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Efficient selection of copper sales contracts for small‐ and medium‐sized mining

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  • Lorenzo Reus

Abstract

The purpose of this study is to generate efficient policies for the selection and postponement of copper sales contracts by a mining company. To do so, it uses a two‐stage stochastic programming model that determines solutions considering different contract types, random prices, and risk aversion. The results show how it is possible for the selection to involve the lowest risk possible for different revenue levels required. During a period of high price volatility, an efficient solution may deliver an increase in monthly revenue of US$210,000 for a mining company that produces 50,000 tons per year, without any additional risk.

Suggested Citation

  • Lorenzo Reus, 2020. "Efficient selection of copper sales contracts for small‐ and medium‐sized mining," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 624-630, June.
    • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:4:p:624-630
    DOI: 10.1002/mde.3125
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    References listed on IDEAS

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    1. Reus, Lorenzo & Pagnoncelli, Bernardo & Armstrong, Margaret, 2019. "Better management of production incidents in mining using multistage stochastic optimization," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
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