Beyond Naïve Optimisation

Abstract

Most practitioners would regard the maximising of the net present value (NPV) of a mine by changing mining schedules, push-backs, cut-off grades, ultimate pit shells and stockpile rules and procedures as encompassing current best practice in mine planning. This optimisation is typically carried out for a single set of assumptions about: orebody tonnes and grade, processing methods and costs, maximum sales volumes in the case of bulk commodities, commodity prices, and discount rates. About the only thing we can be sure of is that the assumptions on all these factors will be wrong, yet we continue to naïvely optimise our mine plan. This paper argues that this approach is inherently flawed. Recognising that our assumptions will be wrong, and that our actions can alter over time as new information is made available, means that the mine plan that is 'optimal' under a single set of assumptions may well be suboptimal in the real and uncertain world.