Optimal Mining and Processing Decisions in Stratiform Phosphate Deposits

International Minerals & Chemical Corporation (IMC) is the world's largest privately-owned producer of phosphate rock, a bulk mineral used primarily in the production of agricultural fertilizers. The company operates several mines and processing plants in central Florida, and controls extensive phosphate resources in central and southern Florida.Like other firms engaged in the extraction of natural resources, IMC faces a general decision problem of determining the subset of resources in the ground that can be mined and processed economically. Land acquisition and plant expansion decisions, as well as tactical and strategic mining and processing plans, are all based in large measure on the company's a priori evaluation of resource data and its estimate of economic reserves.The facts that known phosphate resources are finite, that marketing conditions are highly variable, and that hundreds of millions of dollars are at stake all prompted IMC to assure itself that its mining and processing decisions constitute a financially optimal policy. This paper describes a new algorithm, developed by the authors and implemented by IMC, for making optimal mining and processing decisions.