Utilizing a Value of Information Framework to Improve Ore Collection and Classification Procedures

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Abstract:

This case study utilizes a value of information decision framework to provide mine managers guidance regarding the purchase of ore grade scanners. LKAB's Kiruna mine produces three types of iron ore to meet long-term contractual agreements on a monthly basis. There is a priori uncertainty regarding the ore type in any given mineable section of the orebody. In addition, there is extracted ore type uncertainty that is introduced by the mining process. These uncertainties are better understood by obtaining more precise (real-time) information. In addition, a better understanding of the uncertainties can improve the quality of operational decisions and increase the overall profitability of the mine. This case study provides a framework for measuring the economic impact of information purchases in a mining context and discusses the implications of those findings.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00137910802711883

Affiliations: 1: Department of Mathematical Sciences, United States Air Force Academy, Colorado, USA 2: Division of Economics and Business, Colorado School of Mines, Golden, Colorado, USA

Publication date: January 1, 2009

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