Cut-off Grade Optimization in Open-pit Mines Considering Two Processing Streams and Rehabilitation Cost

  • Author / Creator
    Kalitenge, Dismas
  • Cut-off grade is one of the important aspects of mining engineering. It distinguishes which material is worth mining and processing or stockpiling and which one should be left or dumped as waste. The success of many mining operations nowadays is measured by the net present value generated. Maximization of NPV, therefore, becomes an important process. This goal is inherently achieved by a cut-off grade policy which involves establishing a planned sequence of cut-offs and the associated amounts of material that will flow through different stages of the operation over time. To maximize NPV, the cut-off grade policy ensures that high grade materials are mined earlier to generate high cash flows earlier. Environmental protection is one of the critical elements required to achieve sustainable development. This aspect has therefore gained high priority in modern mining. Mining industry produces solid, liquid, gaseous wastes. Such by-products are of uneconomic value and they pose a threat to the environment. Mine planning should integrate the strategy and cost related to rehabilitation of the mine wastes. A need to incorporate rehabilitation cost of the waste rock in cut-off grade optimization process has been addressed in some past studies. However, the proposed models are limited to a single source of material, single processing stream, and single refinery. Furthermore, Lane’s method has been extended to form algorithms that aid determination of cut-off grades in operations that utilize multiple processing streams. Uninterestingly, such studies share a common drawback; ignoring rehabilitation cost of the mine wastes and more specifically, waste rock. This study aims to develop and implement an integrated cut-off grade optimization framework that takes into account the rehabilitation cost of the waste rock and geological uncertainty of the orebody for an operation employing multiple processing streams in exploiting the ore resource to maximize the NPV. By using fifteen (15) simulated grade tonnage curves, three scenarios, 1, 2, and 3 related to different consideration of the rehabilitation cost of the waste rock in optimizing the cut-off grades were analyzed. By fully incorporating the rehabilitation cost in the whole process of deriving the optimum cut-off grade strategy, two benefits are realized over the method of deducting the cost from the annual profits. First, more material is classified as ore resulting in the decrease of the amount of waste that is rehabilitated by 4.33%. Second, the average NPV of the operation is improved by 1.41% compared to the counterpart approach. Incorporating geological uncertainty finds more application in the prefeasibility stage, where the project's risk-profile can be studied by applying the model across several equally probable grade-tonnage curves, aiding decision makers to make well-informed decisions at the pre-feasibility stage when little information about the orebody is available.

  • Subjects / Keywords
  • Graduation date
    Fall 2021
  • Type of Item
  • Degree
    Master of Science
  • DOI
  • License
    This thesis is made available by the University of Alberta Libraries with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.