1.

1 Introduction
The main asset for the mining industry is the mineral deposit. This is finite and non-
renewable, which imposes a very distinctive constraint on mining by comparison to
other businesses. The projected mining lifetime thus becomes a decision variable that
needs to be carefully determined when planning the development of the mine
(Cavender, 1992). The exploitation phase of each mineral deposit has a beginning and
an end, which is largely determined by the characteristics of the mineral deposit (size,
shape and grade) and by its depletion strategy. Additional considerations should be
taken in account to estimate the life of the mine such as environmental permissions and
infrastructure developments (Cavender, 1992). The primary objective of mine planning
is to select the best alternative that will create the highest value for the defined level of
risk. This value can be quantified by the Net Present Value (NPV) of the project; this is
widely used by the majority of mining and other companies (Runge, 1998).
Planning the exploitation of a mineral deposit is a complex activity. This is not only due
to the exhaustible character of the deposit but, also, to the uncertainties that are
associated with its real size, shape and quality. The knowledge of the mineral deposit at
the beginning of a mining project is estimated from the scattered information that has
been obtained during exploration. This aim is to search for and to investigate the
mineral deposits (Hustrulid and Kuchta, 2006). This information allows estimations for
developing the deposit but the real characteristics of the deposit will,
however, only become known during the extraction of the material throughout the life
of the mine (Camus, 2002). The problem posed by this reality is that the main decisions
regarding the exploitation of the deposit have to be made before the beginning of the
extractive activity when the characteristics of the deposit are still only partially known.
The evaluation of the available options is also based on economic inputs such as prices
and costs, which are only estimations of the future, economic parameters that the
company will face when the exploitation phase begins (Groeneveld
and Topal, 2011).

The finite and non-renewable character of the ore body, together with the uncertainties
in the mineral resource and in the economic inputs, distinguishes the mining business
from other
industries (Camus, 2002). Mining is also usually characterised by having high, up-front,
capital
investments. According to Runge (1998) “most large scale mining is capital intensive”.
This
investment is associated with all the stages of the mining project such as the exploration
phase, the