The Effective Management of Geologic Risk in Mining

Investment in mining projects, like most business investment, is susceptible to risk and uncertainty. The ability to effectively identify, assess and manage risk may enable strategic investments to be sheltered and operations to perform closer to their potential. In mining, geological uncertainty is seen as the major contributor to not meeting project expectations. The need to assess and manage geological risk for project valuation and decision-making translates to the need to assess and manage risk in any pertinent parameter of open pit design and production scheduling. This is achieved by explicitly taking geological uncertainty into account as part of the mine optimization process. This thesis develops a method that enables geological uncertainty to be effectively modeled and the resulting risk in long-term production scheduling to be quantified and managed. In addition to maximizing economic returns, the new method minimizes the risk of deviating from production forecasts. This ability represents a major advance in the risk management of mining projects and operations.