Operating Risk in Economic Analysis for the Assessment of Design & Planning Alternatives in Underground Mine Feasibilities

CIM MEMO 2010
Vassilios Kazakidis,
Abstract Risk assessment is paramount for the design of underground mining operations and the optimization of planning in their development and production schedules. Feasibility studies of green field or brown field capital projects require the increase of confidence in performance estimates and economic milestones related to cost, recovery, and productivity parameters. While market and geological risks can be assessed through a forecasting analysis based on historical and orebody data respectively, operating risk assessment in the mining industry requires a customized approach that combines qualitative and quantitative assessment by qualified personnel. The operating risk is a function of the performance of equipment, schedule and geotechnical components of a mining system. The assessment of operating risk will impact the robustness of the design and the quality of planning in both the development and the production cycles.
A methodology to assess the operating risk in mine feasibility studies is proposed and demonstrated through DCF and M-C simulation analyses. Quality in the development cycle is assessed through the combination of economic analysis and process simulation of operating alternatives. A conceptual example, based on the lateral development practice followed in Sudbury mines, shows the practical application of the proposed approach and quantifies the impact of quality issues on a lateral development process. The proposed operating risk evaluation approach can be incorporated in managerial decision making where the assessment of the operating risk associated with equipment, schedule and ground problem delays critically impacts the consideration of feasible technical and operating alternatives.
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