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G-2021-42

Adaptive simultaneous stochastic optimization of mining complexes: Where is the value coming from?

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This paper aims to identify the sources of value created in the strategic plan of a mining complex when the adaptive simultaneous stochastic optimization of mining complex (ASSOMC) approach is used. This approach considers operational and investment alternatives dynamically within the simultaneous stochastic optimization of mining complex (SSOMC) framework, providing an adaptive strategic plan that manages technical risk and maximizes value. A case study on a world-class mining complex illustrates the effects of this optimization model, comparing the adaptive alternatives of the ASSOMC with the fixed SSOMC case. Results show that considering the SSOMC without alternatives as a starting point, including either investment or operational alternatives in a fixed manner, provides an increase in NPV of 4.4% and 2.8%, respectively; whereas considering both jointly increases the NPV by 10.3%. On the other hand, when adaptive changes are considered over investments, such as additional crushers or conveyor belts, the NPV increases further, by about 20%. The focus is placed on identifying the location and components where this extra value is created within the mining complex, understanding the effect that the alternatives have, and capitalizing from them. This study finds that, due to the non-linear synergies that exist between the different components of a mining complex, the adaptive aspect of the approach allows the production plan optimization to be proactive and to tailor its configuration according to possible changes and future developments.

, 18 pages

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