Maximizing the net present value by applying an optimal cut-off grade for long-term planning of the copper open pits

Abstract

Cut-off grade optimization is one of the basic steps in the open pit planning and design and it is aimed to achieve maximum net present value (NPV). The basic algorithm for the cut-off grade optimization is Lane`s algorithm, subsequently modified by different authors. Long-term planning of the surface mining operation involves consideration of all relevant parameters and factors (geology of ore deposits, mining technology, mining and processing capacities, costs, metal prices, recoveries, etc.) to achieve the maximization of the value to be realized by the excavation and processing of mineral resources. Using different methods and mathematical algorithms, which are implemented by the modern software tools, it is possible to manage costs and revenues, i.e. business economy. The importance of cut-off grade optimization for long-term planning of exploitation at the copper open pits was illustrated using the case study on Kraku Bugaresku . Cementacija surface copper mine, that exploits two types of ore - sulphide and oxide. The analysis results show that the selective mining of ore with a copper oxide grade . 10 % in total copper and ore with a copper oxide > 10% in total copper achieve an increase in the NPV by 24.77 %, and cut-off grade optimization would achieve an additional increase in the NPV by 10.07 %.

Keywords

• open pit mining
• long term planning
• cut-off grade optimization
• net present value maximization