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

Operations Research, 60(1): 4-17. January-February 2012.

14 Pages Posted: 11 Apr 2012

See all articles by Rafael Epstein

Rafael Epstein

University of Chile - Engineering Department

Marcel Goic

University of Chile - Industrial Engineering

Andres Weintraub

affiliation not provided to SSRN

Jaime Catalan

University of Chile - Foundation for Technology Transfer

Pablo Santibanez

University of Chile - Foundation for Technology Transfer

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 2010

Abstract

We present a methodology for long-term mine planning based on a general capacitated multicommodity network flow formulation. It 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, but real size instances are hard to solve due to the combinatorial nature of the problem. We tackle this by solving the relaxation of a tight linear formulation, and we round the resulting near-integer solution with a customized procedure. The model has been implemented at Codelco, the largest copper producer in the world. Since 2001, the system has been used on a regular basis and has increased the net present value of the production plan for a single mine by 5%. Moreover, integrating multiple mines provided an additional increase of 3%. The system has allowed 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.

Keywords: industries, mining, metals, networks/graphs, multicommodity, linear programming, large-scale

Suggested Citation

Epstein, Rafael and Goic, Marcel and Weintraub, Andres and Catalan, Jaime and Santibanez, 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 2010). Operations Research, 60(1): 4-17. January-February 2012.. Available at SSRN: https://ssrn.com/abstract=2038561

Rafael Epstein

University of Chile - Engineering Department ( email )

Republica 701 Santiago
Chile

Marcel Goic

University of Chile - Industrial Engineering ( email )

República 701, Santiago
Chile

Andres Weintraub

affiliation not provided to SSRN ( email )

Jaime Catalan

University of Chile - Foundation for Technology Transfer ( email )

Avda. Beauchef 993
Santiago
Chile

Pablo Santibanez

University of Chile - Foundation for Technology Transfer ( email )

Avda. Beauchef 993
Santiago
Chile

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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