Enterprise-wide risk management of mining operations in a value chain environment

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The major assets of mining companies are mineral deposits, which are typically erratic in shape and content, consequently also erratic in supply of raw materials and economic value. In addition, mining companies closely monitor a diverse group of indicators such as price mechanism, production value chain including sequential processes, geopolitical stability, legislation trends, and sustainable development in the context of profitability, human and environment interaction. The above are all-in factors that put a specific emphasis on risks associated with mining operations/investments. Financial and technical analysis of mining enterprises has over past few decades further evolved to respond to new driving forces such as globalization, industry deregulation, increasing complexity of financial instruments related to mining products, restructuring, and advancements from extraction and computing technologies. The proposed research program described herein focuses on (i) developing new simulation frameworks associated with mining operational and financial risks; (ii) formulating and solving financial risk optimization problems through stochastic mathematical programming approaches; (iii) producing protection approaches against catastrophic financial, environmental or operational events; (iv) modeling a mining asset portfolio/value chain through continuous and discrete event simulation (v) managing trade-off between maximizing project value based on available information and spending resources to have more information to improve decision making processes. New modeling, simulation and optimization methods will be developed to achieve the research aims relating to operation and business risks. The proposed research will have impacts on: (a) investment strategy and operation analysis that manages risks in a realistic way; (b) advancing risk management through diversifying, hedging, quantifying and mitigating; (c) applicable risk-based decision-making practices such that mining enterprises perform more effectively and (d) development of new mine project valuation approaches.