Dynamic-decision-making-data61

[Image appears of a female talking to the camera]

Narrator: Dynamic decision making under uncertainty helps decision makers in mining industry to revise their managerial and operational decisions in response to the evolution of risks.

[Animation image appears of a question mark and then text appears one after the other: Risks, Metal prices, Interest rates]

The main uncertainties include financial risks such as commodity price or interest rates

[Animation image changes to show a cross-section block of land which then morphs into a lump of rock which then reduces in size and falls into the top of a mountain at the bottom of the screen]

and geological uncertainties such as ore grades and estimated remaining reserves.

[Animation image changes to show the mountain moving to the left and a large mountain appearing on the right and then the animation image changes to show a bar graph]

Due to these uncertain variables, setting up a fixed plan at the beginning of the project will not give the best operational strategy.

[Animation image changes to show a fluctuating bar graph and an arrow appears across the bottom of the screen travelling from the left to the right]

Instead decisions need to be updated over time based on the current available information.

[Animation image changes to show a fluctuating type graph and then the animation image changes to show four pink boxes underneath each other and text appears inside: Policy 1, Policy 2, Policy 3, Policy 4]

We developed intuitive graphic tools to display dynamic decision policies.

[Animation image changes to show a side view of a telescope and then the telescope spins around to show a facing view of the telescope and the camera zooms in]

We don’t forecast the future of these uncertain variables.

[Animation image changes to show arrows pointing in different directions within pink boxes and the animation image shows the boxes moving around and yellow circles appearing around the arrows]

Instead we provide a decision policy which tells the decision maker the best decision to make in any situation that could happen.

[Animation image changes to show a mining truck and then an arrow, stop, fast forward and pause symbol appear one after the other in front of the truck]

In the case of natural resource extraction project, the decision to start, postpone, accelerate, temporarily pause or completely abandon the project

[Animation image changes to show a financial graph and then the animation image changes to show a line graph in the top half of the screen and a graph showing remaining reserves at the bottom]

is determined by current financial and geological information such as commodity prices and the remaining reserves.

[Animation image changes to show an arrow labelled “High” pointing up to an “Open” sign]

In a nutshell when the price is high it is optimal to keep the mine operating

[Animation image changes to show an arrow labelled “Low” pointing down to a “Closed” sign and then the animation image changes to show a “Reopening Soon” sign on a plot of land]

while when the price is low it might be better to close the mine temporarily leaving the opportunity to reopen in the future when the price goes up.

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If the price is too low and the estimated reserve too small the decision policy might suggest to permanently abandon the mine.

[Music plays and a green honeycomb pattern on a black screen appears and the Data61 and CSIRO logos and text appear: Creating our data driven future, www.data61.com.au]