Long-Term Mine Planning in Presence of Grade Uncertainty

Open-pit mining is widely used to extract natural resources. Low cut-off grades and large operations can make open-pit mining profitable. An important challenge is to determine the optimum production schedule. Usually the goal is to maximize the net present value of the project while delivering ore to the plant at full capacity. The best production plan would require complete knowledge of the orebody and all other engineering and economic parameters. An estimated block model is often used to determine the production schedule. Uncertainty is inevitable with widely spaced drill holes. The open-pit production schedule based on estimated models may be suboptimal and affected dramatically by grade uncertainty. The research documented herein develops, implements and verifies four mixed integer optimization frameworks for long-term production scheduling in the presence of grade uncertainty. The main contributions of this research are (1) consideration of cost of grade uncertainty to influence the production plan, (2) accounting for the linear and nonlinear effects of the grade uncertainty on the long-term mine planning, (3) development of a mixed integer linear programming model that maximizes NPV and minimizes the cost of the grade uncertainty by considering a stockpile, and finally (4) implementation of a quadratic optimization model accounts for grade uncertainty in the long-term production plan.