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Evaluation of the impact of commodity price change on the mine plan of deep underground mining
Luleå University of Technology, Department of Civil, Environmental and Natural Resources Engineering, Mining and Geotechnical Engineering.
School of Mechanical and Mining Engineering, The University of Queensland.
Luleå University of Technology, Department of Civil, Environmental and Natural Resources Engineering, Mining and Geotechnical Engineering.ORCID iD: 0000-0002-2306-9241
2015 (English)In: International Journal of Mining Science and Technology, ISSN 2095-2686, Vol. 25, no 3, p. 375-382Article in journal (Refereed) Published
Abstract [en]

The fluctuations in commodity prices influences mining operations to continually update and adjust their mine plans in order to capture additional value under the new market condition. Some of the adjustments could include changes to the production sequencing, changes to the point at which the open pit transitions to the underground, and the time for changing or modifying the existing ore handling systems as a result of an increase in mine depth. This paper seeks to present a method for quantifying the net present value component of optimal mine plans that may be directly attributed to the change in commodity prices, and more importantly the changes in the mine plan itself. The evaluation is conducted on a deep underground copper deposit amenable to sublevel stoping whereby optimal mine plans were generated across a total of ten copper price scenarios ranging between $5250/t Cu and $9750/t Cu. Discrete event simulation in conjunction with mixed integer programming was used to attain a viable production strategy and then to generate optimal mine plans. The analysis indicates that the increase in prices results in an increase in net present value from $96.57M to ultimately reach $755.65M. In an environment where mining operations must be looking to gain as much value as possible from the rights to exploiting a finite resource, it is simply not appropriate to keep operating under the same mine plan if commodity prices have altered during the course of operation.

Place, publisher, year, edition, pages
2015. Vol. 25, no 3, p. 375-382
National Category
Other Civil Engineering
Research subject
Mining and Rock Engineering
Identifiers
URN: urn:nbn:se:ltu:diva-4324DOI: 10.1016/j.ijmst.2015.03.008Scopus ID: 2-s2.0-84929272787Local ID: 240d6d7e-426e-44b7-aa8f-c580af54da7dOAI: oai:DiVA.org:ltu-4324DiVA, id: diva2:977188
Note
Validerad; 2015; Nivå 1; 20140116 (abusal)Available from: 2016-09-29 Created: 2016-09-29 Last updated: 2018-07-10Bibliographically approved

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Salama, AbubakaryGreberg, Jenny

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