Benefits realized and lessons learned from modeling the production capacity of the Jansen Potash Project

ABSTRACT

The BHP Jansen project team and the Wood Operations Analysis group have developed a static model and a dynamic model of the Jansen potash production and logistics chain. The static model more rapidly estimated the production capacity than the dynamic model, but the latter was needed for understanding the interfaces in the chain. Both models were used during the project’s prefeasibility and feasibility study stages during which the project’s net present value increased by about $500 million. This modeling success was credited to strong governance, input accountability, relevance of key performance indicators, and a robust approach to trade-off valuation.

KEYWORDS:

• Models
• risk
• mining
• sensitivity analysis
• simulation
• capital assets

Highlights

• The Jansen project team developed two models of production capacity.

• A static model identified and quantified risks to production capacity.

• A dynamic model enabled an increase in production capacity by 15 to 20%.

• This modeling success was mainly attributed to the strong project owner’s presence.

• Another success factor was the continuity of the modeling team.

Acknowledgments

The author offers sincere thanks to BHP’s Peter Boggis and Wood’s Bryan G. Monk, Marianela Pereira, Jefferson Lo, Sandra Fleming, and Keith Quan for their development of the DICE and SLICE models. The author extends her thanks to the journal’s anonymous reviewers who provided valuable comments. The author recognizes BHP for authorization to publish this work.

Disclosure statement

The authors report no conflicts of interest. The authors alone are responsible for the content and writing of the article.