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Mine Planning under Uncertainty Alexandre Marinho March/2013 1 www.miningmath.com

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Page 1: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

Mine Planning under Uncertainty

Alexandre Marinho

March/2013 1

www.miningmath.com

Page 3: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

3

The Oil and Gas Industry

http://www.youtube.com/watch?v=WAvp6OhArrA

Page 4: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

4

Workflow

www.miningmath.com

? ?

? ? ?

Page 5: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

5

Project Evaluation

www.miningmath.com

-150

-100

-50

0

50

100

150

200

250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Page 6: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

6

Dealing with Probabilities

www.miningmath.com

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-100

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0

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250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Average

Min/Max

Page 7: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

7

Overestimation

www.miningmath.com

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250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Estimated

Min/Max

Page 8: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

8

Underestimation

www.miningmath.com

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250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Estimated

Min/Max

Page 9: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

9

How is your mine going to perform?

www.miningmath.com

?

Page 10: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

10

Kriging (Estimation) = Weighted Averages

www.miningmath.com

5%

7%

12%

15%

8%

Page 11: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

11

Independent of adjacent blocks

www.miningmath.com

5%

7%

12%

15%

9%

Page 12: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

12

Overall Consequences - Smoothing Effect

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0

5

10

15

20

25

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Fre

quency

(%

)

Grade

Sample points

Estimated points

Page 13: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

13

Applying a Cutoff - Overestimation

www.miningmath.com

0

5

10

15

20

25

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Fre

quency

(%

)

Grade

Sample points

Estimated points

Waste classified

as ore C

UTO

FF

Page 14: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

14

Applying a Cutoff - Underestimation

www.miningmath.com

0

5

10

15

20

25

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Fre

quency

(%

)

Grade

Sample points

Estimated points

Ore classified

as waste

CU

TO

FF

Page 15: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

15

Non-linear Transfer Function - Example

www.miningmath.com

Scenarios

1

2

4

f(x) = x²

1² = 1

2² = 4

4² = 16

Average

21/3 = 7

x

x x²

Page 16: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

16

Averaging Inputs

www.miningmath.com

Scenarios

1

2

4

f(x) = x²

2.3² = 5.4

Average

7/3 = 2.3

Page 17: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

17

The Flaw of Averages - Dr. Sam Savage

www.miningmath.com

Average In Average Out

E(x²) = 7.0 ≠ 5.4

(E(x))² ≠ E(x²)

http://www.youtube.com/watch?v=j3zKgAetG5k

Page 18: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

18

The Flaw of Averages - Dr. Sam Savage

www.miningmath.com

http://www.youtube.com/watch?v=j3zKgAetG5k

Page 19: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

19

Averaging Inputs in Mining

www.miningmath.com

Scenarios

Estimation

Schedule

(figures from Leite and Dimitrakopoulos, 2009)

Page 20: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

20

Mine Planning under Uncertainty

www.miningmath.com

Scenarios

Estimation

Schedule

(figures from Leite and Dimitrakopoulos, 2009)

Page 21: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

0

5

10

15

20

25

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Fre

quency

(%

)

Grade

Simulated Points

Sample Points

21

Generate Scenarios

www.miningmath.com

Page 22: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

22

Understand Where You Are

www.miningmath.com

?

Page 23: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

-150

-100

-50

0

50

100

150

200

250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Estimated

Min/Max

-150

-100

-50

0

50

100

150

200

250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Estimated

Min/Max

23

Adjust Your Expectations

www.miningmath.com

Page 24: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

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250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

ula

tive N

et Pre

sen

t V

alu

e (

M$

)

Periods

Conventional

Min/Max

Stochastic

Min/Max

-150

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-50

0

50

100

150

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250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Cum

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M$

)

Periods

Estimated

Min/Max

24

Optimize Under Uncertainty

www.miningmath.com

Page 25: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

25

Step Forward

Page 26: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

26

MiningMath Software

Operational Schedule + Ultimate Pit + Multiple Destinations

+ Cutoff Optimization + Risk Analysis

3,0

4,0

5,0

6,0

7,0

8,0

1 2 3 4 5 6 7 8 9

Ore

Pro

du

ctio

n (

t)

Mill

ion

s

Period

Average

P10 and P90

0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9 C

um

ula

tive

NP

V (

$)

Mill

ion

s Period

Average

P10 and P90

(same dataset from Leite 2008, Albor 2010 and Marinho 2013)

Page 27: Mine Planning under Uncertainty - CEERMIN€¦ · 26 MiningMath Software Operational Schedule + Ultimate Pit + Multiple Destinations + Cutoff Optimization + Risk Analysis 3,0 4,0

Questions?

[email protected]

27

Thank You