Measuring success through profit recoveryThere is more to profitability than simply more tonnes and higher metal recovery
There is more to profitability than simply more tonnes and higher metal recovery
By Brent Hilscher
October 23, 2018
Courtesy of Brent Hilscher
It is easy for mining operations, and humans in general, to develop tunnel vision when it comes to focusing on a few easily measured key performance indicators (KPIs). In mining and mineral processing, the three big KPIs tend to be tonnage, recovery and product grade. Profit is very rarely used as a serious metric for operators and engineers.
Losing sight of the big picture – profit – can lead to mines spending millions of dollars processing waste in an effort to boost tonnage and metal recovery, while missing opportunities to reject waste and therefore improve profits.
Profit recovery is a simple way of viewing your mill feed in order to maximize profit, not just tonnage or metal recovery.
Profit recovery was developed to evaluate the potential and the performance of ore sorting systems, particularly in a semi-autogenous grinding (SAG) feed. It is similar to metal recovery, but takes into account the cost of processing and tailings disposal. Once costs are accounted for, a low-grade rock could lose an operation money if processed. Like metal recovery, any high-grade ore accidentally rejected by the sorting system hurts the recovery. But unlike metal recovery, any low-grade waste rocks sent to the mill will hurt profit recovery since money is lost in processing the waste. By admitting the losses involved in processing waste, we are able to create a more useful and concise metric to measure performance.
A CMP 2018 paper demonstrated that three different sites operated by three different companies – Barrick Gold, McEwen Mining, and New Gold – each experienced a 50 to 75 per cent profit recovery range in their current layout. A 50 per cent profit recovery indicates that half of the potential mill profit is spent processing waste. A 75 per cent profit recovery indicates that a quarter of potential profit goes to waste-processing costs. Testing indicated all three operations could use sensor-based ore sorting to boost profit recovery to over 90 per cent. Every operation is different, but about half of the rocks in a typical SAG mill feed are below cut-off grade. Rejecting most of those waste rocks and replacing them with ore will yield tremendous economic and environmental benefits.
The new metric of profit recovery is simple and visual. It is a conservative measurement, as it does not include the potential to increase the resource or mill metal production. The metric also omits the environmental benefits of reduced power consumption, CO2 emissions, and water consumption. Complex benefits are included in later economic studies, but KPIs need to be simple to calculate and track. Profit recovery focuses on the big picture cost savings realized in processing fewer waste rocks. How companies optimize after that is up to them.
As innovation in mining accelerates, the most successful engineers and companies will be those who can see beyond their local KPIs and understand the larger picture. These engineers and their companies will have the rare opportunity to lead the industry in both environmental stewardship and corporate profitability.
Brent Hilscher is principal engineer at Sacre-Davey Engineering.