Case Study Context: Open-Pit Mining
This assessment exercise relates to “open-pit” (or “open-cast”) mining – a surface mining technique (in the open air) performed using heavy-duty mobile equipment to extract valuable mineral ore for later beneficiation and sale.
• Effective and profitable open-pit mining revolves around the efficient use of costly equipment to perform a drill and blast process, and subsequently a load and haul process.
• Equipment is costly both from a capital and operational expenditure perspective.
• Mines often have a costly overhead component and rely on large volumes of ore throughput to operate profitably. Inefficiencies that decrease ore throughput and increase costs are a challenge that all open-pit mines face.
• Equipment incurs a monthly fixed cost that is independent of the amount of ore extracted (even if the equipment is not used) as well as a variable cost component arising from fuels, lubricating agents, maintenance, and other metrics that are related to the use of equipment.
Objectives
• In this case study, you are expected to demonstrate some basic analytical capability applied to a mining case study for an open-pit coal mining operation. Simple key data is provided which you should analyse to provide any observations or insights you may draw into the operation.
• A CSV file is provided with detailed truck information for a period of one day. This is described in more detail in the attached slides on the case study. The Excel spreadsheet provided contains the necessary detail for the summary monthly mining and financial data for the operation.
• In this case study, Business Science Corporation (BSC) management will be looking at processing information to assist them in making the appropriate decision when evaluating how to optimise the trucks (i.e. you are required to process the given information and provide us with a suggested areas of improvement truck efficiency).
• Firstly, the management would like you to review and assess whether there are any trends that they can identify from Geospatial Data over time (such as time spent during activities, sensitivities, ratios / rates, etc.). This table can be found in the attached Excel file under the “Truck Geospatial Output” tab.
• Secondly, the management would like you to process the financial information and identify the reasons for the difference between budget and actual. Provide suggestions on improving the budgeting process and the benefits of improving operations (e.g. create three scenarios indicating how your suggestions will improve the financial position of the mine)