A Sequential Optimization Model of Cut-off Grade and Project/Location Selection in Open Pit Mining

To maximize benefits and gain competitive advantages, open pit mining companies must make right decisions concerning the optimal cut-off grade and the selection of mining projects/locations. The maximum profit for each mining project/location can be achieved through the cut-off grade optimization The aim of this research is to develop a sequential optimization model to determine the optimal cut-off grade and mining project/location selection. The cut-off grade optimization model is developed using an analytical approach by considering several revenues and costs, including valuable waste materials revenue and reclamation cost. Two economic indicators, namely Net Present Value (NPV) and Return on Investment (ROI), and some constraints are used in the mining project/location selection model. A numerical example is given to illustrate the proposed model application. Through this research, it is expected that the proposed model can help mining companies to determine the optimal cut-off grade and which mining project/location should be selected.