Direct Net Present Value Open Pit Optimisation with Probabilistic Models

2018 ◽  
pp. 217-228
Author(s):  
A. Richmond
Keyword(s):  
Probabilistic Models ◽  
Net Present Value ◽  
Open Pit ◽  
Present Value

The Role of Economic Uncertainty on the Block Economic Value – a New Valuation Approach / Rola Czynnika Niepewności Przy Obliczaniu Wskaźnika Rentowności – Nowe Podejście

2012 ◽  
Vol 57 (4) ◽  
pp. 991-1014 ◽  
Author(s):  
H. Dehghani ◽  
M. Ataee-Pour
Keyword(s):  
Net Present Value ◽  
Economic Value ◽  
Operating Cost ◽  
Mine Planning ◽  
Open Pit ◽  
Economic Uncertainty ◽  
Present Value ◽  
Wrong Decision ◽  
Binomial Tree ◽  
Conventional Methods

Abstract The block economic value (BEV) is one of the most important parameters in mine evaluation. This parameter can affect significant factors such as mining sequence, final pit limit and net present value. Nowadays, the aim of open pit mine planning is to define optimum pit limits and an optimum life of mine production scheduling that maximizes the pit value under some technical and operational constraints. Therefore, it is necessary to calculate the block economic value at the first stage of the mine planning process, correctly. Unrealistic block economic value estimation may cause the mining project managers to make the wrong decision and thus may impose inexpiable losses to the project. The effective parameters such as metal price, operating cost, grade and so forth are always assumed certain in the conventional methods of BEV calculation. While, obviously, these parameters have uncertain nature. Therefore, usually, the conventional methods results are far from reality. In order to solve this problem, a new technique is used base on an invented binomial tree which is developed in this research. This method can calculate the BEV and project NPV under economic uncertainty. In this paper, the BEV and project NPV were initially determined using Whittle formula based on certain economic parameters and a multivariate binomial tree based on the economic uncertainties such as the metal price and cost uncertainties. Finally the results were compared. It is concluded that applying the metal price and cost uncertainties causes the calculated block economic value and net present value to be more realistic than certain conditions.

scholarly journals ANALISIS PENENTUAN KADAR BATAS OPTIMAL (OPTIMUM CUT-OFF GRADE) DENGAN METODE LANE: STUDI KASUS PENAMBANGAN EMAS BAWAH TANAH

2020 ◽  
Vol 1 (1) ◽  
pp. 1-8
Author(s):  
Sari Uly Uly Sibarani ◽  
Fadhila A Rosyid ◽  
Aryo P Wibowo ◽  
Lilik E Widodo ◽  
M Nur Heriawan
Keyword(s):  
Net Present Value ◽  
Underground Mining ◽  
Commodity Prices ◽  
Open Pit ◽  
Present Value ◽  
Open Pit Mines ◽  
Vein Type ◽  
Result Show ◽  
Cut And Fill ◽  
Mineral Reserves

ABSTRAKKonservasi mineral akan tercapai manakala semakin banyak cadangan mineral tertambang dan meninggalkan sesedikit mungkin material waste. Untuk mencapai hal tersebut salah satu cara yang dapat ditempuh adalah menentukan jumlah cadangan berdasarkan kadar batas yang optimal (optimum cut-off grade). Dalam penentuan optimum cut-off grade, model matematis yang dapat dipergunakan adalah model/persamaan Lane. Metode Lane akan memaksimalkan nilai Net Present Value (NPV) dengan mempertimbangkan 3 variabel, yaitu; variabel ekonomi (harga komoditas dan biaya), distribusi kadar pada endapan, dan kapasitas maksimum pada tahapan penambangan (mining, milling, and refinery). Model Lane biasa diterapkan dalam tambang terbuka, namun dalam penambangan bawah tanah sulit untuk diterapkan. Dalam peper ini akan dikaji penerapan Model Lane dalam penentuan optimum cut-off grade pada penambangan urat (vein) emas bawah tanah dengan metode cut-and-fill. Hasil simulasi menunjukkan nilai optimum cut-off grade yang dinamis dalam memaksimalkan NPV dan nilainya lebih besar dari break even cut-off grade.Kata Kunci: model Lane, optimum cut-off grade, tambang bawah tanah ABSTRACTMineral conservation will be obtained if more mineral reserves are extracted and leaves less waste as possible. One of the methods to achieve those condition is determining the total minable reserves based on the optimum cut-off grade. Optimum cut-off grade can be estimated using Lane Model. Lane Model will maximize the Net Present Value (NPV) by considering 3 variables, i.e; economic variables (commodity prices and costs), grade distribution of deposit, and maximum capacity of each stage of production (mining, milling, and refinery). Lane models are usually applied in open-pit mines, unfortunately it is difficult to apply for underground mining unless some there are some modifications. This paper will examine the application of the Lane Model in determining the optimum cut-off grade in underground gold mine using cut-and-fill method to extract vein type deposit. Simulation result show dynamic optimum cut-off grade which maximizing NPV and generally greater than the break-even cut-off grade.Key Words: Lane model, optimum cut-off grade, underground mine 

scholarly journals A sequentially advancing algorithm based on multi-value dynamic programming for the cut-off grade optimization in open-pit metalliferous deposits

2021 ◽  
Author(s):  
Pritam Biswas ◽  
Rabindra Kumar Sinha ◽  
Phalguni Sen
Keyword(s):  
Dynamic Programming ◽  
Net Present Value ◽  
Real Life ◽  
Surface Mining ◽  
Life Time ◽  
Copper Deposit ◽  
Early Years ◽  
Open Pit ◽  
Present Value ◽  
Copper Mine

Abstract In techno-economic concern, cut-off grade (COG) optimization is the key for efficient mineral liquidation from the huge metalliferous surface mining sector. In this paper, a sequentially advancing algorithm based on exact multi-value dynamic programming (MDP) has been developed to determine the optimum COG of an open-pit metalliferous deposit. The proposed COG optimization algorithm aims to overcome the limitations of straightforward classical techniques in determining the optimum COG. This discrete COG-MDP model is the first of its kind and has the novelty of dealing with the simulation of eight dynamic possibilities to achieve the maximal Net Present Value (NPV). A high-level programming language (Python) has been used to develop the computer model to deal with the complexity of handling a minimum of 500 series of dynamic variables with a precision value of 0.01% in grade bins. This model can generate results in polynomial-time from the complex mine, mill, and smelter and refinery system corresponding to various limiting conditions. The prime objective considered in the model is to optimize the COG of a metalliferous deposit. The model validation has been done using a real-life case study of an open-pit copper mine in India (Malanjkhand Copper Mine, HCL), considering the fixed yearly output of the mining, milling, and smelting and refining. In this study, the optimum COG for the Malanjkhand copper deposit has been found to be (0.33%, 0.23%, 0.52%, 0.26%, 0.27%, 0.22%, 0.24%) with a maximum NPV of ₹ (12204, 14653, 16948, 14609, 21454, 26717, 38821) million corresponding to various scenarios. The findings also show that the present value of net cash-flow grows in the early years, peaks at a specified mid-life time, and then drops as the reserve is depleted. The present value gradually hits zero after the project’s life cycle, confirming the typical pattern of other mining firms.

A Dynamic-Programming Based Model for Phase-Mining Optimization in Open-Pit Metal Mines

2013 ◽  
Vol 316-317 ◽  
pp. 896-901
Author(s):  
Qing Wang ◽  
Xiao Chuan Xu ◽  
Xiao Wei Gu
Keyword(s):  
Dynamic Programming ◽  
Net Present Value ◽  
Open Pit ◽  
Present Value ◽  
Dynamic Nature ◽  
Time And Space ◽  
Full Account ◽  
Metal Mines

Three important aspects of phase-mining must be optimized: the number of phases, the geometry and position of each phase-pit (including the ultimate pit), and the ore and waste quantities to be mined in each phase. A model is presented in this paper in which, a sequence of geologically optimum pits are first generated and then dynamically evaluated to simultaneously optimize the above three aspects, with the objective of maximizing the overall net present value. The model takes into full account of the dynamic nature of the problem with respect to both time and space, and is robust in accommodating different pit wall slopes and different bench heights.

scholarly journals NPV analysis as a function of the discount rate and cost of rehandling implementing SIMSCHED DBS to open pit mining

2017 ◽  
pp. 81-86
Author(s):  
Carolina Navia-Vásquez ◽  
María Camila Monsalve-Hinestroza ◽  
Giovanni Franco-Sepúlveda
Keyword(s):  
Discount Rate ◽  
Return On Investment ◽  
Net Present Value ◽  
Mineral Deposit ◽  
Open Pit ◽  
Open Pit Mining ◽  
Present Value ◽  
Mining Project ◽  
Search For Information ◽  
The Cost

The function of all software is to model situations that look like reality, in order to find the most viable conditions for developing a mining project, since in these what is sought is to increase revenue and reduce costs by making better decisions. In this industry investors seek to obtain the highest income in exploiting underground resources, with the aim of achieving return on investment. In this article the discount rate and the cost of rehandling of a mineral deposit hypothetical gold and copper is evaluated using the SIMSCHED DBS software. In turn a search for information, which can give clarity to the concepts with which you are working, is done. Based on the simulations performed with the two economic variables you can select the optimal net present value (NPV) for future flows.

scholarly journals Phase Planning for Open Pit Coal Mines through Nested Pit Generation and Dynamic Programming

2021 ◽  
Vol 2021 ◽  
pp. 1-8
Author(s):  
Xiaowei Gu ◽  
Qing Wang ◽  
Xiaochuan Xu ◽  
Xiaoqian Ma
Keyword(s):  
Dynamic Programming ◽  
Net Present Value ◽  
Open Pit ◽  
Coal Deposit ◽  
Present Value ◽  
Coal Seams ◽  
Column Model ◽  
Coal Deposits ◽  
Coal Rock

This paper presents a phase planning method specially designed for coal deposits with nearly horizontal, bedded coal seams. The geology of this type of deposit is modeled into a column model, instead of a block model, to avoid coal-rock mixing in blocks. A nested pit generation algorithm is developed for producing a series of nested, least-strip ratio pits with a column model as its input. The algorithm completely overcomes the troublesome gap problem. Taking the least-strip ratio pits as possible phase states, a dynamic programming formulation is proposed to simultaneously optimize the number of phases, the phase-pits, and the ultimate pit, with an objective of maximizing the net present value. The merits and capability of the proposed method are demonstrated through a case study on a large coal deposit.

ANALISIS KELAYAKAN FINANSIAL INDUSTRI PENGOLAHAN KECAP ANEKA GUNA DI KOTA LANGSA

2017 ◽  
Vol 2 (1) ◽  
pp. 21-30
Author(s):  
Muhammad Jamil ◽  
Januari Frizki Bella
Keyword(s):  
Net Present Value ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Internal Rate

Adapun tujuan dari Penelitian ini adalah untuk mengetahui kelayakan usaha industri pengolahan kecap Aneka Guna apabila dilihat dari segi kelayakan finansial. Penelitian ini menggunakan metode studi kasus. Lokasi penelitian yaitu di Kota Langsa dengan pertimbangan bahwa lokasi tersebut merupakan daerah yang terdapat industri pengolahan kecap asin dan mudah di jangkau oleh penulis. Waktu penelitian dilaksanakan pada Bulan Juni - Oktober 2014. Tenaga kerja yang digunakan berjumlah 27 orang, 20 tenaga kerja pria dan 7 orang tenaga kerja wanita. Jumlah penggunaan tenaga kerja selama 5 tahun sebesar 3759 HKP. Total biaya produksi yang dikeluarkan oleh pengusaha dalam usaha pembuatan kecap didaerah penelitian selama 5 tahun adalah Rp. 2.076.988.000,-. Pendapatan kotor yang diperoleh pengusaha sebesar Rp. 8.199.690.000,- dan pendapan bersih yang diperoleh sebesar Rp. 6.122.702.000,-                 Kota Langsa hanya memiliki 1 pengusaha pengolahan kecap asin dan dijadikan sebagai pengusaha sampel yaitu usaha industri pengolahan kecap asin Aneka Guna. Hasil perhitungan di peroleh Net Present Value (NPV) sebesar Rp. 263.281.290 (lebih besar dari nol), sedangkan Internal Rate of Return (IRR) sebesar 84% lebih besar dari tingkat bunga yang berlaku (D.F. = 18%), sedangkan Net B/C Ratio sebesar 3,27 (lebih dari pada 1) dan Pay Back Priod (PBP) 1 Tahun 6 Bulan (lebih kecil dari umur ekonomis).  

UNIFICATION OF STANDS SELECTION FOR FINAL FELLING IN STRATEGIC AND TACTICAL PLANNING

2015 ◽  
Author(s):  
Ainārs GRĪNVALDS
Keyword(s):  
Strategic Planning ◽  
Net Present Value ◽  
Strategic Plan ◽  
Regression Function ◽  
Tactical Planning ◽  
Present Value ◽  
Black Alder ◽  
Value Maximization ◽  
Annual Changes ◽  
Selection For

The stand selection for cutting in tactical planning should be done according to the same principles like in strategic planning – to maximize net present value. The simple way of how to transfer the net present value maximization principle from strategic planning to tactical planning was created in Sweden. The method is based on annual changes in the net present value by postponing final felling. Forest inventory data and forestry modelling system was used for calculation of changes in net present value for pine, spruce, birch, aspen and black alder stands. And changes in net present value were described by regression function with factors from stand parameters. The regression function allows calculating annual changes in net present value for each stand. And stands with higher decrease in net present value have higher cutting priority. Stands selected for the final felling in strategic plan were compared with the stands selected in tactical plan with two methods, first, by using annual changes in the net present value, second, by traditional planning principles. Stands selected by annual changes in the net present value were similar to stands that were selected for cutting in strategic plan, but stands selected by traditional planning principles – not.

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