Determination of value at risk for long-term production planning in open pit mines in the presence of price uncertainty

Rahmanpour, Mehdi; Osanloo, M.

doi:10.17159/2411-9717/2016/v116n3a3

Cited by 11 publications

(7 citation statements)

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“…Due to this, modern approaches consider the uncertainty and the risk associated with input parameters, which provide a wider vision of the possible losses and gains of the project [2]. The uncertainty of not knowing the real value of the metal content of interest to a certain process is indeed a real risk, so finding a way to organize resources or define alternative operational strategies is a very difficult calculation problem, mainly due to variables that are subject to geological uncertainty; there is generally a range of possible scenarios of mineral grade distribution, process capacities, and commodity market conditions, among others [3,4].…”

Section: Overviewmentioning

confidence: 99%

Optimization of the Heap Leaching Process through Changes in Modes of Operation and Discrete Event Simulation

et al. 2019

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The importance of mine planning is often underestimated. Nonetheless, it is essential in achieving high performance by identifying the potential value of mineral resources and providing an optimal, practical, and realistic strategy for extraction, which considers the greatest quantity of options, materials, and scenarios. Conventional mine planning is based on a mostly deterministic approach, ignoring part of the uncertainty presented in the input data, such as the mineralogical composition of the feed. This work develops a methodology to optimize the mineral recovery of the heap leaching phase by addressing the mineralogical variation of the feed, by alternating the mode of operation depending on the type of ore in the feed. The operational changes considered in the analysis include the leaching of oxide ores by adding only sulfuric acid (H2SO4) as reagent and adding chloride in the case of sulfide ores (secondary sulfides). The incorporation of uncertainty allows the creation of models that maximize the productivity, while confronting the geological uncertainty, as the extraction program progresses. The model seeks to increase the expected recovery from leaching, considering a set of equiprobable geological scenarios. The modeling and simulation of this productive phase is developed through a discrete event simulation (DES) framework. The results of the simulation indicate the potential to address the dynamics of feed variation through the implementation of alternating modes of operation.

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Section: Overviewmentioning

confidence: 99%

Optimization of the Heap Leaching Process through Changes in Modes of Operation and Discrete Event Simulation

et al. 2019

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“…The price simulation performed in this study will influence the expected production rate for the following periods. Iron ore behavior is best modelled by geometric Brownian motion due to the ability to replicate the volatility and the trend observed in the analysis window (Rahmanpour;Osanloo, 2016). The volatility confers a large number of erratic paths with equivalent probability, according to Cortez et al (2017).…”

Section: Price Simulationmentioning

confidence: 99%

“…The volatility of 5% expresses a trend variation near the average, and greater volatility increases the possibility of scattered scenarios. Rahmanpour and Osanloo (Rahmanpour;Osanloo, 2016) do not recommend a long-term extrapolation of the simulation; therefore, the simulated horizon was limited to 10 years.…”

Section: Price Simulationmentioning

confidence: 99%

“…The correlation between price and production demonstrated the need for focus on price simulation (Franco-Sepulveda; Campuzano; Pineda, 2017), since a simulation performed with tenuous criteria can lead to a scenario of increasing or decreasing production in the wrong direction. The analysis of the drift and volatility variables should obey the needs of each operation and ore type (Rahmanpour and Osanloo, 2016;Yang et al, 2015).…”

Section: Figurementioning

confidence: 99%

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Optimum mine production rate based on price uncertainty

et al. 2019

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The production rate of a mining operation has an important effect on the operational cycle and gross profit, which are often evaluated based on engineering practices. Assessment of the economic performance of mine operations in mining engineering is of great importance because an incorrect production rate can result in significant financial losses. The production rate is composed of two bases: the cost estimation and the price scenario. Bureau of Mines studies performed on American mines indicated that processing costs can be estimated through the production rate. This article proposes to connect the model presented by the Bureau of Mines and queuing theory to describe the operational costs, which are used to develop a production optimization methodology. The proposed cost composition describes a production system to verify the law of diminishing returns and the economy of scale. Between these regions of the production curve, the optimum point was determined with mathematical precision.

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“…The stochastic and uncertain nature of geological, technological, market, political, and ecological factors are inherent in the context of mining engineering. For example, the dynamic change of ore and waste material due to the presence of spatial grade uncertainty makes predictions of the optimal mining sequence a challenging task (Godoy and Dimitrakopoulos, 2004;Azimi, Osanloo, and Esfahanipour, 2013;Rahmanpour and Osanloo, 2016a). These uncertainties highlight the importance of careful and risk-based mine planning through the development of new production planning models (Osanloo, Gholamnejad, and Karimi, 2008;Newman et al, 2010).…”

mentioning

confidence: 99%

Application of fuzzy linear programming for short-term planning and quality control in mine complexes

Rahmanpour¹

2017

J. South. Afr. Inst. Min. Metall.

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A strategic mine plan sets the overall objectives of a mining project. Mine planning is a multidisciplinary process and its aim is to develop the life-of-mine extraction plan to meet some predefined goals (Dagdelen, 2007;Henderson and Turek, 2013). Mine plans are classified into long-, medium-, and short-term plans. Normally, these plans are organized such that the mining operations achieve the highest cash flow or net present value (Heureux, Gamache, and Soumis, 2013;Juarez et al., 2014;King, 2014). These plans should consider capacities, blending requirements, block sequencing, reclamation requirements, pit slope, and any other constraints that may exist in each particular mine site (Caccetta and Hill, 2003).However, many problems in the field of mining engineering are characterized by insufficient and incomplete data. The stochastic and uncertain nature of geological, technological, market, political, and ecological factors are inherent in the context of mining engineering. For example, the dynamic change of ore and waste material due to the presence of spatial grade uncertainty makes predictions of the optimal mining sequence a challenging task (Godoy and Dimitrakopoulos, 2004;Azimi, Osanloo, and Esfahanipour, 2013;Rahmanpour and Osanloo, 2016a). These uncertainties highlight the importance of careful and risk-based mine planning through the development of new production planning models (Osanloo, Gholamnejad, and Karimi, 2008;Newman et al., 2010).Long-term plans outline the strategies to achieve a company's goals (the highest net present value, for instance). Short-term plans are aimed at following the strategies of the long-term plan, and the other objective of short-term plans is to minimize operating costs as much as possible. For this purpose, engineers try to find a reliable system with minimal cost (Levitin and Lisnianski, 2001;Rahmanpour and Osanloo, 2016b). Modern and successful production systems are characterized by high productivity, full utilization of resources, flexibility, and reliability. These characteristics enable an operating system to adapt to changing conditions. In any mining operation, ore is mined from different blocks and is hauled to predetermined destinations based on its chemical or mineralogical properties. Mining operations obtain the desired quality of the plant feed by blending ore of different qualities. The same practice is applied in a mine complex where the ore is sourced from different mines and has different chemical and physical characteristics (Figure 1).Since ore properties can vary considerably, blending is a prerequisite in order to obtain a consistent feed to the processing plant. The run-of-mine quality depends on the quality and quantity of ore mined from each face. Uncertainty is the state of having limited knowledge to perform a task. During feasibility studies, the precise values of all the input parameters are not known. Normally, Application of fuzzy linear programming for short-term planning and quality control in mine complexes by M. Rahmanpour and M. Osa...

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Determination of value at risk for long-term production planning in open pit mines in the presence of price uncertainty

Cited by 11 publications

References 0 publications

Optimization of the Heap Leaching Process through Changes in Modes of Operation and Discrete Event Simulation

Optimization of the Heap Leaching Process through Changes in Modes of Operation and Discrete Event Simulation

Optimum mine production rate based on price uncertainty

Application of fuzzy linear programming for short-term planning and quality control in mine complexes

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