Major Open-Pit Copper Mines Move Underground

Major Open-Pit Copper Mines Move Underground

Some of the world’s largest open-pit copper mining operations are heading underground with

ambitious block cave production plans By Steve Fiscor, Editor-in-Chief

Steel liners installed at the feed head of a grinding mill. (Photo courtesy of ME Elecmetal) The natural progression for an open-pit mine in a rich orebody that extends at depth is to eventually convert to some

form of underground mining to extract the ore. During the near term, two open-pit mining icons will do just that.

The world’s largest copper and gold mine, Freeport McMoRan Copper & Gold’s Grasberg mine in Papua,

Indonesia, will reach its open-pit limits and head underground in 2016. Similarly, Codelco’s Chuquicamata mine,

one of the largest open-pit copper mines in Chile will do the same in 2018.

While this natural order of progression is nothing new to metal miners, the size and scope of what is being planned

today is breaking new ground. South Africa’s Palabora Mining was probably the most recent large copper miner to

transition from open-pit to block cave. It was and remains a learning experience for the mine engineers and today

they are quite proud of what they have achieved: a block cave operation that produces at an average rate of 30,000

metric tons per day (mt/d). Freeport and Codelco are considering 160,000 mt/d and 140,000 mt/d respectively.

What further complicates the situation is that Grasberg and Chuqui are located in remote regions with limited access

to resources. The existing workforce will have to be retrained to bring these operations online quickly. It also means

that the engineers will have to get it right the first time. The advantage they have is that both Freeport and Codelco

have experience with block cave mining.

While six to eight years seems like a long time, replenishing these large sources for copper ore has serious

implications for the parent companies and world markets. Codelco is in the midst of preparing a feasibility study of

the engineering design work to properly plan the conversion process. Freeport’s Grasberg block cave development is

underway and detailed design work is ongoing. They will rely on this advanced level of mining engineering to

successfully launch the new underground era for copper mining worldwide.

Palabora Mining Set the Precedent During the early 1990s, Palabora Mining embarked on a similar series of feasibility studies to convert its open-pit

copper mine in the Limpopo Province to an underground mine. In 1996, it announced it would proceed with the

development of an underground block cave mine with a production rate of 30,000 mt/d.

Palabora Mining’s engineering design work set a precedent for converting from open-pit to underground design; no

other block cave mine has been put into as competent an orebody, according to the mine owners. The block height

of the cave is also testing previous limits at 450 m in the center increasing up to 700 m on the periphery.

The construction and development of the underground mine was completed in October 2004, but the Palabora

Mining underground project could not be considered a success until it finally averaged 30,000 mt/d for a month.

This occurred for the first time in May 2005, giving Palabora’s block cave one of the fastest ramp-ups to full

production in history.

The production footprint measures 650-m long and 200-m wide and consists of 20 production cross-cuts and 320

drawpoints. With the orebody’s coarse fragmentation, a high degree of secondary breaking activities is required to

free hang-ups and reduce oversize chunks to keep ore flowing through the drawpoints.

The mine’s fleet of LHDs tip 3,000 buckets per day into four jaw crushers on the northern side of the mine. Ore is

reduced to less than 220 mm and fed onto a high capacity conveyor system up to the shaft complex for hoisting to

surface.

During 2009, the mine averaged more than 31,600 mt/d. More than 11.5 million mt were hoisted last year, a slight

decrease over 2008 tonnages. The decrease was due to a failure on a winder drum. The ore grade averaged 0.67%

copper.

Today, the performance from the cave continues to improve. Increased mobile equipment availability and a general

awareness on the possible impact of the open-pit waste have compelled the underground team to focus closely on

proper draw control principles. Other improvements include the use of two LHDs in one crosscut and a continued

use of oversize reduction philosophy where a rock breaker and a loader operate in the same production crosscut

simultaneously to improve productivity.

Figure 1—Chuquicamata Underground will begin block cave mining below the pit in 2018. Chuquicamata Subterránea After more than 100 years of production, Codelco’s Chuquicamata, one of the greatest open-pit copper mines, which

is located in northern Chile, will deplete its surface minable reserves and move to underground production by 2018.

This is a significant milestone for one of the world’s largest copper producers. Yielding 450,000 mt of copper in

concentrate annually, Chuqui represents more than one-fourth of Codelco’s total copper production. From that

perspective, it’s easy to understand why Codelco has been working diligently to make the transformation to the next

phase, Chuquicamata Subterránea (underground) as smooth as possible. After nine years of preliminary work,

Codelco has reached the fourth stage of a six-stage (17-year) timeline to bring this mine into production in 2018 and

to go on to achieve full production of 140,000 mt/d by 2025.

The Chuqui Underground project (Chuqui UG) will offer Codelco at least 50 years of copper production. More than

1.7 billion mt of reserves with an average grade of 0.7% copper will be extracted from the underground mine.

Copper production in concentrate is expected to total 320,000 mt/y. To mine the ore, Codelco will retrain the Chuqui

workforce to transition from open-pit mining to underground mining. Around $2 billion will be invested in the

project to mine the first ore.

Codelco has decided to pursue a block cave approach. Among other objectives, Codelco also expects Chuquicamata

underground production costs to come in between the lowest and second-lowest quartiles among world copper

producers.

“We are now starting the basic engineering stage,” said Sergio Olavarria, engineering director, Chuquicmata

Subterránea mine project, Codelco. “We plan to have the infrastructure design work completed by the end of the

year. In 2011, construction will begin on what will be one of the largest, safest and most efficient underground

mines in the world.”

At 140,000 mt/d, the annual extraction rate will be 65 million mt. Chuqui UG will require two shafts between 11-

and 12-m in diameter for development extraction and ventilation. The orebody will be mined in four 215-m lifts

during a 42-year mine life. The first lift, Level 1, will begin at an elevation of 1,840 m. The cave will consist of

production blocks as large as 36,000 m2. Four years before the first level is depleted, they will begin to prepare the

next level. Final production is in approximately 2060. At that point the mine will reach a total depth of nearly 790

m.

During the caving process, they plan to pre-condition the current area of mining using a hydro-fracturing technique.

“We will break the rock mass before the caving process begins,” Olavarria said. “We will use water for hydro

fracturing and other holes for explosives. We think this approach will work well for the geology, which is similar to

that of Palabora.” In addition to guiding the cave and managing dilution, Olavarria explained, it might also reduce

the potential for air blasts.

The mine would use 30 6.9-m3 LHDs to move ore from as many as 12 production crosscuts to an orepass feeding a

crusher installation. The engineers are not committing to remote operation yet. They are looking at their experience

at El Teniente, before they commit to any type of automation. Crushed ore would travel by belt haulage to an

underground storage silo, which meters ore onto a main conveyor belt. The ramp for the main belt is 7-km long,

which conveys ore to the surface. “The current plan for the main belt is three flights with two transfer stations, but

we are also studying the possibility of using one transfer stage,” Olavarria said. “Because the conveyor would move

material more than 1,000 m vertically up a 15% slope, it would consume 60 megawatts— making it one of the

highest powerconsuming conveyors.”

Chuqui UG will employ 3,000 to 3,500 miners. The training approach for miners will consist of 80% field training

and 20% classroom. Codelco expects the entire training process for both new workers and converting existing

workers from the openpit to take about three years to complete.

Block Caving at Freeport Indonesia When the Grasberg open-pit mine reaches final production, Freeport Indonesia plans to have the skill and

infrastructure in place to launch the Grasberg block cave mine and ramp production up to 160,000 mt/d. The mine is

under development and scheduled for production in 2016.

Underground mining is nothing new to Freeport Indonesia. For more than 30 years, it has mined ore from the East

Ertsberg Skarn System (EESS) by block caving methods through a systematic set of lifts. The total remaining EESS

reserves are more than 775 million mt, which will yield 11 billion lb of payable copper and 13 million oz of payable

gold.

The Gunung Bijih Timor (GBT) mines first worked the deposit from 1980-1994 and during that period the mines,

which were initially designed for 5,000 mt/d, peaked at 30,000 mt/d. From1994- 2003, the Intermediate Ore Zone

(IOZ) mine worked the next lift and similarly its design capacity of 10,000 mt/d exceeded initial plan and peaked at

19,000 mt/d. The IOZ mine encountered and had to learn how to cope with wet muck, a combination of water and

fines that resulted in occasional large flows of mud in the production areas. Wet muck is a safety hazard, is difficult

to handle and results in less productive mining. To overcome this challenge, the IOZ mine introduced teleremote

mining with LHDs.

Today, the Deep Ore Zone (DOZ) mine works the current lift. Considered one of the largest caving mines in the

world, it was originally designed at 25,000 mt/d. As additional ore was discovered at the DOZ the planned

production rate underwent a series of expansions from 25,000 mt/d to a final sustained production of 80,000 mt/d,

which was achieved in February 2010. Freeport plans to sustain a production level of more than 80,000 mt/d through

at least 2015. The DOZ mine has already produced 112 million mt since it opened in 2003 and it will produce an

additional 282 million mt through 2020.

The DOZ mine, currently working at the 3,125 m level, inherited the wet muck conditions from the IOZ mine. In

fact, of the 490 active drawpoints, 20% are classified as wet. The DOZ mine has also improved underground

construction standards. One initiative in the DOZ is the use of an engineered, boltable linter set in the drawpoints,

which requires less concrete.

Figure 2—The GBC mine would share common infrastructure with the DMLZ mine, namely the adits and

the conveyor network. Mining the DMLZ Ore Body The DMLZ will be the deepest and highest stress block cave mine in the Ertsberg District to date. The reserve is

located below the DOZ mine, between the 3,125- and 2,590-m elevations. Development operations commenced in

November 2008, with the start of a rail spur leading from the AB Adits, and in January 2009 with a conveyor and

service decline access (Figure 2).

Production plans revolve around a block cave mining approach, similar in many respects to current operations at the

DOZ mine.

A departure from the DOZ operation is the main inclined conveyors (~15%) planned to transport production ore up

to the mill area. The DOZ mine, being located at the mill elevation, required relatively short, flat conveyors to

transfer ore from the crushers to surface stockpiles. The DMLZ will use twin gyratory crushers fed by trucks

operating above on the haulage level. Ore will be transported to the surface over a series of 1,829-mm conveyor

belts totaling approximately 4 km in length. This conveyor system raises the ore 550 m vertically from the crusher

discharge up to an existing conveyor near the surface.

The DMLZ ore body measures roughly 1,300-m long (oriented southeast to northwest) and is between 350- and

500-m wide. There are 43 production panel drifts planned. Panel length between the first and last drawpoints varies

from 72 m at the southeast end of the level to 474 m, with an average of 372 m.

Orepasses are installed along the panel drifts at a maximum spacing of 170 m. Aside from the 12 panels short

enough to require only a single orepass and the eastern two panels that share an orepass, the remaining 30 panels

require two orepasses, for a total of 72 orepasses in the current design.

The DMLZ ore body will be mined using an advance undercut method similar to the DOZ mine. Drawbells are

drilled and blasted from the drawpoint drifts into caved material previously blasted above on the undercut level.

Drawbells are blasted in one shot using programmable detonators. The undercut blast forms the major pillar apex;

the drawbell blast forms the minor pillar apex (Figure 3).

Figure 3—Undercutting and drawbelling methods at the proposed DMLZ mine. Undercutting will lead drawbelling by a minimum of 15 m horizontally. It will typically advance beyond this

minimum point, but as a general rule should not lead drawbelling by more than three months. Exceeding this

maximum, according to Freeport Indonesia, creates an elevated risk of blasted undercut material re-compacting and

taking weight.

Caving operations will commence in the higher-grade east section of the mineable footprint, moving in a series of

three blocks to the west. Draw columns along the north side of the mine tend to be shorter in height, averaging

approximately 245-m height of draw (HoD). The majority of the production activity will occur in the southern half

of the mine where HoDs reach 526 m.

Manpower for the DMLZ is forecast to peak at 2,550 during the 2009–2021 preproduction and production ramp-up

years, with a range of 1,950 to 2,400 for the full production period. The first drawbell ton is schedule for January

2015 with peak production achieved during 2020.

The Grasberg Transition Freeport Indonesia is using what it has learned from planning and operating the DOZ and planning the DMLZ to

design and build the Grasberg block cave (GBC) mine that is planned to produce 160,000 mt/d. The GBC mine has

reserves of 1 billion mt with an average grade of 1.03% copper and 0.81 g/mt gold. At a cutoff grade of 0.60%

copper equivalent, the deposit would yield 23 billion lb of copper and 26 million oz of gold.

The GBC mine design comprises a total of 2,400 drawpoints covering an area of 700,000 m2. The drawbells will be

30- x 20-m.

The mine will use an extensive rail haulage network with 40-mt electric trolley locomotives to haul ore. Five to six

trains will have 20 to 24 20-m3-cars. The trains will haul ore to three pockets feeding individual gyratory crushing

stations. Inclined conveyors will transport ore to the surface.

Figure 4—A shift to underground block cave production will help the company maintain 240,000 mt/d. Similar to the DOZ mine, caving would consist of an advanced undercutting system. The average column height

would be greater than 450 m. Caving would be initiated in 2016. The maximum drawbell opening rate would be

eight drawbells per month.

Workers will pass through a security checkpoint at the Ridge Camp rail yard, the area just outside the AB Adits. The

area would also have a materials handling facility, waste muck handling facility, rolling stock maintenance depot, a

mine rescue station and concrete batch plants.

Currently, mine engineers are developing geotechnical and drifting designs. The underground batch plant will be

designed, procured and constructed during 2010 and 2011. Basic engineering for the ore flow system will be

completed along with the underground electrical distribution system design. Detailed design engineering for the

service shaft is also in progress.

The GBC mine plans to initiate service shaft excavation by early 2011. The mine also plans to complete an inter-

level ramp and the first portion of the mine ventilation system in 2010.

During 2011 and 2012, the GBC AB terminal will be constructed with the rail installed to it, along with underground

support infrastructure. By 2012, rail installation should be completed with train service to the GBC mine from

surface. The mine will also commission the service shaft in 2013 and begin development on the undercut, extraction

and rail haulage levels.

The crushing plant will be operational by 2014, along with the initial feed conveyor and main conveying system.

The rail haulage system and main shop come online in 2015. By the end of 2015, the required development on the

extraction and undercut levels will be completed to initiate caving.

Caving will begin in 2016 and the GBC mine will reach full production in 2022. The GBC mine will be the flagship

for the district during the new “underground era.” What the company is learning in the DOZ today at 80,000 mt/d is

critical to achieving the goals for tomorrow’s GBC mine.

References 1. Casten, T., Brannon, C., and Thomas, L., “A Review of the Caving Mines at PT Freeport Indonesia’s East

Ertsberg Skarn System,” SME Annual Meeting, Feb. 28- March 3, 2010, Phoenix, Arizona, USA.

2. Duckworth, I., Casten T., and Rakidjan, “An Overview of the Proposed DMLZ Mine,” SME Annual Meeting, Feb.

28- March 3, 2010, Phoenix, Arizona, USA.

3. Brannon, C., Vergara, P., and Baker, R., “Grasberg Block Cave Mine: Design Considerations to Achieve

160,000 tpb,” SME Annual Meeting, Feb. 28-March 3, 2010, Phoenix, Arizona, USA.

Petra Diamonds Plc 11 Apr 11

Finsch opens the road to producing 3m carats pa

Petra Diamonds Plc has acquired, from De Beers the Finsch Mine in South Africa. The Finsch

mine is the second biggest producing diamond mine in South Africa. The acquisition more than

doubles annual carat production, while adding to the in-ground resource. The acquisition is a

major step toward achieving the target of producing five million carats per annum. The following

figure shows the location of the Finsch mine, together with Petra’s other South African assets.

The acquisition price was R1,425 million (approximately £131 million). The Finsch mine is

considered to be one of the world’s major diamond mines, producing around two million carats

of diamonds per annum. Petra will hold a 74% interest in the mine with the remaining 26% held

by the Black Economic Empowerment (BEE) partners Sedibeng Mining, Namoise Mining and

the Petra Employee Share Trust. Petra will free carry the 26% held by the BEE partners.

The purchase price was paid in cash, with Petra successfully placing 136.7 million shares at 150

pence per share, raising £205 million. The majority of the raising was used to fund the Finsch

purchase of approximately £131 million, with £24.6 million paid to the South African

Department of Mineral Resources for the environmental guarantee and for working capital

requirements at Finsch.

A further £35 million raised was used for internal working capital requirements, accelerate

certain capital expenditure programmes and settle some or all of the deferred Cullinan

consideration owing to Al Rajhi.

The Finsch purchase is subject to conditions including certain South African Government

approvals, approval by the current BEE partners in the Finsch mine, Board approvals by the

current owners and various other approvals and waivers from involved parties. The conditions

appear to be similar to those regularly attaching to the sale of a major mining asset.

Concerning the conditions, we hold an opinion that Petra would not have entered into the

transaction, should it believe these conditions were We cannot not comment

The acquisition includes a major resource of 48.1 million carats, including 26.6 million carats in

reserves and 4.7 million carats as tailings. The mine site is state-of-the-art with a shaft capacity

of 4.6 million tonnes and a plant capacity of 7.2 million tonnes. On site is an 800 plus housing

unit estate in a well established town environment.

The Finsch mine is an underground operation currently producing around two million carats of

diamonds from a deep pipe. The following figure shows a schematic of the Finsch mine’s

diamond pipe.

Over the past four years the pipe has produced a number of large special diamonds with an

average of 27 stones over 50 carats recovered per annum. Some of the better quality diamonds

recovered include a 204.7 carat diamond (in 2003), 109.9 carat (2007) and 101.7 carat diamond

(2010). The recovery of a significant number of large high quality diamonds can

substantially increase the total value of production in any one year.

The mine operates on a block cave mining format. Operating in a block cave format delivers

high volume and low costs. The following figure shows the concept of a block cave underground

mining operation.

The Finsch mine’s unit cash cost per tonne is R15, which compares very favourably with the

R30 for the company’s Cullinan mine which operates in the same block cave format. The

company will benefit from acquiring Finsch as it will be able to bench mark Cullinan and

also the Kimberley underground (block and cave mining format) which is yet to become a

producer.

Diamond production for Finsch is forecast to grow over the course of the next five years. The

following table shows the forecast production of carats carat. The production references refer to

the blocks in the figure Finsch – Underground schematic appearing earlier in this review.

With the acquisition of Finsch, diamond production for 2011 will approach two million carats.

While for 2012, including a full year of production from Finsch will surpass three million carats.

Petra holds a right to mine on site at Finsch until 2038. The following figure shows forecast

diamond production and revenue out to 2019.

We hold the opinion that the acquisition of the Finsch mine will be both earnings and

cashflow accretive and value adding going forward. The opportunity to lift diamond

production to the five million carats by 2019 appears to be readily achievable from the

company’s now expanded production base. The acquisition lifts the total diamond resource of the

company to 309 million carats.

We consider management does have a very good track record in acquiring diamond operations

having successfully acquired Koffiefontein (in 2007), Cullinan (2008), Williamson (2008) and

the Kimberley underground (2010).

After finding solid support at the 142p support region, Petra Diamonds managed to surge higher.

The recent break above the 50 day moving average indicates short term momentum to favour the

upside. We would expect a retest of the January high of 189p in the near term.

The weekly chart signifies an important breakout from the 2007 highs of 167p. This is suggestive

that the broader term uptrend to remain intact. Once the 189 resistance level is cleared, we would

expect a new leg higher to unfold.

We consider the opportunities available to the company to grow diamond production

organically are further enhanced with the Finsch purchase. We consider this aspect of

Petra’s operation is the key to delivering future shareholder value.

Petra is a superior exposure to diamonds and the company will be firmly held within the

Portfolio.

Interstate Technical Group on Abandoned Underground Mines

Fourth Biennial Abandoned Underground Mine Workshop

Figures: Underground Mining and Its Surface Effects

Paper

Figure 1. Schematic developments of mine effects.

Figure 2. Longwall coal face ripper. The overlying strata are of varying thickness and rock types

(photo courtesy of David Young).

Figure 3. Folded coal and other sedimentary strata, Smokey River Coal Mine, Alberta (photo

courtesy of Dave Young).

Figure 4. Longwall mining method and ground reaction [Brady and Brown, 1985].

Figure 5. Rock mass behavior above and behind longwall mining face support [Whittaker and

Reddish, 1989].

Figure 6. Drawing shows bending and breaking of strata above a mined longwall panel.

[Kolebaevna, 1968] in Peng (1992).

Figure 7. Longwall mining subsidence effect.

Figure 8. Generic ground and rock mass movements associated with longwall mining [Whittaker

and Reddish, 1989].

Figure 9. Subsidence from longwall mining in terms of width and depth of working [Orchard,

1956-57], in Whittaker and Reddish (1989).

Figure 10. Surface subsidence profiles for dipping seams [Whittaker and Reddish, 1989].

Figure 11. Location of arching over longwall mining [Whittaker and Reddish, 1989].

Figure 12. Subcritical, critical and supercritical subsidence surface effects [Whittaker and

Reddish, 1989].

Figure 13. Subsidence surface profile with multiple seam situation [Whittaker and Reddish,

1989].

Figure 14. Subsidence factor versus mining depth in the Appalachian coalfield [Peng, 1992].

Figure 15. Mathematical form of longwall mining subsidence profile [Brady and Brown, 1985].