Optimal extraction with grade variation and endogenous reserves
This paper describes and analyzes a simple model of a competitive firm engaged in non-petroleum resource extraction. It allows for grade variation within a mineral deposit, treats as endogenous the determination of reserves and distinguishes between ore throughput and metal output. The central result is a characterization of the optimal intertemporal extraction profile. A numerical example illustrates the main principle of quality selection.
Resources and Energy
Conrad R. and HOOL, Robert Bryce.
Optimal extraction with grade variation and endogenous reserves. (1984). Resources and Energy. 6, (4), 331-338. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/1767