Financial analysis of the impact of increasing mining rate in underground mining, using simulation and mixed integer programming
| dc.creator | Salama, Abubakary | |
| dc.creator | Nehring, Micah | |
| dc.creator | Greberg, Jenny | |
| dc.date | 2020-03-18T13:48:53Z | |
| dc.date | 2020-03-18T13:48:53Z | |
| dc.date | 2017-04 | |
| dc.date.accessioned | 2021-05-07T07:52:51Z | |
| dc.date.available | 2021-05-07T07:52:51Z | |
| dc.description | This paper challenges the traditional notion that mine planners need to plan production so as to incur the lowest mining cost. For a given mine configuration, a mine that increases its mining rate will incur increased mining costs. In an environment in which operations are fixated on cost reduction, a proposal that increases costs will not be readily accepted. Such a proposal requires financial justification-the increase in costs might be recuperated by the additional production. This paper evaluates the net present value (NPV) across a range of copper prices for two underground orebodies located at different depths, using a production rate of 300 kt per quarter and a scenario that introduces additional equipment and costs for 450 kt per quarter. The evaluation was based on the changes of NPV for the orebody located at a shallow depth compared with the orebody at a greater depth. Discrete event simulation combined with mixed integer programming was used for analysis. Unlike traditional sensitivity analysis, this study re-optimizes the mine plan for each commodity price at each production rate. The results show that, for the low mining rate at the final copper price, an NPV of A$1530.64 million is achieved, whereas an NPV of A$1537.59 million is achieved at a higher mining rate. Even though pushing mining rates beyond traditional limits may increase mining costs, this option may be beneficial at certain commodity prices, particularly when prices are elevated | |
| dc.identifier | http://hdl.handle.net/20.500.11810/5395 | |
| dc.identifier | http://dx.doi.org/10.17159/2411-9717/2017/v117n4a8 | |
| dc.identifier.uri | http://hdl.handle.net/20.500.11810/5395 | |
| dc.language | en | |
| dc.publisher | Journal of the Southern African Institute of Mining and Metallurgy | |
| dc.subject | mining rates, commodity price, simulation, mixed integer programming | |
| dc.title | Financial analysis of the impact of increasing mining rate in underground mining, using simulation and mixed integer programming | |
| dc.type | Journal Article |