PhD Project: Assessing the Real Option Approach for Mining projects
Mine extraction involves major uncertainties that affect the estimated value of mining projects, most notably grade quality and metal price. Mathematical programming is the standard tool used in the mining industry for valuing mines, as it can accommodate large-scale problems involving a large number of physical constraints. However, this approach is ill-suited to deal with uncertainty, as its anticipative nature (i.e. assuming exact prior knowledge of the future) can produce overestimated and unattainable valuations that mask the true risk taken by mining companies. By contrast, the alternative real option (stochastic control) approach provides by definition accurate and non-anticipative policies. The aim of this project is to adapt and improve the current methodologies in the real option literature for generating realistic mining valuation and optimal decisions. The objective is to develop and demonstrate the value adding of using the real option approach for efficient and sustainable the mining projects.
Keywords: Mining, real option, stochastic control, mathematical programming, geostatistics, mathematical finance, simulation
Applications can be made by selecting the below link.
Please attach supporting documentation including a covering letter outlining why you would like to undertake the PhD project and a current CV including 2 referees. Please note that more than one application can be made if you wish to be considered for more than one PhD project.