Title: Effects of the volatility of input parameters on cut-off grade optimisation, a case study of Sungun copper mine

Authors: Vahide Dadi; Javad Sattarvand

Addresses: Azarpinar Mining and Construction Company, Fourth Floor, #1 Kouye Sahand, Abresan Square, 5156913616 Tabriz, Iran ' Department of Mining and Metallurgical Engineering, University of Nevada-Reno, 1664 N Virginia Street, Mail stop 173, Reno Nevada 89557, USA

Abstract: Cut-off grade is the lowest grade above which the mined material is considered as ore. Volatility of the parameters involved in its calculation affects the mine operation and economics. For example, the sold products under a highly volatile commodity prices leads to sub-optimal cut-off grade strategies. The paper describes a modified cut-off grade optimisation procedure based on the Lane's optimisation algorithm at Sungun copper mine under volatility of the metal price by generation of the future commodity price schemes using geometric Brownian motion (GBM). Moreover, the effects of the difference in haul distances and consequently the different mining costs, have been investigated by dividing of the pit into various fields and separately optimisation of the cut-off grade in each site. Study revealed that in upper benches of the mine, where the distance to waste dump is much shorter than the route to ore crusher, the calculated cut-off grades are much higher.

Keywords: open pit mining; cut-off grade optimisation; production planning; case study; copper mines; metal price volatility; future commodity prices; geometric Brownian motion; GBM; haul distances; different mining costs; upper benches; waste dump location; ore crusher location.

DOI: 10.1504/IJMME.2016.074598

International Journal of Mining and Mineral Engineering, 2016 Vol.7 No.1, pp.64 - 77

Received: 05 Jan 2015
Accepted: 03 Sep 2015

Published online: 07 Feb 2016 *

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