MFO Essentials Understanding Mine Flow Optimizer

MFO Essentials

In addition to all MAO  functions, Mine Flow Optimizer (MFO) maximizes NPV by adjusting up mining rates (cutoff grades are also optimized).

How it works

• The objective of MFO is to find mining rates, say X1, X2, X3, etc. for years 1, 2, 3, etc. that yield maximum NPV over the life of the mine. If NPV = F(X1, X2, X3…), we just need to find the maximum of function F.

• Finding the maximum of F requires calculating the value of F for a substantial number of values of the variables X1, X2, X3, etc. (the gradient of F is not available).

• Calculating one value of F requires solving the MAO problem.

• The MFO implementation in NPVS 4 finds the maximum of F in a way that minimizes the number of times the value of F needs to be calculated (the method is related to the golden section algorithm).
  
  Suppose the value of X1, the mining rate at year 1, has been increased by 100,000 tonnes and the rates X2, X3, etc. have remained unchanged. To calculate F(X1, X2, X3, …):

1.  MFO reclassifies initial blocks in the input OES that were to be mined in Year 2 as blocks to be mined in Year 1 until the 100,000 tonnes increase target for X1 has been met.

2. To compensate for the loss of tonnage at Year 2, enough blocks that were to be mined at Year 3 are moved to Year 2.

3.  And so on for the remaining years as long as there are blocks to move up in time.

4.  The mine inputs for all years are updated and MAO is run to calculate F.

• If mining rate dependent capital costs have been defined for scheduling, MFO will change the timing of these expenditures appropriately.

•  All calculations are based on OES.

• The impact of stockpiles is fully accounted for.

Conclusion

• MFO completely dispenses with the old “cutoff grade optimization” logic that is unsuitable for multiple products and does not account for stockpiles.

• The logic is simple and accurate.

• It takes into account the sequence in which the blocks are likely to be mined.

• It fully accounts for the impact of stockpiles.

• It fully accounts for capital costs.

• It works for any number of products and processing methods.

• It is faster to process

•  The output is the MAO type parcel model with the extraction time and destination fields.

	Related Topics
	Quick Start Capital Costs Import Essentials  Economic Model Essentials Pit Optimization Essentials Pushback Essentials Scheduler Essentials MAO Essentials FMS Essentials