Optimum mine production rate based on price uncertainty.
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Date
2019
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Abstract
The production rate of a mining operation has an important effect on the opera-
tional cycle and gross profit, which are often evaluated based on engineering practices.
Assessment of the economic performance of mine operations in mining engineering
is of great importance because an incorrect production rate can result in significant
financial losses. The production rate is composed of two bases: the cost estimation and
the price scenario. Bureau of Mines studies performed on American mines indicated
that processing costs can be estimated through the production rate. This article pro-
poses to connect the model presented by the Bureau of Mines and queuing theory to
describe the operational costs, which are used to develop a production optimization
methodology. The proposed cost composition describes a production system to verify
the law of diminishing returns and the economy of scale. Between these regions of the
production curve, the optimum point was determined with mathematical precision.
Description
Keywords
Marginal profit, Mine optimization, Elasticity, Price simulation
Citation
SOUZA, F. R. et al. Optimum mine production rate based on price uncertainty. REM - International Engineering Journal, Ouro Preto, v. 72, p. 625-634, out./dez. 2019. Disponível em: <https://www.scielo.br/j/remi/a/ssHFzDx7sgQMkDvtj34mkwy/?lang=en>. Acesso em: 29 abr. 2022.