Comparative Analysis of the Effect of Mining Parameters on Open-Pit Optimisation

Mineable material is defined using cut-off grade either as geological or economic cut-off grade. Both geological and economic cut-off grade affects the output generated in an open-pit mining operation. It distinguishes the amount of ore sent to the mill for processing and waste to the dump. This consequently affects the overall profits generated from the operation hence the need for cut-off grade optimization. There are several mining parameters that are considered in a typical cut-off grade model. They include economic, geological, and operational parameters. They have a significant effect to influence the cut-off grade selected in mining operations at any given period. Some of the parameters are stochastic in nature by having a random probability distribution that may not be predicted precisely. When selecting cut-off grades in a mine operation, the mining engineers must consider the dynamic nature of the operational parameters in order to maximize the net present value of the project. Modifying Lane’s cut-off grade model which was developed in 1964 to incorporate the stochastic parameters in the approach helps improve the net present value as shown in the paper. The modified Lane’s approach is developed into a stochastic computer-aided application code-named NPVMining. Using NPVMining, selected stochastic parameters are considered in this exercise to show the effect on the output (net present value). The selected parameters (price and grade-tonnage) are varied by ± 10%. NPVMining has a graphical user interface that makes it easy to use and displays results in a user-friendly way. It gives the user the choice to manipulate the data depending on the study being undertaken or any other factor affecting the specific mine. This paper analyses the effect of each of the selected mining parameters on cut-off grade using NPVMining to show the significance of monitoring their variance.