Group for Research in Decision Analysis


Stochastic mining supply chain optimization: A study of integrated capacity decisions


The mining value chain comprises many inter-related components, from mines to transportation, to customers. When the individual components are optimized separately the value that can be generated from the enterprise suffers. Optimization of the mining value chain requires a shift away from conventional methods of optimization and towards the simultaneous optimization of all related aspects, including: the mine's extraction sequence, material destination decisions, material transport decisions, and equipment capacities. Further, if these decisions are to be robust, they must be made while considering sources of uncertainty and managing the related technical risk.

The contributions included in this paper are meant to assist strategic planning and evaluation of mining projects under uncertainty. Specifically, the simultaneous integration of capacity decisions in long-term scheduling is meant to provide a tool that generates a NPV-optimal mine sequence and destination policy that is also synchronized with equipment capacities selected while being robust to two sources of uncertainty, geological uncertainty and metal price uncertainty.

, 24 pages