Optimization Modeling for Mining Engineers

Alexandra M. Newman
Division of Economics and Business

Colorado School of Mines

Slide 1

Seminar Outline

• Linear Programming

• Integer Linear Programming

• Mixed Integer Linear Programming

Slide 2
• Network Models

• Nonlinear Programming

1
 Linear Programming

Consider the following system:

(P ) min cx
subject to Ax = b
Slide 3 x≥0

where x is an n × 1 vector of decision variables, and A, c,

and b are known data in the format of an m × n matrix, a
1 × n row vector, and an m × 1 column vector, respectively.

Linear Programming in Mining

• Blend raw materials with certain characteristics into final

products with specifications on the characteristics

• Given a mining sequence, compute a production

Slide 4 schedule

• Allocate equipment to a task for a given number of hours

• Make tactical production decisions, e.g., regarding

sending product to mills

2
 Example 1: Linear Programming

The Metalco Company desires to blend a new alloy of 40%

tin, 35% zinc, and 25% lead from several available alloys
having the properties given in Table 1. Formulate a linear
program whose solution would yield the proportions of these
Slide 5 alloys that should be blended to produce a new alloy at
minimum cost.

Example 1: Linear Programming

Table 1: Alloy properties

Alloy 1 Alloy 2 Alloy 3 Alloy 4 Alloy 5

%Tin 60 25 45 20 50
Slide 6
%Zinc 10 15 45 50 40
%Lead 30 60 10 30 10
Cost ($/lb.) 22 20 25 24 27

3
 Solution 1a: Linear Programming

Let xi = proportion of alloy i used {i = 1,2,3,4,5}

minimize 22x1 + 20x2 + 25x3 + 24x4 + 27x5

subject to : 60x1 + 25x2 + 45x3 + 20x4 + 50x5 = 40
Slide 7 10x1 + 15x2 + 45x3 + 50x4 + 40x5 = 35
30x1 + 60x2 + 10x3 + 30x4 + 10x5 = 25
x1 + x2 + x3 + x4 + x5 = 1
x1 ≥ 0, x2 ≥ 0, x3 ≥ 0, x4 ≥ 0, x5 ≥ 0

Solutions to the Linear Optimization Problem

If Ax = b is:

• a uniquely determined system, then x is unique.

• an over-determined system, then x may not exist.

Slide 8
• an underdetermined system, then there may be many
sets of values for x.

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 Linear Programming in Two Dimensions

• The intersection of the constraints Ax = b form a feasible

region.

• One can move realizations of the objective parallel to

Slide 9 each other (up for a maximization problem, down for a
minimization problem) until one such realization contour
“last” touches the feasible region.

• This extreme point is the optimal solution.

Linear Program with an Optimal Solution

infeasible

maximum

Slide 10

feasible region objective function

realizations

5
 Linear Program with Multiple Optimal Solutions

Slide 11

Unbounded Linear Program

Slide 12

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 Infeasible Linear Program

Slide 13

Two Linear Optimization Algorithms

• Simplex Method: theoretical performance is exponential,

but practical performance is “good” (only check extreme
points, and usually not all of them)

Slide 14 • Interior Point (Barrier) Method: theoretical performance

is polynomial, and practical performance is good for
large-scale problems

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 Simplex Method

Slide 15

Interior Point Method

Slide 16

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 Solution 1b: Linear Programming

• Minimum cost: $23.46

– Alloy 1: 0.043
– Alloy 2: 0.283
Slide 17 – Alloy 3: 0.674

Integer Linear Programming

Consider the following system:

(P ) min cy
subject to Ay = b
Slide 18 y ≥ 0 and integer (and binary)

where y is an n × 1 vector of decision variables, and A, c, and

b are known data in the format of an m × n matrix, a 1 × n
row vector, and an m × 1 column vector, respectively.

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 Integer Linear Programming in Mining

• Delineate an ore body, determine an economic envelope

• Schedule “long-term” production, e.g., machine

placements
Slide 19 • Make decisions with logical, e.g., precedence,
constraints: open pit block sequencing, mining strata

Example 2: Integer Programming

W.R. Gracea strip mines phosphates in strata numbered from

i = 1 at the top to i = n at the deepest level. Each stratum
must be removed before the next can be mined, but only
some of the layers contain enough suitable minerals to justify
Slide 20 processing into the company’s three products: pebble,
concentrate, and flotation feed (j = 1, 2, 3).
a
Based on D. Klingman and N. Phillips (1988), “Integer Programming
for Optimal Phosphate-Mining Strategies,” Journal of the Operational Re-
search Society, 9, pp. 805-809.

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 Example 2: Integer Programming

The company can estimate from drill samples the quantity aij
of product j available in each stratum i, the fraction bij of
BPL (a measure of phosphate content) in the part of i
suitable for j, and the corresponding fraction pij of pollutant
Slide 21 chemicals. The company wishes to choose a mining plan
that maximizes the product output while keeping the average
fraction BPL of material processed for each product j at least
bj and the average pollution fraction at most pj . Formulate an
integer linear program model of this mining problem.

Example 2: Integer Programming

Table 2: Quantity, BPL, and pollutant for each product and

stratum

Stratum ai1 ai2 ai3 bi1 bi2 bi3 pi1 pi2 pi3
1 4 2 3 .2 .1 .3 .4 .7 .5
Slide 22
2 1 0 2 .1 0 .2 .2 0 .4
3 0 1 4 0 .2 .4 0 .3 .6
4 2 5 0 .3 .7 0 .4 .8 0
5 3 2 5 .2 .3 .2 .4 .5 .4
Limits .25 .3 .27 .7 .9 .7

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 Solution 2a: Integer Programming

Let xi = 1 if we remove stratum i and 0 otherwise

Let yi = 1 if we process stratum i and 0 otherwise
X
n X
3
max aij yi
i=1 j=1
Slide 23 subject to xi ≤ xi−1 ∀ i = 2, ..., n
yi ≤ xi ∀ i = 1, ..., n
X
n X
n
bij aij yi ≥ bj aij yi ∀ j = 1, 2, 3
i=1 i=1
Xn Xn
pij aij yi ≤ pj aij yi ∀ j = 1, 2, 3
i=1 i=1

Integer Linear Programming

Slide 24

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 Integer Programming Optimization Algorithm

• Now, there are a finite, rather than an infinite, number of

feasible solutions.

• So, we could enumerate all the feasible solutions, test

them in the objective function, and choose the best one.
Slide 25
• This would take a long time.

• In fact, even though the conventional algorithm uses

“smarter” techniques to reduce enumeration, the
algorithm still has theoretical exponential complexity.

• And, in practice, integer programs require far more

solution time than linear programs of commensurate size.

Solution 2b: Integer Programming

• Maximum product output: 12

– Remove strata 1, 2, 3, and 4
– Process strata 3 and 4
Slide 26

13
 Mixed Integer Linear Programming

Consider the following system:

(P ) min cx + dy
subject to Ax + Ey = b
Slide 27 x ≥ 0, y ≥ 0 and integer (and binary)

where x is an n × 1 vector of decision variables, y is an n′ × 1

vector of decision variables, and A, E, c, d and b are known
data in the format of an m × n matrix, an m × n′ matrix, a
1 × n row vector, a 1 × n′ row vector, and an m × 1 column
vector, respectively.

Mixed Integer Linear Programming in Mining

• Scheduling production with sequence and tonnage

decisions

• Supporting development decisions with production

Slide 28 constraints

• Combined resolution production scheduling models

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 Example 3: Mixed Integer Linear Programming

A steel mill has received an order for 25 tons of steel. The

steel must be 5% carbon and 5% molybdenum by weight.
The steel is manufactured by combining three types of metal:
steel ingots, scrap steel, and alloys. Four steel ingots are
Slide 29 available for purchase. The weight (in tons), cost per ton,
carbon, and molybdenum content of each ingot are given in
Table 3. Three types of alloys can be purchased. The cost
per ton and chemical makeup of each alloy are given in Table
4. Steel scrap can be purchased at a cost of $100 per ton.

Example 3: Mixed Integer Linear Programming

Steel scrap contains 3% carbon and 9% molybdenum.

Formulate a mixed integer programming model whose
solution will tell the steel mill how to minimize the cost of
filling their order.
Slide 30
Table 3: Ingot properties
Ingot Weight Cost per Ton ($) Carbon % Molybdenum %
1 5 35 5 3
2 3 33 4 3
3 4 31 5 4
4 6 28 3 4

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 Example 3: Mixed Integer Linear Programming

Table 4: Alloy properties

Alloy Cost per Ton ($) Carbon % Molybdenum %
1 500 8 6
2 450 7 7
3 400 6
Slide 31

Solution 3a: Mixed Integer Linear Programming

• s = amount of steel scrap purchased (tons)

• ai = amount of alloy i purchased (i = 1...3) (tons)

• yi = 1 if ingot i is purchased (i = 1...4), 0 otherwise

Slide 32
• xi = amount of ingot i used (i = 1...4) (tons)

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 Solution 3a: Mixed Integer Linear Programming

min 175y1 + 99y2 + 124y3 + 168y4 + 500a1 + 450a2 + 400a3 + 100s

subject to a1 + a2 + a3 + s + x1 + x2 + x3 + x4 = 25
0.08a1 + 0.07a2 + 0.06a3 + 0.03s + 0.05x1 + 0.04x2 + 0.05x3 + 0.03x4 = 1.25
Slide 33 0.06a1 + 0.07a2 + 0.09s + 0.03x1 + 0.03x2 + 0.04x3 + 0.04x4 = 1.25
x1 ≤ 5y1
x2 ≤ 3y2
x3 ≤ 4y3
x4 ≤ 6y4
s, ai , xi ≥ 0 ∀ i; yi binary ∀ i

Mixed Integer Linear Programming Optimization Algorithm

• These are solved the same way as integer linear

programs are.

Slide 34

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 Solution 3b: Mixed Integer Linear Programming

• Minimum cost: $3,894

– Scrap: 4.28 tons
– Alloy 1: 5.8 tons
Slide 35 – Amounts of ingots 1, 2, 3, and 4: 5, 3, 4, 2.92,
respectively (all tons)
– All indicator variables (yi ) are 1.

Network Models

Consider the following system:

X
(P ) min cij xij
(i,j)∈A
X X
subject to sj + xij = dj + xjk ∀j
Slide 36
i k
lij ≤ xij ≤ uij ∀(i, j) ∈ A

where A is the set of arcs, xij is the flow on arc (i, j), cij is
the per unit cost of sending flow on arc (i, j), sj is the supply
at node j, dj is the demand at node j, lij is the lower bound
on arc (i, j), and uij is the upper bound on arc (i, j).

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 Network Models in Mining

• Assigning equipment to jobs

• Making equipment replacement decisions

• Block sequencing with special structure

Slide 37
• Determining the ultimate pit limits

Benefits of Network Models

• You get integrality for free

• You can solve them very quickly

• You can depict them graphically

Slide 38

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 A Network

costs 1
2
1 9 4
(1,3) 7
Slide 39 supplies 3 demands
8 5
(0,4) 4
3
2 5
lower and upper bounds

Network Formulation

A = {(1, 3), (2, 3), (3, 4), (4, 5)}

xij = amount of flow on arc (i, j)

min 7x13 + 8x23 + 9x34 + 5x35

Slide 40
subject to 2 = x13
3 = x23
x13 + x23 = x34 + x35
1 ≤ x13 ≤ 3
0 ≤ x23 ≤ 4
x34 , x35 ≥ 0

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 Example 4: Network Models

The district manager of the Whiskey Coal Mining Company

wants to maximize his profits from his district operations. The
district has two mines and two mills in operation. Products
from Mine #1 are shipped to Mills #1 and/or #2; however,
Mine #2 ships coal only to Mill #2. Production and
Slide 41
transportation schemes, capacities, and costs are given in
Tables 5-7 below. Mill #1 yields $4 profit per ton mined, and
Mill #2 yields $5 profit per ton mined. Please draw a
corresponding minimum cost flow graph whose solution
would maximize profits. Label all supplies, demands, costs,
and lower and upper bounds on your directed network, as
applicable. Explain your answer.

Example 4: Network Models

Table 5: Capacity (tons) of and cost of mining at each mine

Mine lower bound on capacity upper bound on capacity mining cost per ton
1 1 6 $2
2 1 7 $2

Slide 42
Table 6: Capacity (tons) of and cost of transporting coal from
mine to mill
Mine Mill lower bound on capacity upper bound on capacity transportation cost per ton
1 1 2 4 $1
1 2 0 5 $2
2 2 2 8 $4

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 Example 4: Network Models

Table 7: Capacity (tons) of each mill

Mill lower bound on capacity upper bound on capacity
1 0 5
2 1 9

Slide 43

Solution 4a: Network Models

Mine Mill

1
1 1
(2, 4)
2 4
Slide 44 (0, 5)
(1, 6)

S 2 (0, 5) T
(1, 7)
(1, 9)
2
5
(2, 8)
2 2
4

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 Solution 4a: Network Models

Costs of extraction at each mine, and transporting the ore

from the mines to the mills are given on the arcs from the
source to the mines, and from the mines to the mills,
respectively. Profits from each mill are given as negative
costs on the arcs terminating at the sink. Lower and upper
Slide 45
bounds on capacity at the mines, and between the mines and
the mills are given on the arcs from the source to the mines,
and from the mines to the mills, respectively. Capacities at
the mills are given on the arcs terminating at the sink.
An optimal solution to this minimum cost flow problem will
yield the optimal distribution plan from the mines through the
mills.

Solving Network Models

• There are very fast (polynomial time) algorithms to solve

network models.

• Performance gains (over conventional linear

Slide 46 programming solvers) are significant for large models.

• If the model is small or fast solutions are not important,

use a linear programming solver to solve a network
model.

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 Solution 4b: Network Models

• Minimum cost: $4
– Mine 1: Extract 6 tons of coal and send 2 tons to mill
1 and 4 tons to mill 2
– Mine 2: Extract 2 tons of coal and send both to mill 2
Slide 47
– Mill 1: Process and sell 2 tons of coal
– Mill 2: Process and sell 6 tons of coal

Nonlinear Programming

• We will only consider nonlinear programs with

continuous-valued decision variables.

• Generally, nonlinear programming is divided into

Slide 48 constrained and unconstrained nonlinear models.

• Why did we not address unconstrained linear

programming?

• You have seen many unconstrained nonlinear

optimization problems before.

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 Nonlinear Programming in Mining

• Fitting curves to data

• Minimizing quadratic deviation of production output from

target levels (in the short-, medium-, or long-terms)
Slide 49 • Incorporating geotechnical considerations into
production scheduling or other planning models

Example 5: Nonlinear Programming

A mine manager wants to allocate between 10% and 60% of

his available mining capacity to mining each of the precious
metals gold, silver, and copper. With market prices varying
wildly from year to year, he has done some research on past
Slide 50 performance to guide his decisions. Table 8 shows the
average return for each precious metal ($/oz.) and the
covariances among the categories that he has computed.
Formulate a constrained nonlinear program whose solution
would tell the mine manager the least risk plan (using only
covariance terms as a measure of risk) that will average a
return of at least $90.

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 Example 5: Nonlinear Programming

Table 8: Return and covariance matrix for precious metals

Gold Silver Copper

Dollar Return ($/oz.) 77.38 88.38 107.50
Slide 51
Covariance
Gold 1.09 -1.12 -3.15
Silver -1.12 1.52 4.38
Copper -3.15 4.38 12.95

Solution 5a: Nonlinear Programming

Indices:
• i = type of metal in first category, i = 1, 2, 3
• j = type of metal in second category, j = 1, 2, 3

Slide 52 Parameters:
• Ri = average return of metal type i ($/oz) (see table)
• Vij = covariance between metal i and metal j (see table)
• h = minimum return required ($) ($90)
• l = lower bound on capacity (10%)
• u = upper bound on capacity (60%)

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 Solution 5a: Nonlinear Programming

Variables:

• Pi = proportion of capacity devoted to mining metal type i

• P̂i = amount of precious metal i mined (oz.)

Slide 53
Formulation:

X
3 X
3
min Vij Pi Pj
i=1 j=1

Solution 5a: Nonlinear Programming

Formulation:

s.t. li ≤ Pi ≤ ui ∀ i
X 3
Pi = 1
Slide 54 i=1
X
3
Ri P̂i ≥ h
i=1

Pˆ1 Pˆ2 Pˆ3

= =
P1 P2 P3
P̂i ≥ 0 ∀ i

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 Constrained Nonlinear Optimization Problem

min f (x)
subject to hi (x) = bi ∀i = 1...j
gi (x) ≤ ci ∀i = j + 1, ..., m
Slide 55

Difficulties with Nonlinear Optimization

• Functions may not be well behaved.

• Specifically, f may not be convex (or concave).

• A local optimal solution may not be a global optimal

Slide 56 solution.

28
 Illustration of an Ill-behaved Nonlinear Function

Slide 57

Convex and Concave Functions

• Certain functional forms for f will ensure that a local

optimal solution is globally optimal.

• Specifically, if f is convex and the sense of the objective

is minimize, then a local optimal solution will be globally
Slide 58
optimal.

• And if f is concave and the sense of the objective is

maximize, then a local optimal solution will be globally
optimal.

29
 Illustration of Convex and Concave Functions

Slide 59

CONVEX FUNCTION CONCAVE FUNCTION

Solution 5b: Nonlinear Programming

• Least risk: .1403

– P1 , P2 , P3 : .6, .3, .1, respectively
– P̂1 , P̂2 , P̂3 : .645, .323, .108, respectively
Slide 60

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