International Journal of Industrial Engineering & Production Research

Cutoff grade is a grade used to assign a destination label to a parcel of material. The optimal cutoff grades depend on all the salient technological features of mining, such as the capacity of extraction and of milling, the geometry and geology of the orebody, and the optimal grade of concentrate to send to the smelter. The main objective of each optimization of mining operation is to maximize the net present value of the whole mining project, but this approach without consideration of environmental issues during planning is not really an optimum design. Lane formulation among the all presented algorithms is the most commonly used method for optimization of cutoff grades. All presented models for optimum cutoff grades are ore-oriented and in none of them the costs related to waste materials which must to be minimized during the mine life are considered. In this paper, after comparison of traditional and modern approaches for cutoff grade optimization in open pit mines, a real case study is presented and discussed to ensure optimality of the cutoff grades optimization process.

Planning and design procedure of an open pit mining project just can be started after ultimate pit determination. In the carried out study in this paper it was shown that the most important factor in ultimate pit determination and in consequence in the whole planning and design procedure of an open pit mine is the metal price. Metal price fluctuations in recent years were exaggerated and imposed a high degree of uncertainty to the mine planning procedure while none of the existent algorithms of the pit limit determination consider the metal price uncertainty. Real Option Approach (ROA) is an efficient method of decision making in the condition of uncertainty. This approach usually used for evaluation of defined natural resources projects up to now. This study considering the metal price uncertainty used real option approach to prepare a methodology for determining the Ultimate Pit Limits (UPL). The study was carried out on a non-ferrous metallic cylindrical ore deposit but the achieved methodology can be adjusted for all kinds of the deposits. The achieved methodology was comprehensively described through the examples in a way that can be used by the mine planners.