Stochastic optimization of mine production scheduling with uncertain ore/metal/waste supply

Abstract

Optimization of long-term mine production scheduling in open pit mines deals with the management of cash flows, typically in the order of hundreds of millions of dollars. Conventional mine scheduling utilizes optimization methods that are not capable of accounting for inherent technical uncertainties such as uncertainty in the expected ore/metal supply from the underground, acknowledged to be the most critical factor. To integrate ore/metal uncertainty into the optimization of mine production scheduling a stochastic integer programming (SIP) formulation is tested at a copper deposit. The stochastic solution maximizes the economic value of a project and minimizes deviations from production targets in the presence of ore/metal uncertainty. Unlike the conventional approach, the SIP model accounts and manages risk in ore supply, leading to a mine production schedule with a 29% higher net present value than the schedule obtained from the conventional, industry-standard optimization approach, thus contributing to improving the management and sustainable utilization of mineral resources.