1
24-072
Practical Applications of the Hill of Value Approach in
Strategic Planning for Openpit Mining
R. Benito
MINSYS, Tucson, AZ
J. Lopez
MINSYS, Lima, Perú
H. Gamarra
MINSYS, Lima, Perú
ABSTRACT
This article describes three practical applications of the Hill
of Value (HoV) methodology within different stages of stra-
tegic planning for open-pit mining operations and projects.
In the pursuit of optimal mine planning, this study
establishes a comprehensive case study during the (i)design
phase, by refining key parameters for efficient decision-
making. (ii)production planning, where the HoV is used to
define achievable production rates, enhancing operational
effectiveness through a nuanced consideration of mining
and processing capacities. (iii)Additionally, the study intro-
duces a conceptual framework for orchestrating the opti-
mal sequence of multiple pits during the planning phase,
with a focus on maximizing project value.
INTRODUCTION
In recent years, significant acceptance, and utilization of
the HoV methodology within the mining industry has
been noted. This methodology facilitates improved deci-
sion- making, grounded in solid and comprehensive evalu-
ations of multiple scenarios.
The HoV methodology leverages advanced modeling
and three-dimensional graphical capabilities to depict the
influence of each factor on NPV (Net Present Value). This
enables the explanation of optimal decision alternatives
with a robust analytical basis.
One way to comprehend this methodology is by con-
sidering NPV alongside two independent variables, typi-
cally the cutoff grade (CoG), and another key value factor,
such as the production rate. Adjusting the CoG entails a
redefinition of the mining sequence, resulting in modifica-
tions to the final pit design as one of its effects. Similarly,
changes in plant feed demand are directly dependent on
mine production demands, which in turn impact the Life
of Mine (LOM). Thus, unless a Hill of Value surface is gen-
erated, there is no way to conclude and base our selection
on the best combination of variables for the potential cre-
ation of value in our operations.
JUSTIFICATION FOR THE RESEARCH
The cornerstone of the value chain in mining companies
is strategic planning, as it enables quantification of value
and provides the operational foundations for their devel-
opment (Hooman, 2019). This process requires multiple
input parameters such as costs, prices, grades, tonnages,
recoveries, among others. Generally, these parameters are
estimated using deterministic methods, and some inher-
ently carry uncertainty from their conception, which in
turn stems from various sources (geological, operational,
external). Consequently, this uncertainty introduces risk
into the planning outcomes (Seguel, 2017) and potential
value loss associated with incorrect decision-making. The
24-072
Practical Applications of the Hill of Value Approach in
Strategic Planning for Openpit Mining
R. Benito
MINSYS, Tucson, AZ
J. Lopez
MINSYS, Lima, Perú
H. Gamarra
MINSYS, Lima, Perú
ABSTRACT
This article describes three practical applications of the Hill
of Value (HoV) methodology within different stages of stra-
tegic planning for open-pit mining operations and projects.
In the pursuit of optimal mine planning, this study
establishes a comprehensive case study during the (i)design
phase, by refining key parameters for efficient decision-
making. (ii)production planning, where the HoV is used to
define achievable production rates, enhancing operational
effectiveness through a nuanced consideration of mining
and processing capacities. (iii)Additionally, the study intro-
duces a conceptual framework for orchestrating the opti-
mal sequence of multiple pits during the planning phase,
with a focus on maximizing project value.
INTRODUCTION
In recent years, significant acceptance, and utilization of
the HoV methodology within the mining industry has
been noted. This methodology facilitates improved deci-
sion- making, grounded in solid and comprehensive evalu-
ations of multiple scenarios.
The HoV methodology leverages advanced modeling
and three-dimensional graphical capabilities to depict the
influence of each factor on NPV (Net Present Value). This
enables the explanation of optimal decision alternatives
with a robust analytical basis.
One way to comprehend this methodology is by con-
sidering NPV alongside two independent variables, typi-
cally the cutoff grade (CoG), and another key value factor,
such as the production rate. Adjusting the CoG entails a
redefinition of the mining sequence, resulting in modifica-
tions to the final pit design as one of its effects. Similarly,
changes in plant feed demand are directly dependent on
mine production demands, which in turn impact the Life
of Mine (LOM). Thus, unless a Hill of Value surface is gen-
erated, there is no way to conclude and base our selection
on the best combination of variables for the potential cre-
ation of value in our operations.
JUSTIFICATION FOR THE RESEARCH
The cornerstone of the value chain in mining companies
is strategic planning, as it enables quantification of value
and provides the operational foundations for their devel-
opment (Hooman, 2019). This process requires multiple
input parameters such as costs, prices, grades, tonnages,
recoveries, among others. Generally, these parameters are
estimated using deterministic methods, and some inher-
ently carry uncertainty from their conception, which in
turn stems from various sources (geological, operational,
external). Consequently, this uncertainty introduces risk
into the planning outcomes (Seguel, 2017) and potential
value loss associated with incorrect decision-making. The