A team from Manchester University’s School of Mathematics and Manchester Business School has developed a means of helping mining companies accurately calculate the value of their reserves.
The technology provides a solution to an inaccurate methodology used commonly within the mining industry for the past 40 years and will help to increase mining companies’ profits and their longer-term stability.
The techniques used to create the Reserve Valuation and Optimisation Model (RVOM) are a significant step forward from traditional methods and the team is now seeking a leading commercial partner to join it to enable RVOM to become the mining industry standard for valuation.
Prof Peter Duck and Dr Paul Johnson from the School of Mathematics, along with Prof Sydney Howell and Dr Geoffrey Evatt from Manchester Business School (MBS), began work on the RVOM in earnest in 2008, when a generic model for valuing a finite resource was needed in relation to uranium stocks for a UK government-sponsored investigation into the sustainability of nuclear power.
Duck, who is head of the School of Mathematics, said: ‘Being able to make fast and accurate valuations of reserves in the presence of economic and geological uncertainty is of critical importance to mining companies.
‘RVOM draws upon recent advances in financial mathematics to make faster and more accurate reserve valuations than before. It can achieve this in the presence of numerous uncertainties, such as price fluctuations and ore-grade uncertainty, and can even set the optimal processing rules a mining company should use,’ he added.
The University of Manchester Intellectual Property (UMIP) – the commercialisation arm of Manchester University – is helping the team explore the industrial and commercial potential of the solution.