Examining system configuration in an open pit mine design

Current industry practice aims to develop mine designs with a fixed system configuration for a single set of inputs; without regard for uncertainty. Uncertainty is a key element of mining which causes variability in the inputs to the decision making process. Various sources of uncertainty exist in mining projects which may stem from volatility in commodity prices, unknown geological conditions, variable costs or unpredictable productivities. Design approaches that attempt to leverage this uncertainty are proposed and compared in this paper; namely, flexible, robust and operational designs. An analysis of these system configurations reveal that a flexible system configuration generates more value than a robust system configuration, which in turn generates more value than a fixed system configuration. However, a flexible system configuration cannot be practically implemented due to constant change. A robust configuration provides a solution where change can be handled and the analysis of the flexible system configuration provides an optimal frontier (value potential) to compare alternatives. An operational system configuration can be generated by analysing the system configurations generated by flexible and robust design. This paper uses a case study to develop and compare these modelling methodologies and proposes an operational system configuration; as a best fit.