Designing the most probable final pit limit of open pit mines considering price uncertainty

The aim of the planning process for an open pit mine is usually to find optimum annual schedules that will give the highest Net Present Value (NPV). The primary input of this procedure is an economic block model, which includes a set of mining blocks representing the ore body and the surrounding rock. Net economic value is assigned to each block based on the revenue of recoverable metal content in a given block and subtracting all the operating costs, comprising mining, processing, refining, and selling costs. An economic evaluation of each block requires the estimation of ore tonnage and grade of mining blocks as well as some economic parameters such as metal prices and operation costs. In the current pit design approaches, the block economic values are calculated using a fixed known value. In this paper, using the metal prices in the past as well as the Monte Carlo simulation method, the most probable ultimate pit is obtained.

Methodology and Approaches:

In this article, the price distribution function of the metal price (copper) was obtained using the metal price history. Then 100 prices were simulated using Monte Carlo simulation and the expected value of each block was obtained using these simulated values of other fixed technical and economic parameters. Finally, by using these values and using the NPV Scheduler software, a single optimal pit was obtained. 

In this article, the expected value of the blocks was obtained using the Monte Carlo simulation method, and then the optimal pit, which is actually the most probable pit, was obtained. Because the price history of the metal is considered in the design process, the obtained pit has little sensitivity to the changes in the price of the metal in the future.