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Simulation-based decision-making system for optimal mine production plan selection

Author

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  • Jyrki Savolainen

    (LUT-University)

  • Ramin Rakhsha

    (University of Western Australia)

  • Richard Durham

    (University of Western Australia)

Abstract

Price uncertainty is one of the major uncertainties in the life of mine (LOM) planning process which can have a decisive effect on the overall profitability. Today’s mine planning software tools provide block-sequencing optimisation for a given static price assumption that is then used as a basis of managerial decision-making process. This paper proposes a complementary approach to this by introducing a simulation-based decision-making tool that, with the help of simulation, seeks for the optimal mine plan when a managerially estimated price development with minimum and maximum boundaries is used as a data input for the given period. To demonstrate the approach, a realistic gold mine case study is presented with five alternative and technically feasible mine plans calculated in a static optimiser from a commercial mine planning software package. These mine planning scenarios are then subjected to price uncertainty in simulation with and without a price trend assumption to highlight the effect of price on the mine’s expected performance. Based on the results, we derive and demonstrate a simulation-based system that automates the matching of optimal mine plan with the managerial insight of long-term price development.

Suggested Citation

  • Jyrki Savolainen & Ramin Rakhsha & Richard Durham, 2022. "Simulation-based decision-making system for optimal mine production plan selection," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 35(2), pages 267-281, June.
    • Handle: RePEc:spr:minecn:v:35:y:2022:i:2:d:10.1007_s13563-021-00297-w
    DOI: 10.1007/s13563-021-00297-w
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    References listed on IDEAS

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    1. Hazrathosseini, Arman & Moradi Afrapoli, Ali, 2023. "The advent of digital twins in surface mining: Its time has finally arrived," Resources Policy, Elsevier, vol. 80(C).

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