T E C H N I C A L P A P E R S

Estimation of incremental haulage costs by

mining historical data and their influence in
the final pit limit definition
Introduction

typical input economic parameters.

R. BENITO AND S.D. DESSUREAULT
Examples of physical parameters
Diverse economic and physiR. Benito and S.D. Dessureault, members SME, are graduare the ore grade distribution, geocal parameters are considered for
ate research assistant and associate professor, respectively,
technical constraints and metalluropenpit optimization. Mining costs,
with the Department of Mining and Geological Engineering,
gical recoveries.
included in the block-valuing proUniversity of Arizona, Tucson, AZ. Paper number TP-07-030.
Block models are widely used by
cess, are defined by the main acOriginal manuscript submitted August 2007. Revised manuspecialized mining software to assist
tivities involved: drilling, blasting,
script accepted for publication June 2008. Discussion of this
in the final pit outlining process, by
loading, hauling and ancillary operpeer-reviewed and approved paper is invited and must be
storing the economic and physical
ations (pit roads and dumps). From
submitted to SME Publications Dept. prior to Jan. 31, 2009.
parameters in each block. Block valthe main activities mentioned, haulue or profit per block is calculated
ing is considered the most resource-consuming activity
by subtracting the revenue generated from selling the
in a typical openpit truck-shovel operation (Blackwell,
recoverable contained metal minus the costs incurred to
1999). The aim of this research was the determination of
produce it. Variable costs (mining, processing, marketing
historical haulage costs and their variations by location.
and restoration costs) and fixed costs (e.g., overheads)
For this purpose, the fundamentals of the two-stage
are usually considered for block valuing. After all blocks
cost-tracing procedure (Cooper, 1987a) were applied
conforming a three-dimensional model are valued, the
to trace incurred haul costs by bench. This approach
final step is the application of a numerical method for
requires the definition of a measure of the quantity
pit outlining. Lerchs-Grossmann algorithm is a popular
of resources consumed during its second stage called
method to determine the size and shape of the ultimate
cost driver. Tracing costs by location from real data is a
pit. This final shape maximizes the value of the mine
challenging task due to the dynamic nature of haulage
subject to slope constraints (Whittle, 1996).
activity, which is usually controlled by truck dispatch
Final pit limit definition continues, even during the
systems. These systems assign trucks arbitrarily to loadoperation stage, in order to evaluate potential mine
ing points. Their objective is the maximization of truck
expansions. An updated version of the life-of-mine plan
utilization and reduction of waiting and delay times.
(LOM), including the final pit limit definition, is usually
In contrast, haulage costs are usually stored as general
prepared once a year for budgeting purposes. Various
transactions, not detailed by location, due mainly to the
input parameters for openpit outlining may be updated
structure of cost accounting systems.
based on historical data. These input parameters may
reflect the actual performance achieved in terms of proFinal pit limits
duction and incurred costs. Variable haulage costs by
Mine plans, in particular long range mine plans, are
bench are economic inputs that can be updated using
usually developed within a final pit outline. The process
historical data. Detailed and extensive information rerequires the definition of various physical and economic
lated to truck haulage performance and incurred costs is
parameters. Commodity prices and anticipated costs
mostly available in operating mines and stored in large
(mining, processing, selling, rehabilitation costs) are
operational database systems such as truck dispatch
systems and financial transaction systems. This vast
Abstract
amount of information can be integrated, processed and
analyzed by using relatively new information technolThis paper describes the application of modern data-analogy, namely, data warehouse and data mining.
ysis tools, such as data mining, to determine a representative cost driver for haulage activity. This cost driver was
Data warehouse and data mining
subsequently used to trace incurred haul costs by bench
Enterprises now maintain two databases, one confor openpit optimization. For this purpose, large amount of
taining operational data (to assist the day-to-day operapreviously unused cost and production data from an open
tion) and one called the data warehouse (DW), which
pit mine was extracted, loaded, transformed and integrated
contains decision support data (Date, 2004). Data wareinto a data warehouse. Predictive modeling was performed
houses are databases that are used to support manusing Microsoft Decision Trees algorithm to compute exagement decisions. They are populated and updated
pected unit haul costs by bench for future mine expansions.
on a periodic basis from operational databases called
Finally, a sensitivity analysis was carried out to determine
online transaction processing databases (OLTP). For a
the effect of two cost drivers (if any) for incremental haul
mining operation, a data warehouse may be populated
costs in the final pit outline process.
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with historical production data and FIGURE 1

incurred operating costs. Figure 1 is
Attributes stored in a production data table.
a graphical representation of mine
production data and their attributes
stored in a transactional table for an
openpit operation. This figure shows
the detailed distribution of loading
and dumping points, captured and
stored using modern global positioning systems (GPS). The centroid of
the bench is also shown, which is
usually considered as a single loading point for the estimation of truck
productivity during the preparation
of the LOM plan.
Data mining is a data-analysis
which includes spot, load, haul, turn, dump, empty reprocess that identifies trends and patterns of a busiturn, wait and delay times (Hays, 1990). Usually, for
ness process (Chao, 2006). Data mining, also known as
mine planning purposes, the total cycle time is calcuknowledge discovery, is a rapidly developing trend in
lated using truck simulation software. Projected haul
data management. Data mining has become a popular
profiles and truck rimpull/retarding curves are used
tool for managers, analysts and experts in commercial
to calculate expected total cycle times by bench and
and government organizations. The development of
destination. For simplification, it is assumed that the
hardware and software technology allowed for the evohaul and return segments are the same. However, with
lution of data analysis in large databases. Retrospective
the use continuous use of dispatch systems, trucks are
and static data delivery was only possible in the 1960s,
often assigned dynamically to maximize their utilizawhile presently, data mining techniques allows obtaintion. This section describes the process to define a cost
ing prospective and proactive information.
driver that reflects adequately the resource consumpClassification, clustering, association, regression,
tion (fuel, tires, parts, etc.) for haulage activity using
forecasting, sequence and deviation analysis are typical
historical data. Specifically, the cost driver should reflect
examples of data mining tasks. Decision trees and neuvariances in haulage costs due to mining location. For
ral networks are two popular data mining techniques
this purpose, detailed information from a truck dispatch
available in Microsoft SQL 2005. These techniques are
system and a financial transaction system was provided
mainly derived from statistics, machine learning and
from an open pit mine and stored in a data warehouse.
database (Tang, 2005).
Data cleaning and data filtering were the initial tasks
Data collection, data cleaning and transformation
performed using Microsoft SQL 2005 Server Manageare required steps and must be achieved prior to the
ment Studio. These tasks were accomplished by creating
application of a particular data mining technique. Truck
queries or views and integrating transactional tables.
haulage performance trends (e.g., lower productivities
Table 1 displays a summary of the main transactional
due to increased haul distance) and the variables influtables. The data implied two years of production and
encing such trends can be analyzed through data mining.
cost transactions.
Additionally, different truck performance measures may
For integration purposes, the data were aggregated
be defined and analyzed to determine the most repreon a monthly basis to balance the level of detail (granusentative for haulage activity. This measure may then
larity) of production and cost tables. The steps menbe used as a cost driver to trace haulage costs by bench,
tioned above are not detailed in this paper due to their
applying the fundamentals of the two-stage cost tracing
extensive nature. Considering the available data, the
approach (Cooper, 1987b). The next section applies data
following haulage performance indicators were considmining tools available in Microsoft SQL 2005 to define a
ered as potential cost drivers (predictable attributes):
representative cost driver for mine haulage activity.

Truck haulage performance analysis

total cycle time (cycletime),

haul time (haultime),
Truck performance is usually associated to the cal haul time plus return empty (haulreturn) and
culation of incremental haulage costs. Davey (1979)
haul distance (hauldist).
describes an approach to estimate variable
haulage costs by combining truck hourly Table 1
costs and truck performance (in tons per
operating hour), which is influenced by the Production and cost transactional tables.
size, equipment type and the haulage pro- Table name
Type
Columns
Rows
files (length and lift). Unit costs are then
calculated by dividing the truck hourly lh_load_base
Production
103
8,033,230
cost by the resulting truck productivity. lh_dump_base
Production
41
5,417,215
Truck performance is typically expressed lh_location_base
Production
10
2,483,645
in terms of hourly production rate (tons lh_equip_list_base
Production
16
2,746,466
per hour), and it is calculated considering mdm_costs_base_updated
Cost
64
34,441,192
truck payload and truck total cycle time,

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45

FIGURE 2

Dependency network for truck performance indicators.

For this analysis, total cycle time excludes wait and

delay times in the truck cycle to determine the effective cycle time (spot, load, haul, turn, dump and empty
return times). Microsoft Business Intelligence Development Studio was used for the data mining analysis.
Considering the objective of defining a cost driver to
trace haulage costs by location, the following variables
were considered as input attributes:

bench.
destination.
lift (Delta Z).

the level of correlation between input

and predictable attributes. Each oval
or node in the network represents an
attribute (input or predictable), and
the arrows represent the relationship
between two nodes. The direction of
the arrow points from the input and
to the predictable attribute. According to the DN of Fig. 2, haultime
has the strongest relationship (or
most correlated) with the input attributes (bench, destination and lift).
Mining accuracy charts are tools
used to evaluate the quality and precision of a data mining model. Lift
charts, used for continuous variables,
are scatter plots that compare actual
versus predicted values from a model. An ideal model should group the
points on a 45 angle. Figure 3 shows
a lift chart for cycletime attribute,
and the corresponding score value
achieved. Higher score values stand
for better accuracy in a model. The overall score showed
in lift charts for continuous attributes represent the geometric mean of the individual scores for the points conforming the scatter plot. The score of a particular point
in a scatter plot is given by
score [ a, b( m )] =

P[b( m ) | (a, m )]
P[ marginal _ mean | a ]

(1)

where
a is the actual attribute value and
b(m) is the predicted value using the model (m).

Equation (1) assumes a normal distribution to comChen (2001) suggests dividing the data into three
pute the probabilities for both predicted and actual
subsets: training, testing and evaluation sets for predicvalues. Table 2 summarizes the different scores achieved
tive modeling. For this analysis, two data sets were arfor the predictable attributes (potential cost drivers), for
ranged: a training set to build the model (e.g., to define
both training and testing data sets. Additionally, Table 2
equations between input/predictable attributes) and
includes the square of the correlation coefficient (R2)
a testing set to evaluate its accuracy. A data mining
for the models. It can be noted clearly that haultime
technique called Decision Trees was chosen for model
achieved the highest score values compared to the other
construction. For the case of continuous variables, the
indicators in both data sets. Figure 4 shows the decision
decision tree algorithm uses linear regression to decide
tree for haultime, with a regression formula in each
where a decision tree splits. A regression formula is crenode of the tree. For instance, a haul profile having the
ated in each node of the tree. A split occurs at a point
crusher (CR) as destination with a bench elevation less
of nonlinearity in the regression formula. Generally,
than 2,564 has the following expression:
a regression formula contains one or more regressors
(input attributes). If no regressor is present in the forHaul time = 8.808 + 0.024*
(2)
mula, the result tree contains a constant in each leaf
(Delta Z - 122.071) 0.024*(Bench 2,541.929)
node.
Eight destinations were considered for model
construction according to the material type asTable 2
signed. Twenty benches, with elevations between
2,510 and 2,770 m (8,230 to 9,090 ft) above sea Scores and R2 for training and testing data sets.
level, were as well considered as origin points.
Training set
Testing set
Figure 2 shows a dependency network, which is Attribute name
Units
Score
R2
Score
R2
used generally as an exploratory data analysis.
This tool is included in the Microsoft Decision haultime minutes
5.50
0.94
4.98
0.96
Tree approach. The DN displays the relation- haulreturn minutes
4.16
0.92
2.94
0.82
ships among attributes (input and predictable) cycletime minutes
2.88
0.84
2.39
0.77
from the decision tree models content and their hauldist
meters
3.24
0.87
2.43
0.83
associated weights. The weights are related with

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The diamond bars depicted in the FIGURE 3

nodes of the tree represent the value
Lift chart for cycletime attribute.
distribution of the given node. The
width of the diamond indicates the
level of accuracy of the node the
thinner the better in precision.
Considering the results shown
by the DN in Fig. 2 and the scores
values in Table 2, haul time may be
used as a representative cost driver
for haulage activity. Data mining
also allows predictive modeling to
determine expected haulage costs
for future benches. This calculation
may then be used for block valuing
purposes, the initial step of the pit
outlining process. For this purpose,
it was necessary to create a new data
set, specifying only the input parameters (bench, destination and lift). The
mining model prediction function
available in Business Intelligence allows calculating expected haul time
values according to the input values. This expected valincremental unit haulage cost curves for the two cost
ue, combined with the haulage costs by month and the
drivers having the crusher as the final destination. Simiaverage truck payload provide the means to calculate
lar shapes were also obtained for the other destinavariable haulage costs by bench and destination.
tions. The dotted lines represent expected unit costs
for future benches. The expected values are the output
Final pit limit analysis
of the prediction function of the Microsoft Decision
The objective of this analysis was to assess the effect
Trees model. The haul time curve indicates that unit
in the final pit limits outlining when using two differhaul costs are lower compared to the cycle time curve
ent cost drivers to trace haulage costs by bench. Haul
between 0 and -120 m (-400 ft) lift interval. Conversely,
time, the most correlated attribute, and cycle time, the
as the lift increases, unit haul costs are higher for the
lowest scored attribute, were selected as cost drivers.
haul time curve.
Tracing incurred costs by bench requires the calculaBlock value was carried out using a regular threetion of burden rates (Cooper, 1987b). These rates are
dimensional block model representing a low-grade
computed dividing the total costs incurred (from a
copper porphyry deposit, where heap leaching was the
cost center) by the total of units consumed (e.g., haul
current beneficiation method. For simplification, only
hours). For the two cost drivers selected, the totals of
two destinations were evaluated: crusher if leach ore
units consumed (TUC) are expressed in time units. For
and dump if waste. However, it is possible to include
haul time, TUC is expressed as total truck haul hours;
multiple destinations for diverse material types for a
while for cycle time TUC is the total truck cycle hours
complex pit optimization (e.g., beneficiation processes
(effective hours). Full haulage costs include operating
for various ore types, diverse types of waste). The foland maintenance expenses. These values were cumulowing economic parameters were considered for block
lated over the range of the stored data. After dividing
valuing:
the total haulage
costs by the TUC
for each driver, Table 3
the following bur- Pit optimization results.
den rates are obtained: $390 per
Haul time cost Cycle time
Cost
hour hauled and
difference,
$173 per effective
Summary of results
Units
Driver (1)
Driver (2)
(1)-(2)
hour for haul time
and cycle time, reNumber of total blocks mined

7,456
7,171
285
spectively. An avNumber of ORE blocks mined

2,758
2,674
84
erage payload of
Number of WASTE blocks mined
4,698
4,497
201
160 t (180 st) per
Net revenue
million US$
163,324
159,954
3,370
truck was includORE mined
million st
98.7
95.7
3.0
ed in the calculaWASTE mined
million st
161.1
154.2
6.9
tion to determine
TOTAL material mined
million st
259.8
249.9
9.9
unit haulage costs
Stripping ratio

1.63
1.61
0.02
($/st).
Figure 5 shows

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47

FIGURE 4

Decision tree for haultime attribute.

Economic metal: copper

Commodity price: 0.9 $/lb
Mining costs:
Base: 0.50 $/st
Incremental: According to the cost driver
Processing costs: 2.3 $/st ore
Selling costs: 0.17 $/lb (includes rehabilitation
costs).
Pit optimization was performed after completing
the block value step. Lerchs-Grossmann algorithm was
used to determine the final pit limits, considering the
actual topography and an overall slope of 38. Two runs
were performed for the block values using haul time
FIGURE 5

Incremental haulage costs and predicted values.

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and cycle time as

cost drivers. Table 3
shows the results of
the pits generated. A
significant difference
of 9 Mt (10 million
st) for the pits was
achieved using two
distinct cost drivers.
The pit with haul
time as cost driver is
relatively bigger than
the pit with cycle
time as cost driver.
Figure 6 displays
a vertical cross section with the final
contours, the actual
topography and the
economic ore blocks.
A difference of 40 m
(130 ft) between the
final pits is displayed
in the lateral expansion. However, both
pits achieved the
same pit bottom. The
additional expansion
for the pit using haul
time is the effect of
having lower unit
haul costs for a lift range of 0 and -120 m (-400 ft), as
mentioned above. The dissimilarity in pit size demonstrated that the deposit was sensible to incremental
haulage costs, despite the mineralization is moderately
shallow.

Conclusions
Historical production data and incurred costs were
integrated, processed and analyzed to establish a characteristic cost driver for haulage activity. The cost driver
was then used to trace haulage costs by bench. A dependency network was used to find the most representative
cost driver from different truck performance indicators. The dependency network showed that haul time
attribute had the strongest relationship (most correlated) with the location-related input attributes: bench,
destination and lift. The dynamic assignment of trucks by dispatch systems and the speed variation by grade
segment are potential causes of the
lack of accuracy for the other truck
performance attributes evaluated.
In real time, loaded haul and empty
return segments are not always performed in the same route. Instead, the
trucks can be reassigned to different
locations. This event distorts typical
truck performance indicators, such as
total cycle time, that are widely used
for mine planning purposes.
Additionally, a sensitivity analysis
was carried out to evaluate the effect

of using two different cost drivers for

variable haulage costs in the final pit FIGURE 6
outlining process. For this purpose,
Cross section for optimized pits.
a predictive model was built to determine expected unit haul costs by
bench. Microsoft Decision Trees was
the algorithm used for model construction. The predicted output values
(e.g., haul time) were then combined
with their respective burden rates
and average truck payload to calculate expected unit haul costs by bench
for block valuing. Lerchs-Grossmann
three-dimensional algorithm was then
performed for pit optimization. The
results showed a significant difference
in shape and volume for the resulting
pits. The pit with haul time as the cost
driver was relatively bigger than the
pit using cycle time as the cost driver,
Cooper, R., 1987a, The two-stage procedure in cost accounting:
especially in the lateral expansion. This increase in size
Part one, Journal of Cost Management for the Manufacturing Indushad the effect of lower haulage costs for benches at the
try, Vol. 1, No. 2, p. 43-51.
proximity of the pit exit point when using haul time as
Cooper, R., 1987b, The two-stage procedure in cost accounting:
cost driver. The pit optimization analysis demonstrated
Part two, Journal of Cost Management for the Manufacturing Industhat, even with minimal cost increments, different retry, Vol. 1, No. 3, pp. 39-45.
sults might be obtained. Finally, the updating of input
Date, C.J., 2004, An Introduction to Database Systems, 8th Edition,
parameters for final pit outlining with historical data is
Pearson/Addison Wesley, Boston.
highly recommended in order to reflect actual producDavey, R.K., 1979, Mineral Block Evaluation Criteria, AGARD
tion and cost performances.

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Chen, Z., 2001, Data Mining and Uncertain Reasoning: An Integrated Approach, Wiley, New York and Chichester England.

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