loaders.  A total of 17 trucks and 15 loaders 16

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Economical considerations of the open-pit and underground A) Estimation of the annual incomes  The actual production of the processing plant was determined to be 6 Mt/year considering a loss of 5% of concentrate to dust in the plant.  To produce the actual targeted 6 Mt of concentrate, the annual tonnage of processed ore will be in the range of 8.7 Mt.  The price for concentrate is US$0.235 per Fe unit in concentrate based on US$16/t at 68% Fe. 17 CharacteristicOpen-pitunderground Annual concentration (ton) Price of Fe unit (US$)0.235 Annual income Table- Annual incomes achieving from open-pit and underground mining

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010 B) Estimation of the costs  The total operating cost was estimated to be equal to (US$ million).  Here, operating cost is divided into three groups of mining, processing, and general and administration.  “Processing” cost as well as “general and administration” cost are the same in both open-pit and underground.  An average process operating cost was estimated to be US $3.00/ton per feed ore.  General and administration cost was estimated to be equal to 2.3 (US$ million/year).  Therefore, the operating cost of processing plant for open-pit and underground mining is calculated to be and 24.7 (US$ million/year), respectively. 18

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  Ascendant trend of operating cost per each tonnage of produced ore in regard to different open-pit mine sizes, is assessed (following Figure).  As it is clear in following Figure, in relation to an open-pit mine including 130 Mt of ore, mining operating cost is US$2.28 per each tonnage of produced ore. 19

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  During the three years of overburden removal, operating cost of mine is taken into account to be US$0.4 per each tonnage of overburden removal.  Therefore, before ore production and during development stage mining cost will be (US$ million/year).  On the basis of an open-pit mine with maximum production capacity of Mt of ore capital cost is considered to be (US$ million). 20

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  All estimations for the underground costs are in US dollars, using 2002 prices, and have an error of estimate of 25%. A 15% contingency has been added to all cost estimates.  The Capital costs include: o (US$ million) for underground mobile mining equipment, o (US$ million) for miscellaneous mine equipment, o (US$ million) for shaft development and installations, o (US$ million) for mine development, o 2.2 (US$ million) for mine construction, o (US$ million) for miscellaneous mine operating, o 5.23 (US$ million) for staff and labour. 21

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  As it shown in following Figure, the total operating cost for direct operating and maintenance supplies and labour for stope and production development, room and pillar mining has been estimated to be 4.47 (US$/ton, Milled).  Therefore, mining cost of the room and pillar will be 36.9 (US$ million/year).  On the basis of the room and pillar mine with maximum production capacity of Mt of ore capital cost is considered to be (US$ million). 22

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Conclusions Introduction Method description The Case study (Gol-e-Gohar Area 3 iron ore) Determination of final open-pit depth considering the underground option

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  It is first necessary to identify several scenarios of combined mining on the basis of the benches height of 15-m in open-pit.  Each scenario includes three components of open-pit, a crown pillar, and underground.  Crown pillar stability will be dependent on numerous parameters including rock type, rook quality, rock strength, overburden depth, water influence, in-situ rock stress, and pillar geometry.  In the next step, through the economical comparison between the scenarios, the most profitable one can be selected.  It is notable that the main assessment is done according to the constructed economical block models of open-pit and underground mining. 24

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010 Open-pit depth (m)  As it shown in following Figure, considering a discount rate of 12%, a net present value of 63 (US$ million) is achieved due to the related scenario of 285-m depth of open-pit.  It means that the optimal final open-pit depth considering the room and pillar mining to be equal to 285 m achieving a 63 (US$ million) of net present value. 25

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, Conclusions Introduction Method description The Case study (Gol-e-Gohar Area 3 iron ore) Determination of final open-pit depth considering the underground option

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03, 2010  Due to the significance of determining the optimal open-pit depth considering an underground option for Gol-e-Gohar Area 3 ore body, an effective method was used.  In this regard, according to the benches height of 15-m several scenarios of combined mining of open-pit and room and pillar were initially considered.  Then, with considering a discount rate of 12% the related NPV of each scenario was determined.  After that, during an economical comparison between the scenarios, the most profitable one was selected.  In this relation, the optimal open-pit depth was assessed to be equal to 285 m, which achieves a total NPV of 63 (US$ million). 27

100 YEARS OF MINING RESEARCH: 100 YEARS OF MINING RESEARCH: Phoenix, Arizona; February 28 - March 03,