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.

Central Queensland Mining Supplies Pty Ltd v Columbia Steel Casting Co Ltd

In Central Queensland Mining Supplies Pty Ltd v Columbia Steel Casting Co Ltd [2011] QSC 183 Applegarth J considered complaints made by the defendant about the approach the plaintiff had taken in its endeavour to comply with its disclosure obligation under r 211 of the Uniform Civil Procedure Rules 1999 (Qld). The judgment also provides an indication of the direction the court is taking in relation to disclosure and document management in matters involving large numbers of documents.

Optimum utilisation of rolling stocks for iron ore mining industries

In this paper, a generic and flexible optimisation methodology is developed to represent, model, solve and analyse the iron ore supply chain system by integrating of iron ore shipment, stockpiles and railing within a whole system. As a result, an integrated train-stockpile-ship timetable is created and optimised for improving efficiency of overall supply chain system. The proposed methodology provides better decision making on how to significantly improve rolling stock utilisation with the best cost-effectiveness ratio. Based on extensive computational experiments and analysis, insightful and quantitative advices are suggested for iron ore mine industry practitioners. The proposed methodology contributes to the sustainability of the environment by reducing pollution due to better utilisation of transportation resources and fuel.

Operations research for mining : a classification and literature review

In this paper, we describe the main processes and operations in mining industries and present a comprehensive survey of operations research methodologies that have been applied over the last several decades. The literature review is classified into four main categories: mine design; mine production; mine transportation; and mine evaluation. Mining design models are further separated according to two main mining methods: open-pit and underground. Moreover, mine production models are subcategorised into two groups: ore mining and coal mining. Mine transportation models are further partitioned in accordance with fleet management, truck haulage and train scheduling. Mine evaluation models are further subdivided into four clusters in terms of mining method selection, quality control, financial risks and environmental protection. The main characteristics of four Australian commercial mining software are addressed and compared. This paper bridges the gaps in the literature and motivates researchers to develop more applicable, realistic and comprehensive operations research models and solution techniques that are directly linked with mining industries.

A fragment of the LG3 peptide of endorepellin is present in the urine of physically active mining workers : a potential marker of physical activity

Biomarker analysis has been implemented in sports research in an attempt to monitor the effects of exertion and fatigue in athletes. This study proposed that while such biomarkers may be useful for monitoring injury risk in workers, proteomic approaches might also be utilised to identify novel exertion or injury markers. We found that urinary urea and cortisol levels were significantly elevated in mining workers following a 12 hour overnight shift. These levels failed to return to baseline over 24h in the more active maintenance crew compared to truck drivers (operators) suggesting a lack of recovery between shifts. Use of a SELDI-TOF MS approach to detect novel exertion or injury markers revealed a spectral feature which was associated with workers in both work categories who were engaged in higher levels of physical activity. This feature was identified as the LG3 peptide, a C-terminal fragment of the anti-angiogenic / anti-tumourigenic protein endorepellin. This finding suggests that urinary LG3 peptide may be a biomarker of physical activity. It is also possible that the activity mediated release of LG3 / endorepellin into the circulation may represent a biological mechanism for the known inverse association between physical activity and cancer risk / survival.

Class contestations and Australia’s resource boom : the emergence of the ‘cashed-up bogan’

This article examines the figure of the ‘Cashed-up Bogan’ or ‘Cub’ in Australian media from 2006 to 2009. It explains that ‘Bogan’, like that of ‘Chav’ in Britain, is a widely engaged negative descriptor for the white working-class poor. In contrast, ‘Cubs’ have economic capital. This capital, and the Cub’s emergence, is linked to Australia’s resource boom of recent decades when the need for skilled labour allowed for a highly demarcated segment of the working class to earn relatively high incomes in the mining sector and to participate in consumption. We argue that access to economic capital has provided the Cub with mobility to enter the everyday spaces of the middle class, but this has caused disruption and anxiety to middle-class hegemony. As a result, the middle class has redrawn and reinforced class-infused symbolic and cultural boundaries, whereby, despite their wealth, pernicious media representations mark Cubs as ‘other’ to the middle-class deservingness, taste and morality.

Text mining and probabilistic language modeling for online review spam detecting

In the era of Web 2.0, huge volumes of consumer reviews are posted to the Internet every day. Manual approaches to detecting and analyzing fake reviews (i.e., spam) are not practical due to the problem of information overload. However, the design and development of automated methods of detecting fake reviews is a challenging research problem. The main reason is that fake reviews are specifically composed to mislead readers, so they may appear the same as legitimate reviews (i.e., ham). As a result, discriminatory features that would enable individual reviews to be classified as spam or ham may not be available. Guided by the design science research methodology, the main contribution of this study is the design and instantiation of novel computational models for detecting fake reviews. In particular, a novel text mining model is developed and integrated into a semantic language model for the detection of untruthful reviews. The models are then evaluated based on a real-world dataset collected from amazon.com. The results of our experiments confirm that the proposed models outperform other well-known baseline models in detecting fake reviews. To the best of our knowledge, the work discussed in this article represents the first successful attempt to apply text mining methods and semantic language models to the detection of fake consumer reviews. A managerial implication of our research is that firms can apply our design artifacts to monitor online consumer reviews to develop effective marketing or product design strategies based on genuine consumer feedback posted to the Internet.

Mining a data reasoning model for personalized text classification

It is a big challenge to acquire correct user profiles for personalized text classification since users may be unsure in providing their interests. Traditional approaches to user profiling adopt machine learning (ML) to automatically discover classification knowledge from explicit user feedback in describing personal interests. However, the accuracy of ML-based methods cannot be significantly improved in many cases due to the term independence assumption and uncertainties associated with them. This paper presents a novel relevance feedback approach for personalized text classification. It basically applies data mining to discover knowledge from relevant and non-relevant text and constraints specific knowledge by reasoning rules to eliminate some conflicting information. We also developed a Dempster-Shafer (DS) approach as the means to utilise the specific knowledge to build high-quality data models for classification. The experimental results conducted on Reuters Corpus Volume 1 and TREC topics support that the proposed technique achieves encouraging performance in comparing with the state-of-the-art relevance feedback models.

Sustaining a healthy workforce

The changing demographics of the mining workforce and the increasing demand for skilled workers increases the importance of sustaining a healthy workforce now and for the future. Although health is strongly related to safety, the two areas are not well integrated and the relationship is poorly understood. As such there is an important need to raise the profile of health within the Occupational Health and Safety (OH&S) domain. The mining industry carries health and safety risks, often greater than other occupations. Whilst the mining industry is regulated by stringent OH&S controls, the very nature of the work and environmental influences expose employees to a greater number of injury risk factors than many other industries. In contrast to its excellent safety record, compared to most other industries, the mining workforce has a high proportion of chronic health problems. These problems can be exacerbated by the ageing of the workforce, regional location of sites and organisational issues influencing work demands. A major focus has been on the treatment of these conditions with relatively limited attention to prevention strategies. An important prevention strategy is the raising of awareness among the workforce of health issues and the significant increase in the volume of health related information has provided an excellent opportunity to access relevant information. Unfortunately, this information is of varying quality, may not be evidence based, and may provide the wrong guidance to the development of interventions designed to improve health. Limited time of most employees and potential lack of knowledge of ability to differentiate quality information presents additional problems or barriers to increasing awareness of health issues...

Effective health communication in the mining industry

Historically, occupational health and safety has primarily presented as attempts to create a safer work environment for employees. The mining industry carries health and safety risks, often greater than other occupations. Whilst the mining industry is regulated by stringent workplace health and safety regulations, the very nature of the work and environmental influences expose employees to a greater number of injury risk factors than many other industries. The application of risk management techniques has resulted in a substantial decline in injury rates observed for mining operations in developed countries (Donoghue, 2004). This essential focus can be complemented by a more comprehensive approach to occupational health and safety that also supports the design and delivery of proactive health promotion programs...

A mask-based approach for the geometric calibration of thermal-infrared cameras

Accurate and efficient thermal-infrared (IR) camera calibration is important for advancing computer vision research within the thermal modality. This paper presents an approach for geometrically calibrating individual and multiple cameras in both the thermal and visible modalities. The proposed technique can be used to correct for lens distortion and to simultaneously reference both visible and thermal-IR cameras to a single coordinate frame. The most popular existing approach for the geometric calibration of thermal cameras uses a printed chessboard heated by a flood lamp and is comparatively inaccurate and difficult to execute. Additionally, software toolkits provided for calibration either are unsuitable for this task or require substantial manual intervention. A new geometric mask with high thermal contrast and not requiring a flood lamp is presented as an alternative calibration pattern. Calibration points on the pattern are then accurately located using a clustering-based algorithm which utilizes the maximally stable extremal region detector. This algorithm is integrated into an automatic end-to-end system for calibrating single or multiple cameras. The evaluation shows that using the proposed mask achieves a mean reprojection error up to 78% lower than that using a heated chessboard. The effectiveness of the approach is further demonstrated by using it to calibrate two multiple-camera multiple-modality setups. Source code and binaries for the developed software are provided on the project Web site.

Finding and matching communities in social networks using data mining

The rapid growth in the number of users using social networks and the information that a social network requires about their users make the traditional matching systems insufficiently adept at matching users within social networks. This paper introduces the use of clustering to form communities of users and, then, uses these communities to generate matches. Forming communities within a social network helps to reduce the number of users that the matching system needs to consider, and helps to overcome other problems from which social networks suffer, such as the absence of user activities' information about a new user. The proposed system has been evaluated on a dataset obtained from an online dating website. Empirical analysis shows that accuracy of the matching process is increased using the community information.

Discovering novel knowledge using granule mining

This paper presents an extended granule mining based methodology, to effectively describe the relationships between granules not only by traditional support and confidence, but by diversity and condition diversity as well. Diversity measures how diverse of a granule associated with the other granules, it provides a kind of novel knowledge in databases. We also provide an algorithm to implement the proposed methodology. The experiments conducted to characterize a real network traffic data collection show that the proposed concepts and algorithm are promising.

Corporate, risk, mining camps and knowledge/power

Australia is currently in the midst of a major resources boom. However the benefits from the boom are unevenly distributed, with state governments collecting billions in royalties, and mining companies billions in profits. The costs are borne mostly at a local level by regional communities on the frontier of the mining boom, surrounded by thousands of men housed in work camps. The escalating reliance on non–resident workers housed in camps carries significant risks for individual workers, host communities and the provision of human services and infrastructure. These include rising rates of fatigue–related death and injuries, rising levels of alcohol–fuelled violence, illegally erected and unregulated work camps, soaring housing costs and other costs of living, and stretched basic infrastructure undermining the sustainability of these towns. But these costs have generally escaped industry, government and academic scrutiny. This chapter directs a critical gaze at the hopelessly compromised industry–funded research vital to legitimating the resource sector’s self–serving knowledge claims that it is committed to social sustainability and corporate responsibility. The chapter divides into two parts. The first argues that post–industrial mining regimes mask and privatise these harms and risks, shifting them on to workers, families and communities. The second part links the privatisation of these risks with the political economy of privatised knowledge embedded in the approvals process for major resource sector projects.