Cutoff grades optimization in open pit mines using meta-heuristic algorithms

Mohammad Reza Ahmadi and Abbas Aghajani Bazzazi

Resources Policy, 2019, vol. 60, issue C, 72-82

Abstract: To have a sound production planning one of the main factors that should be considered is the cutoff grade. The cutoff grade is used as a criterion to identify waste of minerals in a mining reserve. The cutoff grade is one of the most sensitive parameters that can have a significant impact on net present value (NPV) and cash flow of projects. Since the cutoff grade has a significant impact on the operation, the choice of the correct level of this grade is of considerable importance. Choosing the optimal cutoff grade maximizes the NPV and the total profit of the mining operation and the project. The optimization of the cutoff grades considering the maximum achievable NPV over the life of the mine is one of the key issues in the mining of open pits. In this paper, two different meta-heuristic optimization algorithms are employed to determine the optimal cutoff grade. For this purpose, taking into account the precision of 0.001%, the optimum cutoff grades, the production amount of each unit and the NPV are calculated. Accordingly, the optimum cutoff grades of iron mine No. 1 Golgohar was obtained using the PSO algorithm is 49.11–40.6%, and using the imperialist competitive algorithm, the optimum cutoff grades of iron mine No. 1 Golgohar was obtained from 48.56% to 40.5%. The results show that the determination of the cutoff grade by using these two methods has high accuracy and speed. According to the results, the ICA algorithm has a higher accuracy than the PSO algorithm.

Keywords: Optimal cutoff grade; Net present value; PSO; ICA (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:60:y:2019:i:c:p:72-82

DOI: 10.1016/j.resourpol.2018.12.001

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