Optimizing mining rates under financial uncertainty in global mining complexes

- Mining rate tracking is formulated as a stochastic optimal control problem.
- The optimal closed form linear feedback control is attained.
- A distributed algorithm is presented that attains the unique equilibrium.
- Numerical results are presented to compare the proposed global optimization methodology to the individual optimization implementation.

This paper presents a distributed and dynamic programming framework to the mining production rate target tracking of multiple metal mines under financial uncertainty. A single mine׳s target tracking is stated as a stochastic optimization problem and the solution is obtained by solving the dynamic program which gives the optimal production rate schedule of each mine as a Markovian feedback control on the price process. The global solution is distributed on multiple mines by a policy iteration method, and this iterative method is shown to provide the unique equilibrium among Markovian strategies. Numerical results confirm the efficacy of the proposed global method when compared to individual optimization of mining rate target tracking.