Optimising resources management

 

The Mining and Resources industry is historically cyclical with fluctuating industrial supply and demand causing major changes in resource prices.  After years of strong growth and expansion, the sector is currently susceptible to the pressures of cyclically lower and volatile commodity prices, rising production costs and a resultant slowdown in investment activity.  In this environment, efficiency needs to be maximised in the entire value chain from the initial discovery of the mine through to the extraction, processing,  transport and distribution of the mineral product to the customer to maintain profitability. Digitisation, modelling and integration of all processes and systems within a mine site can be used to enable process optimisation and risk minimisation both in the current cyclical downturn and at any point in the resource price cycle.

The entire mining, processing and distribution process (see Figure 1 below) starts with the most accurate evaluation possible of a new potential orebody from the exploration data available.  This evaluation process  has been a particular challenge.   Typically mine owners:

Figure 1: Minerals value chain

 

This is a nonconvex and nonsmooth problem and the logically consistent approach is to use to a nonconvex and nonsmooth mathematical technique.  Using convex solutions leaves considerable uncertainty which is generally managed by using stochastic and smoothing methodologies.  This has a very high computer demand and results in considerable residual uncertainty.  Using nonconvex, nonsmooth solutions minimises computer time and residual uncertainty, with the likelihood of optimising the mining opportunity to a more reliable NPV estimate.

The value of a new opportunity is influenced by the entire value chain, and this process of optimisation must continue through to delivery to the customer.

In collaboration with Federation University, Optias is developing  a new approach to optimise minerals production, processing and distribution.  This involves sophisticated global optimisation, data mining and simulation.  Preliminary assessments of this approach indicates that it could substantially improve the optimisation of the entire  mining and distribution process resulting in significant savings in cycle time in computer processing as well as substantial cost savings and improved accuracy.

These techniques were originally developed in a project to optimise liquid natural gas production on Australia’s North West Shelf within highly complex natural gas fields.  Optias found the lowest cost way to harvest the gas and produce liquid natural gas, saving the company $40 million per year in production costs.  The main components of this development included:

 

 

Reservoir simulation to optimise pressures across discontinuous gas reservoirs

Optimise the flow rates in gas gathering networks to maximize pressure at gas gathering points

LNG Networks

Maximize gas flow in production within specified gas composition constraints

LNG Production

 

Having demonstrated the application of these techniques to liquid natural gas production, Optias is developing these approaches for use in mining more generally, and across the value chain.