Analysis of Cutoff Grades Using Optimum Control Theory

The determination of the optimum cutoff grade for a surface mine may be very different from that of an underground mine because a selectable mining method may be used in the latter case. A review of research into the theory of cutoff grade is made and then a new method, based on Optimal Control Theory, is presented. This method uses a Hamiltonian function to assist in obtaining the solution. It is shown that the life of a mine can be divided into three parts: a beginning period bf planning before mining; an intermediate period when both an average price and market information are used continually to adjust the cutoff grade; and, a final period when the main consideration is the current market situation.