This study examines the issue of economic optimization associated with mine development and extraction decisions, focusing on the choice of an appropriate installed capacity as well as the control of the cutoff grade and capacity utilization variables. It shows how capacity and production strategies lead to an enhanced economic outcome of resource development and extraction. / An important aspect of the study is the development of deterministic algorithms for cutoff grade and production rate optimization within existing mine facilities. These variables are determined by maximizing the present value of future benefits associated with mine production. Two opposing economic forces are at play in the optimizing process. A higher present value can be achieved by increasing operating profits through a higher cutoff grade and/or extraction rate. This strategy decreases the losses due to discounting. However, a higher cutoff grade generally leads to higher operating costs, and may also result in the loss of ore. A higher production rate within an existing mining system, likewise, increases unit operating costs. These reduce operating profits and act to lower the present value. / Both static and dynamic optimization methods are developed. Static optimization refers to determining the constant cutoff grade and production rate that maximize the total discounted operating profits. Dynamic optimization refers to the situation in which periodical adjustments are allowed for the production variables. In this case, declining cutoff grade and production rate schedules within an established mining system yield higher total discounted profits over the static solution. In general, the schedule is controlled by the discount rate, as well as by trade-offs between ore quality and reserves, and between production rate, cutoff grade and production costs. / The study subsequently focuses on the choice of installed capacity at the mine development stage. The objective here is to find the installed capacity level that maximizes the net present value of the project. The consideration of capital costs alone tends to limit the increase in installed capacity. The preproduction period has a similar effect. When both variables are combined, the increasing preproduction period and capital costs associated with higher levels of installed capacity impose a severe burden on the maximization process, causing limitations to the rising trend of optimum installed capacity at high discount rates.
| Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:QMM.39748 |
| Date | January 1992 |
| Creators | Park, Yearn Hong |
| Contributors | Bilodeau, Michel L. (advisor) |
| Publisher | McGill University |
| Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Format | application/pdf |
| Coverage | Doctor of Philosophy (Department of Mining and Metallurgical Engineering.) |
| Rights | All items in eScholarship@McGill are protected by copyright with all rights reserved unless otherwise indicated. |
| Relation | alephsysno: 001325983, proquestno: NN87539, Theses scanned by UMI/ProQuest. |
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