Faculty of Mining Engineering, Sahand University of Technology, Tabriz, Iran
Production planning of an open-pit mine is a procedure during which the rock blocks are assigned to different production periods in a way that leads to the highest net present value (NPV) subject to some operational and technical constraints. This process becomes much more complicated by incorporation of the uncertainty existing in the input parameters. The commodity price uncertainty is among the most significant factors, whose effects cannot be mitigated through further exploration or investigation. The present work introduced a new approach for integration of the commodity price uncertainty into long-term production planning of open-pit mines. The procedure involves solving the problem by the integer programming method based on a series of economic block models that are realized based on the sampled prices from commodity price distribution function using the median Latin hypercube sampling method. The results obtained showed that the new methodology is able to reduce the risks and the net present value of the new approach at a confidence level 80% more than the conventional methods.