A methodological model to assist in the optimization and risk management of mining investment decisions

Abstract

Identifying, quantifying and minimizing technical risks associated to investment decisions is a key challenge for the minerals industry decision takers and investors. However, risk analysis in most bankable mine feasibility studies are based on stochastic modelling of project NPV which, in most cases, fail to provide decision makers with a truly comprehensive analysis of risks associated to technical and management uncertainty and, as the result, are of little use for risk management and project optimization. This paper presents a value-chain risk management approach where project risk is evaluated for each step of the project lifecycle, from exploration to mine closure, and risk management is performed as part of a stepwise value added optimization process.