Optimizing Long‐Term Production Plans in Underground and Open Pit Copper Mines

Posted: 25 May 2010

See all articles by Rafael Epstein

Rafael Epstein

University of Chile - Engineering Department

Marcel Goic

Carnegie Mellon University - David A. Tepper School of Business

Andres Weintraub

affiliation not provided to SSRN

Jaime Catalán

affiliation not provided to SSRN

Pablo Santibáñez

affiliation not provided to SSRN

Rodolfo Urrutia

affiliation not provided to SSRN

Raúl Cancino

affiliation not provided to SSRN

Sergio Gaete

affiliation not provided to SSRN

Augusto Aguayo

affiliation not provided to SSRN

Felipe Caro

University of California, Los Angeles - Anderson School of Management

Date Written: April 22, 2010

Abstract

We present a methodology for long‐term mine planning based on a general capacitated multi-commodity network flow problem formulated as a comprehensive math programming model. The planning methodology considers underground and open pit ore deposits sharing multiple downstream processing plants over a long horizon. The purpose of the model is to optimize several mines in an integrated fashion, though the real size instances are hard to solve due to the combinatorial nature of the problem. We tackle this by solving the relaxed problem of a tight linear formulation and we round the resulting near‐integer solution with a customized procedure. The outcome of this project has been implemented at Codelco, the largest copper producer in the world. Since 2001, the system is used on a regular basis and has increased the net present value of the production plan for a single mine by 5%. Moreover, the integrated approach for multiple mines provided an additional increase of 3%. The system has allowed the planners to evaluate more scenarios. In particular, the model was used to study the option of delaying by four years the conversion of Chiquicamata, Codelco's largest open pit mine, to underground operations.

Suggested Citation

Epstein, Rafael and Goic, Marcel and Weintraub, Andres and Catalán, Jaime and Santibáñez, Pablo and Urrutia, Rodolfo and Cancino, Raúl and Gaete, Sergio and Aguayo, Augusto and Caro, Felipe, Optimizing Long‐Term Production Plans in Underground and Open Pit Copper Mines (April 22, 2010). Available at SSRN: https://ssrn.com/abstract=1609888

Rafael Epstein

University of Chile - Engineering Department ( email )

Republica 701 Santiago
Chile

Marcel Goic

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268 5162 (Phone)

Andres Weintraub

affiliation not provided to SSRN ( email )

Jaime Catalán

affiliation not provided to SSRN ( email )

Pablo Santibáñez

affiliation not provided to SSRN ( email )

Rodolfo Urrutia

affiliation not provided to SSRN ( email )

Raúl Cancino

affiliation not provided to SSRN ( email )

Sergio Gaete

affiliation not provided to SSRN ( email )

Augusto Aguayo

affiliation not provided to SSRN ( email )

Felipe Caro (Contact Author)

University of California, Los Angeles - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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