A linear programming model for long-term mine planning in the presence of grade uncertainty and a stockpile

The complexity of an open pit production scheduling problem is increased by grade uncertainty. A method is presented to calculate the cost of uncertainty in a production schedule based on deviations from the target production. A mixed integer linear programming algorithm is formulated to find the mining sequence of blocks from a predefined pit shell and their respective destinations, with two objectives: to maximize the net present value of the operation and to minimize the cost of uncertainty. An efficient clustering technique reduces the number of variables to make the problem tractable. Also, the parameters that control the importance of uncertainty in the optimization problem are studied. The minimum annual mining capacity in presence of grade uncertainty is assessed. The method is illustrated with an oil sand deposit in northern Alberta. Keywords: Production scheduling, Geostatistics, Conditional simulation, Kriging, Cost of uncertaint