Application of Optimisation Technology to Resource Planning Within BHP Billiton Iron Ore

BHP Billiton Iron Ore is one of the world’s premier suppliers of iron ore. It currently has operations in Western Australia and Brazil and also has some iron ore interests in West Africa.BHP Billiton’s Optimisation R&D team has developed a proprietary mine planning optimisation tool that uses a mixed integer linear programming (MILP). This tool is called Blasor and it is used to rapidly evaluate the resource development potential (RDP) scenarios for the company’s business development strategy. In addition it generates life of asset (LOA) mine plans for the company’s operations and growth projects. The Blasor optimiser maximises the discounted operating cash fl ow (DCF) as the objective function, subject to mining, processing and transportation capacity constraints and blended product quality constraints. The paper will outline how Blasor has been applied to the resource development potential (RDP) strategy scenario studies, growth project evaluations and LOA mine planning within BHP Billiton Iron Ore.The practical application of Blasor to resource planning optimisation within BHP Billiton Iron Ore has demonstrated the value of such a tool for optimising strategic directions through the evaluation of a number of carefully proposed scenarios and maximisation of operational decisions, such as cut-off grade, open pit development sequence, etc. Particularly for the company’s business development direction studies, Blasor plays the role of a fair valuation tool in that it discovers the most valuable resource development scenario, thus establishing a sound basis for comparing the economic merits of each scenario.