Mining & Exploration | Wednesday, February 27 | 9:05 am | Room 506
Ultimate pit size selection is among the most fundamental decision-making processes for a project, because it shapes many aspects of mining. Yet, many mining companies select the pit shell with the highest NPV as the ultimate pit. When NPV is the only evaluating criteria, 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 a project’s discount rate. However, complex, multivariable factors (including technical, economic, social, and operational) should be accounted for in the ultimate pit selection process—although they can be difficult to quantify in the early stages of a project. These factors include outlook of longterm prices, power and water supplies, human resources, capital requirements, size and shape of orebody, location, mining method, and interests of communities and other stakeholders. Failing to evaluate any of these in depth might hurt the health of project. By using robust, plausible examples, the author demonstrates the challenges that many mining projects are facing in this regard.
