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Mathematical Optimization Models and Methods for Open-Pit Mining
2011 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Open-pit mining is an operation in which blocks from the ground are dug to extract the ore contained in them, and in this process a deeper and deeper pit is formed until the mining operation ends. Mining is often a highly complex industrial operation, with respect to both technological and planning aspects. The latter may involve decisions about which ore to mine and in which order. Furthermore, mining operations are typically capital intensive and long-term, and subject to uncertainties regarding ore grades, future mining costs, and the market prices of the precious metals contained in the ore. Today, most of the high-grade or low-cost ore deposits have already been depleted, and to obtain sufficient profitability in mining operations it is therefore today often a necessity to achieve operational efficiency with respect to both technological and planning issues.

In this thesis, we study the open-pit design problem, the open-pit mining scheduling problem, and the open-pit design problem with geological and price uncertainty. These problems give rise to (mixed) discrete optimization models that in real-life settings are large scale and computationally challenging.

The open-pit design problem is to find an optimal ultimate contour of the pit, given estimates of ore grades, that are typically obtained from samples in drill holes, estimates of costs for mining and processing ore, and physical constraints on mining precedence and maximal pit slope. As is well known, this problem can be solved as a maximum flow problem in a special network. In a first paper, we show that two well known parametric procedures for finding a sequence of intermediate contours leading to an ultimate one, can be interpreted as Lagrangian dual approaches to certain side-constrained design models. In a second paper, we give an alternative derivation of the maximum flow problem of the design problem.

We also study the combined open-pit design and mining scheduling problem, which is the problem of simultaneously finding an ultimate pit contour and the sequence in which the parts of the orebody shall be removed, subject to mining capacity restrictions. The goal is to maximize the discounted net profit during the life-time of the mine. We show in a third paper that the combined problem can also be formulated as a maximum flow problem, if the mining capacity restrictions are relaxed; in this case the network however needs to be time-expanded.

In a fourth paper, we provide some suggestions for Lagrangian dual heuristic and time aggregation approaches for the open-pit scheduling problem. Finally, we study the open-pit design problem under uncertainty, which is taken into account by using the concept of conditional value-atrisk. This concept enables us to incorporate a variety of possible uncertainties, especially regarding grades, costs and prices, in the planning process. In real-life situations, the resulting models would however become very computationally challenging.

Place, publisher, year, pages
Linköping: Linköping University Electronic Press, 2011. 38 p.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1396
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-70844 (URN)978-91-7393-073-4 (ISBN)oai:DiVA.org:liu-70844 (OAI)diva2:442025 (DiVA)
Public defence
2011-10-18, Alan Turing, hus E, Campus Valla, Linköpings universitet, Linköping, 13:15 (English)
Opponent
Supervisors
Available from2011-09-20 Created:2011-09-20 Last updated:2013-08-30Bibliographically approved
List of papers
1. On the use of Parametric Open-Pit Design Models for Mine Scheduling - Pitfalls and Counterexamples
Open this publication in new window or tab >>On the use of Parametric Open-Pit Design Models for Mine Scheduling - Pitfalls and Counterexamples
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper discusses a Lagrangian relaxation interpretation of the Picard and Smith (2004) parametric approach to open-pit mining, which finds a sequence of intermediate contours leading to an ultimate one. This method is similar to the well known parametric approach of Lerchs and Grossmann (1965). We give examples of worst case performance, as well as best case performance of the Picard-Smith approach. The worst case behaviour can be very poor in that we might not obtain any intermediate contours at all. We also discuss alternative parametric methods for finding intermediate contours, but conclude that such methods seem to have inherent weaknesses.

Keyword
Open-pit mining, Picard-Smith model, Lagrangian relaxation, pit design, block value, scheduling
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-70838 (URN)
Available from2011-09-20 Created:2011-09-20 Last updated:2013-08-30Bibliographically approved
2. A Duality-Based Derivation of the Maximum Flow Formulation of the Open-Pit Design Problem
Open this publication in new window or tab >>A Duality-Based Derivation of the Maximum Flow Formulation of the Open-Pit Design Problem
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Open-pit mining is a surface mining operation whereby ore, or waste, is excavated from the surface of the land. The open-pit design problem is deciding on which blocks of an ore deposit to mine in order to maximize the total profit, while obeying digging constraints concerning pit slope and block precedence. The open-pit design problem can be formulated as a maximum flow problem in a certain capacitated network, as first shown by Picard in 1976. His derivation is based on a restatement of the problem as a quadratic binary program. We give an alternative derivation of the maximum flow formulation, which uses only linear programming duality.

Keyword
Open-pit mining, pit design, maximum flow, maximum profit, block model
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-70840 (URN)
Available from2011-09-20 Created:2011-09-20 Last updated:2013-08-30Bibliographically approved
3. A Multi-Parametric Maximum Flow Characterization of the Open-Pit Scheduling Problem
Open this publication in new window or tab >>A Multi-Parametric Maximum Flow Characterization of the Open-Pit Scheduling Problem
(English)Manuscript (preprint) (Other academic)
Abstract [en]

We consider the problem of finding an optimal mining schedule for an openpit during a number of time periods, subject to a mining capacity restriction for each time period. By applying Lagrangian relaxation to the capacities, a multi-parametric formulation is obtained. We show that this formulation can be restated as a maximum flow problem in a time-expanded network. This result extends a well-known result of Picard from 1976 for the open-pit design problem, that is, the single-period case, to the case of multiple time periods.

Keyword
Open-pit mining, scheduling, maximum flow, minimum cut, Lagrangian relaxation
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-70841 (URN)
Available from2011-09-20 Created:2011-09-20 Last updated:2013-08-30Bibliographically approved
4. Open-Pit Production Scheduling - Suggestions for Lagrangian Dual Heuristic and Time Aggregation Approaches
Open this publication in new window or tab >>Open-Pit Production Scheduling - Suggestions for Lagrangian Dual Heuristic and Time Aggregation Approaches
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Open-pit production scheduling deals with the problem of deciding what and when to mine from an open-pit, given potential profits of the different fractions of the mining volume, pit-slope restrictions, and mining capacity restrictions for successive time periods. We give suggestions for Lagrangian dual heuristic approaches for the open-pit production scheduling problem. First, the case with a single mining capacity restriction per time period is considered. For this case, linear programming relaxations are solved to find values of the multipliers for the capacity restrictions, to be used in a Lagrangian relaxation of the constraints. The solution to the relaxed problem will not in general satisfy the capacity restrictions, but can be made feasible by adjusting the multiplier values for one time period at a time. Further, a time aggregation approach is suggested as a way of reducing the computational burden of solving linear programming relaxations, especially for largescale real-life mine problems. For the case with multiple capacity restrictions per time period we apply newly developed conditions for optimality and nearoptimality in general discrete optimization problems to construct a procedure for heuristically constructing near-optimal intermediate pits.

Keyword
Open-pit mining, mine scheduling, Lagrangian relaxation, maximum flow, time aggregation
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-70842 (URN)
Available from2011-09-20 Created:2011-09-20 Last updated:2013-08-30Bibliographically approved
5. Open-Pit Mining with Uncertainty - A Conditional Value-at-Risk Approach
Open this publication in new window or tab >>Open-Pit Mining with Uncertainty - A Conditional Value-at-Risk Approach
(English)Manuscript (preprint) (Other academic)
Abstract [en]

The selection of a mine design is based on estimating net present values of all possible, technically feasible mine plans so as to select the one with the maximum value. It is a hard task to know with certainty the quantity and quality of ore in the ground. This geological uncertainty, and also the future market behaviour of metal prices and foreign exchange rates, which are impossible to be known with certainty, make mining a high risk business.

Value-at-Risk (VaR) is a measure that is used in financial decisions to minimize the loss caused by inadequate monitoring of risk. This measure does however have certain drawbacks such as lack of consistency, nonconvexity, and nondifferentiability. Rockafellar and Uryasev (2000) introduce the Conditional Value-at-Risk (CVaR) measure as an alternative to the VaR measure. The CVaR measure gives rise to a convex problem.

An optimization model that maximizes expected return while minimizing risk is important for the mining sector as this will help make better decisions on the blocks of ore to mine at a particular point in time. We present a CVaR approach to the uncertainty involved in open-pit mining. We formulate investment and design models for the open-pit mine and also give a nested pit scheduling model based on CVaR. Several numerical results based on our models are presented by using scenarios from simulated geological and price uncertainties.

Keyword
Conditional value-at-risk (CVaR), open-pit mining, geological uncertainty, price uncertainty
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-70843 (URN)
Available from2011-09-20 Created:2011-09-20 Last updated:2013-08-30Bibliographically approved

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