Mine NPV Optimization

The Net-Present-Value (NPV) of a mineral source is a key indicator about the health of a mining operation. Hence, the investors not only use NPV for initial investment decisions into a mining project, but also periodically review itand look for ways of maximizing the same.

 
  • Introduction
  • Challenges
  • Solutions
  • Benefits
  • Features
  • More

Introduction

The maximization of NPV of the mine is limited by a number of constraints such as;

  • Mining constraints, which usually reflect equipment capacities such as
    • Maximum amount of rock that can be mined in a given period.
    • Maximum amount of ore that can be processed in a given period, etc.
  • Geotechnical Slope constraints
  • Market constraints, e.g. the total demand of the mineral in the market.
Mines Optimization
 

Solutions

Typically, a Mixed-Integer-Linear-Programming (MILP) model is used to model the NPV maximization problem which is pretty straight forward. It is the enormous size of the problem that presents a challenge in mathematically solving this problem. Facing 100,000 to 250,000 variables and constraints in such a problem is not unusual. Solving such computational mammoths requires; (a) a good optimization formulation, (b) a fast algorithm and solver, (c) high end computing hardware and/or parallel computing setup.

Mines Optimization

NPV Optimizer: We specialize in providing optimization solutions to the problem of maximizing a mine’s NPV. Our solution offers:

  • Optimal block sequencing and scheduling per period
  • Optimal Haul Truck and Shovel operating schedule
  • Optimal blend composition
  • Optimal driver roasters
  • Optimal preventive maintenance and fueling schedules
  • Optimal cut-off grades

Benefits

Once the mine is operational, and since market conditions are mostly intractable, the onus of maximizing the NPV befalls upon optimal utilization of mining and processing capabilities. This includes, and is not limited to, the determination of the following:

  • Optimal Block sequencing and scheduling
  • Determination of optimal cut-off grades
  • Optimal production rates
  • Optimal operating layouts
  • Optimal equipment alternatives
  • Optimal blends
  • Optimal ultimate pit-limit of mine

Features

The solution has many useful features such as:

  • Quickly solving problems having variables and constraints in excess of 100,000.
  • ERP integration capabilities.
  • Easy integration with custom sensor hardware installations.
  • Direct import-export capability with MS-Excel.
  • Intuitive and customizable GUI.
  • Automatic warning generation for user defined threshold levels of all essential production management metrics
  • Capability to generate both pictorial and chart type reports.
 
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