Demo DesertOre Mining: extraction-to-shipment day

Demo DesertOre Mining PJSC operates an open-pit copper mine, concentrator, and export terminal. It sells concentrate in USD, pays local contractors in AED, tracks ore by grade and stockpile, and maintains excavators, haul trucks, crushers, and environmental obligations. OSERP ties production evidence to inventory, cost, sales, royalties, cash, and statutory reporting.

1. Set up the mine and dimensions

Create legal company DOM, sites MINE-01, PLANT-01, and PORT-01, and departments for pit, geology, processing, maintenance, HSE, procurement, and commercial. Use dimensions for pit, bench, ore type, grade, stockpile, equipment, contractor, and shipment.

Field	Demo value	Impact
Mine site	MINE-01	Operational and cost boundary
Bench	B14	Production source and grade analysis
Ore type	Sulphide copper	Recovery and valuation rule
Assay grade	1.82% Cu	Payable metal and stockpile value
Stockpile	SP-HIGH-02	Quantity and quality balance
Equipment	HT-047 haul truck	Hours, fuel, and maintenance
Contractor	Desert Haulage LLC	Measured service cost
Shipment	CONC-2026-09-04	Customer, assay, and settlement key
Royalty	3.5% gross metal value	Statutory payable
Currency	USD sales / AED costs	FX and margin

The item master distinguishes run-of-mine ore, concentrate, reagent, fuel, spare part, and by-product. Concentrate is lot-managed with moisture, assay, payable metal, impurity, and shipment documentation.

2. Plan a production shift

The mine plan records period, pit, bench, target tonnes, grade assumption, equipment, crew, contractor, and approval. The shift ticket captures start/end, operator, equipment hours, tonnes hauled, destination, weather, downtime, safety incident, and supervisor sign-off.

For a shift target of 8,000 tonnes, production records 7,600 tonnes to crusher and 400 tonnes to low-grade stockpile. A downtime code MECH-CRUSHER explains the shortfall. The production dashboard compares plan, actual, grade, recovery, and availability without rewriting the approved plan.

3. Receive and assay ore

The weighbridge receipt records truck, ticket, source bench, gross/tare/net, timestamp, moisture, and destination. Geology enters sample ID, assay date, copper grade, moisture, impurities, and QA status. A lot may remain provisional until assay is approved.

If 7,600 tonnes average 1.82% Cu and 6% moisture, the dry tonnes and contained metal calculation are visible. A later assay correction creates a quality adjustment linked to sample and approval. Stockpile quantity and grade are not changed by an unauthorised spreadsheet.

4. Processing and reagent consumption

The concentrator work order records feed tonnes, recovery, reagent batches, energy, water, labour, downtime, and output concentrate. A batch consumes 7,600 tonnes of ore and produces 1,050 tonnes of concentrate at 24% Cu, with tailings separately recorded.

Issue flotation reagent from PLANT-01 by batch and UoM. Inventory posting debits processing cost and credits reagent inventory. Energy and water are allocated to the production order or cost centre. By-products such as sulphuric acid are recorded with output quantity and revenue or credit-to-cost policy.

5. Equipment maintenance and contractors

Preventive maintenance for excavator EX-012 creates a work order with meter, checklist, parts, labour, safety isolation, and release test. A contractor invoice for 1,200 haul hours at AED 185/hour is matched to approved shift tickets. Quantity variance or unapproved hours create an exception.

The asset record stores acquisition cost, useful life, depreciation, location, custodian, component, meter, and impairment indicators. A major overhaul may be capitalised; routine repairs remain expense. Equipment downtime flows into availability and cost-per-tonne metrics.

6. Sell concentrate and manage assay settlement

A smelter contract stores buyer, product, provisional price, treatment charge, refining charge, moisture rule, assay umpire, shipment window, currency, and payment term. Shipment detail includes lot, wet tonnes, dry tonnes, grade, payable metal, impurities, freight, insurance, and customs documents.

For 1,050 wet tonnes at 8% moisture, dry tonnes are 966. Payable copper at 24% grade and 96% payable factor is 222.8 tonnes. The provisional invoice uses agreed quotation price; final settlement after umpire assay creates a debit or credit adjustment, never an edited original invoice.

Posting records receivable, concentrate revenue, treatment charges, freight, and tax according to policy. Inventory relief uses the lot cost. The shipment pack links certificate of analysis, packing list, bill of lading, customs declaration, and customer acceptance.

7. Royalties, tax, and multi-currency cash

Royalty calculation uses the configured basis, such as 3.5% of gross metal value. The royalty record stores period, production or shipment basis, rate, jurisdiction, filing date, and approval. A payable is accrued and cleared when paid. Tax reporting reconciles shipments, invoices, export treatment, and withholding.

When the smelter pays USD 1,250,000 against an open receivable, import bank value date, rate, reference, and deductions. Realised FX posts separately from production margin. Month-end revaluation covers open USD receivables, contractor payables, and equipment purchases.

8. Environmental provision and incident control

The environmental register stores obligation, site, estimated cost, timing, discount assumption, permit, owner, and evidence. A rehabilitation provision is reviewed each quarter and adjusted with an approval reason. A spill incident records location, substance, quantity, response, regulator reference, photographs, and corrective action.

Access to safety investigations and employee data is restricted. The audit report must show who changed a provision, production record, assay, shipment, or incident status.

9. Close and performance measures

Month end reconciles production tickets to stockpile ledger, processing output to concentrate inventory, assays to shipment settlement, equipment hours to contractor invoices, fuel to usage, royalties, environmental provision, payroll, tax, FX, bank, and GL. A shipment cannot close while assay, customs, or customer acceptance is missing.

KPI	Baseline	After OSERP discipline	Improvement
Production-to-stockpile reconciliation	3 days	4 hours	94% faster
Assay settlement disputes	8.1%	2.0%	75% lower
Equipment availability	79%	88%	+9 points
Contractor invoice exceptions	12%	2.5%	79% lower
Shipment document retrieval	90 minutes	8 minutes	91% faster
Unexplained fuel variance	4.6%	1.3%	72% lower

Practice challenge

Create a mine plan, post a production shift, receive and assay ore, process concentrate, issue reagent, maintain equipment, match contractor hours, ship a lot in USD, calculate royalty, settle cash, and run close reconciliations. Explain every field, quality status, stock movement, journal, FX result, approval, environmental control, and drill-down. Then correct an assay and prove the original result remains auditable.

Related: Manufacturing, Procure to pay, Multi-currency settlement, Advanced GL Mapping, and API library.