Introduction to Panel Caving

An Introduction to Block and Panel Caving Allan Moss, General manager Rio Tinto Copper Projects

Agenda

Context – why the interest in caving How block caving works and key technical considerations Risks Value drivers

1 March 2011

BMO Capital Markets 2011 Global Metals & Mining Conference

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Greater Depths of Mining

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Trends in Mining ~ to 2013

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Trends in Mining ~ after 2013

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Why Caving? • Use of gravity to break the rock (instead of explosives), thus low operating cost compared with other underground methods • High production rates can be achieved allowing economies of scale • Allows high degree of mechanization • Safe However • High initial capital costs • Conceptually simple – let gravity do the work - but technically very challenging • Requires large design effort; high quality construction; and rigorously managed operations 1 March 2011


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Cave Mining ~ When is it Applicable? •

Orebodies with a substantial vertical dimension; massive or pipe like

•

Rock strength not a limitation but need sufficient orebody dimensions

•

Primarily used in copper mining but also molybdenum and diamonds,

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Evolution of daily production rates New generation Caves; under construction

100000 80000 60000

3000m

Western Deeps

2000m

Kidd Creek

Homestake - S Dakota

Magma

120000

TONNES PER DAY

1000m

Henderson

140000

Palabora

160000

Open pits

4000m

San Manuel Climax

40000

Malmberget Premier Kidd Creek Salvador

Miami Mount Isa

1900

1920

1940

1960

1980

YEAR 1 March 2011

Henderson Andina

Kiruna

20000 0 1880

Super caves


“Conventional” underground

Olympic Dam Palabora Freeport IOZ/DOZ Ridgeway

2000

2020

2040

(after Brown 2004a) 8

Modernisation of an Old Method

LHD Grizzley Block Block Cave Cave 1 March 2011


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With Increasing Production comes need for Size Questa

DOZ

Perseverance

Parkes

Henderson

Premier

San Manuel

Oyu Tolgoi

Palabora

Resolution

Waste Unexploited resource Caved waste Exploited resource

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Note: size is for illustrative purpose only and has been sourced from published information BMO Capital Markets 2011 Global Metals & Mining Conference

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Major block and panel cave mines

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Rio Tinto Planned Currently operating Closed mines BMO Capital Markets 2011 Global Metals & Mining Conference

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Rio Tinto – a leader in cave mining • Involved in 5 block caves in operation or development • Applying experience from operating mines to developing next generation block cave mines • Advancing technology and innovation in block cave mining • Building an Underground Technology Centre to ensure objectives are met, particularly with regard to people 1 March 2011


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Agenda


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Where Does Caving fit in the Spectrum of Underground?

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Method

T / Manshift

Avg. T / Day

Relative Operating Cost per tonne

Resuing

0.2 - 0.5

50 - 100+

70+

Cut and Fill

12 - 48

500 – 1,500

20 to 70

Shrinkage

20 - 28

200 - 800

20 to 50

Room and Pillar

15 - 150

1,500 – 10,000

7 to 20

Open Stoping

20 - 115

1,500 – 25,000

7 to 25

Sub-level Caving

65 - 180

1,500 – 50,000

7 to 17

Block Caving

300 - 2000

10,000 – 100,000

1 to 2.5


Underground mining methods modified from Brown, 2003

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Five Key Components of a Cave Mine •

Orebody access Undercut Level – Shafts – Tunnels Extraction Level

•

Orebody

Undercutting Vent Raise

– The level where caving is initiated •

Ore Pass

Extraction

Exhaust Level

– Where ore is removed from the broken rock •

Ore flow – Sizing and transfer of ore to surface

•

Haulage Level Infrastructure

– Support systems, ventilation, power, water, supplies, men 1 March 2011


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Block Cave Concept Plant Crushed Ore

Shaft Ore body

Draw bells

Production tunnels

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Haulage system


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Caving Process

•

20

•

Progressive spalling

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1. Develop undercut level 2. Develop production tunnels 1 March 2011

Block cave mining is based on the principle that, once a sufficiently large area of a block has been undercut by drilling and blasting, the overlying block of ore will start to cave under the influence of gravity. The process will continue until caving propagates through the entire block to surface or to the open pit above

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3. Drill and blast undercut rings 4. Open troughs


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What are we trying to achieve?

Caved Ground

Undercut

Extraction LHD Loading 1 March 2011


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Block Caving Concept VALUE REALIZATION CAPITAL INVESTMENT 100 %

Vyazmensky © 2007

$ CAVE DYNAMICS SOURCES OF UNCERTAINTY

TIME CAVE MANAGEMENT 1 March 2011


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Section Through Cave

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Key Technical Issues

cave propagation cave flow

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cave fragmentation


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Critical dimensions to initiate caving

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Geometry of drawbells

DRAWBELLS

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Fragmentation: the key to a successful operation

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Impacts of Fragmentation

PRODUCTIVITY

IMPLICATIONS ON RESOURCE RECOVERY

SECONDARY BLASTING

VALUE AT RISK 1 March 2011


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Caving the block Primary Fragmentation

Index of Interruptions Frequency (Salvador mine, draw point 04W20)

Secondary fragmentation

HoD

Initial secondary fragmentation Blasting effect Blasted undercut material

Secondary Fragmentation

Flow Interruption Index (events/tons x 1000)

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Rock Structure and fragmentation

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Fragmentation is complex: risks!!! zone of loosening

expansion void

Primary fragmentation

Secondary fragmentation

f(fragment size)

fragment size evolution with draw

higher mobility of finer fragments within a draw column

Fine material

Coarse material

IDZ

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Cave Flow Zone of Loosening

Entry

waste ore

ore

HoD

waste

ore

ore

waste

Waste

(blocks that were displaced vertically at least once)

IDZ ~ Ellipsoid of Motion (extracted blocks) 1 March 2011


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Flow dictates Revenue Stream

WASTE ROCK

CAVED ORE UNCAVED ORE

WASTE ENTRY cylindrical IEZ

EXTRACTED ORE

RILLING and MASS FLOW 1 March 2011

elliptical or frustum shaped IEZ; height equivalent to~100-200 mean fragment size

PREDOMINATLY MASS FLOW


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What do we draw?- the recovery issue High grade ore

Dilution entry

ORE BODY

$ WASTE ROCK

WASTE ROCK

TIME

Vyazmensky Vyazmensky © © 2008 2008

REPEAT 1 March 2011


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What do we draw?- the recovery issue High grade ore

Dilution entry

ORE BODY

$ WASTE ROCK

WASTE ROCK

TIME

Vyazmensky Vyazmensky © © 2008 2008

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Undercutting UNCAVED ORE Rings to be blasted

CAVED ORE

Blasted undercut rings

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Purpose of the Extraction Level

ALLOW DEVELOPMENT OF DRAWBELLS

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ACCESS TO ORE ABOVE


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Light at the End of the Tunnel

A video of some of the concepts outlined can be found http://www.argylediamonds.com.au/video_block_cave.html 1 March 2011


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Agenda


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Can’t define risk - Can’t define value Block caving is not for marginal projects  Complete knowledge of the future is an impossibility  The question then becomes “how representative is the information we have on hand?”  This information is used to develop a robust enough plan to cater for the inherent uncertainty.  Uncertainty translates to risk (Flexibility costs money)

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Differences in Knowledge therefore differences in Uncertainty

Initiation point close to surface Substantial information No geotechnical constraints Ore drilled and typically sampled as part of mining process – detailed knowledge for short term planning Initiation point remote from surface Limited information Substantial geotechnical constraints

Limited knowledge of ore- sampling after the fact

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Scale

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Access and Extraction Complexity DOZ Mine – Freeport, Indonesia

GBT Area I & II

Escondida, Chile IOZ

DOZ

Courtesy of PTFI 1 March 2011


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Control OPEN PIT MINING

CAVE MINING uncertainty

reduced knowledge well established method good control

limited control

more certainty BETTER TECHNOLOGY IS A KEY TO BETTER VALUE 1 March 2011


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Risk Characterisation – the resource; understanding the size of the prize Design – resource to reserve; time for imagination Construction – the big spend and first taste of reality Operation – recovery and payback Paper (Design) Value vs. Actual Value

1,5 m

CONCRETE DAMAGE

CONCRETE DAMAGE

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Lesson learned at Palabora Palabora successfully transitioned from an open pit to a 30,000 tpd underground block cave but……. Surface subsidence

Mine infrastructure

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dilution of the ore reserve and subsequent reduction in life of mine 43

Agenda


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Ore grade and value

Value is a function of Run of Mine (ROM) grade which is an outcome of three interrelated factors

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1. The resource grade; a measure of the metal that is in the ground 2. The reserve grade, a measure of the effectiveness of the design 3. The recovered grade, a measure of how the cave is managed and cave dynamics


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Indicative Costs Capital

The capital and operating costs shown are relative and provide an indication of the spread. Both green field and brown field projects are included as are operations where access is via shaft or by decline. They were developed simply by normalising to lowest cost producers in terms of capital and operating cost.

Operating

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How Soon do you Get your Money Back?

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Realising Value New generation of Cave Mines • • •

represent a step change in the size of operations require investment levels of $2 to 10 billion and require significant time to achieve operating targets

There are value drivers common to any mining project: 1. Costs (capital and operating) 2. Revenue 3. Time 1 March 2011


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Investment in technology and innovation to drive value Cave dynamics • Block caving is inflexible and value locked in at the design phase • Important to understand cave behaviour and reliably forecast metal production (tons and grade)

Mine of the Future™

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Intelligent Mining • Autonomous equipment • Block cave operations well suited to concept of intelligent mining; real time information • Operating efficiencies


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Investment in technology and innovation to drive value Rapid development • Tunnelling concepts that are more productive and cost effective than traditional methods • Integrated shaft boring machinery with the potential to dramatically improve safety while reducing construction time Optimised design and management • Building on ability to predict cave behaviour • Improved planning techniques and software to improve grade sequencing

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The Vision – an Ore Factory Required Fragmentator

In Situ Crushing and Grinding

Fragment Size

Energy (Distance Traveled) Reliable Ore Flow Predictable Fragmentation (+ grade)

Ore Transport and Sizing

The The Ore RockFactory Factory

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Thank You Allan Moss, General manager Rio Tinto Copper Projects

Introduction to Panel Caving

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