Quantification of production risk in the underground mine planning process

Abstract

This report investigates the impact of the stoneworks process at a leading underground colliery in South Africa, which for the purpose of this report, is referred to as ABC Colliery. ABC Colliery delivers the coal to a company, which for the purpose of this report, is referred to as company XYZ. As ABC colliery reaches depletion and the available coal reserves become limited, the flexibility of operations becomes more constrained. The production section is restricted with regard to continued coal extraction the moment it reaches a large amount of dolerite intrusion (dyke or sill) and burnt coal. This dolerite intrusion requires the intervention of a stoneworks team before any operational activities can continue. This specialised stoneworks team will be responsible for removing the dyke through blasting techniques, whereafter the production section can continue with normal coal extraction. If possible the production section starts working on another area while the stoneworks team removes the dyke. The production section will come to a standstill if the dolerite is not removed within a short period of time by the stoneworks team. The coordination of the production and stoneworks schedules is critical to prevent standstills, which will result in production losses. Encountering of an unforeseen dyke or sill has different risks. In such a case there are two possible consequences. The first is the safety impact factor. If there is burnt coal present, there is a possibility of a safety hazard. The second impact factor is the loss of time, resulting in the loss of production volumes. The first aspect to consider with the impact on production volumes, is whether there could be space available for alternative mining if an unforeseen dyke is reached, also known as pit room. The dyke must be removed immediately by the stoneworks team if a pit room is not available. The time required to remove the dyke depends on the dyke thickness. The risk of an unforeseen dyke can be minimised by drilling more vertical or horizontal boreholes in order to attain a more accurate position of the dolerite intrusions. This more perfect information results in a trade-off between higher costs and more accurate information that will significantly reduce the risks of the safety impact and production volumes. The value of imperfect information is reflected in the uncertainty of an unforeseen dyke. A decision tree model was built with the possibilities and probabilities of actual events in the past to determine the value of imperfect information. A Monte Carlo simulation was Page | iv computed by using the triangular distribution for the input variables. A sensitivity analysis was performed to determine the input values with the highest impact on the expected value of R 65 million. From the analysis it was clear that the expected value was most sensitive to the availability of pit room. The value of R 65 million generated by the model indicates the risks to the process as a result of an unforeseen dyke or sill. It now becomes a business decision to determine how much will be utilised to reduce the risk. This decision is based on economic requirements and the level of risk avoidance practised by the company. The funds can be allocated to different areas to obtain more perfect information and / or to optimise the production, stoneworks and geological exploration processes. The actual amount of drilling is R8 million per year. This represents only 12% of the calculated risk and is a function of the economic considerations and risk avoidance practices as mentioned above. The optimisation of this amount and the allocation thereof were not part of this project and provide good opportunities for further development and future projects.