Decision-based approach to the extraction of coal pillars in opencast mines by junior miners

Abstract

Coal pillar mining has been applied in South Africa since the 1990s. Over the years, coal pillar extraction has become the preferred method for Junior Miners to enter the coal mining sector in South Africa, due to its low capital to operation investment requirement. An abundance of coal pillar resources in excess of 1.1 Gigatons (Gt) of coal still remains from previous underground coal mines. Therefore, developing models that will ensure Junior Miners are able to optimise coal resources is very important. This research proposed models that would ensure Junior Miners maximise and realise maximum economic benefit from their coal pillar resources based on two mines located in the Emalahleni region as a case study. A mixed-methods approach, combined with primary and secondary sources, was adopted for this study to address the research objectives. The mines were studied by physically observing the operations as well as analysing their mine, production, and schedule plans. This study was also able to design and draw conclusions from numerical modelling of mine plans and scheduling parameters. Approximately 60% of the coal from Mine 1 is sold to the domestic market. Mine 2 is a typical drill and blast operation producing an average of 210 kilotons (kt) per annum. Mine 1 will need to produce 600 kt per annum to achieve a net present value (NPV) of ZAR532 million with an internal rate of return (IRR) of 23.35%, while Mine 2 will need to produce 480 kt per annum to achieve an NPV of ZAR212 million with an IRR of 42.88%. Both mines have dilution and contamination issues due to poor planning and a lack of appropriate mine designs. This study revealed the importance of accessing historical information, understanding challenges associated with coal pillar mining and addressing all environmental and safety issues that may arise. Critically, this study demonstrated that having a technically competent management team will ensure that appropriate mine plans, designs and schedules are always in place. Lastly, all coal pillar extraction operations need to have a practical financial model that addresses key components such as NPV and IRR, which are vitally important to the sustainability of mining operations of this nature. Having robust mine designs and plans are essential prior to deploying and establishing machines on-site for sustainable coal pillar mining operations.