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A review of cut-off grade policy models for open pit mining operations

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  • Asad, Mohammad Waqar Ali
  • Qureshi, Muhammad Asim
  • Jang, Hyongdoo

Abstract

In an open pit mining operation, the heterogeneity of the grade-tonnage distribution of the deposit dictates that all available material within the boundaries of an open pit may not be processed. Given this heterogeneity, it is imperative that the valuable (ore) and waste materials are clearly identified. In this context, the cut-off grade defines the quantity of ore and waste, ensuring smooth supply of ore to the processing streams. While, the earliest significant effort towards the development of models for cut-off grade policy dates back to 1960s, a number of contributions on this vital aspect of a mining operation have been made since then. This paper presents a comprehensive overview of the available literature on cut-off grade policy models and suggests possible areas of future research.

Suggested Citation

  • Asad, Mohammad Waqar Ali & Qureshi, Muhammad Asim & Jang, Hyongdoo, 2016. "A review of cut-off grade policy models for open pit mining operations," Resources Policy, Elsevier, vol. 49(C), pages 142-152.
    • Handle: RePEc:eee:jrpoli:v:49:y:2016:i:c:p:142-152
    DOI: 10.1016/j.resourpol.2016.05.005
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    References listed on IDEAS

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    1. Azimi, Yousuf & Osanloo, Morteza & Esfahanipour, Akbar, 2013. "An uncertainty based multi-criteria ranking system for open pit mining cut-off grade strategy selection," Resources Policy, Elsevier, vol. 38(2), pages 212-223.
    2. Jeffrey A. Krautkraemer, 1988. "The Cut-Off Grade and the Theory of Extraction," Canadian Journal of Economics, Canadian Economics Association, vol. 21(1), pages 146-160, February.
    3. Mardones, JoseLuis, 1993. "Option valuation of real assets : Application to a copper mine with operating flexibility," Resources Policy, Elsevier, vol. 19(1), pages 51-65, March.
    4. Thompson, Matt & Barr, Drew, 2014. "Cut-off grade: A real options analysis," Resources Policy, Elsevier, vol. 42(C), pages 83-92.
    5. Osanloo, M. & Rashidinejad, F. & Rezai, B., 2008. "Incorporating environmental issues into optimum cut-off grades modeling at porphyry copper deposits," Resources Policy, Elsevier, vol. 33(4), pages 222-229, December.
    6. Rahimi, Esmaeil & Ghasemzadeh, Hasan, 2015. "A new algorithm to determine optimum cut-off grades considering technical, economical, environmental and social aspects," Resources Policy, Elsevier, vol. 46(P1), pages 51-63.
    7. Cairns, Robert D. & Shinkuma, Takayoshi, 2003. "The choice of the cutoff grade in mining," Resources Policy, Elsevier, vol. 29(3-4), pages 75-81.
    8. Asad, Mohammad Waqar Ali & Dimitrakopoulos, Roussos, 2013. "A heuristic approach to stochastic cutoff grade optimization for open pit mining complexes with multiple processing streams," Resources Policy, Elsevier, vol. 38(4), pages 591-597.
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    2. Paithankar, Amol & Chatterjee, Snehamoy & Goodfellow, Ryan, 2021. "Open-pit mining complex optimization under uncertainty with integrated cut-off grade based destination policies," Resources Policy, Elsevier, vol. 70(C).
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    8. Khan, Asif & Asad, Mohammad Waqar Ali, 2021. "A mixed integer programming based cut-off grade model for open-pit mining of complex poly-metallic resources," Resources Policy, Elsevier, vol. 72(C).
    9. Kuangyuan Zhang & Richard Olawoyin & Antonio Nieto & Andrew N. Kleit, 2018. "Risk of commodity price, production cost and time to build in resource economics," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 20(6), pages 2521-2544, December.
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