Risk quantification using qualitative tools

Measuring risk and including it within the evaluation of mining projects has the potential to facilitate better decision-making practices. By quantifying the risks associated with a particular mining scenario, these uncertain components can influence the project's value. Unfortunately, many of the risk factors that influence a mining project are qualitative in nature, and do not easily lend themselves to numerical evaluation. This paper looks at some of the misapplications of quantitative risk analysis tools in the highly uncertain mining industry. It begins with a review of the progression of valuation techniques that have been used in the mining industry, followed by a look at some of the issues with performing a risk-based evaluation. Using a case study, qualitative risk analysis tools are used to show how these quantitative issues can be alleviated, closing with a brief discussion about possible future research directions.