Geostatistical drillhole spacing analysis for coal resource classication in the Bowen

Basin, Queensland
Olivier Bertoli
a,
, Andrew Paul
b
, Zach Casley
c
, Doug Dunn
d
a
Geovariances Pty Ltd, PO Box 979, Wynnum,QLD 4178, Australia
b
Ex BHP Billiton Mitsubishi Alliance Coal, GPO Box 1389, Brisbane QLD 4001, Australia
c
Geovariances, 49b Av F. Roosevelt, 77215 Avon Cdex, France
d
BHP Billiton Mitsubishi Alliance Coal, GPO Box 1389, Brisbane QLD 4001, Australia
a b s t r a c t a r t i c l e i n f o
Article history:
Received 20 July 2012
Received in revised form 14 December 2012
Accepted 15 December 2012
Available online 10 January 2013
Keywords:
Drill hole spacing analysis
Polygonal kriging
Australian Coal Guidelines
Bowen Basin
Global uncertainty
Geostatistical drill hole spacing analysis (DHSA) for resource classication using the global estimation variance
technique has been used across BHP Billiton Mitsubishi Alliance (BMA) Coal Operation's various mines and pro-
jects since 2004. Analysis of the results points to the emergence of possible patterns in the results for projects
pertaining to specic coal measures being mined by BMA. This correlation may be a useful guide to assist in de-
veloping resource classications for projects based on the coal measures in which they occur. Comparison of the
results of classication using the Coal Guidelines versus classication using the geostatistical DHSA method for a
selection of BMA's operating mines in Queensland's Bowen Basin indicates that the non-geostatistical approach
leads to level of uncertainty that does not always agree with the complexity of the geology.
2013 Elsevier B.V. All rights reserved.
1. Introduction
The coal industry in Australia has been actively working in recent
years towards the (re-)integration of geostatistical techniques to the
process of coal resource estimation and overall management of the
coal resource. Whilst the actual estimation of key project variables
may still not be routinely obtained by implementing geostatistical esti-
mation techniques, the area of resource classication has been a topic
where these integrative efforts have been more widely implemented
in the industry.
BMA (BHP Mitsubishi Alliance) has been one of the key proponents
of that success, having supported for almost a decade now the explicit
integration of geostatistical techniques to the characterisation of global
resource risk with a view to offer a quantitative framework to the deri-
vation of adapted resource classication schemes.
Resource classication is a multi-facetted problem that needs to
encompass a detailed characterisation of a wide range of factors (in-
cluding but obviously not restricted to the estimation of mineable
tonnages of coal) capable of impacting the level of condence that
can be placed on a coal resource. Any acceptable scheme of classica-
tion needs to be devised on the basis of quantitative measures of the
uncertainty attached to these factors.
Bertoli et al. (2010) presented the use of a specic geostatistical
technique to support classication of coal resources, namely
geostatistical drill hole spacing analysis (DHSA) based on global es-
timation variance which provides a quantitative measure of the
global estimation precision with which a particular variable for a
given seam/domain combination may be estimated at a particular
drilling spacing.
Froma theoretical viewpoint, the current paper will not dwell upon
the simple geostatistical setting that underpins the global estimation
variance calculations but rather focus on the limitations and caveats
for its use so that the results which are presented can be qualied
accordingly.
Many deposits, variables, and most of all geological settings have
been analysed in the course of this decade-long application of DHSA
to the varied suites of deposits and projects being mined and explored
by BMA in Australia. A simple taxonomy is proposed by which the re-
sults are broken down according to the coal measures to which the dif-
ferent seams being exploited belong. The simple but rather ambitious
objective is to try and detect the existence of potential patterns of clas-
sication for the different coal measures being mined in Australia.
Without presuming if such patterns (that are highly dependent on the
corporate decisions being used to convert global precisions into re-
source categories) may be turned into industrially accepted guidelines,
their mere existence may constitute an interesting platform to stimu-
late further work aimed at guiding the competent person for the classi-
cation of the resource in their derivation of sustainable and
transparent classication schemes for coal deposits.
International Journal of Coal Geology 112 (2013) 107113
Corresponding author.
E-mail addresses: bertoli@geovariances.com (O. Bertoli),
Andrew.Paul@bmacoal.com (A. Paul), zach.casley@macquarie.com (Z. Casley),
Doug.L.Dunn@bmacoal.com (D. Dunn).
0166-5162/$ see front matter 2013 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.coal.2012.12.010
Contents lists available at SciVerse ScienceDirect
International Journal of Coal Geology
j our nal homepage: www. el sevi er . com/ l ocat e/ i j coal geo
2. Regional geology in the Bowen Basin
The Bowen Basin is part of a connected group of Permo-Triassic ba-
sins in eastern Australia that includes the Sydney and Gunnedah Basins.
It occupies an area of approximately 160,000 km
2
, the southern half of
which is covered by the Surat Basin. Maximum sediment thickness in
Bowen basin reaches about 10,000 m, concentrated in two north
trending depocentres, the Taroom Trough to the east and the Denison
Trough to the west (Fig. 1, Sliwa et al., 2008 provides the structural con-
guration of the Bowen Basin).
Tectonically, the Bowen basin may be subdivided into NNWSSE
trending platforms or shelves separated by sedimentary troughs. The
units, from west to east, are Springsure Shelf, Denison Trough, Collins-
ville Shelf/Comet Platform, Taroom Trough, Connors and Auburn
Arches, interrupted by the Gogango Overfold Zone.
Basin development started with an extensional phase during the
Early Permian whereby volcanic, uvial and lacustrine sediments
were deposited in a series of half-graben in the east and a thick succes-
sion of coals and non-marine clastics were laid in the west.
The mid-Early to Late Permian is characterised by thermal subsi-
dence. During this stage, basin-wide transgression allowed deposition
of deltaic and shallow marine, predominantly clastic sediments as
well as extensive coal measures (GeoscienceAustralia, 2009). West-
ward foreland loading during the Late Permian resulted to a period of
accelerated subsidence, enabling the deposition of a thick succession
of marine and uvial clastics, accompanied by coal and Early- to Middle
Triassic uvial and lacustrine clastics. Basin sedimentation was termi-
nated by a compressional event during the Middle to Late Triassic.
3. Coal geology
The economic coal seams of interest for BMA in the Bowen Basin
are hosted by 3 coal-bearing units deposited during the Late Permian:
a) the Moranbah Coal Measures, b) its facies equivalent, German
Creek Formation, and c) the Rangal Coal Measures (Fig. 2). The reader
is kindly referred to Fig. 3 for the regional stratigraphy of the Bowen
Basin.
The Moranbah Coal Measures comprise the most extensive coal mea-
sures in the northern Bowen Basin. The formation was deposited in
mid-late Permian and is characterised by several laterally-persistent,
relatively thick coal seams of mediumto lowvolatile bituminous rank, in-
terspersed with several thin minor seams. Relatively uniformthicknesses
of about 230300 m are noted for the Moranbah Coal Measures on the
western margin of the Bowen Basin, which increase eastwards towards
the depocentre to a maximum thickness of 760 m (Mallett et al., 1995).
The German Creek coal measures, deposited in early Late Permian, is
subdivided into a lower 160 m-thick, marine-inuenced unit barren of
coal and an upper coal-bearing interval about 110 mthick (Falkner and
Fielding, 1990). The coal bearing unit of the German Creek coal mea-
sures is correlatable to the Moranbah Coal Measures.
The youngest coal-bearing units in the Bowen Basin Permian se-
quence are the Rangal Coal Measures (Quinn, 1985). It comprises of
100300 m light grey, cross-bedded, ne to medium-grained labile
sandstones, grey siltstones, mudstones and coal seams. Cemented
sections are common in the sandstones, at times reaching 40 m in
thickness.
Underlying the Rangal Coal Measures are the Fort Cooper Coal
Measures which are typically comprised of tuffaceous sandstones,
siltstones, mudstones and coal seams. At its type section in Hail
Creek Syncline, the unit reaches 400 m thickness (Jensen, 1968).
The transition between the Rangal Coal Measures and the Fort Cooper
Coal Measures is generally clearly marked by the Yarrabee Tuff a
basin-wide marker bedcomprised of weak, brown tuffaceous claystone.
The presence of tuffaceous beds within the Fort Cooper Coal Measures
distinguishes it from the Rangal Coal Measures.
The boundary between the Fort Cooper and the Moranbah Coal
Measures is taken as the basal part of the lowermost tuffaceous seam
in Fort Cooper. This boundary is sometimes difcult to identify because
the Moranbah Coal Measures contain scattered tuffaceous units.
4. Australian Coal Guidelines
The Australian Guidelines for Estimating and Reporting of Inventory
Coal, Coal Resources and Coal Reserves (the coal guidelines), are a set
of non-prescriptive rules destined to guide the competent person in
their classication of a coal inventory (exploration potential) or coal re-
source. The central element to the scheme of classication proposed in
the guidelines is the essential notion of points of observation and the
spacing between points of observation used to characterise a resource.
Points of observation as dened in the guidelines are intersections of
coal bearing strata, at known locations, which provide Information
about the coal. A point of observation for coal quality evaluation is nor-
mally obtained by testing samples obtained from surface or under-
ground exposures, or from bore core samples having an acceptable
level of recovery. Fig. 1. Structural conguration of Bowen Basin (Sliwa et al., 2008).
108 O. Bertoli et al. / International Journal of Coal Geology 112 (2013) 107113
The guidelines state that Measured resource may be estimated using
data obtained frompoints of observation usually less than 500 mapart,
Indicated resource from points of observation less than 1000 m apart
and Inferred resources less than4000 mapart. The guidelines also spec-
ify that these spacings may be extended (the authors would argue that
the termvaried would be more adapted) if there is sufcient technical
justication to do so; for example if supported by geostatistical analysis.
5. Geostatistical method of characterisation of global uncertainty:
global estimation precision
Global estimation variance is an operational concept characterizing
the error associated with a particular sampling pattern and a given ge-
ometry to be estimated. It is the required input to drill spacing analysis
since the method attaches a level of precision(or uncertainty) to a given
drilling budget (at a xed drill spacing a givenarea will require a certain
budget to be drilled).
Several geostatistical algorithms are available to obtain global esti-
mation variances, and include:
The combination of elementary estimation variances which offers a
rst pass approximation of the global estimation variances that
works rather well for known regular geometries;
The post processing of a series of conditional simulations which of-
fers a much more involved, but more precise alternative; and
Polygonal kriging (PK) which is particularly adapted when the ge-
ometry of the global areas to be characterized is xed.
PK is designed to provide an estimated value of a variable of interest
inside a set of areas delineated by polygons. Eachpolygonreceives a sin-
gle global estimation value. As for Block Kriging, PK requires each poly-
gon to be associated with an internal discretization grid to perform the
calculations.
In order to illustrate the last point (PK), suppose we want to esti-
mate the average raw ash content over an area that corresponds to a
Fig. 2. Distribution of coal-bearing formations and BMA areas of interest in Bowen Basin (from BMA).
109 O. Bertoli et al. / International Journal of Coal Geology 112 (2013) 107113
mining period of one year and characterize the precision of estimation
through an estimation variance. This estimation variance depends on:
The level of spatial continuity captured by the variogram model
(Srivastava, 2013this volume);
The geometry of the data, i.e. the particular data locations used for
estimation; and,
The geometry of the area to be estimated.
Once a variogram model is obtained for the specic seam/domain/
area being investigated the following variance can be obtained by PK for
both accumulation and thickness (Armstrong, 1998):

2
NV

i
x
i
y dy
1
V
2
yy

dydy

1
N
2

j
x
i
x
j

1
where N is the number of samples used to estimate the polygonal area
and V denotes the area to be estimated.
This leads to the estimation of the standard deviation for Ash using
the formula for standard deviation of estimation ratio established by
Journel and Huijbregts (1978):

2
ash
ash
2


2
Accu
Accu
2


2
thickness
Thickness
2
2

Accu=Thickness

Accu
Accu

thickness
Thickness
: 2
It must be noted that the uncertainty, which is in that case orders of
magnitude lower than the other uncertainties listed above, attached to
the geometrical denition of the estimation area (see Chils and
Delner (1999)) is not taken into account in Eq. (1).
DHSA at BMA has actually been based on the industrial application
of the rst option (combination of elementary estimation variances)
performed directly on the raw variables (see Bertoli et al., 2010). The
dual simplication of working directly on the raw variables and using
the combination of elementary variances has meant that an industrial
application of the technique to a wide range of projects, seams and vari-
ables was possible. However the clear departure from optimal and
sound geostatistical premises has also meant that careful monitoring
and constant benchmarking of the results produced through the years
were mandatory. The conceptual benchmarking was obtained by regu-
larly comparing the spacings derived from implementing DHSA to the
spacings obtained by post-processing a platform of conditional
co-simulations (CCS) of accumulation and thickness variables for a se-
ries of seams capturing the diversity of coal measures being mined by
BMA. Invariably the conceptual benchmarking concluded that DHSA
spacings based on global estimation variance were producing results
for seam thickness and raw ash (the two variables used by BMA to
guide their classication decisions) in close agreement with CCS results
over periods equating to 5 years of production. To be more specic, the
comparisons showed that DHSA was offering good to very good predic-
tions for thickness and more conservative predictions for raw ash (i.e.
the spacings derived for Ash by DHSA tended to be larger than the
ones resulting from the application of CCS).
Fig. 3. Bowen Basin stratigraphy (from BMA).
Table 6-1
Estimation precision associated with Coal Resource Categories.
110 O. Bertoli et al. / International Journal of Coal Geology 112 (2013) 107113
The practical application and benchmarking of the technique
actually conrmed that the global precisions derived in DHSA were
robust results that:
Apply only to the deposit, seam, domain and variable considered;
Can only be used to assign precisions to estimation of the mean of
an attribute of interest for a global area equivalent to a certain pro-
duction period, assuming a xed mining rate; and,
Are not applicable to any other area than the one implicit in the calcu-
lations and, in particular, are not suited to assigning local condence
intervals.
Are more reliable for longer time periods (i.e. beyond the ve year
timeframes).
Their overall validity strongly depends on the adherence for the
deposit, seam, domain and variable considered to the hypothesis of
stationarity (statistical homogeneity) (Bertoli et al., 2010) that un-
derlies the geostatistical calculations involved in the process.
6. Conversion of global estimation precisions into
resource classication
In general, coal resource classication in Australia is guided by the
Australian Coal Guidelines (Coalelds Geology Council of NSW and
Queensland Mining Council, 2003). The Coal Guidelines recommend
spacing between points of observation of 500, 1000 and 4000 m to de-
ne Measured, Indicated and Inferred resource categories, respectively.
These recommended that spacings are based on historically-proven
continuity of coal seams in the Hunter Valley and in the Bowen Basin.
As a measure of condence in the estimation results, BMA assigns
equivalent ranges of errors for each of the resource categories, such
that precision increases from Inferred to Indicated and Measured. To
substantiate the application of the coal guidelines in coal resource esti-
mation, current BMA practice also involves an analysis of the spacings
obtained by DHSA for raw ash content and seam thickness for the
major seamcontributors of eachproject over anarea equating to a nom-
inal 5 year period. So for each project/mine, the seams contributing to a
cumulative tonnage exceeding 75% of the yearly production are select-
ed indecreasing order of importance. The total area mined over a 5-year
period is derived fromthe cumulative seamthickness, in situ bulk den-
sity and projected annual production. This is then used as an input to
the combination of elementary variance method so that a precision
can be attached to any drill spacing being considered over that area
for ash and thickness. From the resulting precisions/variances, equiva-
lent resource categories are derived using the same parameters as
shown in Table 6-1.
For example an area being mined over a 5 year period if classied
as Indicated should return an average value for thickness and raw ash
within 20% of the estimated values.
7. Main results
7.1. Application of DHSA to Saraji Mine
BMA is currently mining the Saraji Mine in Central Queensland
(Fig. 2), producing coking coal products and a small amount of ther-
mal coal.
Three stratigraphic sequences which lie within the Moranbah Coal
Measures are mined at Saraji: the Harrow Creek seams (H seams), the
Dysart seams (D seams) and the P seams. Coal is uncovered by open
cut methods utilising four draglines supplemented by truck/shovel
stripping operations.
The seams investigated for DHSA at Saraji consisted of the following
(Fig. 4):
Harrow Creek Seams: H15, H16,
Dysart Seams: D14, D24, D141, D142, D52, D63,
P Seams: P07, P08, P14.
30.0
25.0
20.0
15.0
10.0
5.0
0.0
D
2
4
H
1
6
H
1
5
D
1
4
D
5
2
P
0
8
H
1
9
D
1
4
2
P
1
4
P
0
7
D
1
4
1
D
2
2
D
2
1
H
1
8
D
3
0
D
5
3
D
1
7
Q
0
2
H
1
7
D
3
1
Q
0
3
% contribution of seam to resources within reserves
Fig. 4. Contribution to resources by major coal seams within Saraji Mine.
4500
4000
3500
3000
2500
2000
1500
1000
500
Saraji (TK: BHP01022)
s
p
a
c
i
n
g

[
m
]
Measured (+10 %)
Indicated (+ 20 %)
Inferred (+ 50 %)
750
1400
2500
Coal Guidelines
500
1000
4000
0
Fig. 5. Comparison of the results of DHSA to the recommended spacings in the Australia Coal Guidelines.
111 O. Bertoli et al. / International Journal of Coal Geology 112 (2013) 107113
The variables investigated were seam thickness, raw ash content,
washed ash, phosphorous and sulphur, relative density and yield at
differing oating settings.
The variables retained for DHSA as per BMA's corporate guide-
lines were thickness and raw ash. The Annual tonnage of 12.7 Mt
was converted to an annual area of ~1.6 million m
2
equating to a
5 year area of approximately 8 million m
2
.
DHSA based on the above decisions results in the following spacings
at Saraji (the spacings are compared to the spacings recommended in
the coal guidelines that are presented on the right hand side of the g-
ure (Fig. 5)).
The geostatistical analysis thus indicates that the characterization
of spatial continuity of thickness and raw ash for the major tonnage
contributors can lead to a variation of the proposed spacings for
the different categories. In that instance it is argued that at Saraji
Measured resource may be estimated using data obtained from
points of observation 750 m apart, Indicated resource from points
of observation less than 1400 m apart and Inferred resources less
than 2500 m apart (instead of 500 m, 1000 m and 4000 m as being
respectively suggested by the guidelines).
7.2. Summary of DHSA results from all coal measures studied at BMA
The following table (Table 7-1) lists all the deposits the methodolo-
gy has been applied at to date. They offer anactual sampling of the three
main Australian coal measures being exploited by BMA in the Bowen
Basin. The variable between brackets refers to the actual driver for the
classication proposed.
The results are then summarised by ascending required spacings
(in m) for the Measured category (Fig. 6).
A close analysis of the results shows that this ranking allows a
grouping of the deposits into the three principal coal measures being
mined:
1. Rangal Coal Measures (deposits/mines: South Walker, Poitrel,
Blackwater, Daunia) return spacings for the Measured category
around 500 m or below, for Indicated typically at 1000 m or
below, and for Inferred, less than 2000 m between points of ob-
servation; the seams pertaining to these coal measures usually
have levels of variability for secondary variables (phosphorous,
sulphur) such that no control of mine variability is possible unless
adapted short term in pit quality estimates are being undertaken
at an operational level;
2. Moranbah coal measures (deposits/mines: Goonyella Riverside,
Caval Ridge, Peak Downs, Norwich Park, Saraj) return spacings for
the Measured category around 750 m, for Indicated typically at
12501500 m, and for Inferred around 2500 m; and,
Table 7-1
DHSA spacings in metres (m) for various BMA coal projects.
operation
Blackwater (TK, RA) 550 1050 2100
Caval Ridge (RA) 800 1400 2800
Caval Ridge (TK) 500 1000 2450
Crinum M Block (RA) 1100 1900 3600
Daunia (RA) 650 1250 2800
Goonyella Riverside (TK) 650 1250 3150
Gregory Crinum (RA) 1100 1900 3600
Lotus North (TK core) 350 700 1850
Norwich Park (TK) 750 1450 3550
Peak Downs (TK) 700 1300 2600
Peak Downs (TK) 850 1700 4200
Poitrel (TK) 400 750 1800
Saraji (TK) 750 1400 2500
South Walker Creek (TK) 250 500 1000
Coal guidelines 500 1000 4000
Measured
(10 %)
Indicated
(20 %)
Inferred
(50 %)
Measured (+10 %)
Indicated (+ 20 %)
Inferred (+ 50 %)
4500
4000
3500
3000
2500
2000
1500
1000
500
s
p
a
c
i
n
g

[
m
]
0
South
Walker
Creek (TK)
Poitrel
(TK)
Caval
Ridge (TK)
Blackwate
r (TK, RA)
Goonyella
Riverside
(TK)
Daunia
(RA)
Peak
Downs
(TK)
Norwich
Park (TK)
Saraji (TK)
Caval
Ridge (RA)
Peak
Downs
(TK)
Gregory
Crinum
(RA)
Crinum M
Block (RA)
Coal
Guidelines
1000
500
250 400
750
1800 2450
1000
500 550
1050
2100 3150
1250
650 650
1250
2800 2600
1300
700 750
1450
3550 2500
1400
750 800
1400
2800
850
1700
4200
1100
1900
3600 3600
1900
1100 500
1000
4000
DHSA results
Fig. 6. Tabulation and plotting of drill spacings for various resource categories.
112 O. Bertoli et al. / International Journal of Coal Geology 112 (2013) 107113
3. German Creek coal measures (deposits/mines: Gregory Crinum,
M-Block) for which spacings for the Measured category sit at
1000 m, for Indicated at 2000 m, and for Inferred around 3500 m.
8. Conclusions
The following specic conclusions may be drawn upon the inspec-
tion of the above results:
1. First, the summary above is in complete keeping with the under-
standing of the differing geological environments for the three sets
of coal measures. The stationarity hypothesis lying at the core of
the implementation of DHSA comes to the fore eventually by pro-
ducing patterns of category spacings that are consistent with the
overall level of geological complexity attached to each measure;
2. Second, it seems that for deposits in the Rangal Coal Measures,
using the coal guidelines probably does not provide sufcient
levels of condence for Measured resources. For these coal mea-
sures the uncertainty in global estimation is too large when esti-
mation is based on points of observation that are 500 m apart
and that spacing needs to be reduced;
3. In the German Creek formation, the coal guidelines are probably
too strict for Indicated resources, in other words larger spacings
between points of observations may generally be utilised to classi-
fy the seams from the German Creek formation;
4. And generally speaking, 4 km seems to be too large a spacing for
Inferred resources in all three formations.
The general conclusion from this work is that the use of a one size
ts all classication scheme, in this case, the Coal Guidelines, for classi-
cation of resources may result in inappropriate resource classica-
tions. The use of a geostatistical method, whereby the classication of
the resource is driven by the actual in situ variability (or conversely
spatial continuity) of the resource under consideration strongly
recommended by the authors as best practice for the industry.
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