Optimum Open Pit Mine Production Scheduling by Lagrangian Parameterization - Introduction

Production scheduling of an open pit mine is one of the most important steps in open pit mine planning. The production schedule of a mine defines the distribution of cash flows and as a result directly influences the net present value and overall economic feasibility of a project. It is becoming more and more critical to obtain an exploitation schedule of a deposit such that highest possible returns are achieved from a project. As the mining industry mines lower and lower grade ores, production scheduling is becoming a key item which can make or break a project. Although the need to plan and operate a mine with an optimum production schedule has been obvious for some time, the methods used to obtain such a schedule have not been. There is not a single, mathematically proven, optimum mine production scheduling algorithm which is widely accepted and used today. In an attempt to determine a production schedule which is optimum, a new algorithm was developed. This algorithm, in theory, is based on the lagrangian concepts of mathematics and in practice is based on the parameterization concept of mining. This paper describes the fundamentals of this newly developed algorithm.