Risk Analysis in Open Pit Mine Planning

Sophisticated pit optimisation software has allowed mine planning engineers to generate mining outlines that consider the numerous factors that have a major effect on the success or otherwise of a mine plan. The outlines are generally generated using a range of values for which one can assume a fixed mining cost and a variable revenue. During analysis, the expected costs and revenues are used to investigate the cashflow and sensitivities. Ultimately, the final pit and incremental outlines, or shells, are selected for a given expected price. This paper proposes an alternative method for incremental pit shell selection that considers the risk the mine be prepared to accept. The life of mine is divided into a number of Business Risk Periods (BRPs). The BRP represents the period of time over which the owner is prepared to invest capital. During each BRP, the mine will then operate at a selected investment cost which is generally equal to or greater than the minimum required to meet production targets. In this way, a robust mine plan can be produced which allows the mine to react to change without having to alter the incremental shell limits while maintaining a strategic risk profile. This paper will summarise factors to be considered in selection of the BRP and the incremental pit shells within the BRP.