Optimizing mining rates under financial uncertainty in global mining complexes

Arman C. Kizilkale and Roussos Dimitrakopoulos

International Journal of Production Economics, 2014, vol. 158, issue C, 359-365

Abstract: 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.

Keywords: Mining rate tracking; Stochastic optimal control; Dynamic programming; Financial uncertainty; Distributed control (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:158:y:2014:i:c:p:359-365

DOI: 10.1016/j.ijpe.2014.08.009

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