Moving forward from traditional optimization: grade uncertainty and risk effects in open-pit design

Dimitrakopoulos, Roussos; Farrelly, C. T.; Godoy, M.

doi:10.1179/mnt.2002.111.1.82

Cited by 128 publications

(70 citation statements)

References 8 publications

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“…These methods can be classified into three categories: exact methods (Dagdelen and Johnson, 1986;Caccetta and Hill, 2003;Ramazan, 2007;Boland et al, 2009;Bley et al, 2010), heuristic and metaheuristic methods (Gershon, 1987;Denby and Schofield, 1994;Ferland et al, 2007;Chatterjee et al, 2010), and hybrid methods (Tolwinski and Underwood, 1996;Sevim and Lei, 1998;Moreno et al, 2010). However, the uncertain nature of the problem is ignored in the deterministic version of the MPSP, resulting in misleading assessments (Ravenscroft, 1992;Dowd, 1994;Dimitrakopoulos et al, 2002;Godoy and Dimitrakopoulos, 2004). Studies that compare stochastic to deterministic approaches (Godoy and Dimitrakopoulos, 2004;Menabde et al, 2007;Dimitrakopoulos, 2009, 2010;Asad and Dimitrakopoulos, 2013) indicate that stochastic approaches show major improvements in NPV, on the order of 20% to 30%, substantially reduce risk in meeting production forecasts, and find pit limits larger than the ones found by deterministic approaches, contributing to the sustainable utilization of mineral resources.…”

Section: Introductionmentioning

confidence: 99%

A variable neighbourhood descent algorithm for the open-pit mine production scheduling problem with metal uncertainty

Lamghari

Dimitrakopoulos

Ferland

2014

Journal of the Operational Research Society

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Uncertainty is an inherent aspect of the open-pit mine production scheduling problem (MPSP); however, little is reported in the literature about solution methods for the stochastic versions of the problem. In this paper, two variants of a variable neighbourhood descent algorithm are proposed for solving the MPSP with metal uncertainty. The proposed methods are tested and compared on actual large-scale instances, and very good solutions, with an average deviation of less than 3% from optimality, are obtained within a few minutes up to a few hours.

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Section: Introductionmentioning

confidence: 99%

A variable neighbourhood descent algorithm for the open-pit mine production scheduling problem with metal uncertainty

Lamghari

Dimitrakopoulos

Ferland

2014

Journal of the Operational Research Society

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“…In order to evaluate the risk associated with stochastic decision making, a risk analysis is performed on the life-of-mine plans corresponding to the optimal transition depth stated above. Similar analysis has been done extensively on open pit case studies (Dimitrakopoulos et al 2002;Godoy 2003;Jewbali 2006;Leite and Dimitrakopoulos 2014;Ramazan andDimitrakopoulos 2005, 2013;Goodfellow 2014). To do so, a set of 20 simulated scenarios of the grades of the deposit are used and passed through the long-term production schedule determined for the optimal transition depth, which in this case is Transition Depth 2.…”

Section: Stochastic Optimization Results and Risk Analysismentioning

confidence: 99%

A stochastic optimization formulation for the transition from open pit to underground mining

MacNeil

Dimitrakopoulos

2017

Optim Eng

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As open pit mining of a mineral deposit deepens, the cost of extraction may increase up to a threshold where transitioning to mining through underground methods is more profitable. This paper provides an approach to determine an optimal depth at which a mine should transition from open pit to underground mining, based on managing technical risk. The value of a set of candidate transition depths is calculated by optimizing the production schedules for each depth's unique open pit and underground operations which provide yearly discounted cash flow projections. By considering the sum of the open pit and underground mining portion's value, the most profitable candidate transition depth is identified. The optimization model presented is based on a stochastic integer program that integrates geological uncertainty and manages technical risk. The proposed approach is tested on a gold deposit. Results show the benefits of managing geological uncertainty in long-term strategic decision-making frameworks. Additionally, the stochastic result produces a 9% net present value increase over a similar deterministic formulation. The risk-managing stochastic framework also produces operational schedules that reduce a mining project's susceptibility to geological risk. This work aims to approve on previous attempts to solve this problem by jointly considering geological uncertainty and describing the optimal transition depth effectively in 3-dimensions.

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“…Examples of mining simulation models are found in Magalhaes et al (1996);Sturgul (1996); Dimitrakopolous et al (2002).…”

Section: Stochastic Decision Making Modelsmentioning

confidence: 99%

Utilizing a Value of Information Framework to Improve Ore Collection and Classification Procedures

Phillips

2009

The Engineering Economist

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Public reporting burden tor this collection ot intormation is estimated to average 1 hour per response, including tee time tor reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and ABSTRACTOne of the major objectives associated with mining is to deliver an expected amount of product to customers on time. Uncertainties inherent to mining can make this goal difficult to meet. In this research we focus on uncertainty in meeting production targets, specifically at the Loussavaara-Kiirunavarra Aktiebolag (LKAB) company's Kiruna iron ore mine. Uncertainty in ore grade quality is one of the major contributors to the difficulty in meeting production targets. We use a value of information framework (VOI) to consider the economic feasibility of a mine purchasing additional information on extracted ore type to reduce the uncertainty of extracted ore grade quality.The Kiruna mine extracts three ore types during its mining operations. Phosphorus and potassium are the main contaminants of the ore. The first part of this research identifies the existence of different types of ore misclassifications using a database containing ore extraction records from the Kiruna mine. The second part focuses on using these identified misclassification errors and a Kiruna cost model to quantify the cost of the misclassification errors to the Kiruna mine. We assume the principal cost of the errors is reflected in the under-utilization of the ore processing mills.Utilizing a VOI framework, we examine the feasibility of purchasing a laserinduced fluorescence (LIF) analyzer as a source of additional information on extracted ore quality for the Kiruna mine. We find, given certain assumptions, that it is beneficial to the mine to purchase 10 LIFs (one for each production area). Depending on the accuracy of the LIF analyzer, the net benefit of the additional information on ore iii grade quality to the mine ranges from $2.7M to $116M per year.iv ABSTRACT One of the major objectives associated with mining is to deliver an expected amount of product to customers on time. Uncertainties inherent to mining can make this goal difficult to meet. In this research we focus on uncertainty in meeting production targets, specifically at the Loussavaara-Kiirunavarra Aktiebolag (LKAB) company's Kiruna iron ore mine. Uncertainty in ore grade quality is one of the major contributors to the difficulty in meeting production targets. We use a value of information framework (VOI) to consider the economic feasibility of a mine purchasing additional information on extracted ore type to reduce the uncertainty of extracted ore grade quality.The Kiruna mine extrac...

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Moving forward from traditional optimization: grade uncertainty and risk effects in open-pit design

Cited by 128 publications

References 8 publications

A variable neighbourhood descent algorithm for the open-pit mine production scheduling problem with metal uncertainty

A variable neighbourhood descent algorithm for the open-pit mine production scheduling problem with metal uncertainty

A stochastic optimization formulation for the transition from open pit to underground mining

Utilizing a Value of Information Framework to Improve Ore Collection and Classification Procedures

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