A paper presented at Procemin 2016, Santiago, October 2016
AUTHORS: Greg Lane, Bianca Foggiatto, Phil Dakin and Andrew Tew (Ausenco Brisbane) and Niresh Deonarain (Ausenco Santiago).
PRESENTED BY: Niresh Deonarain.
Site and plant layouts have a significant impact on the installed cost of a concentrator. The general arrangement of equipment, the relationship between layout, earthworks requirements, bulk materials quantities and optimization of operational and maintenance needs all provide significant opportunities to maximize the value of projects.
The design of leach plants and concentrators has changed incrementally over the past 50 years and mostly to accommodate the increasing capacity of process equipment. Concentrator layouts tend to be designed conservatively and based on previous practice. Engineering companies have tended to rely on proven designs that decrease their risk. Owners have brought their preferences into the design as lessons have been learnt from the operation of past projects. Through this process designers have tended to have very little exposure to site concentrator operation and critical analysis of previous projects from a design perspective, instead relying on feedback from commissioning engineers.
This paper challenges some of the paradigms associated with concentrator design and summarizes the value associated with good decisions when compared with using “standard designs”.
Process plant design in the minerals industry consists of a number of interconnecting activities commencing with ore body evaluation and culminating in critical evaluation of the design in operation. The design process interfaces with geology, mining, metallurgy, process engineering, discipline engineering, design, constructability assessment, maintainability assessment, safety reviews, procurement strategy, contracting strategy and construction planning.
This paper focusses on the impact of plant design and layout on capital cost. Given that process equipment is common to all layout options, the relationship between layout and cost is driven by the bill of materials and the constructability of the design.
The design of a particular minerals concentrator is influenced by:
Cost effective concentrator design interacts with the project infrastructure constraints, owner’s needs, vendor’s capabilities, constructor’s logic and operator’s and maintenance team’s preferences. However, cost effective design has some “rules of thumb”, namely:
As a consequence of the above, capital cost will increase if:
A summary of previous work
A number of papers have been written on concentrator design and layout. Some examples pertaining to specific aspects of mineral concentrator layout include:
These papers do not specifically deal with the relationship between good layout and capital cost. Rather they deal with process selection, flowsheet design and layout options based on technical criteria and operational preferences.
Whilst technical criteria and operational preferences are very important, they need to be considered in parallel with the operating and capital cost implications. The designers “model” should include “rules” for capital optimization, either in software logic or empirical knowledge form.
The layout of chemical plants is well documented in the literature and typically focusses on minimizing operational risk and improving plant safety, see for example Mecklenburgh (1973). The improvements in CAD over the last 30 years have led to many studies into how to optimize chemical plant design based on a number of factors; see for example Schmidt-Traub et al (1999).
Whilst predominantly focussed on the chemical processing industry, Figure 1 from Schmidt-Traub et al summarizes the high level considerations in layout development that have been captured in subsequent design software packages.
The key elements in Figure 1 are:
The Schmidt-Traub approach does not directly deal with the capital cost implications resulting from the impact of layout on bulk material quantities. Chemical plants are designed based on:
Figure 1 – Layout optimization process for chemical plants (adapted from Schmidt-Traub et al, 1999)
The impact of the financial climate
In the five year period from August 2009 to August 2014 the iron ore price was above $80/t. From about 2 years prior to this period Chinese demand drove project development behaviour across most mineral commodities. The high commodity prices meant that project schedule became paramount, far outweighing the importance of development cost for the major mining houses. In iron ore, establishing and maintaining market share was a driving force for expansion and new projects (Kloppers, 2012). This style of approach to project development, coupled with the high demand for experienced people and resultant influx of less experienced personnel, resulted in project development conditions that adversely impacted on the quality of delivery resulting in project capital cost overruns averaging 62% (EY, 2015).
Project quality, cost and schedule
Measures of quality are often subjective except where poor quality design results in lost production. Hence, determining the quality of the design is difficult to separate from operational factors that are not related to design. Poor redesign and execution nearly always results in slow project ramp-up, see for example Toromocho (Emery, 2015) and Sino Iron (Mckenzie, 2016). A well designed and executed concentrator will ramp-up to full production well inside 6 months provided ore supply is adequate (McNulty, 2014).
Project cost and project schedule have an interesting relationship that is established in the study phase. Project schedule is related to project cost in design because optimization of bulk quantities leads to a reduction construction man hours and a significant reduction in capital cost. Failure to capture the design optimization opportunities in the study phase results in loss of project schedule that cannot be recaptured. Rework and redesign takes time and in some cases the cost of lost schedule (delayed construction and commissioning due to design optimization) cannot be offset by the savings in commodities because the opportunities were not captured early enough in the design process. Value improvement processes signifies inefficiency in the original design process that did not capture scope and cost optimization opportunities.
There have been several attempts to generate “standard layouts” for concentrators and CIL plants. These have developed based on commercial expedience. Minproc (and others) developed a series of standard designs for CIL plants in the 1980’s and early 1990’s that allowed it to compete effectively in the competitive lump sum turn-key gold plant business over a number of years and dislodge incumbent larger engineering companies (Close, 2002). Bechtel and Xstrata reached an agreement to design a “standard” concentrator for a number of copper concentrator projects, two of which were constructed at Antapaccay and Las Bambas. The same design was also considered in studies for Tampakan and Frieda River.
In the Minproc example, the driving force was cost competitiveness and reduction in project schedule. The basic design and layout framework enabled the LSTK/EPCM for plants as large as 2 Mt/y to be completed in less than 40 weeks. This approach did lead to some performance issues for projects such as Three Mile Hill where the ore competency was extremely high and the standard design was not appropriate (Newell, 2015; Lane et al, 2011). However, the same situation occurred for some bespoke plants constructed by other engineers, such as St Ives. Both St Ives and Three Mile Hill initially installed SAG mills and had to retrofit stage crushing to achieve desired throughput.
In the Bechtel-Xstrata example, the aim was to reduce project schedule and contractors EPCM costs during a period of heated demand for resources but using a standard design. This approach led to several inefficiencies in design due to the variation in ore competency across ore bodies and resulting compromises in design. It is arguable that these inefficiencies more than offset all the efficiencies of the “standard design” due to the excessive bulk materials required for generic layout.
Notwithstanding the above, standard designs are highly advantageous for the engineer and designer. They are usually a compilation of the best aspects of design and represent the aggregation of years of experience. This approach can be highly beneficial as long as the “standard” is challenged for every project from technical, delivery, operations and maintenance perspectives.
Factors that influence project layout and cost
A well-designed plant layout suits the design criteria, flowsheet and selected equipment in the most economical possible configuration. Thus, understanding the cost/risk/benefit relationships is key to successfully design minerals processing plants.
The principal design parameters that drive the design minerals processing plants include: ore characteristics and life of mine, production requirements, project location, climatic conditions and environment, expansion plans, capital and operational costs, maintenance requirements and safety.
Prior to the definition of the design criteria, it is necessary to obtain representative ore samples, conduct testwork and define ore properties which drive the selection of flowsheet and equipment. Ore characteristics change over the life of mine, thus understanding the ore body, mineralogy and process responses is necessary to allow process and market risks to be managed effectively.
Production requirements are typically defined by the client and along with the ore characteristics drive the flowsheet selection. The flowsheet options need to be considered and evaluated prior to detailed engineering and project execution proper. Value engineering assessments can occur during the design process but these need to be limited to low level issues and not matters of scope or issues material to the schedule. Value engineering exercises to contain capital cost after 30% engineering completion mean that the project was not set up initially with the correct capital and/or design expectations, and changes to flowsheet may cause rework and administrative churn within the project.
Project location may have major impacts in plant design and construction costs. Survey and geotechnical data generally hold up progress when defining the plant location and finalising earthworks detail. Site survey and geotechnical studies need to be completed in the study and front end engineering phases. In addition, in-country materials of construction costs need to be understood in order to make cost effective structural decisions (e.g. concrete versus steel).
Local weather or environmental issues may define the need for a plant under roof, inside buildings or with other protection. The cost of installing plant in buildings, particularly in the typical South American style, is high.
Reagent delivery and on-site storage requirements need to be defined based on plant access limitations (seasonal weather and/or other social and environmental factors). Environmental approvals need to be finalized and permitting requirements (traffic, run-off, dust, noise, fumes, and materials safety) need to be clearly defined before the layout design starts.
Often high grade ores are exploited in the beginning of the life of mine and as grades decline, so does the production of final concentrate. Production is attained through expansion rather than by increased metallurgical recoveries, thus project expansion requirements and timing need to be clearly defined. Planned expansions should be considered prior to the commencement of layout design in order to minimize footprint, capital and operational costs.
Higher operating availabilities are typically achieved when plants are designed for maintainability and ease of access. Client maintenance preferences and local crane availability impact on the decisions to use overhead cranes, tower cranes, monorails or davit cranes for various duties. These decisions need to be made early in the plant layout process to avoid rework in all disciplines.
Other requirements needed early in the plant layout process include client approved flowsheets (these determine the scope, mechanical equipment and battery limits) and preliminary piping and instrumentation diagrams (P&ID’s) (these determine the network of piping and pipe racks adjoining all areas), the definition of concentrate transportation methods (e.g. truck or rail) and water storage method (ponds versus tanks).
Lane et al (2005, 2008, 2009, 2011) listed a number of factors driving selection the layouts, which are summarized below:
Quantity targets for large concentrators
Table 1 contains typical Lang factors for various projects. The Lang factor is the installed direct cost divided by the installed mechanical equipment cost. It has a relationship to the design philosophy and layout of the plant, directly reflecting material quantities and local factors such as labour cost and site location.
Table 1 – Lang factors for copper concentrators:
A typical cost breakdown for a South American plant comminution circuit is illustrated in Table 2. Approximately a quarter of the cost and more than a quarter of the man-hours are associated with the concrete and steel quantities. Another quarter of the cost is associated with other commodities such as electrical, platework and piping whose quantities are also related to layout. Hence, reducing the footprint can impact on up to 50% of the grinding area capital cost with an additional flow-on impact on indirect costs.Approximately half of the direct capital cost of a copper concentrator is associated with the comminution circuit, primary crushing to cyclone overflow. The layout of this area of the plant has a large impact on overall plant layout and the overall plant capital cost.
Table 2 – Percentage cost distribution for a typical South American concentrator comminution circuit:
Figure 2 depicts various concrete and steel relationships with installed grinding mill power for various concentrators across the world. The concrete and steel ratios vary by project based on the layout of the plant, mill configuration and design basis. A typical South American concentrator has 0.4 m3 concrete per installed kW.
Figure 2 – Concrete and steel benchmarked quantities:
Table 3 depicts an example of reductions in concrete and steel quantities for a South American project. These reductions in concrete and steel will directly impact the man-hours and schedule of the project resulting in associated savings.
Table 3 – An example of potential reduction in bulk material quantities based on paradigm shift in layout and design:
There is no panacea solution but there are some key issues to consider in the design and layout of any plant as outlined in this paper. However, the critical considerations are to deliver the owner(s) targets, budgets and project timing. To achieve this, it is the engineer’s role to optimize the design within the owner’s constraints to achieve maximum value from the project.
To assist the engineer, a clear strategy in terms of scope and execution needs to be defined and agreed upon between the owner and the engineer as early as possible in the design process. Items of significance, which include any plant expansion requirements, need to be resolved prior to the commencement of layout design to ensure opportunities to minimize costs, both capital and operating.
Early engagement by the owner with the engineer will allow the engineer to challenge and optimize the plant design during the study and front end engineering phases. It is during this work that the greatest impact on overall project cost can be achieved without impacting the project schedule. This is best achieved utilizing engineers and designers with previous field installation, commissioning and site as-built experience.
Any ‘value engineering’ exercises to contain capital cost after 30% engineering completion is an outcome of the project not being set up correctly during the initial engagement process between the engineer and the owner(s). Changes to the flowsheet and layout at this stage of the design process will likely cause rework and administrative churn within the project resulting in unnecessary schedule delays.
By challenging ‘standard design’ convention considerable project savings can be achieved by minimizing footprint and associated bulk quantity requirements through ‘smart’ approaches to the layout. This mantra will also reduce construction man-hour requirements and hence project schedule resulting in considerable savings to the project owner(s).
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