Computer-Aided Cut-off Grade Optimisation for Open Pit Mines

Abstract

A mine planning team is tasked among other duties with designing a feasible mine plan which in turn maps out the daily running of the mining project. A mine plan revolves around a cut-off grade which is thoughtfully and uniquely selected while considering various aspects such as grade tonnage distribution, economic and operational parameters specific to a mine. Selection of a cut-off grade can be a daunting task often involving iterative and lengthy mathematical formulas which take huge amounts of time to execute, often leaving room for error. In the occurrence of such errors, a mining project can be faced with sequential outcomes that could even lead to premature closure. The cut-off grade is therefore a strategic variable that determines the economic viability of a mine, and hence return on investment. It is critical that the cut-off grade is optimal so as to maximise the net present value. Lane’s approach is a model that utilises several steps to yield one cut-off grade value. This algorithm is flexible and can be adjusted to include other factors specific to a mine. Regrettably, many mining companies continue to operate using inaccurate cut-off grades wrongly calculated or assumed. This has continuously led to frustrations due to losses and prematurely abandoned mines. This study focused on the development and implementation of an easy to use computer application based on Lane’s approach that runs on Windows platform, and hence targeting a larger user base for choosing an optimum cut-off grade for open pit mines.

Keywords: Cut-Off Optimisation, Cut-Off Optimiser, Optimum Cut-Off Grades, Whittle