COST OF RISK AND THE VALUE OF INFORMATION IN MINE PLANNING.

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Abstract

There are many methods available for the estimation of geologic parameters. An interesting property of geostatistical estimation is that when a geologic parameter is estimated for a given volume, not only is the estimate generated but an associated measure of certainty is produced as well. This statistical measure of estimation confidence is called the estimation variance. This paper attempts to develop and present some of the necessary tools required to incorporate estimation uncertainty into mine planning. Geologic uncertainty is portrayed as an economic business risk. This risk is objectively characterized, and the associated cost is quantified. Geologic delineation sampling is viewed in this light as an economic commodity with an associated cost and value. A coal mine planning example is used as a focus in this presentation. The data used is real, though it has been modified to maintain data security and project anonymity.

Original languageEnglish (US)
Title of host publicationApplication of Computers and Operations Research in the Mineral Industry
EditorsR.V. Ramani
PublisherSoc of Mining Engineers of AIME
Pages459-469
Number of pages11
ISBN (Print)0873350588
StatePublished - 1986

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