Project Design

"Chairman: Professor J. C. Griffiths Rapporteur: Mr J. P. G. PRETORIUSPapers:Mine-mill production scheduling by dynamic programming by R. J. Roman Optimization of a large mining venture by J. C. Paynter, B. K. Loveday and C. G. Robinson Economic surface mining of multiple seams by T. V. Falkie and W. E. PorterIn introducing his paper, Mr Roman said that whereas in manufacturing plants the yearly production levels were usually chosen to produce the largest annual cash flow, in a mining operation, the raw materials (ore) were exhaustible so that the production had to be scheduled to maximize the total net present worth of the operation. This optimum production schedule could be determined by using dynamic programming. The required information was readily available to management at most mines. The 'possible operating range' of production rates lay between the rate with the highest profit per ton. and that with the highest profit per year. The optimum production rate started typically at the top of this range and decreased slowly as the deposit was depleted.Dynamic programming was used to determine several production schedules for a hypothetical mine-mill complex. The effects of changes in the ore grade estimates, size of deposit and acceptable rate of interest on the production schedule were taken into account. Apart from the fact that the net present worth of the overall profits was larger than that obtained by conventional methods, it appeared from the cases studied that the amount of metal recovered was also greater.Dr it P. King commented that this was a very interesting application of dynamic programming. He pointed out, however, that the market price of the metal was likely to vary significantly and randomly during the life of the mine, and he suggested that the problem should, therefore, be reformulated as a stochastic dynamic programming problem.If the price of the metal rose to abnormally high levels, a much higher than normal production rate could be expected. The results of analyses given in Table 5 showed that the production rate was a function of market price. In his view the stochastic problem could be solved just as easily as the deterministic problem.In reply to a question by Dr King as to whether the function relating recovery to production rate (Table I) was based on real data, the author replied that it was based on the results of an analysis conducted at the Union Carbide Corporation's Pine Creek tungsten mine in California.Dr D. M. Hawkins stated that costs were incurred when the production rate was altered, for example, in appointing or laying off staff, and that in practice it may be necessary to take these costs into account in finding the optimum production rate. Mr Roman replied that, while normal administrative costs were accounted for, the additional costs incurred in appointing and laying off staff were not taken into account."