Stochastic Open Pit Mine Production Scheduling Incorporating Price Uncertainties

Abstract

Production scheduling of an open pit mine is a process of assigning mining blocks to different production periods so that the total profit from a mine can be maximized over the life of the mine. The proposed stochastic version of the conventional (deterministic) network flow algorithm is applied in this paper for production scheduling incorporating metal price uncertainties. The uncertainty of metal price is introduced by simulating the price using conditional geostatistical simulation. The method is applied for optimizing the annual production scheduling at an Iron ore mine, and compared against a traditional scheduling method using the traditional single “average type” assessment of the mineral resources. In the case study presented here in, the schedule generated using the proposed stochastic model resulted in approximately 5% higher NPV than the schedule derived from the traditional approach.