mining reserve estimation
Over my years of preparing and reviewing mining studies, ore dilution often seems to be a contentious issue.  It is deemed either too low or too high, too optimistic or too pessimistic.  Everyone realizes that project studies can see significant economic impacts depending on what dilution factor is applied.  Hence we need to take the time to think about what dilution is being used and why.

Everyone has a preferred dilution method.

I have seen several different approaches for modelling and applying dilution.   Typically engineers and geologists seem to have their own personal favorites and tend to stick with them.   Here are some common dilution approaches.
1. Pick a Number:
This approach is quite simple.  Just pick a number that sounds appropriate for the orebody and the mining method.  There might not be any solid technical basis for the dilution value, but as long as it seems reasonable, it might go unchallenged.
2. SMU Compositing:
This approach takes each percent block (e.g.  a block is 20% waste and 80% ore) and mathematically composites it into a single Selective Mining Unit (“SMU”) block with an overall weighted average grade.  The SMU compositing process will incorporate some waste dilution into the block.  Possibly that could convert some ore blocks to waste once a cutoff grade is applied.   Some engineers may apply additional dilution beyond SMU compositing while others will consider the blocks fully diluted at the end of this step.
3. Diluting Envelope:
This approach assumes that a waste envelope surrounds the ore zone.  One estimates the volume of this waste envelope on different benches, assuming that it is mined with the ore.  The width of the waste envelope may be correlated to the blast hole spacing being used to define the ore and waste mining contacts.  The diluting grade within the waste envelope can be estimated or one may simply assume a more conservative zero-diluting grade.   In this approach, the average dilution factor can be applied to the final production schedule to arrive at the diluted tonnages and grades.  Alternatively, the individual diluted bench tonnes can be used for scheduling purposes.
4. Diluted Block Model:
This dilution approach uses complex logic to look at individual blocks in the block model, determine how many waste contact sides each block has, and then mathematically applies dilution based on the number of contacts.  Usually this approach relies on a direct swap of ore with waste.  If a block gains 100 m3 of waste, it must then lose 100 m3 of ore to maintain the volume balance.   The production schedule derived from the “diluted” block model usually requires no subsequent dilution factor.

When is the Cutoff Grade Applied?

Depending on which dilution approach is used, the cutoff grade will be applied either before or after dilution.   When dilution is being added to the final production schedule, then the cutoff grade will have been applied to the undiluted material (#1 and #2).
When dilution is incorporated into the block model itself (#3 and #4), then the cutoff grade is likely applied to the diluted blocks.   The timing of when to apply the cutoff grade will have an impact on the ore tonnes and had grade being reported.

Does one apply dilution in pit optimization?

Another occasion when dilution may be used is during pit optimization.  There are normally input fields for both a dilution factor and an ore loss factor.   Some engineers will apply dilution at this step while others will leave the factors at zero.  There are valid reasons for either approach.
My preference is use a zero dilution factor for optimization since the nature of the ore zones will be different at different revenue factors and hence dilution would be unique to each.   It would be good to verify the impact that the dilution factor has on your own pit optimization, otherwise it is simply being viewed as a contingency factor.

Conclusion

My personal experience is that, from a third party review perspective, reviewers tend to focus on the final dilution number used and whether it makes sense to them.   The actual approach used to arrive at that number tends to get less focus.
Regardless of which approach is being used, ensure that you can ultimately determine and quantify the percent dilution being applied.  This can be a bit more difficult with the mathematical block approaches.
Readers may yet have different dilution methods in their toolbox and I it would be interesting to share them.
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2 thoughts on “58. Ore Dilution Prediction – Its Always an Issue

  1. hardrockminer

    Hi Ken, It’s been a while since I’ve visited your site. Nice to see you’ve continued your blog.

    Dilution is difficult to measure in most mines, particularly in open pits, and this is why (I think) there are so many different ways to put a decent estimate on it for the resource or reserve models. Add to this the fact that reserve models can be highly inaccurate on an annual measurement basis, or even on a life of mine basis, which means any attempt to measure dilution is highly subjective.

    Nevertheless, everyone knows that some estimate is required, else they will be questioned by their superiors as to why they didn’t include it. At the end of the month no one wants to see less metal produced than predicted by the plan. Positive surprises are always good but negative ones cause VP’s to issue directives to sort the problem out.

    When I do pit optimizations I usually include a small percentage for dilution and ore loss. My numbers are probably pie in the sky wrong but I know they will occur at some level so why not acknowledge their reality? Models are most reliable when they are at least close to reality.

    I’ve bookmarked your site and will try to get caught up on some of your blog posts. Being recently retired, I have a bit of time on my hands!

  2. Ken Kuchling Post author

    Thanks for the comments. Its been awhile since I wrote a blog since I ran out of topics to write about (and motivation). I have a small backlog of topics but sometimes the motivation isn’t there to work on them. I’m semi-retired and now have some time, so starting to go through my old blogs, modernizing them, making a few edits here and there, fixing missing links.

    Dilution is a funny one, everyone has opinion when the number is obviously wrong but tougher to come up with the correct number that should be used.

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