Troubled Industry Lauds Advances in Intelligent Optimization as "Paradigm Shift"
MONTREAL, Oct. 4, 2016 /CNW Telbec/ - The global mining industry has lost some $1.4 trillion of shareholder value in the last 5 years. This is easily explained by the sudden end of the 2004-2011 commodity super-cycle. But such cycles are bound to repeat themselves. Will they have the same consequences? Can we learn from the past? Are there decision-making processes that can be used to improve the mining industry's performance in the face of uncertainty?
Ground-breaking developments in risk managing optimization technologies for mining operations around the world are the results of several years of research at the COSMO - Stochastic Mine Planning Laboratory of McGill University. These new technologies shift well-established mine planning paradigms to substantially increase gains for mining companies through risk management, while contributing to sustainable development by improving utilization of non-renewable resources.
Applications of the new technology to real-world situations have shown that production forecasts can be improved from 5 to 25%; reserves can be increased by 5 to 15%, and NPV by 5 to 30%.
These technologies simultaneously optimize when and which materials to extract from mines; how to blend and/or stockpile these materials, and transport them; how to utilize available processing streams; how to manage capital investments; and how to sequence rehabilitation. They have been tested in several case studies at different mining complexes and on various commodities, including gold, copper, nickel laterites, and iron ore as well as diamond mining.
Results consistently demonstrate that: (1) reliability is improved in meeting production forecasts by managing risk in supply and controlling this risk over time; (2) larger amounts of metal are produced from the same mineral resource by better understanding the spatial distribution and connectivity of high-grade material; and (3) a substantially higher economic value is obtained when compared with existing approaches. These improvements represent a step change contribution to the development of a new generation of intelligent risk-management concepts and technologies, as well as the sustainable development of mineral resources and reserves.
The COSMO Mining Industry Consortium includes the McGill lab and the following companies which together represent about 75% of the world's mining activity: AngloGold Ashanti, Barrick Gold, BHP Billiton, De Beers, Kinross Gold, Newmont Mining, and Vale SA.. Development of the new mine planning paradigm was facilitated by NSERC research grants to Professor Roussos Dimitrakopoulos, Founder and Director of COSMO.
The success of COSMO is best illustrated by comments received from the mining industry:
- Edson Ribeiro of Vale SA calls this "a paradigm shift in the industry because we have traditionally relied on simplistic and limited risk analyses, which often generated unreliable production plans."
- Alan Bye of BHP Billiton says the research will "enable mining companies to identify risks, as well as additional value from mineral deposits and enhance their ability to navigate commodity cycles."
- Marcelo Godoy of Newmont Mining Corporation adds: "The achievements of the COSMO consortium … will have a profound impact to the mining industry as it allows for more sustainable operations and optimum use of mineral resources."
- Leo Fusciardi of De Beers Canada states that "our involvement with COSMO on this initiative has ensured De Beers continues to be at the forefront of diamond mining techniques and technology."
- Vaughan Chamberlain of AngloGold Ashanti says his company "recognises the need for step changes in the optimisation of our scarce Mineral Resources in order to maximise the return to our shareholders. We see our relationship with COSMO as critical in achieving this goal..."
About COSMO – Stochastic Mine Planning Laboratory:
Celebrating its 10th anniversary this year, COSMO was established in 2006 with the support of the mining companies that became its members. Professor Dimitrakopoulos is Canada Research Chair (Tier I) in Sustainable Mineral Resource Development and Optimization under Uncertainty, and the world's leading expert in the field. He created the COSMO Mining Industry Consortium for collaboration and funding for what is now the leading centre in research, development and training in mine planning optimization, valuation and resource/reserve development, stressing risk management. For more information: http://cosmo.mcgill.ca
About COSMO Mining Industry Consortium:
The 7 companies that form the Consortium represent about 75% of mining activities on the globe. Each company participates actively with the COSMO Stochastic Mine Planning laboratory through collaborative research programs and projects, as well as knowledge transfer.
NSERC aims to make Canada a country of discoverers and innovators for the benefit of all Canadians. The agency supports colleges and universities in advanced studies, and promotes and supports discovery research. The agency fosters innovation by encouraging Canadian companies to participate and invest in postsecondary research projects. For more information, please visit www.nserc-crsng.gc.ca.
SOURCE COSMO - Stochastic Mine Planning Laboratory
Image with caption: "Logo: COSMO Mining Industry Consortium (CNW Group/COSMO - Stochastic Mine Planning Laboratory)". Image available at: http://photos.newswire.ca/images/download/20161004_C4567_PHOTO_EN_788665.jpg
For further information: Deborah Frankland, e-mail: Deborah.Frankland@mcgill.ca