THE EVALUATION OF AN ORE DEPOSIT DEVELOPMENT PROSPECT THROUGH APPLICATION OF THE "GAMES AGAINST NATURE" APPROACH

Mariusz Krzak ()
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Mariusz Krzak: AGH University of Science and Technology, Faculty of Geology, Geophysics and Environmental Protection, al. A., Mickiewicza 30, 30-059 Kraków, Poland

Asia-Pacific Journal of Operational Research (APJOR), 2013, vol. 30, issue 06, 1-18

Abstract: Geological-mining projects are usually associated with relatively high risk and uncertainty in many aspects, including geological, mining, ecologic, economic, market, legal and social conditions. A mineral deposit is an underground natural resource and hence it is difficult to unequivocally predict the actual results of its discovery. Depending on the extent of the resource, the operation of the mine can extend to a few decades. It is necessary to conduct investment actions in successive stages and to evaluate the results of the work stage by stage. This reduces the investment risk and facilitates the decision-making process. In this paper, the use of a specific kind of game, the so-called "game against Nature," is suggested before a final decision on deposit development is made. This methodology was tested on the example of one of the zinc-lead ore deposits in the Silesia-Cracow region. Apart from supporting the decision-making process, this methodology offers the means to evaluate further research and costs which may be incurred for obtaining supplementary information related to the ore deposit parameters, specifically its reserves.

Keywords: Ore deposit development; decision; risk and uncertainty; game theory; information (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S0217595913500292

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