GEOLOGICAL MODELLING AND EVALUATION OF NICKEL LATERITE DEPOSITS

Graeme Lyall1

Abstract

The development of geologically realistic resource models for nickel laterite deposits is
hindered by their extensive geometry and complex grade characteristics. Thickness
modeling with digital terrain surfaces is appropriate for straightforward examples,
however, more complex deposits will require additional enhancements. Examples are
included to illustrate methods that have been employed on deposits evaluated by Anglo
geologists in South American.

Grade interpolation should take cognizance of the characteristic presence of vertical

trend profiles and the multivariate behavior of the variables that are to be estimated.
This is of particular importance if simulation exercises are to be performed.

The tabular geometry and presence of grade trends may lead to problems when using
kriging algorithms as the interpolation method. An example showing how this problem
can be minimized is provided.

Most of the techniques described were developed using the DATAMINE software
package. The versatile nature of this software was beneficial in developing the
innovative tools used in these studies.

Generalised Nickel Laterite Profile

Nickel laterite deposits form by surface weathering and leaching processes in tropical
and sub-tropical climates. Typically, these phenomena result in three main mineralized
units (laterite, saprolite and hard rock), which can be pictured on the cross section in
the figure below. Characteristic vertical trends in nickel and iron grades are also shown.
The unweathered fresh rock at the base has a dunitic to peridotitic composition, of
which the principal constituents are approximately 40% SiO 2, 35% MgO and 8% Fe.
Nickel grades in this unit are sub-economic. The laterite unit is characterized by Fe
enrichment (>30%) and SiO 2 and MgO depletion (generally both < 10%). The highest
Ni grades are encountered within the saprolite zone, which shows compositions
between fresh rock and laterite.

Typical cross section

100 m
Laterite
Saprolite

Fe Ni
Fresh Rock
Vertical Grade profiles

1
Anglo American Chile – Assistant Manager of Mineral Resource Division
Geological Modeling in DATAMINE

Technique for generating “optimal” drillhole coding

In most laterite deposits, fairly abrupt grade boundaries are observed between the Fe-
rich laterite unit, the underlying Ni-rich saprolite and the low Ni grade hard rock at the
base, as can be observed from the grade profiles in the figure above. The identification
of these zone boundaries is commonly a manual process done on the inspection of the
drill hole grades. Moreover, considering that some of these deposits may cover
extensive areas and the number of drill holes are often of the order of several hundred
and sometimes in the thousands, this manual process can be a significant task. To
alleviate this, an automatic method was developed using DATAMINE processes to
identify the “optimal” intercept for each mineralised unit. In summary, this involves an
iterative compositing procedure based on previously established cut-off grades for
each unit. The process defines the top and bottom of continuous “mineralised”
intercepts and identifies the optimal interval for each unit. The optimal composite
interval will include samples falling below the established cut-off grades only if the
contained metal (above cut-off) in sample extensions to the interval exceeds the loss of
contained metal (below cut-off) in the waste samples. Both Fe and Ni cut-offs can be
considered. The figure below illustrates the results of this process.

Geological zonation using optimal composite algorithm

High Fe Laterite

Ni-rich saprolite Ni-rich saprolite

Waste Waste
Included
Not
Included Hard rock
base

Hard rock
base
35%Fe
0.9%Ni
35%Fe
0.9%Ni

The above procedure proved very useful during evaluation studies for carried out on
extensive drill hole data that required a relatively rapid evaluation. On reviewing the
results, the “optimal compositing” procedure provided intercepts almost identical to the
manual determinations.

Loma de Niquel

The modeling of the laterite-saprolite and saprolite-hard rock interfaces is best done by
generating thickness models for the above units, by this way avoiding cross-overs with
the surface topography. For the Loma de Niquel deposit, cross sections are interpreted
in DATAMINE at 50 metre intervals. These are then used to generate 2D thickness
data spaced at 10 metre intervals along each section. Additional thickness data are
provided from the drill hole intercepts and from horizontal delineations indicating the
areal extents of the mineralized unit (thickness=0). All three data types are used to
interpolate 2D thickness models on a 5x5 metre grid. A surface elevation model is also
generated on the same 5x5 metre grid. These are illustrated in the figure below.
 Gridded Surface Elevation Thickness Data

Drill hole intercept

Cross section interpretation
Limits of unit – thick=0

Gridded Laterite thickness Gridded Saprolite Thickness

From the 2D grid model containing surface elevation, laterite and saprolite thickness,
the elevation of the laterite-saprolite and saprolite-hard rock interfaces can be
calculated. Digital terrain models are then generated using the gridded models together
with the data used for the interpolation (cross sections, drill hole intercepts and
horizontal limits). These are used to develop block models followed by grade
estimates. The figure below illustrates these procedures.

Cross section DTM’s generated using Block Modelling and grade

interpretation thickness models estimation
A more complex example

An example of a more complex deposit where a total of five units have been
recognized in the vertical profile is shown in the figure below. In addition, these units
are often discontinuous meaning that in many cases not all of the units will be present.

Vertical Profile
Outcropping waste
Acid Ore
Internal Waste
Basic Ore
Hard Rock Base

Thickness modelling techniques were also used on this deposit to generate the surface
wireframes for the base of each unit (see figure below) and the geological block model.

Wireframe Surfaces
Outcropping waste
Acid Ore
Internal Waste
Basic Ore
Barro Alto

At Barro Alto in Brazil the laterite development can be classified into two main types.
Flat lying areas (ETO and PTO areas) show typical laterite profiles similar to the Loma
de Niquel deposit, however, approximately half the mineralisation is characterized by
much thicker and complex profiles (WTO areas) cross-cut by sub-vertical chalcedonic
and internal waste bodies as is shown in the cross sections below.

WTO ETO

NW SE

OVERBURDEN
ACID ORE
BASIC ORE
CHALCEDONY
Acid ore - SiO2/MgO>2.5
WASTE Basic ore - SiO2/MgO<2.5

For WTO areas, geological block models were developed by combining 3D surface
geology with detailed wireframe modelling of the sub-vertical units together with
surface based techniques as is illustrated in the following figures.

Barro Alto – Area 3A

SURFACE GEOLOGY CHALCEDONY BLOCK MODEL SLICES

OVERBURDEN
ACID ORE
BASIC ORE
CHALCEDONY
WASTE

OVERBURDEN

ACID ORE

BASIC ORE

CHALCEDONY

WASTE
Grade Estimation

Flattening

Flattening procedures can be used as a simpler alternative to “unfolding” in tabular

deposits that are controlled by gently undulating surfaces (e.g surface controlled
weathering deposits or veins). The basic procedure involves projecting the drill holes
and block model elevations (or co-ordinates) to a geological “datum” surface. Other
thickness correction and straightening functions may also be employed. Co-ordinate
transforms of this type are common practice in petroleum reservoir modeling (Deutch,
2002).

An easily identifiable surface that can be used for a straightforward projection in laterite
deposits is the laterite-saprolite contact boundary. Some people may prefer to use the
surface topography, however, recent erosional processes are likely have distorted the
original geological continuity. When considering veins it may be more appropriate to
consider its centre as a reference datum. For Ni-laterites, the co-ordinate transform can
be performed by subtracting the datum elevation (laterite-saprolite inteface) from the
original block or drillhole elevation. These procedures are relatively straightforward to
program in DATAMINE and are illustrated in the following figure.

Datum elevation surface

PROJECTION

The flattening process is expected to provide more realistic geological continuity for the
grade interpolation study, especially considering the presence of strong vertical grade
trends that are characteristic of these laterite deposits.

Multiple variables

The evaluation of Ni-laterite deposits that are to be processed through the

pyrometallurgical route require grade estimates for multiple components that are of
importance to the metallurgy. The principal variables include Ni, Fe, SiO 2 and MgO. In
the laterite environment, these variables exhibit strong correlations as a result of
mineralogical transformations and, given that their interrelationships directly affect the
metallurgical process, it is important that these correlations be reproduced in the block
grade estimates. Independent interpolation of these by kriging will not guarantee that
the correlations are reproduced appropriately and so some measures are
recommended to ensure that these are honored. This may be especially important
where drilling is sparse or more data is available for one variable than another. A
simple solution is to use identical variograms for variables showing strong correlation
characteristics. Consideration could also be given to estimating secondary variables
based on a ratios that directly associate them to the primary variable, however, an
additional weighting mechanism would be required during interpolation given that ratios
do not average in a linear fashion. A more complex alternative would be to use co-
kriging methods (Journel, A.G., and Huijbregts, C.J.,1978) that require painstaking
variogram modelling processes and an algorithm that is not available in standard
commercial software packages. The co-kriging option may be pushing geostatistics to
the limit, especially considering the uncertainty that usually exists in the variogram and
cross-variogram models. A co-located co-kriging approach available in GSLIB
(Deutsch, C.V., and A. G. Journel, 1997) simulation programs could show promise, as
this does not require the full LMC variogram models required for co-kriging. The co-
located option only requires the correlation coefficient between the variables to be
estimated where the secondary variable block kriging makes consideration of the
previously estimated primary variable. However, this alternative is only available in the
GSLIB simulation algorithms and not for kriging since, theoretically, it would require the
use of a slightly different correlation coefficient; that of an estimated block with the
sample.

Problems with kriging flat or thin deposits

During the Barro Alto Evaluation study, it was noted from the initial kriging runs that the
block grade estimates for Ni were in almost all cases lower than those of the sample
grades. The regular nature of the drilling grids meant that sample clustering was not to
be blamed. Further investigations showed that the apparent bias in the kriging process
was due to the over-weighting of lower grade samples at contact boundaries given their
apparent redundancy. The figure below, showing ordinary kriging weights along a drill
hole using the acid ore Ni variogram model, illustrates this problem. Note that although
logic dictates that the centre sample should receive the largest weight or at least a
similar weight as to all the others, this sample receives the lowest weight, whilst the
highest weight is given to the samples at the end of each line of data. The over-
weighting occurs because the end sample is seen as less redundant (it only has 1
sample beside it) than the other samples which have a sample on either side and this
leads the kriging process to assign higher weights to these samples. The end result is
that more weight is given to samples lying on contact boundaries, since when these
samples are used they will always be located on the end of the data line. If these
contact samples are generally lower grade, which is often the case, this will result in a
global underestimation of the grades.

Ordinary kriging sample weights along drill hole

Sample weights along drill hole

Ni variogram, Acid Ore:
0.15+0.40sph(10,4,4)+0.35sph(32,10,10)+0.15sph(150,30,30)
5x5x5 m block
0.16 0.16
0.07 0.07
0.05 0.05
0.07 0.07
0.16 0.16

25 metres - Y direction
The bias was almost completely eliminated by adopting a small modification in the
kriging weighting process. This involved firstly adding an imaginary sample onto the
end of each string of samples (drillhole), calculating the sample weights by ordinary
kriging and then eliminating the weights of the imaginary samples. The remaining
sample weights were then re-scaled to sum to 1. This procedure can be carried out in
DATAMINE by reprocessing the kriging sample output file.

The tables below compare average Ni grades of samples and estimated blocks for the
original ordinary kriging Ni estimate and for the modified kriging using imaginary
samples in six different resource areas. The bias in the original estimate is clearly
noted. On the other hand, it can be seen that the bias is almost completely eliminated
when using the alternative kriging option. Checks were also carried out using Inverse
Distance weighting, which compared closely to the sample and the modified kriging
average grades.

More documentation for this unexpected behavior of the kriging algorithm can be found
found in two papers by C. V. Deutsch (1993 and 1994). In his 1993 paper, Deutsch
suggests a solution that is identical to the one used here.

Average Ni Grades - Ordinary and Modified Kriging Options

BASIC ORE
Modified Kriging Comparison
Average %Ni by Area for BASIC ORE
2.0

1.9
Average %Ni

1.8
Samples
1.7 Original Kriging
Modified Kriging
1.6

1.5

1.4
1A 1BC 1D 2A 3A 3B 3C
Area

ACID ORE
Modified Kriging Comparison
Average %Ni by Area for ACID ORE
2.0

1.9
Average %Ni

1.8
Samples
1.7 Original Kriging
Modified Kriging
1.6

1.5

1.4
1A 1BC 1D 2A 3A 3B 3C
Area
Considerations for Simulating Laterite Deposits

Notwithstanding recent advances in simulation methodology, experience gained in

application of kriging methods is not directly transferable to simulation. This is
particularly true when considering trends that are characteristic of Ni-laterite deposits.
Ordinary Kriging is remarkably robust at capturing trends and other local variations in
the mineral grades; however, the use of Ordinary Kriging in simulation is not as robust
because of a greater reliance on the kriging variance and, implicitly, on the decision of
stationarity.

For simulation purposes, trends in average grades can be dealt with by deterministic
modeling of locally varying trends followed by stochastic simulation of residuals of the
trend. Real simulated values are obtained by adding trend back to the simulated
residuals.

In addition, the handling of multivariate relationships in simulation is much more

complex than in kriging due to the random component of the simulation. In this regard,
a co-simulation approach is essential to reproduce the correlation characteristics.

For those interested in more detail on way to handle multivariate relationships and
trends in simulating Ni-laterite deposits, refer to the following publications: Lyall G.D.
and Deutsch C.V., 2000; Leuangthong O., Lyall G.D. and Deutsch C.V., 2002

Conclusions

This paper shows some of the tradecraft necessary to obtain realistic models for Ni
laterite deposits. Thickness surface-based modeling is suited for thin tabular deposits
that parallel surface topography. Flattening is also recommended to better represent
the geological directions of continuity of these deposits. A number of other useful tips
for the evaluation of these deposits have also been mentioned.

The DATAMINE geological and mining software offers a number of functionalities that
permit flexible data manipulation and programming of these atypical procedures into
automated processes.

Acknowledgements

Finally, its important to acknowledge the participation in these studies of a number of

able geologically minded Anglo professionals in South America.

Hopefully, Leonardo de Souza, who is currently on secondment to S. Africa, will be

returning soon to the continent to give us a supporting hand with Anglo’s growing
assets in South America. Leonardo was responsible for developing the resource
models for several laterite deposits in Brazil and for important other deposits further
afield. Leonardo’s practical geological mind and experience continues to be of extreme
value to the group.

Luis Carlos de Assis, currently based in Anglo’s Goiania office, continues to provide
support to all the Brazilian projects and operations, principally in resource evaluation.
Luis Carlos was the principal resource geologist at Barro Alto, and has also been
involved with a nearly all of Anglo’s operations and projects in Brazil. Additionally, Luis
Carlos has been implementing similar resource evaluation techniques at Anglo’s
Codemin Ni operation in Goias.

Jose Andre Alvez, up until recently fulfilled a position in charge of mine planning at
Anglo’s Loma de Niquel operation in Venezuela. The Loma de Niquel thickness-based
modelling techniques were originally developed in conjunction with Jose Andre at
Anglo’s Santiago offices and since then he continued to improve the procedures on the
operation in Venezuela. Jose Andre is another geologist with operational expertise and
knowledge that has been of merit.

Manuel Machuca, a mining engineer working with Anglo’s Resource Evaluation Group
in Chile has provided innovative support in many of these projects and continues to do
so.

A final acknowledgement is necessary for Professor C.V. Deutch’s tuitition and

contribution in the multivariate simulation aspects of these deposits.

References

Deutsch, C.V.,1993. Kriging in a Finite Domain, Mathematical Geology, Vol. 25, No. 1,
January 93, pp. 41-52

Deutsch, C.V., 1994. Kriging with Strings of Data, Mathematical Geology, Vol. 26, No.
5, November 94, pp. 623-638

Deutsch, C.V., and A. G. Journel, 1997, GSLIB: Geostatistical Software Library,

Second Edition, Oxford University Press, New York, NY, 369 pp.

Deutsch C.V., 2002. Geostatistical Reservoir Modeling. Oxford University Press, New
York, NY, 376 pp.

Journel, A.G., and Huijbregts, C.J.,1978, Mining Geostatistics, Academic Press,

London, 600 pp.

Isaaks, E.I., and Srivastava, R.M., 1987, An Introduction to Applied Geostatistics,

Oxford University Press, New York, NY, 561 pp.

Lyall G.D. and Deutsch C.V., 2000. Geostatistical Modeling of Multiple Variables in the
presence of Compex Trends and Mineralogical Constraints. Geostatistics 2000 Cape
Town.

Leuangthong O., Lyall G.D. and Deutsch C.V., 2002. Multivariate Geostatistical
Simulation of a Nickel Laterite Deposit. APCOM 2002 proceedings, Phoenix.