Abstract
Abstract Mineral projects are composed of geological, operational and market uncertainties, and reducing these uncertainties is one of the objectives of engineering. Most surveys assess the impact of geological and operational uncertainties on the mining planning. The objective of this work is to study the impact of market uncertainty on the mineral activity. The influence of iron ore price simulation on mining sequencing will be evaluated. The price of iron ore has random behavior that is best represented by the Geometric Brownian Movement system. This study analyzed the historical series of iron ore in order to determine the percentage volatility and drift. Traditionally, a constant and deterministic price is used for the ore mined in all periods of a mineral project. The direct block scheduling methodology was adopted because it is able to apply the appropriate financial discount factor to the simulated probabilistic price. The proposed methodology was able to quantify the market uncertainty.
Highlights
The methodology based on LerchsGrossmann and deterministic pricing can be considered the standard methodology adopted by the industry (SME, 2011)
This process was carried out 10 times, generating 10 different scenarios, in order to try to understand the impact of this change in the mining sequence
In all cases with variable selling prices, there was a gain in the discounted NPV, when compared with the mining sequence generated with a constant selling price
Summary
The methodology based on LerchsGrossmann and deterministic pricing can be considered the standard methodology adopted by the industry (SME, 2011). Direct block sequencing (SDB) is able to determine the destination of the block using the appropriate discount factor for the period in which it will be mined. The SDB should be able to use the simulated product price to apply the correct discount factor (Dimitrakopoulos, 2011). The first stage uses SDB to generate an initial solution with a correct discount factor, but with deterministic and constant price. This step determines in which period each block will be mined. The second step begins with the use of the SDB with the benefit function of the blocks recalculated according to the simulated price. Direct block scheduling is able to rearrange all sequencing due to change of one parameter or value in one block
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