Production optimization of underground mining operations : A case study of the Renco mine expansion project

This study was undertaken to develop an optimum production plan for an underground mine using Renco Mine, an underground gold Mine in Zimbabwe,as a case study.A detailed structural analysis of the orebody's grade distribution has been done to establish technical parameters for production planning.This showed that the grade is lognormally distributed with a mean of 6.49g/t and a variance of 48.88(g/t)^ and the experimental variogram can be modelled by the spherical scheme with a nugget of 30, a sill of 17, and a range of 30m.The open-ended dynamic programming model has been used to compute the optimum production rates and cutoff grades for the project which yielded a Net Present Value(NPV) of Z$7,215,000. A computerised stoping and development generator has also been developed which calculates the number of stoping and mining blocks to maintain in order to achieve the production plan.A single parameter sensitivity analysis has been done on the sensitive economic parameters -used in executing the dynamic programme. It has been found out that the annual gold price increment rate and the annual cost escalation rate are sensitive and their changes can significantly affect the optimum production plan and the project NPV.