Researchers at Finland's Lappeenranta University of Technology have developed a new system for mine operators to calculate the profitability of mining operations.
The techno-economic system is said to facilitate mining investment decision-making, as well as help fine tune the production guidance.
LUT strategic financing professor Mikael Collan said: "The planning of international investments with the help of more detailed models can save tens of millions of euros over a mine's lifespan compared with traditional methods.
"The savings come from better optimisation of production and better planned investments.
"The benefits of the model are comparable with the benefits stemming from the optimisation of transport routes."
The new system model comprises four key interlinked components; production, cashflow, project balance sheet and profitability. Alteration in any of these components will have an impact on others thereby affecting the profitability of a mine, the team said.
To analyse mine investments, the system uses a simulation that runs 5,000 random price paths for metal.
The results will be evaluated, and represented as distributions that will show the likelihood of a profitable outcome.
"When there is a need to ascertain the value-added that an alternate production product would bring, it is possible to model it and to run a simulation," Collan added.
"Comparing the results reveals something about possible value-added. It is possible, for instance, to find a suitable amount of operating capital for avoiding profitability problems and allowing for the optimum use of a mine."