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Date of publication xxxx 00, 0000, date of current version xxxx 00, 0000.
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A Stochastic Mixed Integer Programming

Framework for Underground Mining Production
Scheduling Optimization Considering Grade
Uncertainty
Shuwei Huang1,2, Guoqing Li1, Eugene Ben-Awuah2, Bright Oppong Afum 2 and Nailian Hu1
1
School of Civil and Resource Engineering, University of Science and Technology Beijing, Beijing 100083, China
2
Mining Optimization Laboratory (MOL), Bharti School of Engineering, Laurentian University, Sudbury, ON P3E 2C6, Canada

Corresponding author: Guoqing Li (e-mail: qqlee@ustb.edu.cn).

This work was supported in part by the National Key R&D Program of China under Grant # 2018YFC0604400. The work of Shuwei Huang was supported
by the China Scholarship Council for a joint Ph.D. program at Laurentian University under Grant # CSC.201706460043.

ABSTRACT Conventional mine planning approaches use an estimated orebody model as input to generate
optimal production schedules. The smoothing effect of some geostatistical estimation methods cause most
of the mine plans and production forecasts to be unrealistic and incomplete. With the development of
simulation methods, the risks from grade uncertainty in ore reserves can be measured and managed through
a set of equally probable orebody realizations. In order to incorporate grade uncertainty into the strategic
mine plan, a stochastic mixed integer programming (SMIP) formulation is presented to optimize an
underground cut-and-fill mining production schedule. The objective function of the SMIP model is to
maximize the net present value (NPV) of the mining project and minimize the risk of deviation from the
production targets. To demonstrate the applicability of the SMIP model, a case study on a cut-and-fill
underground gold mining operation is implemented.

INDEX TERMS production schedule optimization, mining industry, stochastic mixed integer programming,
grade uncertainty, underground mining

I. INTRODUCTION (MIP) or mixed integer linear programming (MILP) became

In general, mine production scheduling is the determination
of the sequence and processing of mineralized material that
maximizes the overall net present value subject to technical
and operational constraints, while shielding the mining
operation from risk [1, 2]. Strategic mining decisions could
be made at different time scales entailing varying objectives
for long-term, medium-term, and short-term plans. Long-
term mine production scheduling usually takes place at an
annual scale for three to five years or more. The optimal
schedule usually delimits the ore, metal and waste tonnages,
average grades, and cash flows of each period. It is one of the
most challenging and complex tasks in mine planning
optimization due to the computational complexity and the
uncertainty of input parameters, particularly, the quantity and
quality of mineralized material.
Optimization methods in underground mining were
introduced in the 1980s [3, 4]. Mixed integer programming
a well-suited modeling method for optimizing production
schedules of underground mines since the 1990s [5, 6]. More
recently, Nehring et al. [7] and Nehring et al. [8] presented
MIP models for sublevel stoping operations to optimize
short- and long-term production schedules and equipment
allocation. These optimization approaches simplify the model
with fewer variables and provide optimal solutions to
sublevel stoping scheduling problems within a reasonable
time frame. Pourrahimian [9] and Pourrahimian and Askari-
Nasab [10] proposed a theoretical optimization framework
based on a MILP model for long-term production scheduling
in underground block-caving aiming to maximize net present
value (NPV) within acceptable technical and operational
constraints. Huang et al. [2] developed a MILP model for an
underground cut-and-fill mining production scheduling,
which aims to maximize the NPV and generate a practical,
operational, and long-term mining schedule. However, these

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deterministic formulations described above consider a single
estimated orebody model and are incapable of dealing with
in-situ variability of orebodies [11]. The deterministic
representation of orebodies smoothens the metal grades and
do not adequately represent the deposit. Thus, resulting in
unrealistic mine plans and unlikely revenue forecasts.
Drillhole data is generally made up of sparse and discrete
point information, which is far from enough to determine
accurate three-dimensional orebody information. The mineral
grades of blocks in the block model are estimated in the
unsampled regions based on these sample data. As the main
input of mine optimization models, the uncertainty of grade
estimation can affect the metal content of blocks as well as
economic block values. Consequently, this will impact the
production plan and NPV of the mining operation. These
limitations have motivated researchers to seek to develop
risk-based optimization frameworks for mine planning that
can incorporate and manage geological uncertainty [12].
With the development of simulation methods, the risks from
geological uncertainty in ore reserves can be measured and
managed through a set of equally probable orebody
realizations. Dimitrakopoulos et al. [13] quantified the
geological uncertainty from grade, tonnage, and rock-type for
a conventional mine production schedule using 50 equally
probable simulated realizations of the deposit. The
probabilistic approach for risk analysis showed that the
expected NPV only had a 5% chance of being realized and
the median NPV from the stochastic simulations was 25%
lower than the scheduling result from the estimated orebody.
Although this method can be used for sensitivity analysis of
the geological risk, it cannot be capable for integrating and
evaluating the uncertainty and risk accurately. The earliest
attempt to develop a long-term mining schedule while
incorporating geological uncertainty was established and
implemented in an open-pit mine [14]. The authors used a
multistage optimization framework to obtain the most
profitable mining sequence while compatible with orebody
uncertainty. This approach made significant improvements,
yet it is a step-wise framework and does not integrate
geological uncertainty into the production scheduling
optimization formulation directly.
The next generation of stochastic optimization based on
stochastic integer programming (SIP), provides a more
robust solution in dealing with uncertainty. The SIP model
was first introduced to integrate geological uncertainty and
manage risk directly in the production scheduling
optimization by Ramazan and Dimitrakopoulos [11, 15].
This approach maximizes the NPV and minimizes geological
risk from production targets by penalizing the simulated
realizations deviations in the objective function
simultaneously. Similar studies and applications have been
implemented along this line of thought. Ramazan and
Dimitrakopoulos [16] developed an efficient model based on
two-stage SIP for optimizing the production schedule for a
small gold deposit and showed a 10% increase in expected
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NPV when compared to the deterministic design. Leite and
Dimitrakopoulos [17] tested a SIP formulation at a copper
mine to generate a 29% higher NPV in comparison with the
conventional mine planning method. Benndorf and
Dimitrakopoulos [18] developed a SIP formulation to address
joint multi-element grade uncertainty and successfully
applied it to an open-pit iron ore mine. The optimal schedule
demonstrated that the SIP model can generate a higher
probability in achieving production targets, which diminishes
the overall project risk and increases the project profit. Asad
and Dimitrakopoulos [19] also incorporated joint financial
and geological uncertainty in the design of open-pit mines.
All the studies above illustrate the merits of using a
stochastic approach to incorporate geological uncertainty in
open-pit production scheduling optimization. However, little
work has been done in terms of incorporating geological
uncertainty in underground mining production schedules,
because of the complexities associated with the development
and implementation of underground mining methods. Based
on Ramazan and Dimitrakopoulos’s approach [16],
Carpentier et al. [20] presented a SIP model with recourse
optimization formulation to generate the optimal long-term
schedule for an underground mining project extension while
considering geological uncertainty, economically minable
lenses, and cut-off grade. However, this work was developed
for a specific purpose and needed more generalization for
stope extraction sequencing. Petro [21] and Montiel et al. [22]
implemented mining complexes optimization comprising
multiple open-pits, underground operations, and processing
destinations under geological uncertainty. Although some
efforts have been made in incorporating geological
uncertainty in underground mining production scheduling,
the application of stochastic optimization is relatively recent
and the methods available in the literature remains to be
verified when applied to different types of deposits and
underground mining methods. The research question here is;
“can a practical mine plan be generated taking into
consideration grade uncertainty for underground cut-and-fill
extraction with backfilling”?
There are currently limited production scheduling
optimization models available for large scale underground
cut-and-fill mining. This research seeks to develop a risk-
based optimization framework using stochastic mixed integer
programming (SMIP) that effectively integrates grade
uncertainty into the optimization of long-term production
scheduling in underground cut-and-fill mining. The objective
function of the SMIP model is to maximize the net present
value and balance the risk associated with grade uncertainty
simultaneously, while meeting all technical constraints and
operational requirements.
II. DEFINITIONS AND ASSUMPTIONS
Cut-and-fill mining provides better selectivity and is
preferred for steeply dipping orebodies with an irregular
shape, discontinuities and dissemination. Together with
2
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room-and-pillar mining, it is the most flexible of respectively, and one continuous variable to control the
underground mining methods. In cut-and-fill mining, there portion of a stope to be mined in one-time period. The
are horizontal development levels connected to the main advancement and mining activities are repeated until mining
shaft at regular vertical intervals along the orebody. The ore has progressed along the entire strike of the orebody on a
is extracted and removed from a stope. When a stope is level.
mined, the void is backfilled and allowed to cure before
Outside stope Inside stope
adjacent stopes could be mined with the backfill material
serving as a working platform or artificial pillar. A typical
layout of planned stopes to be developed and extracted on
selected levels is illustrated in Figure 1. Drilling Extraction Backfilling

Main shaft Advancement Mining

Ground surface
Level Development Stope Production

Figure 2. Stope production phases.

Stopes

III. A SMIP FORMULATION FOR LONG-TERM

UNDERGROUND MINING PRODUCTION SCHEDULING
OPTIMIZATION
Drift
A. NOTATIONS
The following notations, sets, parameters, and definitions are
used to construct the objective function and constraints of the
Figure 1. A schematic diagram of stopes and level development layout.
SMIP model for underground cut-and-fill mining.
1) INDICES
The principal means of access to an underground ore body t schedule time periods: t = 1, 2, …, T, where T is the
is the main shaft, decline or adit. In this case, the main shaft schedule duration.
is sunk from the surface downward to a predetermined depth v advancement identification: v = 1, 2, …, V, where V
somewhat below the bottom of the orebody. Generally, the is the total number of advancements.
main shaft also serves as part of the ventilation system n stope identification: n = 1, 2, …, N, where N is the
together with auxiliary shaft and return airways. These total number of stopes.
development constructions are often completed at one time s realization identification: s = 1, 2, …, S, where S is
as a permanent facility for subsequent stope development and the total number of equally probable orebody realizations.
operation. However, these infrastructure developments are 2) DECISION VARIABLES
not within the scope of this research. avt  0,1 binary integer variable; equal to one if the
In cut-and-fill mining, a typical mining cycle for each advancement v is to be scheduled in time period t, otherwise
stope includes a number of sequential production phases: zero.
advancement, drilling, extraction, and backfilling; as ent  0,1 binary integer variable; equal to one if the
illustrated in Figure 2. Advancement including the necessary mining of stope n is to be scheduled in time period t,
crosscuts, transport drifts, and proper ventilation raises, must otherwise zero.
be provided to the worker and equipment. When the xnt   0,1 continuous variable; representing the
advancement for a stope is complete, the ore inside the stope portion of stope n to be extracted in time period t. This
can be mined at any time or left as the preparatory reserve. variable is linked to the stope mining variable e and only
Afterwards, stope mining activities such as drilling (charging takes a non-zero value when e is non-zero.
and blasting), extraction and backfilling can begin. Generally, 3) SETS
advancements, as well as developments, are prepared outside An(J) for each stope n, there is a set An(J) defining the
the stope. Mining activities including drilling, extraction and adjacent stopes that cannot be mined simultaneously with
backfilling, are inside the stope. Each phase is dependent stope n; where J is the total number of stopes in set An(J).
upon the completion of the previous one. It is important to Dn(I) for each stope n, there is a set Dn(I) defining the
note that, the mining activities inside the stope must be done advancements that must be completed prior to the mining of
in sequence without any time delay for ground control stope n; where I is the total number of advancement activities
purposes and to provide a working surface for future stope in set Dn(I).
mining. Therefore, taking into consideration this dependence Dv(I) for each advancement v, there is a set Dv(I) defining
sequence, the SMIP model assigns two binary variables to the advancements that must be completed prior to the current
control the practical advancement and mining sequence

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advancement v; where I is the total number of advancement precisely, the first part (Part 1) of the objective function
activities in set Dv(I). refers to the total discounted cashflow from mining and
Ll(M) for each level l, there is a set Ll(M) defining all the processing ore material for all realizations. The second part
stopes on this level; where M is the total number of stopes in (Part 2) minimizes the costs associated with deviating from
set Ll(M). the ore grade operating targets for all realizations. The third
4) PARAMETERS part (Part 3) minimizes the total costs associated with
Rnt , s revenue, generated by selling the final product from deviating from the ore tonnage operating targets. Part 2 and 3
stope n in period t for realization s. aim to control grade uncertainty by minimizing the
g n, s average grade of ore portion of stope n for variability from the ore grade and ore tonnage targets.
realization s. The per-unit penalty costs (denoted by ctg and cto in
on the ore tonnage of stope n. Equation (1)) for the deviations are discounted in terms of
rt processing recovery; the proportion of mineral geological risk discounting (GRD) [23]. It can be used to
recovered in period t. control the grade and ore tonnage risk distribution over time.
pt selling price in terms of obtainable per unit of This further motivates the extraction of lower-risk and
product sold in period t. higher-grade stopes in the early periods and leaves the
CAvt total cost for advancement v in period t. higher-risk stopes for later periods. It should be noted that it
cavt cost per tonne for advancement v in period t. is crucial for the operation to mine less risky parts of the
adv the tonnage of advancement v. deposits in early periods with the limited geological
CEnt total cost in terms of mining for stope n in period t. information. As mining progresses, with more geological
cent cost per tonne in terms of mining for stope n in information available in the form of operational exploration,
period t. we can reproduce the schedule for the later periods. When
CPnt total cost in terms of processing ore from stope n in the GRD is set to zero, a balanced-risk profile is produced.
period t. The per-unit value of penalty costs is defined based on the
cpnt cost per tonne in terms of processing ore from stope impact of one unit of deviation from the related production
n in period t. target on the overall mining strategy. They are defined based
cgt , − per-unit penalty cost in terms of the lower grade on trial and error with consideration of the magnitude of
target deviation in period t. different production targets. Therefore, the per-unit value of
cgt , + per-unit penalty cost in terms of the upper grade the penalty can be altered to prioritize the most critical
target deviation in period t. operational targets according to the optimization
gDevst , − continuous variable; the shortfall from the grade requirements in the mining complex. Two binary decision
upper bound in period t for realization s. variables are used to model the advancement and extraction
gDevst , + continuous variable; the excess over the grade lower in each period, and a continuous decision variable is used to
bound in period t for realization s. model the portion of a stope which is mined in each period.
cot , − per-unit penalty cost for the lower ore tonnage The total revenue is defined in Equation (2) and the
target deviation in period t. advancement, mining, and processing costs are defined in
cot , + per-unit penalty cost for the upper ore tonnage Equations (3)-(5). By this uncertainty-integrated objective
target deviation in period t. function, the SMIP model can reduce the risk of not meeting
oDev−t continuous variable; the shortfall from the ore the planned production targets and provide a feasible
tonnage upper bound in period t. schedule.
oDev+t
1 S T V N  ( Rn , s − CEn − CPn )  xn − CAv  av 
continuous variable; the excess over the ore tonnage t t t t t t

lower bound in period t. Max    Part 1

S s =1 t =1 v =1 n =1  (1+i ) 
t
lelt binary integer variable; when it is equal to one, it 
means there are mining activities in progress on level l in 1 S T  cg , +  gDevs , + + cg , −  gDevs , − 
t t t t

-    Part 2
period t. (1+g )
t
S s =1 t =1  
N let the maximum number of active levels available for
T  c t  oDev t + c t  oDev t 
mining in period t. -  o , + + o,− −
 Part 3
( )
t
t =1  1+ g 
N ed the maximum length of mining duration for stopes. 
i the financial discount rate. (1)
g the geological discount rate; used to control the risk
Rnt , s = g n , s  on  r t  pt (2)
distribution over time.
CAvt = cavt  ad v (3)
B. OBJECTIVE FUNCTION
The objective function of the SMIP model in Equation (1) is CEnt = cent  on (4)
to maximize the expected NPV and at the same time
minimize the deviations from the production targets. More CPnt = cpnt  on (5)

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C. OPERATIONAL CONSTRAINTS completed. As shown in Figure 3, an advancement atv cannot

1) ADVANCEMENT AND MINING CAPACITY
CONSTRAINTS
Equation (6) ensures that the total tonnage of advancement
taking place from all stope advancement activities in each
period cannot exceed the predefined advancement capacity
available in that period. Similarly, Equation (7) ensures that
the total tonnage of material mined in each period cannot
exceed the predefined mining capacity available in that
period. aut, eut are the maximum advancement and mining
capacity in period t, respectively.
begin until all its predecessor activities Dv(I) have been
completed. ati ∈Dv(I) is a binary variable representing the
advancements prior to the current advancement to be
scheduled or not scheduled by time period t. Similarly, ati∈
Dn(I) is a binary variable representing the advancements prior
to the stope to be scheduled or not by time period t.
Equations (10) and (11) guarantee practical advancement and
stope sequencing.
Extraction direction

 ( ad  ant )  au t t  1,..., T 
v

v (6) Stope Stope Stope Stope …… Stope

v =1

(o  xnt )  eu t
N

n t  1,..., T  (7)
n =1
Current Predecessor
2) PROCESSING QUANTITY CONSTRAINTS advancement advancement
Equation (8) is a flexible constraint for the total tonnage
processed in each period and in each realization. The Figure 3. Schematic representation of advancements.
continuous variables oDevt+ and oDevt- are used as buffers to
allow deviations but these deviations are penalized in the t
objective function. Penalizing such deviations ensure that the avt −  aik  0 i  Dv ( I ) , v  1,...,V  , t  1,...,T  (10)
k =1
proportion of ore processed at the plant is within the required
targets as much as is feasible. put and plt are the upper and t

lower bounds for ore tonnage mined by the limiting ent −  aik  0 i  Dn ( I ) , n  1,..., N  , t  1,...,T  (11)
k =1
processing capacity in period t, respectively.
2) NON-ADJACENT STOPE PRODUCTION CONSTRAINT
N
 ( on  xn ) − oDev+  pu t  1,..., T 
t t t Non-adjacent stope production constraint is a geotechnical
 n =1 constraint which focusses on limiting the size of unsupported
N (8)
 ( o  xt ) + oDevt  pl t
 n n − t  1,..., T  void areas. Figure 4 shows horizontal and vertical view of
n =1 nine adjacent stopes in two kinds of spatial constraints
required to ensure the geotechnical stability of the mine. If
3) GRADE BLENDING CONSTRAINTS
the central stope H5 is in the mining state, all mining
Equation (9) seeks to adjust the average grade of ore
activities are forbidden in the adjacent stopes (H2, H4, H6, H8)
production within the desired range in each period and in
(Figure 4 (1)). Similarly, if the central stope V5 is in the
each realization. Similar to the processing quantity
mining state, all mining activities are forbidden in the
constraints, the excess and shortage of the desired grade
adjacent stopes (V2, V4, V6, V8) (Figure 4 (2)). Equation (12)
range in each period across all geological realizations are
ensures that all forms of simultaneous adjacent stope
penalized in the objective function. gut and glt are the
activities are avoided to prevent excessively large
respective upper and lower bounds for the desired grade
unsupported voids.
range in period t.
N
 ( g n , s -gu )  on  xn − gDevs , +  0 t  1,...,T  , s  1,..., S 
t t t V1 V2 V3
H1 H2 H3
 n =1 H4 H5 H6
N H7 H8 H9 V4 V5 V6 Unmined
 ( gl t -g )  o  x t − gDev t  0
 
 n =1
n, s n n s,− t  1,...,T  , s  1,..., S  Mining
Forbidden
V7 V8 V9
(9) (1) (2)

D. SEQUENCING AND GEOTECHNICAL CONSTRAINTS

Figure 4. Schematic representation of activities around stopes. ((1) a
1) ADVANCEMENT AND STOPE SEQUENCING horizontal view of nine adjacent stopes; (2) a vertical view of nine
CONSTRAINTS adjacent stopes)
A stope is available for mining only if its advancements have
already been completed or are in progress in the same period. ent + etj  1 j  An ( J ) , n  1,..., N  , t  1,...,T  (12)
Meanwhile, the advancements prior to the current
advancement required to exploit a stope must first be 3) ACTIVE LEVELS CONTROL CONSTRAINTS

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These constraints are typically used in a cut-and-fill mining A. IMPLEMENTATION OF THE SMIP MODEL
scheduling model. Active levels control constraints take into The proposed model is implemented on an underground cut-
account the equipment mobility and access required for the and-fill gold mining operation. The deposit orientation is
underground mine production scheduling optimization N45°E, dipping to SE at an angle between 30°~50°. The
framework. As we all know, a large number of active levels main metallic minerals in the deposit are pyrite, electrum and
might lead to serious operational problems. Therefore, a native gold. The geological database consists of 490 drill
defined maximum number of simultaneous active levels holes with 13967 composites covering an area of 1300 by
allow mine planners to adjust production strategies to enable 600 m2, approximately. Using the available geological
different application scenarios depending on available information, one mineralized domain is defined and modeled.
infrastructure, production rates, equipment capacities, and the The deposit is estimated to contain 32 million tonnes of ore,
stability of the surrounding rocks. In addition, the active with an average grade of about 1.8 g/t Au. Figure 5 shows
levels control can also be considered as indirect geotechnical the schematic orientation of the orebody. This case study area
constraints. Equations (13) and (14) control the maximum contains 200 stopes distributed on 8 levels. The size of a
number of simultaneous active levels in each period of the stope is 50 m in length, 40 m in height, and the width follows
schedule. In general, the active levels control constraints help that of the orebody ranging from 10 to 30 m.
the optimization model to generate a more operationally
feasible mining pattern, indirectly leading to a practical
maximum NPV.
t
 1 M

  M  x
k =1 m =1
k
m − lelk   0

m  Ll ( M ) , l  1,..., L , t  1,...,T 

(13)
L

 le
l =1
t
l  N let t  1,..., T  (14)

Figure 5. Schematic orientation of the orebody.

E. VARIABLES CONSTRAINTS
In the proposed model, the variables constraints control the
The SMIP framework proposed in Section 3 can provide a
logics and interrelationships of the binary and continuous
stochastic strategic mining schedule that accounts for grade
variables that define advancement and mining to ensure all of
variability and uncertainty. The goal of the stochastic
them are within desired ranges. Equation (15) links the
optimization is to seek a maximum profit from the mining
starting of the stope mining to the extraction percentages
operation while decreasing the overall geological risk.
from this stope and ensures a non-zero value for continuous
Fifteen stochastic simulated orebody realizations are used for
variable x when the binary variable e is non-zero. By setting
risk assessment and optimization. The simulated orebody
the sum of binary variables of advancement and mining of a
realizations are generated by direct sequential simulation
stope over all periods less than or equal to one, Equations (16)
(DSSIM) within the mineralized domain [24]. Fifteen
and (17) ensure that all stopes only can be advanced and
realizations were used for the case study following previous
mined once in the mine life. Equation (18) ensures that the
research studies, which show that the optimization results are
mining duration of a stope cannot exceed the predefined
not sensitive to the use of more realizations beyond ten; and
number of periods. According to the variety of application
twenty to four hundred realizations will not provide different
scenarios, this constraint allows mining from a stope over
results in terms of schedules and forecasts [25, 26].
multiple periods. It provides additional practicality and
To demonstrate the benefit of integrating grade uncertainty
functionality to the formulation.
in long-term production scheduling, the stochastic approach
xnt − ent  0 n  1,..., N  , t  1,..., T  (15) is compared to a conventional method. An estimated orebody
model generated using ordinary kriging (OK) serves as a
T
comparison to the application of this stochastic framework.
a
t =1
t
v 1 v  1,...,V  (16)
Therefore, two different cases are implemented to
demonstrate the influence of geological uncertainty and to
T

x t
n 1 n  1,..., N  (17) outline the robustness and impact of the risk-based mine plan
t =1 generated by the SMIP model. The two case study scenarios
T are implemented as follows:
e
t =1
t
n  N ed n  1,..., N  (18) (1) The stochastic optimization method (SMIP): a
stochastic mine production schedule is generated based on
fifteen orebody realizations using the SMIP model with
IV. CASE STUDY
reasonable technical, economic and risk-control parameters.

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The stochastic optimization method generates a stochastic
mine production plan which is referred to herein as SMIP
schedule. It should be noted that although the SMIP model
had stochastic element, grade, the use of explicit realizations
enabled us to formulate the problem deterministically. As
additional ore reserve data becomes available subsequently,
the SMIP model needs to be re-run to update the SMIP
schedule.
(2) The conventional optimization method (CM): the
objective function and constraints implemented in the
conventional optimization method are the same as in the
SMIP model. However, this schedule is generated using the
single estimated orebody model as input while maintaining
the same technical, economic and risk-control parameters.
The conventional method generates a solution which is
referred to herein as CM schedule.
Table 1 shows the average values of the simulated orebody
realizations (SIM) and estimated orebody model (EST).
Table 2 shows the technical, economic and risk parameters
used for defining and constraining the optimization model.
The presented case study is solved with Matlab [27] in a
CPLEX [28] environment on a computer with two Intel Xeon
CPU E5-2670 v3 @ 2.30 GHz processors and 64 GB RAM.
The case studies were solved to 5% gap. It contained 7200
binary variables, 3672 continuous variables in CM model and
57600 binary variables, 54576 continuous variables in SMIP
model. The solution times for the case study to generate the
CM schedule is 0.5 hour and the SMIP schedule is 3.4 hours.
Table 1. Average values of the SIM and EST models.
Ore tonnage Average Grade
Model
(Mt) (g/t)
SIM (E-type) 32.05 1.827
EST 32.05 1.806
Table 2. Technical, economic and risk parameters.
Technical and economic parameters
No. Description
1 Advancement cost ($/t)
2 Mining cost ($/t)
3 Processing cost ($/t)
4 Price of gold ($/g)
5 Mining recovery (%)
6 Economic discount rate (%)
7 Maximum advancement capacity (Mt/Period)
8 Maximum mining capacity (Mt/Period)
9 Maximum processing capacity (Mt/Period)
10 Minimum processing capacity (Mt/Period)
11 Maximum grade (g/t)
12 Minimum grade (g/t)
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13 Maximum active levels 3 3
14 Maximum mining duration (Periods) 2 2
Risk parameters
1 Number of realizations 15 1
2 Geologic risk discount rate (%) 20 20
3 Cost of shortage in ore production (unit/tonne) 1000 1000
4 Cost of excess ore production (unit/tonne) 1000 1000
5 Cost of shortage in grade (unit/grade) 160 160
6 Cost of excess grade (unit/grade) 160 160
Note: Period = six months.
B. ANALYSIS OF THE OPTIMIZATION RESULTS: THE
EFFECTIVENESS OF THE SMIP MODEL
In this section, the two case study scenarios are implemented
to demonstrate the effect of the SMIP model. The results of
the stochastic mine production scheduling using the 15
simulations and the conventional optimization approach
using a single estimated orebody model are shown in Figure
6 and Figure 7. Solution time for the SMIP model during this
case study is approximately three hours.
From Figure 6, the ore tonnage mined is approximately
consistent for all periods with an exception of the last year
when the available material is exhausted. Figure 7 shows that
the average grade of ore processed is varying within the
expected ranges before the thirteenth period in both case
studies. In the last few years, the average ore grade shows a
trend of fluctuating downward below the lower bound
because the overall ore quality decreases in the remaining
deposit. These results demonstrate both schedules from
Au(t) SMIP and CM could provide a reasonable, reliable, and
58.56 implementable solution for the underground mining project.
57.88 In addition to the production schedule, the risk profiles of
ore grade and cumulative cash flow for the evaluated results
are shown in Figure 8 and Figure 9. Risk profiles are
calculated using the equally probable representations of the
orebody. The spread of the grades and cumulative cash flows
SMIP CM in each realization provides an indication of uncertainty in
Value Value each period according to the generated schedules (Figure 8
32.12 32.12 (left) and Figure 9 (left)); where P10, P50, and P90 are the
34.04 34.04 tenth, fiftieth and ninetieth percentiles, respectively. The
average grade and cumulative cash flow comparison are
9.81 9.81
presented considering each realization for each period in the
47.64 47.64 stochastic schedule and conventional schedule, as shown in
92.5 92.5 Figure 8 (right) and Figure 9 (right). The variation in grade
8.00 8.00 and NPV outcomes highlight the high-risk periods of the
schedule. It should be observed that there is less risk in
0.40 0.40
deviating from grade targets, and little difference in cash
1.80 1.80 flow in the early periods (Periods 1-9), while the grade and
1.80 1.80 cash flow appear to vary drastically in the later periods
1.76 1.76 (Figure 8 and Figure 9). The overall trend of the coefficient
2.00 2.00 of variation gradually increases from 5% to 30% over time,
providing valuable information for the strategic mine
1.70 1.70
planning. It graphically illustrates that the planned production
7
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targets will have a strong likelihood of being realized in the
early periods depending on the geological information
available now. To reduce this risk and obtain more accurate
forecasts for the later periods, new drill hole data and
exploration information need to be updated over time and the
schedules generated again.
Figure 6. Ore tonnage mined in SMIP and CM schedules over 18 periods.
Figure 7. Average ore grade processed in SMIP and CM schedules over
18 periods.
Figure 8. Risk profiles for ore grade in SMIP and CM schedules.
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C. ANALYSIS OF THE OPTIMIZATION RESULTS:
CONTROLLING GEOLOGICAL RISK
Besides providing a reasonable solution and risk analysis for
the mining operation, a major contribution of the SMIP
model is the ability to control risk. To demonstrate its
effectiveness, another fifty realizations of the deposit were
generated. Using different realizations for both the
optimization and the risk assessment provides a better
representation of the risk resilience of the SMIP schedule.
As we all know, the actual value of the deposit will never
be known except at locations where data are collected in the
future. Conditional simulation provides a model of
uncertainty by a set of equally probable simulated
realizations. In other words, each realization has an equal
probability to be the actual orebody. A comparison between
grade and NPV is described by randomly selecting three
different simulation realizations; the 10th, 25th, and 40th
realizations. The orebody model is replaced with these three
realizations and the stochastic and conventional schedules are
run with the same mining and economic parameters. Figure
10, Figure 11 and Figure 12 show the average ore grade (left)
and cumulative NPV (right) of the stochastic schedule (red)
and the conventional schedule (gray) for three different
realizations, respectively. For these representative
realizations, the expected ore grade in the stochastic results
are more compatible within the desired range and show less
fluctuations when compared to the conventional results.
Evidently, these merits can be attributed to incorporating in-
situ variability and uncertainty into the optimization
formulation. More importantly, from the cumulative cash
flow comparison from the three realizations, the expected
profit shows a 2-9% improvement in NPV from the SMIP
schedule when compared with the CM schedule (Table 3).
Even though the total metal content extracted by the SMIP
schedule is less, the higher NPV is as a result of the SMIP
model scheduling consistently higher grades earlier in the
mine life compared to the CM model.
8
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Figure 9. Risk profiles for cumulative cash flow for SMIP and CM schedules.

Figure 10. Average grade and cumulative NPV from the stochastic schedule (red) and the conventional schedule (gray) for 10th realization.

Figure 11. Average grade and cumulative NPV from the stochastic schedule (red) and the conventional schedule (gray) for 25th realization.

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Figure 12. Average grade and cumulative NPV from the stochastic schedule (red) and the conventional schedule (gray) for 40th realization.

improvement in the expected NPV by the SMIP model, and

Table 3. Comparison of SMIP schedule and conventional schedule. the ability to control the geological risk when compared to
the conventional approach. This model can easily be adapted
Ore tonnage Grade Au NPV
Model to similar underground mining method variations and is
(Mt) (g/t) (t) (M$)
versatile for the generation of long and medium-term plans.
SMIP 31.87 1.89 58.82 2795.08 Additional work will focus on integrating economic
Case-10 CM 30.67 1.91 60.21 2746.33 uncertainties and complex ore flows in the model, as well as
improving optimization solver efficiencies to reduce run time.
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SHUWEI HUANG was born in Hebei, China. NAILIAN HU is currently a Professor with the
He received the B.S. and M.S. degrees in mining University of Science and Technology Beijing.
engineering from the University of Science and His work has been funded by many grants,
Technology Beijing (USTB). He is currently including the National Science Foundation of
pursuing the Ph.D. degree in mining system China and the Ministry of Science and
engineering with the School of Civil and Technology of the People's Republic of China.
Resource Engineering, University of Science and His research interests include mining system
Technology Beijing, and Laurentian University. engineering, mining economics, intelligent
His research interests include mining system mining, and mining safety. He is a member of a
engineering, mining economics, and minig council of the China Gold Association.
optimization.

GUOQING LI received the B.S. degree in

mineral processing engineering and the M.S. and
Ph.D. degrees in mining engineering from the
University of Science and Technology Beijing.
She is currently a Professor with the University of
Science and Technology Beijing. Her work has
been funded by many grants, including the
National Science Foundation of China and the
Ministry of Science and Technology of the
People's Republic of China. Her research interests
include mining system engineering, mining
economics, and intelligent mining. She received
many awards from the China Gold Association.

EUGENE BEN-AWUAH is an Associate

Professor of Mining Engineering at the Bharti
School of Engineering, Laurentian University,
Sudbury, Canada. He is also the IAMGOLD
Research Fellow in Open Pit Mining and a
MIRARCO Research Associate. He holds a
MSc from the University of Mines and
Technology and a PhD from the University of
Alberta in Mining Engineering. Eugene is a
registered professional mining engineer and has
extensive operational, consulting and research
experience from Ghana, Canada and Australia in mine design and
optimization, and mine production management. He is the Principal
Mining Consultant for OptiSim Mining Solutions on mine optimization
and simulation of mining systems. He is a member of the West African
Institute of Mining, Metallurgy and Petroleum (WAIMM) and the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM).

BRIGHT OPPONG AFUM obtained his

master’s degree in Environmental Monitoring and
Analysis from the Aberystwyth University, UK,
and his bachelor’s degree in Mining Engineering
from the University of Mines and Technology
(UMaT), Ghana. He has over 10 years of surface
mining, underground mining, environmental
studies and lecturing experiences. He is currently
a PhD student in the Natural Resources
Engineering (Mining Engineering) program at
Laurentian University. His research is focussed
on open pit to underground mining options and transitions optimization
using mathematical programming. His research interests include blast
optimization, blast impact modeling and prediction studies, atmospheric
impact modeling and prediction studies, applied geostatistics, and mine
closure, reclamation and remediation studies.

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