11:30 a.m. | IMCET 2019 | Antalya, Turkey
A major step in mine planning and design is to define ultimate expansion of the mine called final or ultimate pit.When it comes to final pit selection there are usually more than one option to choose from. Most deposits support a range of sizes of pits that all are technically mineable and economically profitable. The size of final pit greatly affects other aspects of project such as life of mine, capital requirement, scale of operation, equipment size, profitability and resource utilization. Pit size selection is technically, financially and socially a complex, multivariable function. Due to contradicting factors, this process often becomes complex and turns into a decision-making paradox. Therefore, to reduce the risk and to make sure that all aspects are fulfilled, a holistic approach should be adopted in the analysis. It is important to understand the conditions and consequence of choosing different sizes of pits.
Companies often target the highest net present value (NPV) when planning for a mining project. When this is the case, long-term/low production rate projects cannot compete with short-term/high production rate projects. This is due to the time value of money, reflected by the project’s discount rate. However, NPV is not the only way to evaluate projects. There are some influential factors that are difficult to quantify such as; the outlook of commodity prices and interests of communities and other stakeholders.
