Impact of metal prices on plant optimization

M.H. Abu-Ali and S.A. Abdel Sabour*

Mining and Metallurgical Engineering Department, Faculty of Engineering, Assiut University, Assiut 71516, Egypt

Accepted 10 September 2004


The optimum economic operating conditions of a processing plant are highly dependent on the market price of the metal produced. Since the price of a metal product is determined by supply and demand relationships and is greatly affected by local and world political events, future metal prices are not explicitly defined. Apart from historical trends, such factors create a degree of speculation. The study provides a method to account for the volatility of future metal prices when optimizing fully integrated mineral processing plants. A model was developed for estimating the “certainty-equivalent price” throughout the project lifetime while taking into account the volatility of future metal prices. The certainty-equivalent price should be used as a substitute for the volatile spot price in any optimization process that depends on the realized metal price. Non-ferrous metals were considered in the investigation rather than iron-bearing and/or precious metals. A hypothetical copper project was provided as an example to illustrate the applicability of the model and investigate the advantages of the suggested procedures in improving the financial performance of the plant.

Keywords: Mineral processing; Mineral economics; Process optimization

* Corresponding author
   E-mail : sabrysabour@yahoo.com