Optimum mine production rate based on price uncertainty

Abstract

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.

Design of Open Pit Mines using 3D Model in Two-element Deposits under Price Uncertainty

“…The deterministic parameter assumption might lead to unrealistic and incorrect production planning because these parameters are associated with a significant uncertainty [12][13][14]. Most studies considered singleelement deposit, and there have been few studies regarding the role of economic parameter uncertainty for two-element deposits [15][16][17][18][19][20][21][22][23][24]. To address the shortcomings of previous studies, the present study investigates the design of two-element deposits under price uncertainty using the proposed 3D tree model.…”