Chapter (18): Illegal Mining and Data Analytics


The main presented idea in this chapter is to see the type of tools, information collected/curated, and use of information to decide the value of a mining proposition/project. This topic is an important one as several transactions that happen within the value chain depend on assigning the appropriate value to the project/proposal, and it needs to be done at several points in the value chain and at different times in the development/execution of a project. Central to this need is the problem of future price forecasting and the characterization of the associated uncertainty. The aim of this chapter is a basic review of project evaluation techniques and, in particular, the deeper consideration of technical, financial models (project evaluation models for mining purposes) and then to discuss some of the inputs to the advanced analytics model and to see how to characterize the uncertain variables that it requires, for example, exchange rate, future prices, interest rate, etc. The evaluation framework should then consider the Value at Risk as a measure to consider and communicate risk in a very uncertain industry. This is by far an advanced topic in the industry today and requires several techniques that are mathematically challenging in some cases or data-intensive in other cases; for example, data is always needed to determine the statistical characteristics of the price time series to provide appropriate fitting for the trend, volatility and autocorrelation behavior, additionally there is usually correlation relationships between different commodity prices that makes everything considerably more complex and usually outside the knowledge of mining engineers, geologists, and metallurgists.

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