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The encyclopedia · Engineering & Operations · Financial decision · 2016–2018

Simulation cut $300M from BHP's Jansen potash mine and added $500M in value.

A discrete-event model of mining and logistics let BHP drop capital spend and lift output 15–20%, earning board approval to advance Jansen.

BHP

the move

BHP's first potash venture, the Jansen mine in Saskatchewan, needed a prefeasibility study. With Amec Foster Wheeler, the project team built DICE, a comprehensive discrete-event simulation of upstream production and downstream logistics.

DICE showed where capacity really came from: it justified removing about $300 million of capital for a second hoisting shaft, cutting planned maintenance and increasing mining automation. Stage-1 annual production was estimated to rise 15–20 percent, two-thirds of the gain credited to the model.

That extra output added $500 million to the project's net present value and helped the board move Jansen from prefeasibility to feasibility. INFORMS named the work a 2017 Edelman finalist.

why it works

  • Simulating the whole chain exposes bottlenecks that spreadsheet estimates miss.
  • Evidence from the model made cost cuts and automation proposals board-ready.
  • The same model tested storage, redundancy, bypasses and operating practice cheaply.
the payoffModel the whole chain before spending on the mineinspired

what transfers

Before committing capital, simulate the whole production and logistics chain: the model pays for itself by finding spend that never needs to happen.

what came after

Jansen stayed in feasibility study while potash prices stayed weak, and the team published follow-up work on benefits realized from the model. BHP later advanced the project under its revised strategy, with DICE-derived design choices still shaping the operation.

references

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