Cemal Furkan Erhan
Sustainable Cut-off Grade Optimization: An Integrated ESG and Stochastic Risk Framework.
Rel. Marilena Cardu. Politecnico di Torino, Corso di laurea magistrale in Georesources And Geoenergy Engineering, 2026
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Abstract
Mine planning has historically prioritized the maximization of Net Present Value (NPV) through deterministic geoeconomic frameworks, predominantly isolating operational variables from environmental externalities and market volatility. This thesis focused these critical deficiencies by developing an integrated Sustainable Net Present Value (S-NPV) framework that incorporates stochastic uncertainty and Environmental, Social, and Governance (ESG) liabilities directly into the dynamic cut-off grade optimization calculations. The proposed methodology expands classical capacity-constrained optimization theory by mathematical internalization of environmental footprints, specifically Scope 1 and Scope 2 carbon dioxide equivalent emissions (PCO2) and industrial freshwater consumption (PH2O), by applying shadow pricing into the operational expense (OPEX) functions.
Simultaneously, the framework formalizes the capital risk reduction mechanics of sustainability performance by integrating sustainability linked green financing mechanisms that compress the traditional corporate discount rate from 10.0% to an ESG-adjusted funding cost of 6.5%
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