Strategic project evaluation for open pit mining ventures using real options and allied econometric techniques

Open pit mine operations are complex businesses that demand a constant assessment of risk. This is because the value of a mine project is typically influenced by many underlying economic and physical uncertainties, such as metal prices, metal grades, costs, schedules, quantities, and environmental issues, among others, which are not known with much certainty at the beginning of the project. Hence, mining projects present a considerable challenge to those involved in associated investment decisions, such as the owners of the mine and other stakeholders. In general terms, when an option exists to acquire a new or operating mining project, , the owners and stock holders of the mine project need to know the value of the mining project, which is the fundamental criterion for making final decisions about going ahead with the venture capital. However, obtaining the mine project’s value is not an easy task. The reason for this is that sophisticated valuation and mine optimisation techniques, which combine advanced theories in geostatistics, statistics, engineering, economics and finance, among others, need to be used by the mine analyst or mine planner in order to assess and quantify the existing uncertainty and, consequently, the risk involved in the project investment. Furthermore, current valuation and mine optimisation techniques do not complement each other. That is valuation techniques based on real options (RO) analysis assume an expected (constant) metal grade and ore tonnage during a specified period, while mine optimisation (MO) techniques assume expected (constant) metal prices and mining costs. These assumptions are not totally correct since both sources of uncertainty—that of the orebody (metal grade and reserves of mineral), and that about the future behaviour of metal prices and mining costs—are the ones that have great impact on the value of any mining project. Consequently, the key objective of this thesis is twofold. The first objective consists of analysing and understanding the main sources of uncertainty in an open pit mining project, such as the orebody (in situ metal grade), mining costs and metal price uncertainties, and their effect on the final project value. The second objective consists of breaking down the wall of isolation between economic valuation and mine optimisation techniques in order to generate a novel open pit mine evaluation framework called the ―Integrated Valuation / Optimisation Framework (IVOF)‖. One important characteristic of this new framework is that it incorporates the RO and MO valuation techniques into a single integrated process that quantifies and describes uncertainty and risk in a mine project evaluation process, giving a more realistic estimate of the project’s value. To achieve this, novel and advanced engineering and econometric methods are used to integrate financial and geological uncertainty into dynamic risk forecasting measures. The proposed mine valuation/optimisation technique is then applied to a real gold disseminated open pit mine deposit to estimate its value in the face of orebody, mining costs and metal price uncertainties.

Bi-2223 precursor billets for pit wire production

High temperature superconductor precursor billets (feed rods) have been developed for loading into silver tubes. The billets are loaded prior to rolling or drawing operations in PIT wire manufacture. Investigations have shown that wires and tapes prepared from feed rod loaded tubes show enhanced uniformity of electrical transport properties when compared with conventional powder packing, especially in wires drawn to long lengths. Analysis on production feed rods have shown carbon content to be as low as 110 ppm. © 1999 IEEE.

A short-term production scheduling methodology for open-pit mines

A multi-resource multi-stage scheduling methodology is developed to solve short-term open-pit mine production scheduling problems as a generic multi-resource multi-stage scheduling problem. It is modelled using essential characteristics of short-term mining production operations such as drilling, sampling, blasting and excavating under the capacity constraints of mining equipment at each processing stage. Based on an extended disjunctive graph model, a shifting-bottleneck-procedure algorithm is enhanced and applied to obtain feasible short-term open-pit mine production schedules and near-optimal solutions. The proposed methodology and its solution quality are verified and validated using a real mining case study.

Development and pilot study of the Primary Care Practice Improvement Tool (PC-PIT) : an innovative approach

Objective To assess the usability and validity of the Primary Care Practice Improvement Tool (PC-PIT), a practice performance improvement tool based on 13 key elements identified by a systematic review. It was co-created with a range of partners and designed specifically for primary health care. Design This pilot study examined the PC-PIT using a formative assessment framework and mixed-methods research design. Setting and participants Six high-functioning general practices in Queensland, Australia, between February and July 2013. A total of 28 staff participated — 10 general practitioners, six practice or community nurses, 12 administrators (four practice managers; one business manager and eight reception or general administrative staff). Main outcome measures Readability, content validity and staff perceptions of the PC-PIT. Results The PC-PIT offers an appropriate and acceptable approach to internal quality improvement in general practice. Quantitative assessment scores and qualitative data from all staff identified two areas in which the PC-PIT required modification: a reduction in the indicative reading age, and simplification of governance-related terms and concepts. Conclusion The PC-PIT provides an innovative approach to address the complexity of organisational improvement in general practice and primary health care. This initial validation will be used to develop a suite of supporting, high-quality and free-to-access resources to enhance the use of the PC-PIT in general practice. Based on these findings, a national trial is now underway.

Regards, the Pit

A solo exhibition by Joseph Breikers included in the MetroArts 2011 galleries Program. The exhbition comprised a series of predominantly sculptural works that reflected the artists ongoing interest in medieval, gothic and death metal visual motifs. The exhibition thus acted as a ironic meditation on ritual, belonging and cultural identity.

Integrated approach to optimize open-pit mine block sequencing

Critical stage in open-pit mining is to determine the optimal extraction sequence of blocks, which has significant impacts on mining profitability. In this paper, a more comprehensive block sequencing optimisation model is developed for the open-pit mines. In the model, material characteristics of blocks, grade control, excavator and block sequencing are investigated and integrated to maximise the short-term benefit of mining. Several case studies are modeled and solved by CPLEX MIP and CP engines. Numerical investigations are presented to illustrate and validate the proposed methodology.

An open pit multistage mine production scheduling model for drilling, blasting and excavating operations

This paper proposes a new multi-resource multi-stage scheduling problem for optimising the open-pit drilling, blasting and excavating operations under equipment capacity constraints. The flow process is analysed based on the real-life data from an Australian iron ore mine site. The objective of the model is to maximise the throughput and minimise the total idle times of equipment at each stage. The following comprehensive mining attributes and constraints have been considered: types of equipment; operating capacities of equipment; ready times of equipment; speeds of equipment; block-sequence-dependent movement times of equipment; equipment-assignment-dependent operation times of blocks; distances between each pair of blocks; due windows of blocks; material properties of blocks; swell factors of blocks; and slope requirements of blocks. It is formulated by mixed integer programming and solved by ILOG-CPLEX optimiser. The proposed model is validated with extensive computational experiments to improve mine production efficiency at the operational level. The model also provides an intelligent decision support tool to account for the availability and usage of equipment units for drilling, blasting and excavating stages.

Towards the development of a low cost airborne sensing system to monitor dust particles after blasting at open-pit mine sites

Blasting is an integral part of large-scale open cut mining that often occurs in close proximity to population centers and often results in the emission of particulate material and gases potentially hazardous to health. Current air quality monitoring methods rely on limited numbers of fixed sampling locations to validate a complex fluid environment and collect sufficient data to confirm model effectiveness. This paper describes the development of a methodology to address the need of a more precise approach that is capable of characterizing blasting plumes in near-real time. The integration of the system required the modification and integration of an opto-electrical dust sensor, SHARP GP2Y10, into a small fixed-wing and multi-rotor copter, resulting in the collection of data streamed during flight. The paper also describes the calibration of the optical sensor with an industry grade dust-monitoring device, Dusttrak 8520, demonstrating a high correlation between them, with correlation coefficients (R2) greater than 0.9. The laboratory and field tests demonstrate the feasibility of coupling the sensor with the UAVs. However, further work must be done in the areas of sensor selection and calibration as well as flight planning.

Optimisation of open pit mine block sequencing

This study presents a comprehensive mathematical model for open pit mine block sequencing problem which considers technical aspects of real-life mine operations. As the open pit block sequencing problem is an NP-hard, state-of-the-art heuristics algorithms, including constructive heuristic, local search, simulated annealing, and tabu search are developed and coded using MATLAB programming language. Computational experiments show that the proposed algorithms are satisfactory to solve industrial-scale instances. Numerical investigation and sensitivity analysis based on real-world data are also conducted to provide insightful and quantitative recommendations for mine schedulers and planners.

New graph-based algorithms to efficiently solve large scale open pit mining optimisation problems

In the mining optimisation literature, most researchers focused on two strategic-level and tactical-level open-pit mine optimisation problems, which are respectively termed ultimate pit limit (UPIT) or constrained pit limit (CPIT). However, many researchers indicate that the substantial numbers of variables and constraints in real-world instances (e.g., with 50-1000 thousand blocks) make the CPIT’s mixed integer programming (MIP) model intractable for use. Thus, it becomes a considerable challenge to solve the large scale CPIT instances without relying on exact MIP optimiser as well as the complicated MIP relaxation/decomposition methods. To take this challenge, two new graph-based algorithms based on network flow graph and conjunctive graph theory are developed by taking advantage of problem properties. The performance of our proposed algorithms is validated by testing recent large scale benchmark UPIT and CPIT instances’ datasets of MineLib in 2013. In comparison to best known results from MineLib, it is shown that the proposed algorithms outperform other CPIT solution approaches existing in the literature. The proposed graph-based algorithms leads to a more competent mine scheduling optimisation expert system because the third-party MIP optimiser is no longer indispensable and random neighbourhood search is not necessary.

A new open-pit multi-stage mine production timetabling model for drilling, blasting and excavating operations

This paper proposes a new multi-resource multi-stage mine production timetabling problem for optimising the open-pit drilling, blasting and excavating operations under equipment capacity constraints. The flow process is analysed based on the real-life data from an Australian iron ore mine site. The objective of the model is to maximise the throughput and minimise the total idle times of equipment at each stage. The following comprehensive mining attributes and constraints are considered: types of equipment; operating capacities of equipment; ready times of equipment; speeds of equipment; block-sequence-dependent movement times; equipment-assignment-dependent operational times; etc. The model also provides the availability and usage of equipment units at multiple operational stages such as drilling, blasting and excavating stages. The problem is formulated by mixed integer programming and solved by ILOG-CPLEX optimiser. The proposed model is validated with extensive computational experiments to improve mine production efficiency at the operational level.

An integrated model of an open-pit coal mine: Improving energy efficiency decisions

This article contributes an original integrated model of an open-pit coal mine for supporting energy-efficient decisions. Mixed integer linear programming is used to formulate a general integrated model of the operational energy consumption of four common open-pit coal mining subsystems: excavation and haulage, stockpiles, processing plants and belt conveyors. Mines are represented as connected instances of the four subsystems, in a flow sheet manner, which are then fitted to data provided by the mine operators. Solving the integrated model ensures the subsystems’ operations are synchronised and whole-of-mine energy efficiency is encouraged. An investigation on a case study of an open-pit coal mine is conducted to validate the proposed methodology. Opportunities are presented for using the model to aid energy-efficient decision-making at various levels of a mine, and future work to improve the approach is described.