6 ways to capitalize on APAC’s coal boom

Coal production in Asia-Pacific is anticipated to continue rising through 2022 to keep pace with local energy and manufacturing demands. For the next five years at least, emerging Asian states will rely on thermal coal-fuelled power plants to energize ambitious urban development projects.

Increased construction and industry will require a supply of metallurgical coal. Japan, India and China account for three of the five top producers, with China in first, producing upward of 800 million tonnes. In May 2018 the world reached 77.7% utilization of steel capacity, up 4.2% from May 2017[1].

This continued demand from northern neighbors has helped sustain the Australian coal industry with coal production and exports maintaining a high volume into 2018. Approximately 75% of coal in Australia is exported to our neighbors in Asia and with a large portion of the remainder used for local energy consumption. Even with the emergence of renewables and natural gas alternatives, 60% of energy can trace its source back to black or brown coal [2].

Mining methods and technology have progressed during the last decade and the continued modernization of mining methods in Southeast Asia will help yield better production from existing mines. Adopting best practices and a digital strategy early in a project’s life can reduce the complexity and length of time required to identify, validate and develop potential reserves into thriving long-term mining operations. Here are six ways that Hexagon’s experts and its diverse product suite can help the industry build innovation strategies to improve efficiency, reduce waste and lead coal into a sustainable future.

 1. Modeling complex deposits – Drillhole management, coal modeling

Coal has been mined for centuries. Its utility as a fuel source has been integral to the advancement of society. Coal mining experienced an exponential jump at the commencement of the industrial revolution. Continued industrialization means that flat-lying stratigraphic coal deposits close to the surface are becoming scarcer. Modern coal reserves are increasingly complex to identify, model and confirm. In the current climate, new coal projects need to be economically justified and engineered to reduce negative environmental impact.

The identification of spatial patterns is critical to the coal modeling process.

Every project is high-risk at its inception. Exploration and resource geologists must gain an understanding of reserve potential and they need the tools to effectively manage and improve their understanding of exploration data. The identification of spatial patterns is critical to the coal modeling process. The ability to visualize and measure distances between intercept points can assist in confirming relationships and defining boundaries of sampled data.

Rapidly generating and comparing potential geological timelines provides more confidence in the geological interpretation. This enables seasoned geologists to apply their geological knowledge to the understanding of data and frees them from the pains of manual digitizing exercises. The result of which should lead to the production of more refined models with less human bias. Once modeling workflows are established, they can be re-run with the introduction of new exploration data points.

The ability to visualize and measure distances between intercept points can assist in confirming relationships and defining boundaries of sampled data.

Not every coal seam will be economically viable to extract. Effort should be directed toward value-generating projects. A better estimation of mine-able coal thickness can be gained by processing and analyzing drillhole data. An ore vs. coal-based approach can unlock hidden reserve potential or preserve wasted funds spent on unprofitable digging exercises.

Block models can help build an understanding of quality distribution within modeled coal domains. Numerous block modeling techniques have been developed over the years to solve different problems. Traditional multi-ore percent models help geologists and engineers estimate the volume of product and expected ore recovery with high accuracy. Sub-blocked models help geologists and engineers to better define the economic limits and boundaries of seam reserves. A defined and repeatable modeling workflow ensures speed and repeatability on every model build.

Numerous block modeling techniques have been developed over the years to solve different problems.

2. Maximizing yield – Block modeling, optimizing designs, optimizing extraction sequence

In an unstable market, coal miners need to know the risk associated with individual assets within a broader portfolio and have a clear picture of what market conditions will lead to assets depreciating to marginal or unsustainable value. Projects should be ramped up with proper foresight and scaled down effectively to increase value and minimize wasted capital. Optimizing the extraction sequence and resource utilization delivers proven benefits in improving project value over time. Optimization methods traditionally applied to metals work just as well in the coal space. Knowing where equipment should be when, and what production capacity can be promised, can help shareholders and management with information required for key decisions.

Optimizing the extraction sequence and resource utilization delivers proven benefits in improving project value over time.

3. Optimizing equipment – Adjust targets based on changing conditions

Optimization should not stop at the planning and design phase. Large open pit coal mines normally come paired with a large equipment fleet. Analyzing current equipment positions, routing assignments and destination targets is a difficult task for even the most experienced of production staff. The ability to make value-generating decisions in a short time frame can only come with years of field experience but a  modern fleet management system can offer the much needed decision support to monitor equipment and keep production on track.

A progressive fleet management system is the next logical step in optimization beyond planning and design.

4. Blending – Predicting and controlling

Scheduling tools enable us to predict what will come out of the ground when, and where ore should ideally be routed to maximize a selected value target. Traditionally, where material finally ends up has been a grey area. It’s common to schedule the delivery of material to a crusher run of mine stockpile and ignore the impact of irregularities further down the supply chain. Detailed production scheduling tools enable engineers to optimize material routing from multiple pit sources through to multiple stockpiles, processing facilities and shipping routes. This provides true transparency of the scheduling assumptions that were made.

The number of mobile devices in use today is estimated at 4.5 billion. Modern mobile devices are fitted with the ability to broadcast and record positional information. Location services paired with an expanding connectivity market open the possibility for improved tracking of material movement, from digging through to shipment. Reconciling planned material movement with recorded material movement should drive improvement and lead to a convergence of assumption and production over time.

Production scheduling software enables engineers to optimize material routing from pit to port.

5. Execute with precision –  Activity scheduling and high precision

Improving the design and scheduling of daily mining activities will provide the benefit of an improved capability model. Bridging the gap between planning assumptions and executed performance delivers production management staff with a clearer understanding of benchmarks and daily performance levels. The improvement of design communication can aid equipment operators in executing their tasks more in-line with an engineer’s plan.

Precision is key in complying to engineered drill locations and dig boundaries. A high-precision guidance system fitted on drills will guide operators to and through coal contact, improving overburden fragmentation and coal yield. High precision guidance systems fitted on shovels can reduce waste dilution and misallocation of material.

Integrating a production planning system with spatial data from the field will drive operation excellence. Drilled locations can be compared to design locations to track the impact poor hole placement has on recorded fragmentation. End of shift dig points can be spatially reconciled to track planned daily material movement vs. actual material movement. By comparing fragmentation to moved tonnes we can gain insight into the consequences of poorly performed activities at an early chain in the production cycle.

Precision is key in complying to engineered drill locations and dig boundaries.

6. Consulting and training – Easy to use, local experts, global support

Hexagon’s Mining division has offices, staff, local representatives and university ambassadors strategically placed throughout Asia. Our highly qualified staff provide high-quality training, project assistance and system review services. Our global network of support ensures that someone is always available to accept your queries.

Find out more about coal mining in Australia to 2022 in our Global Data Report.

About the author: Product Owner, Verne Vice has been a member of our Perth team for the last seven years and has assisted in numerous software and improvement projects throughout the Asia Pacific region.

 

 

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