Adaptive simultaneous stochastic optimization of the Escondida mining complex, Chile

This paper presents the application of adaptive simultaneous stochastic optimization with a representative branching framework to generate a strategic mining plan for the Escondida mining complex, the world’s largest copper production operation. This adaptive stochastic optimization considers geological uncertainty while integrating investment and operational alternatives in the production schedule of a mining complex. Mining complexes consist of interconnected components affected by multiple sources of uncertainty. Thus, they must be optimized simultaneously in order to maximize their value, manage environmental impacts and minimize risk. Additionally, due to the extensive lives of assets and the dynamic and uncertain environment in which mining complexes operate, it is not reasonable to assume that the current strategic plan will remain optimal. Thus, an operationally feasible method to embed alternatives in the mine plan is used. The method utilized provides a strategic plan with representative branches for future possible investment decisions. Adaptive decisions are made sequentially over time, activating costs and effects over the model. The optimization process chooses the optimal strategic production plan accordingly, as well as the investments made and their timing. The Escondida mining complex is a multielement, multipit operation with nine different processing destinations. Investment options considered are truck and shovel fleet sizing, adding a secondary crusher in one of the plants, and investing in a main crusher assigned to one of the pits. Additionally, operational alternatives at the mine and plant levels are included. The adaptive solution shows a substantial probability that the mine plan might change its design substantially due to geological uncertainty, presenting an increased expected net present value when compared to the previously developed stochastic mathematical programming formulation that does not consider adaptive decisions, thus generating a single static strategic production plan for the related mining complex. Further studies at the Escondida mining complex can consider adoptive solutions integrating capital investments pertinent to climate change issues.

Adaptive simultaneous stochastic optimization of the Escondida mining complex, Chile

Authored by: M. Fernanda Del Castillo, Roussos Dimitrakopoulos, and Marco Maulen

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To view this article you must be a member of SME/UCA.

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Fall is just around the corner, bringing back hazards of rain and reduced visibility

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