If You Are Planning on Developing a New Mining Project, You Need an Operations Readiness “Road Map”

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ABSTRACT

A mining project’s bankable feasibility study identifies the deposit geology, drill results, statistical analyses of the expected ore grade, basic mine plan and engineering, basic process plant design, capital and operating cost estimates, and staffing ramp-up plan. What’s missing? Most feasibility studies do not adequately identify those non-engineering or construction activities necessary to successfully start up the mine and plant. These activities can be grouped under the heading: Operations Readiness. Adequately planning for these activities and costs and including them in the final bankable feasibility study will result in a more accurate project budget and will serve to greatly reduce the risk of underperformance during and after the start-up.

INTRODUCTION

We define Operations Readiness as all of the operating and maintenance activities associated with start-up—those activities other than the engineering, design, development, and construction of the mine and plant. Specifically, these include:

Most feasibility studies do not pay much attention to these critical activities.

Historical Background

In the 1970s, Charles River Associates Inc.1 completed a mining project start-up study for the World Bank. The study concluded that even plants with relatively straight-forward metallurgical processes encountered problematic start-ups. The study reported:

Investors should be prepared for long delays, added capital to correct mistakes in scale-up, and loss of revenue. If delays are not properly factored into the project’s financial feasibility analysis, the cash flow returns are grossly overstated and rarely achieved on schedule.

Figure 1 illustrates results of the study analyzing 16 mill and concentrator projects. We believe that these results are also typical of gold processing plants comprising relatively straightforward SAG mill/ball mill grinding plants followed by CIL/Leach-CIP and ADR plants or Merrill-Crowe recovery plants.

FIGURE 1
MILL AND CONCENTRATOR PRODUCTION AFTER START-UP

Mill and Concentrator Production After Start-Up

Figure 2 illustrates results of the study analyzing 11 metallurgical processing plants, more complex than the mills/concentrators shown in Figure 1. We believe that the projects shown in Figure 2 are also representative of more complex refractory ore gold processing plants such as pressure oxidation or fluid-bed reactor plants.

FIGURE 2
PROCESS PLANT PRODUCTION AFTER START-UP

Process Plant Production After Start-Up

As evidenced by the Charles River Associates study, approximately 70 percent of the mills and concentrators had an average annual production of 70 percent of design capacity during their first year. However, most of these operations operated at between 80 and 100 percent of capacity by their third year.

The start-up performance of more complex metallurgical processing plants, as shown in Figure 2, is significantly poorer than for the average mill and concentrator. Even after four years, many of these processing plants failed to achieve design capacity. Several failed prior to the fourth year.

Although operating personnel normally blame poor design and equipment problems for the delays, these so-called problems usually mask a much more fundamental problem: an inadequately prepared workforce.

We note that the start-up delays identified in Figures 1 and 2 were in evidence for projects in developed countries, as well as in developing countries.

DEVELOPING THE OPERATIONS READINESS “ROAD MAP”

The first step in ensuring that the bankable feasibility is complete with respect to operations readiness, is to develop an operations readiness planning study to be incorporated in the feasibility study.

Table of Contents Outline

The scope of the operations readiness planning study is illustrated in the following table of contents outline.

TABLE 1
OPERATIONS READINESS PLANNING STUDY CONTENTS

Section Subsections
1.0 Staffing Ramp-Up Mine operations
Mine maintenance
Plant operations
Plant maintenance
2.0 Recruiting Assessment sequence
Construction labor
3.0 Plant HAZOP Introduction
Team
HAZOP process
Reporting and review
4.0 Spare Parts Inventory Model Introduction
Data to be captured
ROP and ROQ identification methodology
Parts ordering
5.0 Training Curriculum and Development Plan

Basic training units

  • Introduction to metallurgical plant unit operations
  • Introduction to process control
  • Introduction to basic mechanical skills
  • Introduction to mining industry mobile equipment
  • Supervisory skills development program

Equipment and plant-specific training

  • Mine-specific mobile equipment operator training
  • Controls and indicators
  • Operating procedures
  • Emergency procedures
  • Performance optimization
  • Plant-specific operator training
  • Process description
  • Safe work procedures
  • Process control
  • Interlocks
  • Alarms
  • Operating procedures
  • Mine-specific mobile equipment maintenance training
  • Component descriptions
  • Safety
  • Troubleshooting
  • Preventive maintenance
  • Plant-specific mobile equipment maintenance training
  • Component descriptions
  • Safety
  • Troubleshooting
  • Preventive maintenance
6.0 Training Program Development Schedules Mine mobile equipment operations and maintenance
Plant operations and maintenance
7.0 Training Methodology and Execution Schedules Mine mobile equipment operations and maintenance
Plant operations and maintenance
8.0 Training Resource Loadings by Week ClassroomsComputers, white boards, desks
Instructors
9.0 Commissioning and Start-Up Package definitions and guidelines
Preoperational test procedures
Functional test procedures
Initial introduction of feed procedures
10.0 Exhibits Detailed cost estimates
Examples and other exhibits

In many cases, the staffing ramp-up is defined by the engineering, procurement, and construction management (EPCM) contractor performing the feasibility study. Recruiting is normally handled by human resources and the HAZOP is also normally handled by the EPCM contractor with mine owner personnel participating. However, we recommend that each of these components be assessed by operations and maintenance specialists and included in the operations readiness planning study.

Planning the Spare Parts Inventory Model

Spare parts planning for new projects is typically limited to the EPCM contractor obtaining one or two years of parts from equipment suppliers. These parts are normally stored in a laydown yard or in shipping containers, and in many projects, organization leaves much to be desired.

We recommend that the operations readiness plan provide for experienced maintenance personnel evaluating the equipment supplier recommendations with a view to:

Additionally, the plan should also include purchasing and warehouse personnel assessing delivery times and costs.

The plan must identify the resources and time requirements necessary to develop an inventory model yielding Economic Order Quantities (EOQs) and Reorder Points (ROPs) based on standard inventory control rules. The plan must then provide for uploading the EOQs and ROPs into the computerized inventory management system. Refer to Performance Associates’ white paper Spare Parts Planning for New Metallurgical Plant Start-Ups—Why You Need a Spare Parts Inventory Model.

An inventory model example for a particular supplier is shown in Figure 3. Note that for the example, the shipping cost, as well as weight, customs, and taxes are not shown.

FIGURE 3
INVENTORY MODEL EXAMPLE

Inventory-Model-Example

 

Planning for Preventive Maintenance Procedures Development and the CMMS

An essential component of the operations readiness plan is to allocate resources and time for developing all of the preventive maintenance (PM) procedural checksheets and schedules. The PM procedures need to be completed in time to upload them into the CMMS. Additional resources above and beyond the maintenance planners may be required to complete this work. At all costs, you must avoid the common misconception that “the equipment is new, so we don’t need to worry about preventive maintenance for a while.” The PM procedures must be planned to be complete well before the mine and plant start-up.

Planning for Training

Training will be one of the most crucial components of the plan. Planning for training must be extensive and detailed. Effective training prior to the start-up can make a huge difference in the ultimate mining project return on investment. Refer to Performance Associates’ white paper So You Are Investing in a Mining Project—What Usually Goes Wrong.

The training is composed of basic and equipment- and plant-specific operations and maintenance training. Basic training covers basic mining industry equipment and processes. Computer-based basic interactive training modules are available off the shelf from Performance Associates for licensing at an entire property. Equipment- and plant-specific training focuses on the exact plant, equipment, and process to be covered, including specific equipment and instrument tag numbers. The equipment- and plant-specific training should also be computer based and interactive.

Basic Training

The plan is to deliver the basic training first—this training can also be used as a screening device to make ultimate hiring decisions. If this approach is taken, prospective personnel can be told that they will be given a stipend and provided with valuable training. Although there is no guarantee that they will be hired, some of them will be. For those not ultimately hired, they will still have had a valuable skills training experience. In addition to evaluating the personnel completing basic training, decisions can be made on where those hired should be assigned.

Examples of Performance Associates’ off-the-shelf basic computer-based training designed for the mining and process industries include:

Equipment and Plant-Specific Training

Topics for this training are shown in the contents outline described above. This training ensures that plant operators have a conceptual understanding of the process and are familiar with each control loop and interlock, as well as the applicable operating procedures. A conceptual understanding will ensure that process upsets can be solved successfully through logical reasoning. Jumping to conclusions is a particular problem during plant start-ups, and they can quickly lead to wrong decisions and the masking of the original problem. For example, a high temperature alarm in a process circuit can be caused by a number of situations. The operator must be able to evaluate the applicable control loop. Is the controller output in the expected range? Is the instrument air pressure to the control valve appropriate for the requirement? Is the upstream cooling water reacting as expected? What is the cooling water flow rate? What factors affect the flow rate? All of these questions must be evaluated quickly and accurately.

Equipment-specific mine training ensures that equipment is operated safely and efficiently. Again, conceptual understanding of the major components and controls is critical. For example, the details involved with the Caterpillar automatic retarder control (ARC) on haul trucks must be thoroughly understood for safe operations. For example, under what weather condition should it be turned off? Under what conditions is it activated? Another example: How does an equipment operator know that a transmission clutch is slipping? What is the effect of a slipping transmission clutch? And another: How can a large Caterpillar loader operator optimize the use of the impeller clutch torque converter? This computer-based classroom training paves the way for getting the most out of the on-equipment practical training.

Training Plan

The first step in developing the training plan is to develop the curriculum. Figure 4 illustrates a typical curriculum matrix for plant operators.

FIGURE 4
TYPICAL CURRICULUM MATRIX

Typical Curriculum Matrix

The curriculum—represented by a curriculum matrix—for the equipment- and plant-specific training content is based on the tasks and conceptual knowledge required for each defined position. As can be seen in Figure 4, the curriculum training modules are shown on the horizontal axis at the top, and the job positions are shown on the vertical axis on the left-hand side. The number of personnel in each position requiring training is shown in the column to the right of the job positions. The remaining columns illustrate the training hours for each module for each position.

The training plan must include the schedule for the procurement and/or development of the computer-based training program, as well as the execution of the training that is developed. Refer to Figure 5 for an example screen shot of a development schedule in Microsoft Project for mine mobile equipment training modules.

FIGURE 5
MINE MOBILE EQUIPMENT TRAINING PROGRAM DEVELOPMENT SCHEDULE

Mine Mobile Equipment Training Program Development Schedule

Refer to Figure 6 for an example screen shot of a development schedule for typical process plant computer-based training modules.

FIGURE 6
PROCESS PLANT TRAINING PROGRAM DEVELOPMENT SCHEDULE

Process Plant Training Program Development Schedule

Once the curriculum matrix for each department has been completed, estimated resource requirements for developing the computer-based training will be necessary. These estimates are used in the training program development schedules. The formal and practical training hours for each module shown in the matrices are used in the training execution schedules.

Note that in the examples shown in Figures 5 and 6, a language translation step is necessary, as the example project output will be in a foreign language. CBT referenced in the schedules is an acronym for computer-based training.

Figures 7 and 8 represent examples of execution schedules. Note that the schedules are very detailed and identify the training for each position and the number of trainees in that position. This detail is important as it allows for identifying the specific resources necessary to support the training.

FIGURE 7
MINE MOBILE EQUIPMENT TRAINING INSTRUCTION SCHEDULE

Mine Mobile Equipment Training Instruction Schedule

FIGURE 8
PROCESS PLANT TRAINING INSTRUCTION SCHEDULE

Process Plant Training Instruction Schedule

With respect to plant training, a warning is warranted at this point in the paper. Be very cautious of firms that tell you that you can perform the training with a process simulator. Simulators are great training tools—but only after the basic and plant-specific training are complete. For a more in-depth explanation, refer to Performance Associates’ white paper Process Control Training—Simulators Are Only Half the Story.

Resource Loading

Once the detailed training execution schedules are complete, the resource loads must be calculated to ensure that a sufficient number of classrooms, computers, etc., are available to make the schedule. Figure 9 illustrates an example resource loading chart indicating the number of classrooms and instructors by week and the maximum number of trainees that must be accommodated.

FIGURE 9
EXAMPLE CLASSROOM RESOURCE LOAD PLAN

Example Classroom Resource Load Plan

For more details on start-up training for process plant operators, refer to Performance Associates’ white paper Preparation of Effective Computer-Based Operator Training (CBT) Programs for Metallurgical Plants.

Commissioning and Start-Up Plan

Although the EPCM contractor will often manage the preoperational and functional testing, this plan must be included in the operations readiness plan. It is essential that owner operating and maintenance personnel participate in the final stages of this testing as they complete equipment- and plant-specific training. Therefore, the staffing ramp-up and training schedules must recognize this requirement.

The plan must also address the initial introduction of feed, as the normal start-up procedures for the initial introduction of feed will be somewhat different. Therefore, plans must be made to edit the normal operations procedures to make them suitable for the initial start-up. For more information on commissioning and start-up, refer to Performance Associates’ white paper Metallurgical Plant Commissioning—Are There Any Shortcuts?.

Conclusion

If the bankable feasibility study does not account for the myriad operational-related requirements that ensure that the operation is ready to start, capital budgets will not be sufficient, shortcuts will be taken, and in all likelihood the start-up will be less effective than it should be. A detailed operations readiness planning study is not expensive.

Performance Associates specializes in operations readiness, and we have experience preparing these studies. This experience also includes developing the spare parts inventory model, as well as developing PM and standard maintenance procedures, developing and executing the operations and maintenance training program, and assistance in the initial start-up. Depending on the scope of the project and whether or not both the mine and plant are included, an operations readiness planning study is likely to cost less than $US100,000. Ideally, this study is completed in time to incorporate it into the final feasibility study.


1. Engineering and Mining Journal, September 1984, “Taking the Sting Out of Start-Up Problems,” J. C. Agarwal, et al.