Application of the Equipment Replacement Dynamic Programming Model in Conveyor Belt Replacement: Case Study of a Gold Mining Company

Abstract

As assets age, they generally deteriorate, resulting in rising operating and maintenance costs and decreasing salvage values. In this paper a comprehensive Dynamic Programming-based optimisation solution methodology is used to solve the equipment replacement optimisation problem on the replacement of conveyor belts at a Gold Mining company in Zimbabwe. Given a mining setup with one and two-year old conveyor belts the ultimate objective is to keep or replace the conveyor belt such that the overall cost of material handling is minimised within a five-year period. The findings reveal that this mining system should replace conveyor belts yearly. It is concluded that, an equipment replacement policy for conveyor belts is a necessity in a mining system so as to achieve an optimal contribution to the economic value that a mining system may accrue within a period of time.