Mine Performance Assessment by Means of Stochastic Frontier Analysis

Abstract

This paper employs stochastic frontier analysis (SFA) in assessing efficiency at the mine level. An SFA model is derived using annual operational data from the Kardia Field mine of the Greek Public Power Corporation (PPC) S.A. for the 1984-2006 period and the causes of inefficiency are investigated by means of regression techniques. The proposed two-stage model can be used as a diagnostic tool to identify causes of mine inefficiency and as a tool for designing and specifying interventions to improve mine performance.