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Economic Aspects of Pad Construction Costs on Heap Leach Projects
Economic Aspects of Pad Construction Costs on Heap Leach Projects
Summary
Pad construction costs can affect the overall economics of heap leach projects. Costs for single- and double-
lined pads, using various designs, are listed for a typical small and large project. Double-lined pads are now
frequently required by regulatory agencies. Unless such designs significantly reduce the risk of site-specific
contamination, the extra costs cannot be justified from an economical viewpoint. Specificattention is given
to the short project life (typically five years) of heap leach projects. A few numerical examples are presented
to demonstrate the overall impact of these costs on economic parameters.
Keywords: Heap leaching; pad construction; economics.
Introduction
Heap leaching of low-grade precious metal and copper ores is widely practised. This process for
the extraction of metals has gained in popularity because of the low capital outlay, as well as
operating and closure costs associated with a well-designed and operated heap leach facility
(Van Zyl et al., 1988). A cost item which contributes significantly to the capital and operating
costs of heap leach projects is pad construction.
For the purposes of this paper, capital costs will be considered as that part of the outlay
incurred before a project starts operating. This means that the original pad construction will fall
into this category. Future pad construction will be considered as part of operating costs.
The economics of a mining project is directly tied to the size of the ore body and the ore grade.
Examples will be used in the evaluations presented below. Two typical examples will be used as
the basis for these evaluations: a small project having 1 million tons ofminable ore at an average
grade of 0.06 ounces per ton of gold, and a large ore body with 10 million tons of 0.045 ounces per
ton of gold. These project sizes and ore grades have been chosen on an arbitrary basis, but will be
useful in evaluating the impact of pad construction costs and mining costs on project economics.
Preamble
Pad construction cost is a function of the specific project layout. In general, three different
layouts can be considered: expanding pad (dedicated), reusable pad (on-off), and valley leach
0269-0136/90 $03.00+.12 © 1990 Chapman and Hall Ltd
276 Van Zyl, Henderson and Cobb
facilities. The latter two design approaches are used when specific site conditions demand it.
As these layouts are less frequently used, they will not be further considered in this paper.
Expanding pads, or dedicated pads, will be assumed in the analyses that follow, however, the
principles may also be applied to the evaluation of projects with reusable pads and valley
heap leaches.
Regulatory controls often determine the pad design which has to be followed. One of the
considerations in deciding the level of containment design required for a project is the
economics. The importance of this issue will be explored below. Three typical designs are
considered in this analysis: single liner, double liner, and triple liner (referring to the number
of low-permeability layers in the liner system). Typical costs for these liner systems will be
presented considering a small project and a large project.
Project assumptions
Average gold price $400/oz ($14.1 g-1)
Ore bodies
Example 1:
Minable reserves 1 000 000 tons (0.89 M tonnes)
Grade 0.06 oz/ton gold (1.48 g tonne- 1)
Metallurgical extraction 70%
Stripping ratio 1 ton waste/ton ore
Production rate 500 000 tons/yr (0.44 M tonnes yr- l)
Example 2:
Minable reserves 10 000 000 tons (8.89 M tonnes)
Grade 0.045 oz/ton gold (1.11 g tonne-l)
Metallurgical extraction 70%
Stripping ratio 2.5 tons waste/ton ore
Production rate 2 000 000 tons/yr (1.78 M tonnes yr-1)
Processing:
Leachate application rate 0.005 gpm/ft 2 (0.0041 dm 3 s -1 m -2)
Flow-rate:
Example 1 200 gpm (15.15 dm 3 s -1)
Example 2 1000 gpm (75.77 dm 3 s- 1)
Leaching time for 30 days
assumed extraction
Pad construction
Example 1: Ore stacked in five 15 ft (4.5 m) lifts to a total of about 75 ft (22.5 m)
Example 2: Ore stacked in six 15 ft (4.5 m) lifts to a total of about 90 ft (27 m)
Dry density of ore 85 pcf (136 Mg m -3)
Outside slope of stacked ore is 2H: 1V.
Single liner
Single liners can consist of a compacted clay liner or a synthetic (geomembrane) liner placed
on a prepared foundation. The latter construction will be assumed here. Figure la shows the
section assumed for a single liner.
GEOMEMBRANE
GEOMEMBRANE DRAIN
~ DRAIN
..... .. . . . . . . . . .
GEOMEMBRANE
GEOMEMBRANE CLAY
m ~ GEOMEMBRANE
In order to evaluate the cost of a single liner, cost must be available for the following
mobilization, site preparation (stripping, grading, compaction); supply and installation of
geomembrane liner, drainpipes; and supply and placement of solution collection system.
Various geomembrane liners are available on the market and for this evaluation it will be
assumed that either a 60-mil (high density polyethylene) H D P E or a 40-mil (polivinylchlor-
ide) PVC or (very low density polyethylene) VLDPE liner is being used. Table 1 presents a
summary of the costs for single liners for a small and a large project considering two different
synthetic materials.
Double liner
Double liners can be constructed of various combinations of synthetic and natural materials.
A clay liner overlain by a geomembrane is one alternative, while two geomembrane liners
278 Van Zyl, Henderson and Cobb
with a leak detection and collection system between them is another alternative. In the latter
liner system, the bottom geomembrane can be replaced by a clay layer. The advantage of this
system is that a thinner layer of pervious material can be placed for the leak detection and
collection system because the clay layer is not as sensitive as the geomembrane to the
dynamic stresses of earthmoving equipment. Although small quantities of moisture leaking
through the upper geomembrane will seep into the bottom clay liner and may not report to
the leak detection system, large leaks will be detected. In the evaluation of a double liner
design, one should consider the availability of local clay sources which can reduce the overall
liner cost.
For the analysis in this paper, it will be assumed that a double liner consists of two
geomembrane layers with a leak detection and collection system between them. Figure lb
shows the section of double liner which will be used in this evaluation.
Costs must, therefore, be available for: mobilization and site preparation; supply and
installation of two geomembrane layers; supply and installation of a leak detection and
collection system consisting of granular material plus drainpipes; and supply and placement
of a solution collection system on top of the liner.
It is again assumed that the geomembrane liners can consist of 60-mil HDPE or 40-mil
PVC or VLDPE. Table 2 presents a cost evaluation for this liner system.
Triple liner
The term triple liners is used here to indicate a liner system containing three low-permeability
layers. The configuration assumed for the triple liner discussed here is two geomembrane
liners, with a leak-detection system between them, underlain by a compacted clay layer.
Figure lc shows the section of the liner which will be used in this analysis. This liner system is
referred to by EPA as a double composite liner (EPA, 1987).
Costs must be available for: mobilization; site preparation; clay liner installation; supply
and installation of two geomembrane liners; supply and installation of a leak detection layer;
and supply and placement of a solution collection system on top of the liner.
It will again be assumed that the synthetic liners consist of 60-rail HDPE or 40-mil PVC or
VLDPE. Table 3 shows the development of costs for this liner system.
The economic analysis of the liner options described above focuses on the importance of liner
costs in relation to the overall project. The single liner option is the base case and the
double/triple liner systems are incremental cases. The incremental capital and operating
costs of these two systems is readily calculated from the data on Table 4.
Hypothetical capital and operating costs are presented in Table 5 for both the 1 and 10
million ton cases using information presented by Cobb (1988). The capital cost estimate for
the 1 million ton case is probably overstated, in that a low-capital approach would be taken
for a mine with a two year life (for example, contract mining, crushing and stacking; portable
recovery plant; minimal office and warehouse facilities). As a quick check on the cost
280 Van Z y l , Henderson and Cobb
60-rail 40-mil
HDPE PVC or
VLDPE
Liner type ~$) ($)
Table 2--continued
60-mil 40-mil
HDPE PVC or
VLDPE
Liner type ($) ($)
Solution collection system
Drainpipe: 19 200 ft @ $0.30/ft 5760 5760
(5850 m @ $0.98 m - 1)
Drain layer: 66 700 yd 3 @ $4.00/yd 3 266 800 266 800
(51 000 m 3 @ $5.23 m -3)
Total 1 839 320 1 519 320
Cost/ft 2 2.04 1.69
(Cost m -3) (22.17) (18.37)
Notes:
1 Unit prices for larger pad reflect savings on volumes.
2. Cost/ft 2 is based on area of pads: Example 1. 450 ft x 650 ft=292 500 ft 2 (27 170 mZ);
Example 2. 750 ft x 1200 ft =900 000 ft 2 (83 610 mZ).
3. Drain layer for solution collection is assumed to be specially prepared (crushed and
screened) ore, this cost can vary considerably ifa special borrow source must be developed.
4. Drain layer for leak detection and collection system to be specially prepared to satisfy
stricter specifications, therefore, the higher unit cost.
estimates, the operating costs are less than $200 per ounce produced and the total cost is
between $225 and $300 per ounce. Both of these values are within acceptable limits for
current investment decisions. At a $400 per ounce gold price, both projects would have a
15-25 % (after tax) rate-of-return (ROR). It must also be noted that the capital and operating
cost estimates in Table 5 for the 10 million ton project are somewhat lower than those
presented by Haas (1989) for a similar scenario.
The reader should be aware that these cost estimates are for illustrative purposes only and
they are hypothetical; actual project costs can vary substantially from these. Thorndycraft
(1988) points out, and it is an extremely important point, that heap leach capital costs for a
given production rate can vary up to one-half order of magnitude (for example, from $3 to
$15 million) because of differences in corporate philosophy and approach. Similar variations
can occur in operating costs.
Table 6 presents the relative capital and operating costs for the three liner options for both
the 1 million and 10 million ton cases. The relative capital costs for the 1 million ton heap
processing, etc. are high because contract mining/crushing/stacking is assumed, which
decreases the total capital cost. It is also assumed that the total liner area for a Year 1 pad will
be capitalized, which is an aggressive investment strategy (it is more conventional to
capitalize 6 months of pad construction for such a short-term project). The relative capital
costs for the 10 million ton case indicate that liner costs are a relatively small component of
the total capital cost if mining capital is included; these percentages could increase by 2.5
times if contract mining was used (and total capital decreased).
The relative operating cost expressed as percentages in Table 6 is more striking. Liner costs
represent 6 to 19% of the total operating cost. In terms of operating cost per ounce produced,
the liner options represent $13-21 per ounce.
282 Van Zyl, Henderson and Cobb
7.00 6.15
Op cost/oz $167 $195
Total cost/oz $243 $274
a 0.06 opt, 70% recovery.
b 0.045 opt, 70% recovery.
There is a marked decrease in net present value (NPV) from more stringent liner
requirements (i.e. single to double liner). However, the incremental decrease in N P V for
triple liners is relatively small over that for a double liner system.
Conclusions
The general conclusions reached from this quick comparison of present worth and
percentage costs are as follows:
Economic aspects of pad construction costs on heap leach projects 285
1. An increase in liner costs from a single to double liner (an additional 3 - 9 % in capital
and 6 - 8 % in operating cost) will decrease N P V (increasing present worth costs). The effects
of this decrease on a production decision are site-specific.
2. The ability to minimize capital and operating costs is always a good idea and there can
be a saving generated by not having to use double or triple liners if site-specific conditions
allow. However, if a company is faced with being forced into a double liner as a minimum,
then the incremental cost difference for going to a triple liner may be small.
3. The sensitivity to variations in liner unit costs is significant for the big ticket items like
the clay liner, geomembrane, granular drain material, or drain layer.
4. The cost estimates and relative percentages are based on assumed scenarios that are for
the "average" conditions. There are numerous situations where a more significant cost saving
can be generated by only using a single layer. Certainly this is the case when the mine life is
2 3 years or less. In these cases, a mining company will probably attempt to minimize capital
investment through used equipment, off-the-shelf recovery plants, and single liners.
5. A very important factor which has not been considered in this evaluation is the risk of
release associated with each containment system. The releases of a leachate from a well-
constructed liner system can be estimated. This release can finally be used on a site-specific
basis to assess the risk to h u m a n health and the environment. Therefore, instead of the
subjective 'feel' that the use of more low-permeability layers in a liner system is better, the
risks and costs associated with each system can be quantified. Such an approach can lead to a
more objective approach in making investment decisions on a risk-cost basis.
References
Cobb, W.E. (1988) An overview of capital and operating cost estimation techniques for heap leach
projects, in Introduction to Evaluation, Design and Operating of Precious Metal Heap Leaching
Projects Van Zyl, D.J.A. et al. (ed), SME, Littleton, Colorado, pp. 306-44.
EPA (1987) Minimum technology guidance on double liner systems for landfills and surface
impoundments - design, construction and operation, Report no. EPA/530-SW-85-014, OSWER,
Washington DC.
Haas, D.D. (1989) Economics of contract mining, in Gold Forum on Technology and Practices World
Gold '89, Roshan B. Bhappu and Rod J. Harden (ed), SME, Littleton, Colorado, pp. 206-13.
Thorndycraft, B. (1988) Impact of top management philosophy on heap leach design, Randol
International Symposium.
Van Zyl, D.J.A., Hutchison, Ian P.G. and Kiel, J.E. (eds) (1988) Introduction to Evaluation, Design and
Operating of Precious Metal Heap Leaching Projects, SME, Littleton, Colorado.
Appendix A
In order to apply leachate and build heap, the pad area must be at least 2 × area needed for flow rate
of 200 gpm, i.e. an area of 80 000 ft 2 (or 400 ft × 200 ft).
Production per year is 500 000 tons and leach cycle is about 30 days, therefore, an 80 000 ft 2 pad
(5 lifts of 15 ft each vertically stacked) can handle production of 510 000 tons (10 × 2 × 25 500) in
300 days.
It will be necessary to construct a new pad for the second year of leaching.
Area required to allow construction:
For a 2:1 outside heap slope and 200 ft wide heap base (as assumed above), the maximum heap height is
50 ft before a peaked top is reached. In order to construct five 15 ft lifts, a larger initial pad area is
required. To allow for a final surface area that is still large enough for stacking and leaching five 15 ft
lifts, a pad area of 450 ft x 650 ft (top area 150 ft x 350 ft) will result in the following capacities:
Lift 1: 166 000 tons
Lift 2: 128 700 tons
Lift 3: 95 800 tons
Lift 4: 67 500 tons
Lift 5: 43 700 tons
501 700 tons
It is still necessary to construct a new pad for the second year of leaching.
The final area of 292 500 f t 2 ( 4 5 0 ft x 650 ft) per pad area obtained is not necessarily optimized, but will
be used for calculations in this paper.