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.

Understanding evaluation of learning support in mathematics and statistics

With rapid and continuing growth of learning support initiatives in mathematics and statistics found in many parts of the world, and with the likelihood that this trend will continue, there is a need to ensure that robust and coherent measures are in place to evaluate the effectiveness of these initiatives. The nature of learning support brings challenges for measurement and analysis of its effects. After briefly reviewing the purpose, rationale for, and extent of current provision, this article provides a framework for those working in learning support to think about how their efforts can be evaluated. It provides references and specific examples of how workers in this field are collecting, analysing and reporting their findings. The framework is used to structure evaluation in terms of usage of facilities, resources and services provided, and also in terms of improvements in performance of the students and staff who engage with them. Very recent developments have started to address the effects of learning support on the development of deeper approaches to learning, the affective domain and the development of communities of practice of both learners and teachers. This article intends to be a stimulus to those who work in mathematics and statistics support to gather even richer, more valuable, forms of data. It provides a 'toolkit' for those interested in evaluation of learning support and closes by referring to an on-line resource being developed to archive the growing body of evidence. © 2011 Taylor & Francis.

Ingroup and role identity influences on the initiation and maintenance of students' voluntary attendance at peer study sessions for statistics

Background: Although class attendance is linked to academic performance, questions remain about what determines students’ decisions to attend or miss class. Aims: In addition to the constructs of a common decision-making model, the theory of planned behaviour, the present study examined the influence of student role identity and university student (in-group) identification for predicting both the initiation and maintenance of students’ attendance at voluntary peer-assisted study sessions in a statistics subject. Sample: University students enrolled in a statistics subject were invited to complete a questionnaire at two time points across the academic semester. A total of 79 university students completed questionnaires at the first data collection point, with 46 students completing the questionnaire at the second data collection point. Method: Twice during the semester, students’ attitudes, subjective norm, perceived behavioural control, student role identity, in-group identification, and intention to attend study sessions were assessed via on-line questionnaires. Objective measures of class attendance records for each half-semester (or ‘term’) were obtained. Results: Across both terms, students’ attitudes predicted their attendance intentions, with intentions predicting class attendance. Earlier in the semester, in addition to perceived behavioural control, both student role identity and in-group identification predicted students’ attendance intentions, with only role identity influencing intentions later in the semester. Conclusions: These findings highlight the possible chronology that different identity influences have in determining students’ initial and maintained attendance at voluntary sessions designed to facilitate their learning.

Productivity performance of Singapore’s retail sector : a two-stage non-parametric approach

This paper seeks to identify and quantify sources of the lagging productivity in Singapore’s retail sector as reported in the Economic Strategies Committee 2010 report. A two-stage analysis is adopted. In the first stage, the Malmquist productivity index is employed which provides measures of productivity change, technological change and efficiency change. In the second stage, technical efficiency estimates are regressed against explanatory variables based on a truncated regression model. Sources of technical efficiency were attributed to quality of workers while product assortment and competition negatively impacted on efficiency.

Semi-parametric forecasting of realized volatility

Forecasts generated by time series models traditionally place greater weight on more recent observations. This paper develops an alternative semi-parametric method for forecasting that does not rely on this convention and applies it to the problem of forecasting asset return volatility. In this approach, a forecast is a weighted average of historical volatility, with the greatest weight given to periods that exhibit similar market conditions to the time at which the forecast is being formed. Weighting is determined by comparing short-term trends in volatility across time (as a measure of market conditions) by means of a multivariate kernel scheme. It is found that the semi-parametric method produces forecasts that are significantly more accurate than a number of competing approaches at both short and long forecast horizons.

Implementing an enhanced repository statistics system for QUT ePrints

Queensland University of Technology (QUT) was one of the first universities in Australia to establish an institutional repository. Launched in November 2003, the repository (QUT ePrints) uses the EPrints open source repository software (from Southampton) and has enjoyed the benefit of an institutional deposit mandate since January 2004. Currently (April 2012), the repository holds over 36,000 records, including 17,909 open access publications with another 2,434 publications embargoed but with mediated access enabled via the ‘Request a copy’ button which is a feature of the EPrints software. At QUT, the repository is managed by the library.QUT ePrints (http://eprints.qut.edu.au) The repository is embedded into a number of other systems at QUT including the staff profile system and the University’s research information system. It has also been integrated into a number of critical processes related to Government reporting and research assessment. Internally, senior research administrators often look to the repository for information to assist with decision-making and planning. While some statistics could be drawn from the advanced search feature and the existing download statistics feature, they were rarely at the level of granularity or aggregation required. Getting the information from the ‘back end’ of the repository was very time-consuming for the Library staff. In 2011, the Library funded a project to enhance the range of statistics which would be available from the public interface of QUT ePrints. The repository team conducted a series of focus groups and individual interviews to identify and prioritise functionality requirements for a new statistics ‘dashboard’. The participants included a mix research administrators, early career researchers and senior researchers. The repository team identified a number of business criteria (eg extensible, support available, skills required etc) and then gave each a weighting. After considering all the known options available, five software packages (IRStats, ePrintsStats, AWStats, BIRT and Google Urchin/Analytics) were thoroughly evaluated against a list of 69 criteria to determine which would be most suitable. The evaluation revealed that IRStats was the best fit for our requirements. It was deemed capable of meeting 21 out of the 31 high priority criteria. Consequently, IRStats was implemented as the basis for QUT ePrints’ new statistics dashboards which were launched in Open Access Week, October 2011. Statistics dashboards are now available at four levels; whole-of-repository level, organisational unit level, individual author level and individual item level. The data available includes, cumulative total deposits, time series deposits, deposits by item type, % fulltexts, % open access, cumulative downloads, time series downloads, downloads by item type, author ranking, paper ranking (by downloads), downloader geographic location, domains, internal v external downloads, citation data (from Scopus and Web of Science), most popular search terms, non-search referring websites. The data is displayed in charts, maps and table format. The new statistics dashboards are a great success. Feedback received from staff and students has been very positive. Individual researchers have said that they have found the information to be very useful when compiling a track record. It is now very easy for senior administrators (including the Deputy Vice Chancellor-Research) to compare the full-text deposit rates (i.e. mandate compliance rates) across organisational units. This has led to increased ‘encouragement’ from Heads of School and Deans in relation to the provision of full-text versions.

Fusing loop detector and probe vehicle data to estimate travel time statistics on signalized urban networks

This article presents a methodology that integrates cumulative plots with probe vehicle data for estimation of travel time statistics (average, quartile) on urban networks. The integration reduces relative deviation among the cumulative plots so that the classical analytical procedure of defining the area between the plots as the total travel time can be applied. For quartile estimation, a slicing technique is proposed. The methodology is validated with real data from Lucerne, Switzerland and it is concluded that the travel time estimates from the proposed methodology are statistically equivalent to the observed values.

Who claims gifts as a tax deduction? An examination of tax deductible gift statistics

Many donors, particularly those contemplating a substantial donation, consider whether their donation will be deductible from their taxable income. This motivation is not lost on fundraisers who conduct appeals before the end of the taxation year to capitalise on such desires. The motivation is also not lost on Treasury analysts who perceive the tax deduction as “lost” revenue and wonder if the loss is “efficient” in economic terms. Would it be more efficient for the government to give grants to deserving organisations, rather than permitting donor directed gifts? Better still, what about contracts that lock in the use of the money for a government priority? What place does tax deduction play in influencing a donor to give? Does the size of the gift bear any relationship to the size of the tax deduction? Could an increased level of donations take up an increasing shortfall in government welfare and community infrastructure spending? Despite these questions being asked regularly, little has been rigorously established about the effect of taxation deductions on a donor’s gifts.

Semi-parametric modelling of ultrafine particle number concentration

Quantifying spatial and/or temporal trends in environmental modelling data requires that measurements be taken at multiple sites. The number of sites and duration of measurement at each site must be balanced against costs of equipment and availability of trained staff. The split panel design comprises short measurement campaigns at multiple locations and continuous monitoring at reference sites [2]. Here we present a modelling approach for a spatio-temporal model of ultrafine particle number concentration (PNC) recorded according to a split panel design. The model describes the temporal trends and background levels at each site. The data were measured as part of the “Ultrafine Particles from Transport Emissions and Child Health” (UPTECH) project which aims to link air quality measurements, child health outcomes and a questionnaire on the child’s history and demographics. The UPTECH project involves measuring aerosol and particle counts and local meteorology at each of 25 primary schools for two weeks and at three long term monitoring stations, and health outcomes for a cohort of students at each school [3].

Earned value management insights using inferential statistics

Purpose – The purpose of this paper is to summarise a successfully defended doctoral thesis. The main purpose of this paper is to provide a summary of the scope, and main issues raised in the thesis so that readers undertaking studies in the same or connected areas may be aware of current contributions to the topic. The secondary aims are to frame the completed thesis in the context of doctoral-level research in project management as well as offer ideas for further investigation which would serve to extend scientific knowledge on the topic. Design/methodology/approach – Research reported in this paper is based on a quantitative study using inferential statistics aimed at better understanding the actual and potential usage of earned value management (EVM) as applied to external projects under contract. Theories uncovered during the literature review were hypothesized and tested using experiential data collected from 145 EVM practitioners with direct experience on one or more external projects under contract that applied the methodology. Findings – The results of this research suggest that EVM is an effective project management methodology. The principles of EVM were shown to be significant positive predictors of project success on contracted efforts and to be a relatively greater positive predictor of project success when using fixed-price versus cost-plus (CP) type contracts. Moreover, EVM's work-breakdown structure (WBS) utility was shown to positively contribute to the formation of project contracts. The contribution was not significantly different between fixed-price and CP contracted projects, with exceptions in the areas of schedule planning and payment planning. EVM's “S” curve benefited the administration of project contracts. The contribution of the S-curve was not significantly different between fixed-price and CP contracted projects. Furthermore, EVM metrics were shown to also be important contributors to the administration of project contracts. The relative contribution of EVM metrics to projects under fixed-price versus CP contracts was not significantly different, with one exception in the area of evaluating and processing payment requests. Practical implications – These results have important implications for project practitioners, EVM advocates, as well as corporate and governmental policy makers. EVM should be considered for all projects – not only for its positive contribution to project contract development and administration, for its contribution to project success as well, regardless of contract type. Contract type should not be the sole determining factor in the decision whether or not to use EVM. More particularly, the more fixed the contracted project cost, the more the principles of EVM explain the success of the project. The use of EVM mechanics should also be used in all projects regardless of contract type. Payment planning using a WBS should be emphasized in fixed-price contracts using EVM in order to help mitigate performance risk. Schedule planning using a WBS should be emphasized in CP contracts using EVM in order to help mitigate financial risk. Similarly, EVM metrics should be emphasized in fixed-price contracts in evaluating and processing payment requests. Originality/value – This paper provides a summary of cutting-edge research work and a link to the published thesis that researchers can use to help them understand how the research methodology was applied as well as how it can be extended.

Non-parametric techniques for fast and robust stereo matching

The mining environment presents a challenging prospect for stereo vision. Our objective is to produce a stereo vision sensor suited to close-range scenes consisting mostly of rocks. This sensor should produce a dense depth map within real-time constraints. Speed and robustness are of foremost importance for this application. This paper compares a number of stereo matching algorithms in terms of robustness and suitability to fast implementation. These include traditional area-based algorithms, and algorithms based on non-parametric transforms, notably the rank and census transforms. Our experimental results show that the rank and census transforms are robust with respect to radiometric distortion and introduce less computational complexity than conventional area-based matching techniques.

Suitability of non-parametric stereo matching algorithms for mining automation

The mining environment, being complex, irregular and time varying, presents a challenging prospect for stereo vision. For this application, speed, reliability, and the ability to produce a dense depth map are of foremost importance. This paper assesses the suitability of a number of matching techniques for use in a stereo vision sensor for close range scenes consisting primarily of rocks. These include traditional area-based matching metrics, and non-parametric transforms, in particular, the rank and census transforms. Experimental results show that the rank and census transforms exhibit a number of clear advantages over area-based matching metrics, including their low computational complexity, and robustness to certain types of distortion.

Frame-rate stereopsis using non-parametric transforms and programmable logic

A frame-rate stereo vision system, based on non-parametric matching metrics, is described. Traditional metrics, such as normalized cross-correlation, are expensive in terms of logic. Non-parametric measures require only simple, parallelizable, functions such as comparators, counters and exclusive-or, and are thus very well suited to implementation in reprogrammable logic.

Parametric and generative methods with building information modelling : connecting BIM with explorative design modelling

Parametric and generative modelling methods are ways in which computer models are made more flexible, and of formalising domain-specific knowledge. At present, no open standard exists for the interchange of parametric and generative information. The Industry Foundation Classes (IFC) which are an open standard for interoperability in building information models is presented as the base for an open standard in parametric modelling. The advantage of allowing parametric and generative representations are that the early design process can allow for more iteration and changes can be implemented quicker than with traditional models. This paper begins with a formal definition of what constitutes to be parametric and generative modelling methods and then proceeds to describe an open standard in which the interchange of components could be implemented. As an illustrative example of generative design, Frazer’s ‘Reptiles’ project from 1968 is reinterpreted.

Regulating bereavement : inquests, family pressure and the gate keeping of suicide statistics

This study of English Coronial practice raises a number of questions, not only regarding state investigations of suicide, but also of the role of the Coroner itself. Following observations at over 20 inquests into possible suicides, and in-depth interviews with six Coroners, three main issue emerged: first, there exists considerable slippage between different Coroners over which deaths are likely to be classified as suicide; second, the high standard of proof required, and immense pressure faced by Coroners from family members at inquest to reach any verdict other than suicide, can significantly depress likely suicide rates; and finally, Coroners feel no professional obligation, either individually or collectively, to contribute to the production of consistent and useful social data regarding suicide—arguably rendering comparative suicide statistics relatively worthless. These issues lead, ultimately, to a more important question about the role we expect Coroners to play within social governance, and within an effective, contemporary democracy.